[Senate Hearing 108-]
[From the U.S. Government Publishing Office]



 
    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2005

                              ----------                              


                        WEDNESDAY, MARCH 3, 2004

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:08 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Pete V. Domenici (chairman) 
presiding.
    Present: Senators Domenici, Craig, Reid, and Murray.

                          DEPARTMENT OF ENERGY

            Office of Energy Efficiency and Renewable Energy

STATEMENT OF DAVID GARMAN, ASSISTANT SECRETARY


             opening statement of senator pete v. domenici


    Senator Domenici. The committee will come to order. Thank 
you everyone for coming. It's interesting to note that, of no 
consequence other than it's interesting, this is the first 
meeting of the Subcommittee on Energy and Water and we haven't 
yet seen impact that the budget's going to have on this 
subcommittee's ability to do its work, but it's pretty obvious 
that it won't be a bed of roses, so I regret to tell you that I 
don't think there's any chance that very many of the 
discretionary programs are going to be funded with any 
increases. Most will get some cuts.
    But today we're going to review the Department of Energy's 
2005 budget request, the Office of Energy Efficiency and 
Renewable Energy, the Office of Science, and the Office of 
Nuclear Energy, and we will receive testimony from David 
Garman, Assistant Secretary, Office of Energy Efficiency. I'd 
like to thank you for joining us. And Dr. Raymond Orbach, 
Director of the Office of Science, and William Magwood, 
Director of the Office of Nuclear Energy. I appreciate your 
attendance today and look forward to your testimony.
    The budget request for Renewable Energy provides $374 
million, an increase of $4.3 million. DOE--that's 1.2 percent--
DOE's budget provides $95 million for hydrogen technology, that 
is the basic research. It's a $13 million increase and overall 
the President proposes spending $228 million on hydrogen R&D, 
multi-agency effort to diversify energy supply.
    Office of Science, the administration requests $3.4 
billion, a reduction of $78 million, 2 percent below last 
year's level. Science reports specifically stated that flat 
funding for the office should be reversed. Unfortunately, that 
language was ignored.
    Dr. Orbach, I understand the Secretary of Energy released a 
20-year science plan late last year which will serve as a road 
map for science research. I appreciate your efforts to focus on 
these priorities and look forward to learning more about this 
proposal.
    For the Office of Nuclear Energy, the budget provides $409 
million, that's a $4.7 million increase, 1.2 percent. I'm 
disappointed to learn that nuclear R&D budget has been cut by 
$34 million, a 26 percent reduction. If I have anything to do 
about it, I'll put that money back, but I don't know how to do 
it yet.
    The budget also cuts nuclear energy technology by 50 
percent. I'm skeptical that the Department is serious about its 
commitment to deploy a new nuclear reactor, especially if you 
put a date alongside it of 2010.
    I'm discouraged by the fact that the advanced fuel concepts 
initiative was cut. The objective of this program is to develop 
a proliferation-resistant nuclear fuel. In light of the recent 
news regarding the sale of nuclear materials, the last and 
biggest being Pakistan's top nuclear scientist, I believe more 
should be done to protect against nuclear proliferation, not 
less. I think we're beginning to make people understand that in 
the administration. The President spoke to it, Secretary Powell 
has alluded to it, but nonetheless you can't do this without 
money, and I'm hopeful that America will take the international 
lead in this regard.


                           prepared statement


    I'm now going to turn to my good friend who's been working 
with me on this subcommittee either as chairman or ranking 
member for many years, Senator Reid. I'd like you to make your 
opening statement and then we will proceed in order to Mr. 
Garman, Dr. Orbach, and Mr. Magwood.
    [The statement follows:]
             Prepared Statement of Senator Pete V. Domenici
    Today, the subcommittee will review the Department of Energy's 
fiscal year 2005 budget request for the Office of Energy Efficiency and 
Renewable Energy, the Office of Science, and the Office of Nuclear 
Energy.
    We will receive testimony from David Garman, Assistant Secretary, 
Office of Energy Efficiency and Renewable Energy, Dr. Raymond Orbach, 
Director, Office of Science, and William Magwood, Director, Office of 
Nuclear Energy.
    I appreciate your attendance today and look forward to your 
testimony.
    The budget request for Renewable Energy provides $374 million--an 
increase of just $4.3 million (+1.2 percent). The DOE budget provides 
$95 million for hydrogen technology research, a $13 million increase. 
Overall, the President proposes spending $228 million in fiscal year 
2005 on hydrogen R&D in a multi-agency effort to diversify our Nation's 
energy supply.
    For the Office of Science, the administration has requested $3.4 
billion--a reduction of $78 million or 2 percent below last year's 
level. The Senate report specifically stated that flat funding for the 
Office of Science should be reversed--unfortunately, that language was 
ignored.
    Dr. Orbach, I understand the Secretary of Energy released the 20-
year Science Plan late last year, which will serve as a road map for 
DOE's science research. I appreciate your efforts to focus the 
Department's priorities and I look forward to learning more about this 
proposal.
    For the Office of Nuclear Energy, the budget provides $409 
million--an increase of $4.7 million above fiscal year 2004 (+1.2 
percent).
    I am disappointed to learn that the Nuclear R&D budget has been cut 
by $34 million (-26 percent). The budget entirely eliminates funding 
for the Nuclear Energy Plant Optimization and the Nuclear Energy 
Research Initiative.
    This budget also cuts the Nuclear Energy Technologies by 50 
percent. As a result of these cuts, I am skeptical that the Department 
is serious about its commitment to deploy a new nuclear reactor by 
2010.
    I am also discouraged by the fact that the Advanced Fuel Concepts 
Initiative was cut by 30 percent. The objective of this program is to 
develop a proliferation-resistant nuclear fuel. In light of the recent 
news regarding the sale of nuclear material by Pakistan's top nuclear 
scientist; I believe more should be done to protect against nuclear 
proliferation.
    It is clear from these lean budgets that we will face numerous 
challenges this year. Nevertheless, I look forward to working with 
Senator Reid to develop the best bill we can.
    I will now turn to Senator Reid or any other Senator who would like 
to make a brief opening statement. Thereafter, we will hear from Mr. 
Garman, Dr. Orbach, and Mr. Magwood.

                    STATEMENT OF SENATOR HARRY REID

    Senator Reid. Thank you very much, Mr. Chairman. You and I 
have worked together, a long, long time together on this 
committee, subcommittee, I'm sorry, and I enjoy working on this 
bill with you. I think the enjoyment will have been better in 
the past than this year because of the tremendous constraints 
on the budget. It's been frankly a lot of fun in years past, 
but I don't see that happening this year, but with our 
friendship we'll work our way through this.
    Today is a first, as you have indicated, in a series of 
five budget oversight hearings for our subcommittee. Next week, 
a week from today, the subcommittee will hear testimony from 
the Bureau of Reclamation and the Corps of Engineers, which is 
so vitally important to the entire western half of the United 
States.
    Today we're going to hear from the witnesses as you've 
outlined. I've reviewed all your statements and they cover some 
of my most--some of my favorite subjects, alternative energy 
and all these things that are so important to the future of our 
country.
    I'm going to--we have a big tax bill coming up in 20 
minutes so I have to leave soon, go back and work on that on 
the floor, but I appreciate everyone being here. I have a 
series of questions for each of the witnesses, Mr. Chairman, 
and I would ask consent of the subcommittee that I be allowed 
to submit those in writing and that they respond to them within 
the next 10 days in writing.
    Senator Domenici. Yes, sir.
    Senator Reid. And the answers go to every member of the 
subcommittee.
    Senator Domenici. I'll submit them on your behalf and let 
me say to you, if you have any trouble with the time, I don't 
expect you to just let it pass. I expect you to tell us why, if 
you had to go find something or whatever then let us know. Go 
ahead, Senator.

           OFFICE OF SCIENCE FISCAL YEAR 2005 BUDGET REQUEST

    Senator Reid. I've reviewed the budget for the Office of 
Science, and by and large I suspect that you share some of the 
same frustrations as I have and you won't articulate them today 
and I understand why you can't. I'm concerned that such a 
budget, if enacted, will not allow you to move forward 
aggressively on enough major initiatives, including the ITER 
Project.
    The request also strikes me as inadequate in terms of 
allowing you to maintain and improve your laboratory facilities 
nationwide. My overall impression is that the request is weak 
and I really believe it's short-sighted. I hope we'll be able 
to improve on that this year before we complete our work.
    As I've said many times before, funding for research in the 
hard sciences is one of the very best and most appropriate 
investments taxpayer dollars can be made for this country. Few 
things that we do here can make our country safer or more 
secure than maintaining a scientific and technological edge.
    For many years now, Chairman Domenici and I have watched as 
the last two administrations have sent ever-escalating budget 
requests up here for National Institutes of Health that have 
far outstripped the increase requests of the Office of Science. 
The imbalance between funding for the physical sciences and the 
biological sciences was getting to be staggering, particularly 
because both disciplines rely on each other so much. I think 
this is short-sighted in the long term.
    I'm pleased with the work that you're doing on genomics and 
with the very impressive pace of the nanotechnology. Drew 
Willison of my staff and Tammy Perrin of Senator Domenici's 
staff visited the Lawrence Berkeley National Lab last month and 
were surprised at the rapid progress the lab is making on the 
molecular foundry.

                 ENERGY EFFICIENCY AND RENEWABLE ENERGY

    You've been on the job now for nearly 2 years and I hope 
you're enjoying your time in one of the greatest jobs our 
Federal Government has to offer. Mr. Garman, as you know, I am 
a big supporter of your programs and believe that the National 
Renewable Energy Laboratory in Golden is one of the premiere 
labs in all the DOE if not the world. While I certainly hope we 
can add some resources to your budget, I realize that the most 
important thing Congress can do in the short term for the 
renewable energy industry is to get a series of productive tax 
credits into place and extend some of the others. Hopefully our 
body will be able to get that done this year and we may be able 
to get it done on this bill this week.
    For the last few years, you've funded a competitive project 
in Nevada that has worked very well. As you know, my State has 
tremendous solar and geothermal potential and the seed money 
for the Department--that the Department has provided--allows 
Nevada and its universities and research organization 
industries to work together to prove out technology and 
techniques.

                             NUCLEAR ENERGY

    Mr. Magwood, as you know, I've been very supportive of your 
programs during my years as chairman and ranking member of this 
subcommittee. I'm supportive even though it sometimes puts me 
in an awkward spot due to that very visible word, nuclear in 
your office's title. I support strong budgets for you because, 
as I mentioned earlier, long-term stable investments in 
scientific research and development is what makes our Nation 
strong.
    My biggest problem with nuclear power comes, of course, at 
the end of the fuel cycle, and we've heard that so many times 
that I even get tired of myself saying it. To the extent that 
there will be an ongoing waste stream, it will be investments 
in science that solves all or most of those disposal problems, 
and you're involved in that and I appreciate that.
    That's why I've supported your advanced fuel cycle 
initiative over the years. I'm a little concerned this year 
that your support for this program seems to have eroded, but I 
suspect that Chairman Domenici and I can help you un-erode it 
as we move through this budget.

                           PREPARED STATEMENT

    I feel confident that Senator Craig and Domenici have 
thoughts on the ongoing transition of the laboratory in Idaho 
to the Nation--this is to the Nation's nuclear energy 
laboratory, so I'll not address that issue at this time, other 
than to say that I'm far more interested in an aggressive R&D 
budget that benefits the Nation as a whole than I am in a long, 
slow, drawn-out transition.
    I thank everyone for appearing today and appreciate the 
patience of everyone listening to my long statement.
    [The statement follows:]
                Prepared Statement of Senator Harry Reid
    Thank you, Mr. Chairman. By my count you and I are beginning our 
eighth Energy and Water appropriations cycle together. As you know I 
enjoy working on this bill with you and greatly appreciate your 
friendship and support throughout our many years together here in the 
Senate.
    Today is the first in a series of five budget oversight hearings 
for our subcommittee. Next Wednesday, the subcommittee will hear 
testimony from the Bureau of Reclamation and the U.S. Army Corps of 
Engineers.
    Today we will hear from three witnesses: Dr. Raymond Orbach, the 
Director of DOE's Office of Science; Mr. Bill Magwood, the Director of 
the Office of Nuclear Energy; and Mr. Dave Garman, the Assistant 
Secretary for the Office of Energy Efficiency and Renewable Energy.
    Good afternoon, gentlemen, thank you for coming. Senator Domenici 
and I both appreciate you taking the time to join us. My duties on the 
Floor may require me to depart early today, but my staff will remain 
here and will report back on what transpires. I do have a series of 
questions for each of you and would ask, at this time, that they be 
made a part of the record. I hope each of you can respond quickly 
because the Chairman and I rely on your answers to help us make 
informed funding decisions. We are likely to be on an accelerated 
schedule this year so timely responses are critical.
    I plan to keep my comments very brief today, but do want to 
highlight several issues concerning the budget requests for each of the 
three DOE offices represented today.
    Dr. Orbach, I have reviewed the budget for the Office of Science 
and, by and large, I suspect that you and I share some of the same 
frustrations with it. The administration's budget request provides your 
office with a 2 percent cut this year. I am concerned that such a 
budget, if enacted, will not allow you to move forward aggressively 
enough on a number of major initiatives, including the ITER project. 
The request also strikes me as inadequate in terms of allowing you to 
maintain and improve your laboratory facilities nationwide.
    My overall impression is that the request is weak and shortsighted.
    I hope that we are able to improve on that a little bit before 
Congress completes work this year. As I have said many times before, 
funding for research in the hard sciences is one of the very best and 
most appropriate investments of taxpayer dollars that Congress can 
make. Very few things that we do here can make our country safer or 
more secure than maintaining a scientific and technological edge.
    For many years now Chairman Domenici and I have watched as the last 
two administrations have sent ever-escalating budget requests up here 
for the National Institutes of Health that have far outstripped the 
increases requested for the Office of Science. The imbalance between 
funding for the physical science and the biological sciences was 
getting to be staggering, particularly because both disciplines rely on 
each other so much.
    Again, over the long-term, this is very short-sighted.
    That said, I am very pleased with the work you are doing on 
genomics and with the very impressive pace of the nanotechnology 
program. Drew Willison of my staff and Tammy Perrin of Senator 
Domenici's staff visited Lawrence-Berkeley National Laboratory last 
month and were surprised at the rapid progress the lab is making on the 
Molecular Foundry.
    You have been on the job now for nearly 2 years and I hope you are 
enjoying your time in one of the greatest jobs our Federal Government 
has to offer.
    Mr. Garman, as you know, I am a big supporter of your programs and 
believe that the National Renewable Energy Laboratory in Golden is one 
of the premiere labs in all of DOE. While I certainly hope we can add 
some resources to your budget this year, I also realize that the most 
important thing Congress can do in the short term for the nascent 
renewable energy industry is to get a series of production tax credits 
into place and to extend some of the others. Hopefully, we, as a body, 
will be able to get that done this year.
    For the last few years you have funded a competitive pilot project 
in Nevada that has worked tremendously well. As you know, my home State 
has tremendous solar and geothermal potential and the seed money the 
Department has provided has allowed Nevada universities, research 
organizations, and industries to work together to prove out 
technologies and techniques. I appreciate your hard work and that of 
your staff in getting this program started and keeping it moving 
forward.
    Mr. Magwood, as you know I have been very supportive of your 
programs during my years as Chairman and Ranking Member of this 
subcommittee. I am supportive even though it sometimes puts me in an 
awkward spot due to that very visible word ``nuclear'' in your office's 
title.
    I support strong budgets for you because, as I mentioned earlier, 
long-term, stable, investments in scientific research and development 
is what makes our Nation strong.
    My biggest problem with nuclear power comes at the end of the fuel 
cycle. However, I firmly believe that investments in the future of 
nuclear power can produce reactors that are safer and will not produce 
the deadly waste streams that plague the current generation of 
reactors.
    To the extent that there will be an on-going waste stream, it will 
be investments in the science that solves all or most of the disposal 
problem.
    This is why I have supported your Advanced Fuel Cycle Initiative 
over the years. I am a little concerned this year that your support for 
this program seems to have eroded, but I suspect that Chairman Domenici 
and I can help you in this area.
    I feel confident that both Senator Craig and Senator Domenici have 
many thoughts on the on-going transition of INEEL to the Nation's 
nuclear energy laboratory, so I will not address that issue at this 
time other than to say that I am far more interested in an aggressive 
R&D budget that benefits the Nation as a whole than I am in a long, 
slow, drawn-out transition.
    Again, thanks to our witnesses for appearing today.

    Senator Domenici. Senator, thank you very much, and now we 
will excuse you and look forward to the next hearing.
    Senator, would you like to make some comments, please?
    Senator Murray. Mr. Chairman, I do not have an opening 
statement. I'll just welcome the witnesses. I do have questions 
and we'll wait until after they've had their testimony.

               PREPARED STATEMENT OF SENATOR THAD COCHRAN

    Senator Domenici. Senator Cochran has submitted a statement 
for the record which will be included.
    [The statement follows:]
               Prepared Statement of Senator Thad Cochran
    Mr. Chairman, I'd like to thank the Assistant Secretary and 
Directors for testifying before this committee today. The work you do 
is very important to my State and to me. I commend David Garman, the 
Assistant Secretary of the Office of Energy Efficiency and Renewable 
Energy, for the work his department does with biomass research.
    Biomass energy is estimated to contribute over 7 percent of 
Mississippi's total energy consumption--that amount is double the 
national average. The majority of our lumber facilities burn wood waste 
to generate steam for industrial processes. Biomass offers special 
benefits for Mississippi's economy by keeping energy dollars in our 
State and by providing jobs in rural areas where biomass is produced. 
By using these wastes for energy, disposal costs are avoided, and 
industries are better able to compete. I would also like to commend 
Mississippi State University and Jackson State University for their 
continuing research into this important scientific area.
    Mr. Chairman, with your permission I have some questions I'd like 
to submit for the record.

    Senator Domenici. Let me say how good it has been to have 
you working with us on this subcommittee. You have some very 
significant interests, but I'm very pleased to find that when 
we have problems on this committee, you're there to help us. 
It's not just strictly what's going on in your State, and we 
all need each other. Some very tough, tough problems when you 
cut the budget as much as ours here.
    I want to make one last observation before I proceed to the 
witnesses. I don't know how to solve it, but I want to say 
about 10 years ago or a little less, a couple of Senators 
circulated around and got most of us to sign up on a 
resolution. Perhaps you signed it like I did and you probably, 
having been here awhile, chuckled as you signed it. We were 
going to make the NIH, National Institute of Health, double in 
10 years. Of course, we signed it as we walked out the door 
wondering, who's kidding who?
    Well, it happened, and every year after that it would be 
among the last bills, and sure enough, somebody would stand up 
and say, well, in order to meet our resolution we need $680 
million more and the next year they needed a billion and here 
we have the largest National Institute of Health growth in a 
decade of any institution of that type in the world has ever 
seen. And here we sit with everybody telling us the counterpart 
is science, right, that without basic science, pretty soon the 
NIH, with all of its work, is going to be without the talent 
that's needed to back up the medical people.
    And here we come, not critical of the President, after all 
we're in this terrific deficit, but here we are. While that 
occurred, we're cutting basic science, not increasing it. And 
I'm just wondering what we have to do around here to get us on 
a path where we recognize that these scientists and scientific 
prowess is not going to keep America if we don't fund it.

                 ENERGY EFFICIENCY AND RENEWABLE ENERGY

    And so with that, I'm very sorry to start with such a 
negative comment, but let me open with you, Mr. Garman. You're 
the Assistant Secretary of Energy Efficiency and Renewable 
Energy and we want you to give your testimony and be ready for 
questions. I do want to say to you, sir, from the first time I 
inquired of you about this work, you have come a long way and I 
am very complimentary of you.
    First of all, you are not run by the renewable associations 
out here in America. They have their interests but they don't 
run your Department. You're not supposed to be running their 
editorials, you're not supposed to be paying for their 
journals. Remember, we had all that going when you took over. 
Of course, all they did was get mad. Then when you looked at it 
you found that Domenici was right, that if you want to do 
research, you ought to do research, but you sure shouldn't be 
paying for various organizations to get done what they want. 
They aren't synonymous with research. And now I think it's 
pretty clean in that regard.
    I also want to tell you that we can do as much research as 
you want, but ultimately Americans want to see some of this 
work, and I am very, very pleased that I heard today that 
Democratic leader said we have the votes to pass the Energy 
bill. Now why would I be speaking of that at the same time? 
Well, you know, if you want to build wind energy, you want to 
build solar energy and biomass energy, everybody knows how to 
do that. You can perfect it, but that's already passed, your 
research issues.
    And we're ready to go and build those but we need the 
incentive that caused them to move ahead so rapidly, and what 
everybody's finding out now, there is no incentive today. And 
people say, well what do you mean? Well, the incentives expired 
in January, so those who are very anxious and terribly enamored 
as most of us are with energy that comes from wind, you ought 
to know that unless you have a project that is already going, 
there are no new ones, and there's nobody going to do a new 
one. Why? Because they can't afford it.
    But if we pass this bill they got this wonderful incentive 
for this next decade, and you will see biomass and geothermal 
and these other ones, you'll see them flourish across the land. 
The biggest one will be wind. Whether the public's going to 
want that much wind, I don't know. It's going to look funny 
because there's going to be a lot of it, but I think we're 
going to win, I think it's going to happen.
    All right, would you proceed with your testimony? Make it 
brief, please.

                       STATEMENT OF DAVID GARMAN

    Mr. Garman. Yes, sir. And thank you for your comments. As 
you noted in your statement, we are seeking an increase of 
$17.3 million in the renewable energy funding, and a budget 
increase in this environment does constitute an awesome 
responsibility and we understand that. We're not only mindful 
of how much we spend, but the way we spend it, as you noted, 
and we're proud of the fact that OMB has recognized the 
Department of Energy as leading the pack of Cabinet agencies in 
terms of management improvement, and we're also proud that the 
Office of Management and Budget has singled out the Office of 
Energy Efficiency and Renewable Energy as an example in 
implementing the President's management agenda.
    So I will very briefly mention a few highlights of our 
budget. Our hydrogen technology subprogram is a key component 
of the President's Hydrogen Fuel Initiative. For 2005, we 
request $95.3 million, a $13.3 million increase. With these 
funds we propose to continue and accelerate our work with 
regard to hydrogen production, safety, storage, codes and 
standards, and other work that's critical to the long-term 
success of this initiative.
    Last year, roughly $40 million out of our total hydrogen 
appropriation of $82 million was earmarked for some specific 
projects that in many cases were inconsistent with our research 
plan, so we will have to delay some very important work in 
areas such as hydrogen storage and production that the National 
Academy of Sciences and others have told us is very important 
to the success of our program.
    For our solar energy technology program, we're seeking 
$80.3 million, roughly equivalent to the unencumbered amount of 
our fiscal year 2004 appropriations. With this funding, we'll 
continue our work to lower the cost of photovoltaic solar 
energy systems, and for the first time in several years we're 
seeking funding for concentrating solar power technologies.
    Our wind energy technology program has been successful in 
bringing down the cost of electricity generated from wind. Wind 
energy systems have been the fastest growing source of 
electricity worldwide for over a decade, but, of course, as the 
chairman mentioned, that is dependent on the production tax 
credit, which we do hope Congress will extend very quickly.
    We are starting to devote more attention to the promise of 
offshore wind and our focus on wind energy has shifted to 
larger blades and turbines using advanced materials that will 
allow economically viable wind development in lower wind speed 
areas that are distributed across the country.
    For our hydropower technology work, we request $6 million, 
a $1.1 million increase over the fiscal year 2004 
appropriation. Geothermal, as the chairman mentioned, offers a 
promise as a baseload renewable energy resource, particularly 
in the U.S. West. Our program focuses on exploration and 
reservoir technologies and drilling research to enable industry 
to locate and produce new geothermal fields at greatly reduced 
cost.
    Our biomass and biorefinery system R&D program is focused 
on technologies to transform our domestic biomass resources 
into high value chemicals, fuels, and power. In fiscal year 
2005, we're seeking $72.6 million for activities conducted 
under this appropriation. That's $13.9 million less than the 
fiscal year 2004 amount. However, last year we did receive 
nearly $41 million in earmarks, so we're actually seeking far 
more funding directed toward our biomass and biorefinery R&D 
goals than we received last year.

                           PREPARED STATEMENT

    There are a variety of other programs and activities that 
time doesn't allow me to mention, but for now I ask that my 
full statement appear in the record and I'm happy to answer any 
questions this committee has either today or in the future. 
Thank you, Mr. Chairman.
    [The statement follows:]
                   Prepared Statement of David Garman
    Mr. Chairman, Members of the subcommittee, I appreciate the 
opportunity to testify on the Fiscal Year 2005 President's Budget 
request for the Office of Energy Efficiency and Renewable Energy 
(EERE). My focus will be the renewable energy activities under the 
purview of this subcommittee.
    The research and development activities surrounding and the 
deployment of advanced clean energy technologies are already making a 
difference in the lives of Americans, and they will have an even 
greater impact in the future. The overall EERE budget request for 
fiscal year 2005 is a robust $1.25 billion, an increase of $15.3 
million over the comparable fiscal year 2004 appropriation. For the 
renewable energy programs funded through the Energy and Water 
Development appropriation, the fiscal year 2005 request totals $374.8 
million, a $17.3 million increase over the fiscal year 2004 
appropriation and 30 percent of the total EERE Budget.\1\
---------------------------------------------------------------------------
    \1\ Activities focused on energy conservation are funded through 
the Interior and Related Agencies appropriations bill.
---------------------------------------------------------------------------
    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. 
Our budget is prioritized in accordance with the National Energy Policy 
Report and the Department of Energy Strategic Plan. EERE has also used 
the research and development investment criteria called for in the 
President's Management Agenda to focus our research and development 
dollars on a balanced portfolio of well-planned activities that could 
generate significant public benefits and that require Federal 
involvement to be successful.
    The Office of Management and Budget (OMB) recently announced that 
DOE has made the most progress among cabinet-level agencies in the 
implementation of the President's Management Agenda. OMB recognized the 
Department as the cabinet-level agency ``leading the pack with regard 
to management improvement.'' In support of that, EERE in 2002 underwent 
a dramatic restructuring to streamline program management and 
centralize administration functions with a focus on developing 
consistent, uniform and efficient business practices. We are also 
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. While we are very proud of the accomplishments we have 
made, a great deal of progress remains to be made in all of these 
areas.
       renewable energy programs fiscal year 2005 budget request
    The renewable energy programs included in the Energy Supply account 
and funded within the Energy and Water Development appropriations 
include Hydrogen Technology, Solar Energy Technology, Wind and 
Hydropower Technologies, and Geothermal Technology. Activities in the 
Biomass Program and Intergovernmental programs are funded through both 
the Energy and Water Development and Interior and Related Agencies 
appropriations.
                          hydrogen technology
    The Fiscal Year 2005 Budget Request for Hydrogen Technology is 
$95.3 million, a $13.3 million increase over the fiscal year 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 on an interagency codes 
and standards plan. 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 
$2.25 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 fiscal year 2005 
budget provides funding for innovative storage technologies to be 
pursued under our ``Grand Challenge'' to leading universities and 
national laboratories. ``Grand Challenge'' is our name for a 
competitive solicitation that was directed towards the scientific 
community to get the best minds at our universities and national labs 
to propose research ideas 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 the fuel cell and vehicle 
work funded through the Interior Appropriations bill. Taken together, 
these programs represent the majority of the Federal efforts comprising 
the Hydrogen Fuel Initiative announced by President Bush during his 
2003 State of the Union Address, 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.
    The President's initiative was received by Congress with 
enthusiasm, and we appreciate this subcommittee's support. However, 
while the fiscal year 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, and thus our ability to meet our 
established research targets in the specified timeframes may be in 
jeopardy. The Department looks forward to working with the subcommittee 
to help ensure that projects supported by the Committee are consistent 
with our established goals in an effort to keep our progress on track.
                        solar energy technology
    The Solar Energy Technology program focuses research on advanced 
solar devices that can provide the Nation with a widely available 
domestic energy resource to help meet electricity needs and reduce the 
stress on our critical electricity infrastructure. Efforts are directed 
in the interrelated areas of Photovoltaics, Solar Heating and Lighting, 
and Concentrating Solar Power. The fiscal year 2005 budget request for 
Solar Technology is $80.3 million. This is roughly equivalent to the 
unencumbered amount of the fiscal year 2004 appropriation of $83.4 
million, which included $3.6 million earmarked to specific recipients.
    Photovoltaic research and development seeks to reduce the 
manufacturing cost of highly reliable photovoltaic modules from $2.10/
watt in 2003 to $1.85/watt by fiscal year 2005. The program is focused 
on next-generation technologies such as thin-film photovoltaic cells 
and leap-frog technologies such as polymers and nanostructures. Systems 
engineering efforts seek to increase system durability and develop 
technologies to improve interconnections with the electric grid. The 
fiscal year 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, 
including thin films and next generation materials with potential for 
dramatic cost reductions; and $16.4 million for technology development 
efforts to improve reliability of the entire system, including testing, 
verification, and deployment activities for grid-connected applications 
and analysis of private sector commercialization options.
    The fiscal year 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. The program uses new formulations of lightweight polymer 
materials to modernize solar water heaters, making them easier to 
install, while lowering the cost of solar water heating in non-freezing 
climates.
    Last year, we did not request any funding for the Concentrating 
Solar Power (CSP). 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 fiscal year 2005 to support a more 
thorough investigation of the appropriate R&D course needed to realize 
the potential for CSP. The fiscal year 2005 budget request will 
maintain essential facilities and support work with several States on 
the establishment of 1,000 MW of Concentrating Solar Power in the 
Southwest, while developing a comprehensive program plan to help inform 
the fiscal year 2006 budget development process and a longer term R&D 
plan.
                         zero energy buildings
    Zero Energy Buildings activities develop strategies 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. The fiscal year 2005 budget request for the Building 
Technologies Program funded through the Interior Appropriations bill 
combines this energy research and development with ongoing activities 
in the Buildings program and therefore, no fiscal year 2005 funds are 
requested in this area.
                    wind and hydropower technologies
    Wind and Hydropower research and development supports the Nation's 
fastest growing and most widely used renewable energy resources. These 
technologies emit no air pollution or greenhouse gases, and they 
produce significant amounts of bulk power to help meet America's 
growing need for clean, domestic sources of electricity.
    Since 2000, installed wind turbine capacity in the United States 
has more than doubled, driven in large part by the tremendous 
reductions in cost that have resulted from wind energy research. Our 
research contributed to reducing the cost of electricity generation by 
a factor of 20 since 1982, to 4 cents or less per kilowatt-hour in 
areas with excellent wind resources.
    The fiscal year 2005 budget request for Wind Energy is $41.6 
million, $290,000 more than the fiscal year 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 3 cents per kilowatt-hour 
for onshore systems. It also supports new work in off-shore systems to 
help achieve a cost goal of 5 cents or less per kilowatt-hour. Fiscal 
year 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.
    Hydropower is the most widely used form of renewable energy in the 
world today and accounts for about 7 percent of total electricity 
generation in the United States and over 75 percent of domestic 
renewable electricity generation. The fiscal year 2005 budget request 
for Hydropower Technologies is $6.0 million, a $1.1 million or 22 
percent increase over the fiscal year 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 fiscal year 2005 budget request for Geothermal Technologies is 
$25.8 million, a $300,000 increase from the fiscal year 2004 
appropriation of $25.5 million, which included almost $2 million in 
funds that were earmarked to specific recipients. Geothermal energy 
generates electricity and provides heat for applications such as 
aquaculture, crop drying, and district heating, and for use in heat 
pumps to heat and cool buildings. 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.
    Fiscal year 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. Fiscal year 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. New geothermal State working groups in 
Alaska and California will be added, bringing the number of groups to 
nine.
                  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. With the U.S. Department of 
Agriculture, the DOE biomass program leads the multi-agency Biomass 
Research and Development Initiative that coordinates and accelerates 
all Federal bioenergy research and development in accordance with the 
Biomass Research and Development Act of 2000.
    The 2002 EERE reorganization integrated several bioenergy 
activities into one office to allow a clear and consistent set of goals 
and objectives and increased collaboration with industry. The program 
worked closely with industry to produce a vision and R&D roadmap that 
focuses on the most promising long-term opportunities that, with 
leveraged funding from industry, can realize a goal of establishing the 
first large-scale biorefinery based on agricultural residues by 2010. A 
multiyear technical plan in support of this goal provides a 
comprehensive work breakdown structure with milestones, costs and 
schedule, so that every project is linked to program goals, objectives 
and technical barriers.
    In fiscal year 2005, the Department is requesting $72.6 million for 
biomass program activities in the purview of the Energy and Water 
appropriation, $13.9 million less than the fiscal year 2004 
appropriation. However, it is important to note that the fiscal year 
2004 appropriation included nearly $41 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.
    Biomass activities funded through the Energy and Water 
appropriation focus on advanced biorefinery technologies to produce low 
cost sugars, syngas and pyrolysis oils. In fiscal year 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. Additional 
partnerships may further improve the procession operations leading to 
cheaper biomass-based sugars. Projects to test and evaluate the 
performance and costs of converting corn fiber to fuels and co-products 
will also continue.
                      intergovernmental activities
    Intergovernmental Activities funded through the Energy and Water 
appropriation include a variety of programs to promote renewable energy 
technologies. The fiscal year 2005 request for these programs is $16 
million, an increase of $1.3 million over the fiscal year 2004 
appropriation.
    The International Renewable Energy Program provides technical 
assistance to support sustainable development and emerging market 
economies. These efforts expand the market of U.S. industries and 
reduce the cost of energy to trading partners while improving their 
environment and creating new jobs. In fiscal year 2005, we request $6.5 
million for international activities, a $612,000 increase from the 
fiscal year 2004 appropriation, which included nearly $2.7 million in 
funds that were earmarked to specific recipients. We propose to use 
these funds for a wide variety of partnership activities under the U.S. 
Clean Energy Initiative arising from the World Summit on Sustainable 
Development.
    In fiscal year 2005, we request $5.5 million for the Tribal 
Resources Program, an increase of $594,000 over the fiscal year 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. This primarily involves the development of energy 
efficiency and renewable energy resources on Tribal lands. Projects 
include resource assessments and development plans for energy efficient 
and renewable energy technologies. Technical assistance helps Native 
American Tribes, and Tribal Colleges develop culturally compatible 
energy and economic development plans and strategies reflecting Tribal 
priorities. In addition, the program invests in technical program and 
market analysis and performance assessment in order to direct effective 
strategic planning. Again, this is an area where congressionally 
directed spending totaling $3.2 million, or more than half of our 
funding, inhibits our ability to issue and entertain 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.
                 departmental energy management program
    The Departmental Energy Management Program seeks to improve energy 
and water efficiency, promote renewable energy use, and manage utility 
costs in DOE facilities and operations. The Department owns or leases 
about 11,000 buildings at more than 50 sites across the United States. 
The fiscal year 2005 request for Department Energy Management Program 
activities of $1.97 million, about the same as the fiscal year 2004 
appropriation, will allow continued facility audits to identify energy 
conservation opportunities; provide funding for best practices 
identification and dissemination; and accomplish energy conservation 
retrofits through direct funding and alternative financing.
national climate change technology initiative competitive solicitation 
                                program
    This is the third year we seek funding for the Competitive 
Solicitation Program as part of the President's National Climate Change 
Technology Initiative. The competitive solicitation process will seek 
innovative, novel, high-impact climate change technology options that 
can complement and enrich the existing portfolio of climate change-
related research and applied technology. By stimulating and 
strengthening Federal research in this area, the program hopes to 
inspire private sector interest and international cooperation in a 
sustained collaborative program of research investment aimed at 
accelerating technology development and advancing the administration's 
climate change goals. The Department is requesting $3 million in fiscal 
year 2005 for this initiative.
                     facilities and infrastructure
    This Facilities and Infrastructure budget addresses capital 
requirements for capital projects, equipment and plant maintenance at 
the National Renewable Energy Laboratory (NREL). NREL provides state-
of-the-art research facilities, user facilities, analysis, and 
management of R&D contracts for the Solar, Wind, Geothermal, Biomass, 
and Hydrogen programs within the Energy Supply budget, and does the 
same for the programs in the Energy Conservation budget and 
superconductivity research in the Office of Electricity Transmission 
and Distribution. NREL is home to 1,100 researchers, engineers, 
analysts, and administrative staff, plus visiting professionals, 
graduate students, and interns on a 300-acre campus in Golden, CO, 
occupying five large research buildings and over 200,000 square feet of 
research and administrative space in a neighboring office park.
    The fiscal year 2005 request of $11.5 million will provide $4.8 
million for operation and maintenance funded activities and $6.7 
million for continued construction of the Science and Technology 
Facility.
                           program direction
    Program Direction provides the technical direction and oversight 
resources needed to successfully implement EERE renewable energy 
programs. The budget requests covers Federal staff, as well as 
associated properties, equipment, supplies, and materials required to 
support the management and oversight of programs. Areas funded by these 
requests include information systems and technology equipment; travel; 
public information activities; support service contractors; and 
crosscutting performance evaluation, analysis and planning.
    The fiscal year 2005 budget request for Program Direction in the 
Energy Supply account is $20.7 million, which is $8.3 million more than 
the fiscal year 2004 appropriation. The increase in fiscal year 2005 
will fund activities to develop and strengthen EERE's program 
management and project management practices at both Headquarters and 
field offices. A new Project Management Center that includes the Golden 
Field Office and other EERE field organizations is responsible for 
project management of research and development partnerships, laboratory 
contract administration including the management and operating contract 
for the National Renewable Energy Laboratory, and providing 
procurement, legal, business management, and information resource 
management. This Project Management Center initiative allows our 
Laboratories to devote more time to real research as opposed to 
management oversight functions, and will help our program dollars 
remain focused on research, development, and deployment.
    The proposed increase will also provide full funding for the 
renewable energy programs' share of landlord services at the Golden 
Field Office and its fair share of Information Technology services and 
local-area network operations.
    The budget request also includes $3 million to provide analytical 
and technical support services to the cross-cutting Climate Change 
Technology Program, a multi-agency research planning and coordination 
activity led by DOE.
                               conclusion
    Mr. Chairman, we believe the administration's fiscal year 2005 
budget request for 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.
    This completes my prepared statement, and I am happy to answer any 
questions the subcommittee may have.

                             OFFSHORE WIND

    Senator Domenici. I have a series of questions, but your 
testimony kind of interrupted my thoughts and suggested that I 
ask you a question. When you mentioned offshore activities, 
we've run into a lot of arguing about people wanting more say-
so about where these great big fields of windmills are located. 
In fact, we almost got an amendment on the floor. They were all 
waiting for me to do it and I guess I let them down to give 
local authority to decide yes or no.
    I'm not asking you that question, but I'm saying, is there 
a significant growth in the complaints about where you should 
locate these fields and tell me a little bit about what's 
happening?
    Mr. Garman. Sure. Today the regulatory structure is very, 
very difficult to navigate. There are a variety of State and 
local agencies that one has to deal with if one wants to put 
offshore wind in place. Offshore wind has such great promise 
because it is a tremendous resource that's located very close 
to the population and load centers, particularly on the 
northeast coast of the United States, and we believe wind 
energy could be very competitive there.
    But today, unlike if you're trying to develop offshore 
leasing for oil and gas and you deal with only one agency, the 
Minerals Management Service as the lead agency to develop 
offshore wind you have to deal with several agencies. The Army 
Corps of Engineers is the lead agency, but it is very, very 
difficult to deal with the regulatory structure.
    There is a provision in the energy bill, however, that 
would vest authority with the Department of the Interior to 
begin to manage offshore leasing for wind similar to the way 
they manage it for offshore outer continental shelf leasing.
    Senator Domenici. Well, sir, you mentioned the northeast. 
What's the issue off the shore of Massachusetts?
    Mr. Garman. The Cape Wind Project is a project that is 
probably economically viable today, but there is, of course, 
concern, NIMBYism, some call it, about the impact of the wind 
turbines on the horizon. I think wind turbines are 
aesthetically beautiful, but that's me. Not everybody agrees.
    So we are actually developing the larger technology that 
could be offshore at such a distance that it couldn't be seen 
from shore, and I think that could help ameliorate many of the 
concerns that people have about the aesthetics.
    Senator Domenici. There isn't any need that it be right 
close, but does it get more expensive as you go out?
    Mr. Garman. It does because the water is deeper. But 
particularly in the Northeast, less so on the West Coast, you 
have shallow water that extends 20 or more kilometers offshore. 
The limit today is about 30 meters. If you go deeper than that, 
we don't quite have the technology today to install wind 
turbines.
    Senator Domenici. Okay. Thank you very much. Dr. Orbach.

                           Office Of Science

STATEMENT OF RAYMOND L. ORBACH, DIRECTOR
    Dr. Orbach. Mr. Chairman, members of the committee, I want 
to thank you for your support over the years. I look forward to 
working with you to ensure that our Nation stays at the leading 
edge of science and technology for energy security.
    The Office of Science 2005 budget request is $3.4 billion, 
an increase of $72 million, or 2.2 percent over the fiscal year 
2004 appropriation when congressionally-directed projects are 
taken into account. This request allows the Office of Science 
to carry forward with the Department's and the administration's 
priorities in critical areas of science.
    It 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 report and 
in the Office of Science strategic plan. It increases the 
operation of our user facilities from 92 percent to 95 percent 
of optimum, enhancing our leverage for our construction 
investment. The full details of our budget request are provided 
in the written statement I have submitted.
    By title, let me talk about the highlights of our budget. 
It will keep our Nation on the path to fusion power, with 
important investments in ITER and other fusion programs. It 
will enable investments in leadership-class machines for high-
end computation, essential for America's open scientific 
technological research and economic development.
    The President's request for the Office of Science will fund 
vital research enabling the hydrogen economy. The President's 
request provides funding for long-lead procurement of the LINAC 
coherent light source, an X-ray free-electron laser, which will 
truly provide a new window on nature.

                           PREPARED STATEMENT

    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, which promises to accelerate genomics 
research.
    I would be delighted to answer any of your questions and I 
hope that my testimony can be submitted for the record. Thank 
you.
    [The statement follows:]
                Prepared Statement of Raymond L. Orbach
    Mr. Chairman and Members of the subcommittee, thank you for the 
opportunity to testify today about the Department of Energy's Office of 
Science 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 fiscal year 2005 budget request is $3.4 
billion, a $68.5 million decrease from the fiscal year 2004 
appropriation levels. When $140.8 million for fiscal year 2004 
congressionally-directed projects is set aside, there is an increase of 
$72.3 million in fiscal year 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.
    It 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.

                             OFFICE OF SCIENCE FISCAL YEAR 2005 PRESIDENT'S REQUEST
                                               [B/A in thousands]
----------------------------------------------------------------------------------------------------------------
                                                                                                   Fiscal Year
                                                                 Fiscal Year      Fiscal Year          2005
                                                               2003 Comparable  2004 Comparable    President's
                                                                   Approp.          Approp.          Request
----------------------------------------------------------------------------------------------------------------
Science:
    Advanced Scientific Computing Research...................        $163,185         $202,292         $204,340
    Basic Energy Sciences....................................       1,001,941        1,010,591        1,063,530
    Biological & Environmental Research......................         494,360          641,454          501,590
        Congressionally-directed projects....................         (51,927)        (140,762)  ...............
        Core Biological and Environmental Research...........        (442,433)        (500,692)        (501,590)
    Fusion Energy Sciences...................................         240,695          262,555          264,110
    High Energy Physics......................................         702,038          733,631          737,380
    Nuclear Physics..........................................         370,655          389,623          401,040
    Science Laboratories Infrastructure......................          45,109           54,280           29,090
    Science Program Direction................................         137,425          152,581          155,268
    Workforce Development for Teachers & Scientists..........           5,392            6,432            7,660
    Small Business Innovation Research/Technology Transfer...         100,172   ...............  ...............
    Safeguards and Security..................................          61,272           56,730           67,710
                                                              --------------------------------------------------
      Subtotal, Science......................................       3,322,244        3,510,169        3,431,718
Use of prior year balances...................................  ...............         -10,000   ...............
                                                              --------------------------------------------------
      Total, Science.........................................       3,322,244        3,500,169        3,431,718
      Total, excluding Congressionally-directed projects.....      (3,270,317)      (3,359,407)      (3,431,718)
----------------------------------------------------------------------------------------------------------------

    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.''
    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 fiscal 
year 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
    When I joined the Office of Science after a career as a university 
scientist and administrator, I came with an appreciation for the four 
key roles that the Office plays 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 United States at the 
forefront of intellectual leadership, supporting the core capabilities, 
theories, experiments, and simulations to advance science.
    This fiscal year 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. 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 fiscal year 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 SC, 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 Fiscal 
Year 2005 Request.
                            science programs
                 advanced scientific computing research
Fiscal Year 2004 Comparable Appropriation--$202.3M; Fiscal Year 2005 
        Request--$204.3M
    The Advanced Scientific Computing Research (ASCR) program 
significantly advances scientific simulation and computation, applying 
new approaches, algorithms, and software and hardware combinations to 
address the critical science challenges of the future, and provides 
access to world-class, scientific computation and networking facilities 
to the Nation's scientific community to support 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 fiscal year 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
Fiscal Year 2004 Comparable Appropriation--$1,010.6M; Fiscal Year 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 fiscal year 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 (NSRC's) and a Major Item of 
Equipment for the fifth and final NSRC. NSRC's 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 
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 fiscal year 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
Fiscal Year 2004 Comparable Appropriation--$641.5M; Fiscal Year 2005 
        Request--$501.6M
    The Biological and Environmental Research (BER) program advances 
energy-related biological and environmental research 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 fiscal year 2005, the Department 
requests $501.6 million for BER. The fiscal year 2004 appropriation 
includes $140.8 million of one-time Congressionally-directed projects, 
for which no additional funds are being requested in fiscal year 2005.
    Research on microbes through the Genomics: GTL program, addressing 
DOE energy and environmental needs, continues to expand from $63.5 
million in fiscal year 2004 to $67.5 million in fiscal year 2005. The 
request also provides $5 million for initiation of Project Engineering 
Design (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
Fiscal Year 2004 Comparable Appropriation--$262.6M; Fiscal Year 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 United States 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 fiscal year 2004 enacted 
level. Within that amount, $38 million is requested for preparations 
for ITER in fiscal year 2005, $30 million more than in fiscal year 
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.
    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
Fiscal Year 2004 Comparable Appropriation--$733.6M; Fiscal Year 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 fiscal year 2005, the Department requests $737.4 million for 
the HEP program, an increase from fiscal year 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 fiscal year 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 fiscal year 2005 on the proposed Supernova Acceleration 
Probe (SNAP) experiment for the DOE/NASA Joint Dark Energy Mission 
(JDEM).
                            nuclear physics
Fiscal Year 2004 Comparable Appropriation--$389.6M; Fiscal Year 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 fiscal year 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 fiscal year 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 3 months of operations in fiscal year 2005 to complete its 
research program. This facility closure follows the transitioning of 
operations of the Lawrence Berkeley National Laboratory 88-Inch 
Cyclotron in fiscal year 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
Fiscal Year 2004 Comparable Appropriation--$54.3M; Fiscal Year 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 fiscal year 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. Health and safety improvements to address OSHA- and NRC-
identified deficiencies and recommendations at Office of Science 
laboratories are expected to be completed in fiscal year 2004.
                        safeguards and security
Fiscal Year 2004 Comparable Appropriation--$56.7M; Fiscal Year 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 fiscal year 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 fiscal year 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
Fiscal Year 2004 Comparable Appropriation--$6.4M; Fiscal Year 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 fiscal year 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 from minority serving institutions (MSI's). 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
Fiscal Year 2004 Comparable Appropriation--$152.6M; Fiscal Year 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 for SC employees in which their 
success and high performance can continue in the face of changing 
resources, requirements, and societal needs.
    The fiscal year 2005 budget request of $155.3 million represents a 
1.8 percent increase over the fiscal year 2004 enacted level. This 
increase is reflected in salaries and benefits to support a total SC 
workforce of 1,014 full-time equivalents (FTE's). Compared to fiscal 
year 2004, the fiscal year 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 reengineering 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, Mr. Chairman, for providing this opportunity 
to discuss the SC'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.

    Senator Domenici. Is this your product?
    Dr. Orbach. Yes, it is, sir.
    Senator Domenici. Facilities for Future of Science 20-Year 
Outlook. I think it's terrific.
    [Clerk's Note.--The document entitled, ``Facilities for the 
Future of Science: A Twenty-Year Outlook'' can be found at 
http://www.sc.doe.gov/sub/Facilities_For_Future/20-Year-
Outlook_screen.pdf.]
    Dr. Orbach. Thank you.
    Senator Domenici. I'm very sorry that it doesn't get more 
use and more exposure and maybe you might just tell me, how 
does it get around?
    Dr. Orbach. Well, we've been distributing it at each of the 
meetings that I attend around the country. We have made major 
press announcements and we have submitted it to scientific 
organizations not only in the United States but also abroad.
    Also our current budget request enables us to begin the top 
six of our priorities at different stages depending on R&D, so 
we're beginning to put it into play.
    Senator Domenici. Great.
    Dr. Orbach. Thank you for your comment.
    Senator Domenici. Mr. Magwood, would you proceed with kind 
of dispatch on your statement, because we've got a lot of 
questions.

            Office of Nuclear Energy, Science and Technology

STATEMENT OF WILLIAM D. MAGWOOD, IV, DIRECTOR
    Mr. Magwood. Be happy to, Mr. Chairman. I do have a written 
statement for the record. Let me very briefly summarize my 
remarks because I know you're very familiar with our program 
activities.

                      NUCLEAR ENGINEERING PROGRAMS

    I want to take a look back. When you think about where we 
started from back in 1998, when you and I spoke about the 
pretty dire situation facing the nuclear energy program run by 
the Federal Government, at that time our research budget 
plummeted to zero; students entering nuclear engineering 
programs had gone down to 500 from 1,500 just a few years 
earlier; and many countries that had seen the United States as 
a principal partner for nuclear energy research and development 
had turned away from us and had begun to think of the United 
States as being basically a past partner.
    Over the last several years, this has turned around 
significantly. I think there's been a lot of success to look 
back on. Looking at it today, the number of nuclear engineering 
students now are 1,400 in universities across the country. This 
is a huge accomplishment considering where we were a few years 
ago.
    Senator Domenici. How many?
    Mr. Magwood. One thousand, four hundred. Almost as----
    Senator Domenici. Studying what?
    Mr. Magwood. Nuclear engineering. So that's almost 
completely reversed from the climate of the 1990's.
    Senator Domenici. But now we went like that and we're going 
to stop growing.
    Mr. Magwood. No, we want to keep growing. We think we're in 
good shape. As a matter of fact, we are actually starting new 
programs in nuclear engineering across the country at schools 
like the University of South Carolina, South Carolina State and 
even--I'm sorry that Mr. Reid's not here--University of Nevada 
Las Vegas is looking at starting a new nuclear engineering 
program.
    On our side, the research that we're pursuing in Generation 
IV nuclear power systems has really taken off. We're working 
with our international partners very closely and we're very 
optimistic about the direction that that work has taken.

                           PREPARED STATEMENT

    You may know, Mr. Chairman, that I was recently elected 
chairman of the Generation IV International Forum and also the 
OECD steering committee on nuclear energy, and in those 
positions I've been able to really leverage our activities with 
those of our international partners; and we think that the 
ability to work with our international partners to pursue 
advanced technologies, including the possible pursuit of a 
project at our Idaho site to look at an advanced hydrogen 
electricity production reactor, is something that's well within 
our grasp.
    So I'll just leave it at that. We've appreciated your 
leadership over the years and look forward to any questions you 
have.
    [The statement follows:]
              Prepared Statement of William D. Magwood, IV
    Mr. Chairman, Senator Reid, and Members of the subcommittee, it is 
a pleasure to be here to discuss the fiscal year 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 fiscal year 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 fiscal year 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 11 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 fiscal year 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 thermo-chemical 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 fiscal year 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 fiscal year 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 
United States 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 United States 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 fiscal year 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 fiscal year 2005 to demonstrate, in cost-shared cooperation with 
industry, key regulatory processes associated with licensing and 
building new nuclear plants in the United States 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 fiscal year 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 fiscal year 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 United States 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 fiscal year 2002. In fiscal 
year 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 fiscal year 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, Mr. Chairman. I am sure that you 
have noticed that no funding is requested for the Nuclear Energy 
Research Initiative (NERI) in fiscal year 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 fiscal year 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.

    Senator Domenici. Thank you very much. Well, the fact that 
we've started at nothing and put these things in is a good 
thing to repeat, but it's pretty pathetic when you note that 
most of them were things everybody knew we needed. It wasn't 
like this was a vision from on high, and every year because 
they didn't come out of the administration made it harder and 
harder to fund them. And now when we get a tighter and tighter 
budget, it's, you know, they're the easiest ones to choke.
    So, you know, you're getting 20 and 30 percent cuts in 
yours, while over here on the side they're saying we're for 
nuclear energy, right? You don't have to comment. You work for 
the administration.

                   STATEMENT OF SENATOR PATTY MURRAY

    Senator Murray, I note you're on a tough time schedule and 
I'm most appreciative you would come today so I yield to you.

            PACIFIC NORTHWEST NATIONAL LABORATORY FACILITIES

    Senator Murray. Well, thank you very much, Mr. Chairman. 
Thank you for your tremendous work on this committee over the 
years and your leadership in many directions. I just have a 
couple of questions for Dr. Orbach today. Dr. Orbach, you note 
the Pacific Northwest National Laboratory, PNNL. In my State 
it's one of the Department of Energy's multi-program 
laboratories and is under your stewardship at the--as Director 
of Science.
    PNNL is a very valuable asset to the State of Washington 
and it's going to be an enduring asset to the Tri-Cities 
community after Hanford clean-up is completed. I think you know 
there's been considerable concern over the schedule for the 
cleaning up of the 300 area and the replacement of the many 
facilities that currently house approximately 1,000 staff at 
PNNL. That space, I think it's 700,000 square feet, represents 
a third of PNNL's total laboratory space.
    The Tri-Party Agreement required clean-up of the Columbia 
River corridor including that 300 area by 2018. As I understand 
it, current proposed clean-up contracts assume a 2012 or 6-year 
earlier completion date. That would require those 1,000 PNNL 
employees to exit the 300 area facility by 2007. This budget, 
the fiscal year 2005 budget, has no funding for replacement 
facilities in the 300 area and I see no scenario where new 
facilities can be in place by fiscal year 2007.
    I noticed in your written testimony you talk a great deal 
about facilities and infrastructure and planning, but I don't 
see any plan from you or DOE on how those facilities at PNNL 
are going to be replaced. As owner of PNNL, Mr. Orbach, what 
are you doing to lead the effort in the Department to seek an 
aggressive program to replace those facilities at PNNL, which 
is your laboratory?
    Dr. Orbach. Thank you, Senator, for the question. We are as 
concerned as you are over the 1,000 staff members who have been 
so productive for our country. I have visited PNNL often and it 
is a magnificent laboratory and your assessment of its future 
is mine as well, and also the community's.
    We have put together some funding from our own budget from 
2003 and from fiscal year 2004, and there are funds in the 
fiscal year 2005 budget which we believe can help in this 
process, but it will require a reprogramming to use the fiscal 
year 2003 and fiscal year 2004 funds and so I hope you will 
help us in the reprogramming request.
    Senator Murray. So would you support a reprogramming in the 
fiscal year 2004 budget for that?
    Dr. Orbach. Yes.
    Senator Murray. You do, okay.
    Dr. Orbach. We may require it for 2003, 2004, and for 2005 
we will reassess our options.
    Senator Domenici. Did you ask him if they had?
    Senator Murray. I was about to. I will.
    Senator Domenici. Good.
    Senator Murray. Had you----
    Dr. Orbach. And I want to say also we're working very 
closely with the contractor, Battelle, to work together to 
provide the facilities for the staff who will be displaced from 
the 300 area. Our target date is October 2007, which as we 
understand it, would be the latest that the Office of 
Environmental Management could begin the clean-up in order to 
satisfy the river corridor agreement that it has by 2012. And 
we believe that by working with Battelle, we can achieve the 
facilities that are required to house the staff. They will be 
new facilities, they will be more efficient facilities, and in 
the long run we hope that this will be a very positive outcome 
for the laboratory.
    Senator Murray. Well, we need to get a reprogramming 
request from you as soon as possible then to get this going 
because in order to replace your facility there we're going to 
have to have some planning in place fairly quickly. And, Mr. 
Chairman, I really am concerned about DOE's initial inability 
to coordinate its clean-up and its science programs, and I 
think we have to be very concerned about DOE's planning process 
for both the labs and the clean-up sites.
    I know that the Secretary's office has become engaged in 
this matter and I've personally spoken with Mr. McSlarrow and I 
appreciate the Secretary and Mr. McSlarrow's involvement. I 
wish it hadn't risen to that level, but I do think we need 
direction from you, reprogramming requests, and to get this 
going because 2007 is not that far off when we're talking about 
an entire facility or large facility there that needs to be--we 
need to know where we're going with that, so I want to hear 
more from you on this.
    Dr. Orbach. You're absolutely right, Senator, and I have 
just met with Dr. Len Peters, the director at PNNL, and we've 
talked about the need to get moving quickly in order to begin 
the planning and construction phase. It's my view that if we 
start now that we can in fact meet that October 2007 date.
    Senator Murray. When do we expect to see the reprogramming 
request from you?
    Dr. Orbach. We need to process it through the Department 
and I'm hopeful that we can get it to you within a month.
    Senator Murray. All right. Well, Mr. Chairman, thank you 
very much. I have some other questions. I will submit them for 
the record and look forward to working with you on this.
    Senator Domenici. You understand if we get that, unless 
there's something I'm not aware of, I will hurry up. It comes 
to me and my friend in the House and we'll try to----
    Senator Murray. I appreciate that very much.
    Senator Domenici [continuing]. Try to hurry it up.
    Dr. Orbach. Thank you.
    Senator Murray. Thank you.
    Senator Domenici. Senator, would you like to inquire, 
Senator Craig?

                    STATEMENT OF SENATOR LARRY CRAIG

    Senator Craig. Thank you, Mr. Chairman. I apologize for 
running late.
    Senator Domenici. I haven't asked any questions yet, but I 
would like to yield to you for a few remarks.
    Senator Craig. Well, why don't we move right ahead into the 
questioning? You proceed with questions and then I'll come to 
questions. That would be appropriate.
    Senator Domenici. I was going to make an observation since 
this was the first time off the Senate floor this year that we 
have your presence at a committee hearing and I want the record 
to reflect that we have a very distinguished Senator here. He 
has a big record. Yesterday he completed work on a bill where 
he spent more time, took more amendments, defeated more 
amendments, all in pursuit of the bill that he wanted, that 
many wanted, only to find that in the end he had to vote 
against the bill.
    Senator, I had been leaving for a little while and taking 
naps, so when I came in, my staff said, it's very important you 
be here for the last vote because it's an important thing for 
your constituency, as you might recall, you were there. And I 
walked in and made the wrong vote. I voted aye because I had 
been wanting to help pass that bill. It turned out everything 
had kind of blown up and you were advising everyone to vote no. 
How many no votes? Everybody?
    Senator Craig. Ninety-something, yes. I don't think it was 
a demonstration of my power whatsoever. I wish it were, Mr. 
Chairman.
    Senator Domenici. It was.
    Senator Craig. But I will tell you, in the words that I've 
been here working with you and a good many other of our 
friends, I've learned a few lessons, and I've also learned that 
something that goes bad does not necessarily get better and 
that you have an opportunity to stop something and that's what 
I did yesterday.
    Senator Domenici. Yes.
    Senator Craig. Because it had grown worse than we had hoped 
it would be and because of the rules of the Senate, something 
those who want to obstruct can obstruct absolutely. We found 
that on a couple of issues that you and I had been working on 
in recent times and some of our friends on the other side I 
think have determined that this is a year of total 
obstructionism, and so we're going to have to work our way 
through those problems. Thank you.
    Senator Domenici. I do want to tell you, Senator, I'm most 
appreciative of all your work that you've put into the energy 
bill, and there's a nice story out today that the Minority 
Leader expects a victory on the floor and so it's just a matter 
of when. No, there are going to be some Senators like the ones 
you mentioned that wanted to obstruct that bill, but how many 
days are they going to get on it to make our leader frustrated? 
I don't know. I don't think it's going to frustrate him if they 
take a few days because he's made up his mind that he wants to 
send this bill to the House so that the Senate can at least go 
on record that they've produced one.

                           SCIENCE PRIORITIES

    Having said that, let me move quickly. Dr. Orbach, can you 
explain to me the department's priorities contained in this 20-
year plan and how they were selected? Can you do that very 
quickly?
    Dr. Orbach. Yes, thank you, Mr. Chairman. We began an 
initial process in my office through our Associate Directors 
who headed each of our six programs. That set of 
recommendations is important because it began first with the 
research money. We took into account the energy bill 
authorization level and subtracted from the out-years the cost 
of doing research. The reason I stress that is that these 
facilities are not meant to displace our ability to do 
research. Research comes first. They then provide us the 
ability to do that.
    With the recommendations from the Associate Directors, we 
went out to our advisory committees, and what you see today 
reflects the advice, priorities that the advisory committee set 
with regard to the importance of the science. This is a 
science-driven prioritization.
    I then had over 50 recommendations from the advisory 
committees and I had to make them fit under the energy bill's 
authorization levels and I had to make them fit also with 
regard to time, and when we got done we had 28 facilities that 
survived.
    I was in the unenviable position of having to prioritize 
across fields, but the response of the community has been very 
positive and I believe that the scientific community is very 
supportive of this prioritization.

              Z MACHINE APPLICATION TO THE SCIENCE PROGRAM

    Senator Domenici. Thank you very much. Now let me ask you a 
question about something technical and see if you can agree to 
do something for us. Sandia National Laboratory has developed a 
power plant concept known as the Z machine. You must have heard 
of it. It has made all kinds of news, including the front page 
of Time magazine. Shortly after we had agreed to pay for NIF 
over in California because the Z hadn't quite made it, we got a 
big announcement that Z was ready to go. What we've got now is 
about $3 billion invested in NIF and we've got Z going, a 
little cheap machine.
    This machine is the world's most powerful x-ray source, and 
extensive experiments have led the technology to make 
breakthroughs that lead to record fusion neutron yields. 
Although this program has been funded by NNSA, and that's part 
of the nuclear preparedness program of the country, the low 
cost and high efficiency seem attractive to the development of 
commercial fusion power. In fact, this facility has been 
identified by the Fusion Energy Science Advisory Committee as 
one of the three promising approaches to internal fusion 
energy.
    I would greatly appreciate it if you would visit Sandia and 
spend some time with the scientists associated with Z and would 
be willing to visit the facility. After you've done that and 
had the opportunity to evaluate it, I would be interested in 
your thoughts on its application to the science program. Can 
you do that?
    Dr. Orbach. Yes, Mr. Chairman, I'd be delighted. I've been 
briefed on the Z-Pinch machine. It is a magnificent 
accomplishment and I am scheduled to visit Sandia on the 24th 
of May.
    Senator Domenici. That's great.
    Dr. Orbach. And I will be spending a good portion of my 
time there to talk to the people on the Z-Pinch. They have some 
very clever ideas for renewing it with a liquid wall, which 
might help in the fusion energy area.

                        GENOMES TO LIFE PROGRAM

    Senator Domenici. I have a question with reference to ITER, 
but I'll just submit that and I'll move on to Genomes to Life. 
This project focuses on the utilization of genome maps and 
understanding of genome, or genomic functions in seeking 
solutions to DOE missions. Funding increases by $4 million to 
$67 million from its inception. It's accurate to say that the 
entire program was created by virtue of a discussion which very 
few people know about which took place in my office with a very 
distinguished scientist named Charles DeLisi. You may or may 
not know him but he was with the NIH.
    He decided he didn't like the NIH because they didn't like 
genome research, believe it or not. Think of that. They covet 
it today as their great baby, but they literally didn't want to 
do it, so he left and went to the Energy Department. He came to 
my office and talked me into funding it. Believe it or not, 
when I got it funded, NIH decided that they should too, so it 
turned out--you wonder why DOE and NIH are in it, that's why, 
because I introduced a bill, put it all in DOE, and that 
brought the people who are for NIH to my office and we changed 
the bill so they both got funding. Great things happened much 
quicker than expected in producing the genome mapping of the 
human system. You're aware of that.

                  PROTEIN AND MOLECULAR TAGS FACILITY

    I note that you plan to start project engineering and 
design for dedicating a facility, a facility for the production 
and characterization of protein and molecular tags. I 
understand that you will conduct a competition for the site of 
that facility. What's the status of that competition? How will 
this benefit the Genomes to Life program?
    Dr. Orbach. First of all, Mr. Chairman, I want to thank you 
for your support----
    Senator Domenici. You're welcome.
    Dr. Orbach [continuing]. Of genomics and the Genomes to 
Life program. It has been a tremendous success. What this 
project does is to take us from the structural elements that we 
have been able to study through our sequencing to the dynamics 
of how cells actually function, and this particular factory 
will produce, as you noted, proteins for our scientists in the 
United States which are tagged.
    We are currently in the final stages of preparing the 
competition amongst all of the DOE laboratories for the 
facility, and we are working towards the formal RFP as we 
speak.

                             GENOME SCIENCE

    Senator Domenici. How do you generally, for 2 minutes, 
think genome is going? The evolution of the genome science, is 
it going well?
    Dr. Orbach. It's going wonderfully. The relationship with 
NIH is as you described it. The DOE has the ability to create 
these large-scale machines using, as you said in your opening 
remarks, the physical sciences that we have available. This is 
truly a factory. This will produce proteins that are tagged so 
there will be a common way of identifying them and visualizing 
them in cellular function. Your assistance and really 
initiation of this project has had phenomenal impact.
    Senator Domenici. You know, it's interesting when people 
look around and read from time to time some experts tell us, 
Greenspan testifies and my friend, Senator Craig, gets a hold 
of it and goes to the floor and gives a speech because 
Greenspan says productivity went up 8.2 percent and it doesn't 
bother him because he doesn't have too much hair, but people 
that have got a lot of hair, they go bald-headed when they hear 
such a thing. That's incredible.
    But I'll give you an example. We produced the entire 
mapping of the protoplasm of the human genome in half the time 
predicted when we started the program, half. It was supposed to 
take 20-plus years, it took 10. Why? Well, because the machines 
that we used to do it, computers, were never imagined to have 
the capacity in such a short time that they had. That's a 
perfect example of productivity. The productivity was 
incredible in producing the mapping of the human genome, wasn't 
it? It was so big that it caused us to produce the most complex 
set of information in half the time, which is the genome 
mapping of the human body.
    I think we haven't even come close to its utility, is that 
correct?
    Dr. Orbach. Absolutely, and what you've said is true in 
spades. The sequencing facility we have in Walnut Creek used to 
cost $2 a base pair to sequence. It now costs two-tenths of a 
cent, so it's a factor of 1,000 increase in productivity that 
this factory has achieved. It can now sequence two human 
genomes a year.
    Senator Domenici. Entirely?
    Dr. Orbach. Entirely, so that 10 years is now compressed 
into 6 months.

           ADVANCED REACTOR HYDROGEN CODE GENERATION PROJECT

    Senator Domenici. Just a couple more. This one has to do 
with Senator Craig and I. Mr. Magwood, general funding under 
the title of nuclear energy, last year as part of the 2004, $15 
million was included in the Generation IV initiative so the 
Department could begin the research, development, design work 
on an advanced reactor hydrogen code generation project at 
Idaho National Laboratory.
    Senator Craig and I sent a letter to Secretary Abraham 
urging him to make a competitive solicitation for this project. 
The response we received, signed by the Secretary, reassuring 
Senator Craig and me that the Department intended to undertake 
this design competition this year. Do you recall that, Senator?
    Senator Craig. I do.
    Senator Domenici. Now, can you please tell us what you have 
prepared for the budget and the schedule for this solicitation, 
and what you believe your funding requirements will be for 
2005? Are the funds requested sufficient to support the 
engineering design of at least two competing concepts as 
spelled out in H.R. 6 prior to selecting the final choice?
    Mr. Magwood. Mr. Chairman, we have been working very hard 
over the last several months since the 2004 appropriation was 
passed to put in place the kind of program that you're 
describing. We do expect to have some sort of solicitation 
available for the industry and others to look at this fiscal 
year, fiscal year 2004, and we believe that the funding that we 
have available in fiscal 2004, and what we have requested in 
fiscal 2005, which by the way is an increase for this activity 
of about $4\1/2\ million over the 2004 request, 2004 
appropriation rather, is sufficient to move forward.
    Obviously, if we move forward with a major project, 
significantly more funds will be needed, but at this stage of 
the game, we believe that what we've asked for is enough.

         WORLD NUCLEAR POWER PLANTS UNDER CONSTRUCTION ON ORDER

    Senator Domenici. I have two other questions for you, Mr. 
Magwood, and then I'll proceed to yield to Senator Craig. One, 
could you get for us at your earliest convenience a current 
status of the construction of nuclear power plants in the 
world? Get us a report that says as of this date, whatever date 
that is, three plants are being built in Taiwan, two in China, 
one somewhere else, so we would know just how many plants the 
world is building, and if you can, tell us what their status is 
and what kind they are, we'd appreciate it.
    Mr. Magwood. Be happy to do that.
    [The information follows:]

                                           WORLD NUCLEAR POWER PLANTS UNDER CONSTRUCTION AS OF JANUARY 1, 2004
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                       Year of
                                                                                                          Capacity     Expected
              Country                        Name                 Location               Type \1\          (MWe)      Commercial          Comments
                                                                                                                    Operation \2\
--------------------------------------------------------------------------------------------------------------------------------------------------------
USA...............................  Browns Ferry 1.......  Decatur, AL..........  BWR..................      1,065         2007    Approximately $1.7
                                                                                                                                    billion is being
                                                                                                                                    invested over five
                                                                                                                                    years to return this
                                                                                                                                    unit, which has not
                                                                                                                                    operated since 1985,
                                                                                                                                    to service.
Argentina.........................  Atucha 2.............  Buenos Aires.........  PHWR.................        962           NA    Suspended
                                                                                                                                    indefinitely.
China.............................  Tianwan 1............  Jiangsu..............  VVER.................      1,000         2004
China.............................  Tianwan 2............  Jiangsu..............  VVER.................      1,000         2005
China--Taiwan.....................  Lungmen 1............  Taipei...............  BWR..................      1,300         2006
China--Taiwan.....................  Lungmen 2............  Taipei...............  BWR..................      1,300         2007
India.............................  Kaiga 3..............  Karnataka............  PHWR.................        202         2007
India.............................  Kaiga 4..............  Karnataka............  PHWR.................        202         2007
India.............................  Kudankulam 1.........  Tamil Nadu...........  VVER.................        917         2007
India.............................  Kudankulam 2.........  Tamil Nadu...........  VVER.................        917         2008
India.............................  Rajasthan 5..........  Rajasthan............  PHWR.................        202         2007
India.............................  Rajasthan 6..........  Rajasthan............  PHWR.................        202         2008
India.............................  Tarapur 3............  Maharastra...........  PHWR.................        490         2007
India.............................  Tarapur 4............  Maharastra...........  PHWR.................        490         2006
Iran..............................  Bushehr 1............  Bushehr..............  PWR..................        915         2005
Japan.............................  Hamaoka 5............  Shizuoka.............  BWR..................      1,325         2005
Japan.............................  Higashidori 1........  Aomori...............  BWR..................      1,067         2005
Japan.............................  Shika 2..............  Ishikawa.............  BWR..................      1,304         2006
North Korea.......................  LWR-Project 1........  Kumho................  PWR..................      1,040           NA    Construction
                                                                                                                                    suspended pending a
                                                                                                                                    decision, to be made
                                                                                                                                    before 12/1/04, on
                                                                                                                                    whether support for
                                                                                                                                    this project by the
                                                                                                                                    Korean Peninsula
                                                                                                                                    Energy Development
                                                                                                                                    Organization (KEDO)
                                                                                                                                    should continue.
Romania...........................  Cernavoda 2..........  Cernavoda............  PHWR.................        655         2007
Russia............................  Balakovo 5...........  Saratov..............  VVER.................        950         2008
Russia............................  Kalinin 3............  Tver.................  VVER.................        950         2004
Russia............................  Kursk 5..............  Kursk................  RBMK.................        925         2006
Russia............................  Rostov 2.............  Rostov...............  VVER.................        950         2007
South Korea.......................  Ulchin 5.............  Ulchin...............  PWR..................        950         2004
South Korea.......................  Ulchin 6.............  Ulchin...............  PWR..................        950         2005
Ukraine...........................  Khmelnitski 2........  Neteshin.............  VVER.................        950         2004
Ukraine...........................  Rovno 4..............  Kuznetsovsk..........  VVER.................        950         2004
                                   ---------------------------------------------------------------------------------------------------------------------
      Total.......................  .....................  .....................  .....................     24,130  .............
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ BWR-Boiling Water Reactor; PWR-Pressurized Water Reactor; PHWR-Pressurized Heavy Water Reactor; LMFBR-Liquid Metal Fast Breeder Reactor; VVER-Soviet-
  designed PWR; RBMK-Soviet-designed boiling water, graphite-moderated, pressure-tube reactor.
\2\ NA-Not Announced.
 Sources: IAEA Power Reactor Information System; Uranium Information Centre/World Nuclear Association; Nuclear News 2004; organization press releases/web
  pages.


                            WORLD NUCLEAR POWER PLANTS ON ORDER AS OF JANUARY 1, 2004
----------------------------------------------------------------------------------------------------------------
                                                                                                      Year of
                                                                                         Capacity     Expected
               Country                          Name                   Type \1\           (MWe)      Commercial
                                                                                                   Operation \2\
----------------------------------------------------------------------------------------------------------------
China...............................  Lingdong 1.............  PWR....................      1,000         2012
China...............................  Lingdong 2.............  PWR....................      1,000         2012
China...............................  Sanmen 1...............  PWR....................      1,000         2012
China...............................  Sanmen 2...............  PWR....................      1,000         2012
Finland.............................  Olkiluoto..............  PWR....................      1,600         2009
India...............................  Kaiga 5................  PHWR...................        489           NA
India...............................  Kaiga 6................  PHWR...................        490           NA
India...............................  Rawatbhata 7...........  PHWR...................        490           NA
India...............................  Rawatbhata 8...........  PHWR...................        491           NA
Japan...............................  Fuikishima 7...........  PWR....................      1,325         2009
Japan...............................  Tomari 3...............  PWR....................        912         2009
Japan...............................  Fuikishima 8...........  PWR....................      1,325         2010
Japan...............................  Higashidori 1-2........  BWR....................      1,320         2011
Japan...............................  Shimane 3..............  BWR....................      1,375         2011
Japan...............................  Tsuruga 3..............  PWR....................      1,500         2011
Japan...............................  Higashidori 2..........  BWR....................      1,320         2012
Japan...............................  Ohma...................  BWR....................      1,350         2012
Japan...............................  Tsuruga 4..............  PWR....................      1,500         2012
Pakistan............................  Chashma 2..............  PWR....................        300         2011
South Korea.........................  Shin Kori 1............  PWR....................        950         2008
South Korea.........................  Shin Kori 2............  PWR....................        950         2009
South Korea.........................  Shin Wolsong 5.........  PWR....................        950         2009
South Korea.........................  Shin Kori 3............  PWR....................      1,350         2010
South Korea.........................  Shin Wolsong 6.........  PWR....................        950         2010
South Korea.........................  Shin Kori 4............  PWR....................      1,350         2011
South Korea.........................  Ulchin __..............  PWR....................      1,350         2015
South Korea.........................  Ulchin __..............  PWR....................      1,350         2015
                                     ---------------------------------------------------------------------------
      Total.........................  .......................  .......................     28,987
----------------------------------------------------------------------------------------------------------------
\1\ BWR-Boiling Water Reactor; PWR-Pressurized Water Reactor; PHWR-Pressurized Heavy Water Reactor.
\2\ Not Announced.
 Source: Uranium Information Centre/World Nuclear Association.

                     ADVANCED FUEL CYCLE INITIATIVE

    Senator Domenici. You know, Mr. Magwood, some of us in this 
Congress are very happy that the President and the Secretary 
have finally come around. They're talking about trying to stop 
proliferation of Weapons of Mass Destruction in the broadest 
sense, stop the proliferation of the great scientists, you know 
about that. We're trying to stop the flow of plutonium, got a 
big program going, highly enriched uranium, we've bought a 
bunch of it from them, a lot of things, cost a lot of money, 
but we've started.
    Now, I am very concerned. With that going and the threat of 
nuclear proliferation, what's the basis for reducing funding 
for this account, Advanced Fuel Cycle Initiative, from $66 
million to $46 million? Would you update the committee as to 
what you hope to achieve this year, when you expect to have a 
project ready for deployment?
    Mr. Magwood. Yes, Mr. Chairman. First, I should say that 
the Advanced Fuel Cycle Initiative really has shown tremendous 
progress over the last several years and continues to show 
progress. For example, we have successfully demonstrated on a 
laboratory scale the separation of pure uranium from spent 
fuel, to the point of 99.999 percent purity.
    We've also demonstrated on a laboratory scale the 
separation of a mixed neptunium/plutonium fuel that we believe 
could form the basis of a new proliferation-resistant 
recyclable fuel for the future, and this work is going to 
continue in increasing scale in fiscal 2005.
    So our primary missions for this program will continue. We 
will continue to make progress. The reduction that you spoke of 
is primarily because we are deferring the project of a large 
commercial-scale facility for UREX+ until we've gained greater 
confidence that this technology is really viable commercially.
    That said, there are--we are going to continue to fund our 
primary missions for the program. That will continue.
    Senator Domenici. Senator Craig.
    Senator Craig. Mr. Chairman, thank you very much. Let me 
use my time both to ask questions and make in positioning those 
questions somewhat of an opening statement, and I'll address my 
questions at you, Bill, and I do thank all the rest of you for 
being here.

                ADVANCEMENT OF NUCLEAR ENERGY TECHNOLOGY

    Bill, your prepared statement starts off by talking about 
the times not so many years ago when this country was very 
close to abandoning advanced nuclear reactor research and 
development. I remember those years very well. As a matter of 
fact, the chairman and I wrote a letter to the then-Secretary 
of Energy, Federico Pena, and we told him this in our letter, 
and I'm going to quote from that letter, that was 1997.
    The Chairman and I said, the coming fiscal year will mark a 
notable event in the history of your agency and its 
predecessors. For the first time since the establishment of the 
Atomic Energy Commission more than 40 years ago, the United 
States Government has no program to further the development of 
nuclear energy for the production of energy. This change, in 
the view of many, of the technology's critics is long overdue. 
However, in the view of many members of the Senate and in the 
view of the Nation's energy experts, the lack of a strong and 
reliant nuclear energy research and development program 
represents a major gap in the Department of Energy's research 
and development agenda.
    The year is now 2004. We've traveled a long way on nuclear 
energy since I signed that letter along with the chairman. I 
appreciate your efforts in the progress we've made and I mean 
that most sincerely, but I must suggest to you that the state 
of our nuclear energy program is nearly as fragile and 
vulnerable today as it was when we sent that letter in 1997, 
and I will further suggest that the nuclear energy budget 
proposal for fiscal year 1995 is as--is a--2005--is a discredit 
to the progress that we've made. I believe the chairman has 
made similar strong statements.

                 INEEL SOLICITATION AND INFRASTRUCTURE

    That's the basis of my following questions, the question 
that the chairman just asked was my first question, and I 
appreciate him asking it. So, having heard that answer, Bill, 
let me ask you this question. Since you will be issuing a 
solicitation, why have you not engaged the experts at the Idaho 
labs, the INEEL and Argonne, that are supposedly DOE's command 
center of nuclear R&D? To my knowledge, you have not engaged 
anyone in the lab in this initiative yet. Is that true?
    Mr. Magwood. In the actual solicitation?
    Senator Craig. In the process.
    Mr. Magwood. In the process, not yet, and that's because we 
are still working within my office to put a plan on the table 
where we can sit down with those lab scientists and discuss the 
ins and outs and the particulars of it. It's been my experience 
that before sitting down with the scientists who are trying to 
deal with very technical issues, it's been my job to set the 
framework as to how to accomplish a particular mission, and 
that's proven successful in the past and that's what we're 
implementing this time.
    Senator Craig. Well, I thank you for that, because the 
Office of Nuclear Energy is currently responsible, I think is 
the lead program office for the INEEL. Because you have this 
lead, most of the costs for supporting the INEEL's 
infrastructure being transferred over to the nuclear energy 
budget, my conclusion is that the nuclear energy budget is not 
growing sufficiently to support the infrastructure that your 
program is becoming responsible for at Idaho.
    I think this leads to a very dangerous situation. You can 
either not support the infrastructure adequately, a program 
that some would say already exists, or you can raid your small 
research budget to support the infrastructure. Over time, the 
nuclear energy program might reach a point where it is doing 
very little research but is merely supporting an aging 
infrastructure. Either way, it is a bad situation for nuclear 
energy, for Idaho, and for the country from my perspective.
    We even had a recent example, I think, with the Advanced 
Test Reactor, the only operating test reactor in Idaho and one 
of the few in the DOE complex. What happened? It was shut down 
because the safety documentation was not up to date. Lack of 
resources, lack of initiative, down goes the reactor. Question: 
Do you believe the budget you are requesting is sufficient to 
fully support the Idaho infrastructure as well as research you 
are charged with doing?
    Mr. Magwood. Senator, I would say that clearly--you use the 
word fragile--and I clearly agree with that. I think that the 
program is at a fragile state at this point in history, but 
nevertheless, still poised for some considerable growth. In the 
case of the infrastructure and research program that we've laid 
out for fiscal 2005, I do believe that it's sufficient to meet 
the primary missions that we've set out for ourselves.
    We have a long way to go to build this laboratory. It's 
going to be a long, hard process that we think will take 10 
years to really accomplish. So while this fiscal year 2005 
budget request is a first step, a fragile first step, it is 
only the first step, and I think that what we do in fiscal 
years 2006 and beyond will probably be more important to the 
future of the laboratory than what we've done in 2005.
    Senator Craig. Well, I guess my greatest concern, one last 
comment----
    Senator Domenici. Sure.
    Senator Craig [continuing]. Mr. Chairman, it is that 
tearing down and then building back can be a very expensive 
process, one that I doubt this country could afford to do or 
would be willing to do. Sustaining and building on a sustained 
base is something that we can afford to do and should.
    Now finally, I have many concerns, I think, with DOE's 
request for the proposals for the Idaho lab. This is not, I 
think, the forum to explore all of those concerns, but let me 
say this. The Idaho congressional delegation will be sitting 
down with the Secretary. We are very concerned about DOE's 
draft RFP. It does not reflect, we believe, the principles 
necessary to build a sustainable new mission. We--and I say 
this, Mr. Chairman--I know that Los Alamos is facing a 
recompetition in its operating contract in the near term.
    Senator Domenici. Yes.
    Senator Craig. I think that we have at stake some very 
important issues to address with DOE as we craft RFP's for the 
sustainability and growth of these laboratories. So I say that 
as now not just an observer, but one who's fully engaged in an 
RFP that--the devil is in the details, and we're very much 
focused on the details.
    I thank you very much, Bill, to all of you thank you much. 
Mr. Chairman, thank you.

                  ENERGY EFFICIENCY PROGRAM DIRECTION

    Senator Domenici. Mr. Garman, did we fail to ask you 
something that is important in your opinion that you want put 
on the record?
    Mr. Garman. I would like to mention one thing, Mr. 
Chairman.
    Senator Domenici. Please do.
    Mr. Garman. And I appreciate the opportunity. You said 
something a little earlier about gaining control of the program 
and understanding and being able to be accountable for the 
things we spend----
    Senator Domenici. Yes.
    Mr. Garman [continuing]. And to assure the taxpayers are 
receiving value for their dollars. I think the committee will 
note that we have sought an increase in funding for program 
direction, which is not a very popular thing to do and a very 
difficult thing to talk OMB, much less the Congress, into 
doing.
    But we've done that and we were successful in making our 
case to OMB and we think it's important, because quite frankly, 
we heard what you said in your direction to us in prior 
conference reports that we must have an increased vigilance in 
project management and that we take project management very, 
very seriously. And candidly, in the past we ceded some of our 
responsibilities to contractors and others that we need to re-
federalize to ensure that we're doing a good job. More money 
will actually get to the lab at the bench doing R&D, which is 
the important thing, and so I do leave you with that plea and 
thank you for that opportunity.
    Senator Domenici. Well, thank you. Thank you to all three 
of you and for the record, I'd like to close with two things. 
First, it's my understanding that Senator Stevens from Alaska 
has questions he's going to ask of you. They're going to be 
submitted. Please answer them as quickly as you can. I ask that 
any other questions submitted to you by me or any other members 
of the committee receive your response within 2 weeks, and 
again, I said if you can't do it, tell us so we don't sit over 
here getting mad at you for not doing your work. The record 
will be left open for 2 weeks for members to submit questions, 
so watch for them also.

                             YUCCA MOUNTAIN

    Senator Craig, I would just like to talk with you a moment 
about the status of nuclear power in the world and what a 
terrible mistake the United States has made, is making. You 
know, there is nobody, no country trying to build a Yucca 
facility, just America. France has 87 percent of its facility 
from nuclear. Countries have lots of nuclear power. So I ask 
for the record for conversation, that we be able to talk about 
what's even happening today, how many new reactors are being 
built.
    Senator Craig. Good point.
    Senator Domenici. Lots of them. I don't mean 50, but I can 
check off six or eight that I know about. What are we doing? 
Nothing. Every year we have a fight over how much is enough for 
Yucca and we all with bated breath wonder, is the Nuclear 
Regulatory Commission (NRC) going to really license them, 
aren't they?
    And if you go to Europe or France and you'd say, I'd like 
to see your spent fuel rods. Oh, fine, we'll take you. They put 
you in a bus and blindfold you--no they don't, but they could--
and say, we're here and let you out. You walk into this 
beautiful building, looks like a great schoolhouse, modern 
schoolhouse, and once you're in the doors, they say, now you 
can look all around. And you look around and you say, this is 
where all the nuclear waste is, and you say, well, what are you 
talking about. Well, now you can just look down and you look 
down and it's all in the floor in casks, glass casks. Spent 
fuel rods are in there and the whole thing is filled with glass 
of some kind and you walk all over the place and there's no 
radioactivity escaping, it never will, and they may take it out 
of there in 100 years. They plan to get it out in 50 but 
they're wondering how crazy, why do we want to do that and just 
disturb everybody. It's very safe.
    Here we sit with the tail end of this tiger haunting us, 
the greatest engineers in the world. This morning we read we're 
following old Rover around up there on the red planet, right? 
Trying to find out how much water was up there, how many 
thousands of years ago, and America can't find a way to dispose 
of in a safe manner high-level waste so you can build some 
nuclear reactors.
    To me, one of the most astounding failures on the part of 
talent and leadership that the world has ever seen, and we're 
all worried about energy. Now we're going to run out of the 
next one, which is natural gas. We've already run out of crude 
oil, now pretty soon natural gas, and then pretty soon after 
that, who knows? But we've got 15 big power plants in a row 
waiting there, where's my natural gas, right, 15, I think, or 
13, up almost 1,000 kilowatts each. Not a single one plans to 
use coal, geothermal, nothing, all natural gas.
    Well, to me, we have a little bit of a role up here when 
we're in the Senate for a while, we're only here a few years. 
But I tell you, I'm going to continue to make the point and try 
to make the proposition wherever I can that the United States 
must get on with this, and frankly I wouldn't be at all adverse 
right now, as late as it is, to pick a site for interim storage 
and do it. You know, Senator, we've come that close.
    Senator Craig. Oh, yes.
    Senator Domenici. If we didn't have the President we had at 
that point, we would already be building interim storage some 
place and it wouldn't have been the least bit dangerous to 
anybody except those who want to run around and claim that the 
world's dying because there's radioactivity coming out of spent 
fuel. So obviously you can't help but get my lecture.
    Senator Craig. Well, Mr. Chairman, for those of us who 
worry about a variety of issues when it comes to energy, I so 
totally agree with you that we've not only made some missteps 
and some poor judgement over time because of the political 
pressures involved, but we've been unwilling to lead.
    The reason I was late coming here, as I was sitting down 
with the new Minister for Energy from Canada. Canada loves us 
at the moment and they'll continue to love us more because 
we're not developing energy and they are and they're anxious to 
send it south. And I'm glad they're our northern neighbors, 
because if we cannot rely on ourselves, thank goodness we've 
got them to rely on.
    But the consequence of doing that is that the $35 billion 
that flows north today will be $40, then $50, then $60, then 
$80, then $100 billion a year and more, and that's not good 
business that some of that can't stay here. That'll be our 
companies north of the border working with Canadians and 
Canadian companies.

                             CLIMATE CHANGE

    But lastly, I found it fascinating, I was in Milan this 
winter for the climate change conference. The world has 
significantly changed since I was in Belgium a few years ago 
where I was almost--put it this way--a riot almost occurred, we 
almost were succumbed by eggs and pies in the face and all of 
that. Today the world recognizes a folly so defined. The 
Minister of Energy for Italy, now that Italy has ratified the 
Kyoto Protocol, suggests that they can't meet it. In fact, 
their gases today, emissions, are a factor of 5, 4 or 5 percent 
higher than they were at the time. You cannot grow today in the 
world using hydrocarbons without greater emissions and nobody 
wants to die, economically speaking.
    I met with the Minister of Environment for Japan. Japan was 
at 6 percent above 1999 gas emissions at the time they signed 
it. They are now 13 percent and she opined as to how they could 
not meet, and they've even become an aggressive nuclear reactor 
developer.
    So it is significant out there that politics sometimes 
mislead us dramatically, but the reality is that those 
emissions levels cannot be met, because we're driving the world 
toward greater use of hydrocarbon, and unless we advance the 
technologies of their utilization, we don't meet anywhere near 
those standards unless we just turn our economy off.
    Lastly, we met the 1999 standards about 6 months ago, 8 
months ago in this country, and the reason we did was because 
we were in a recession and we reduced our employment by 2.5, 
almost 3 million jobs, and we met the standard or were right at 
it. That's the bad news, so you see they can be met, and for 
those of us who went to the floor and spoke of those realities, 
guess what? We were right. I don't like to be right on those 
kinds of issues, but we were.
    Now, the good news is that we come back--as we come back 
online, and we are, our unit of utilization of hydrocarbons is 
less per unit of production. Our emissions are less per unit of 
production coming back online because the technologies we are 
applying are newer. We're not using less hydrocarbon, we're 
using it differently, and those of us who have advocated 
technology and the application of technology over the years 
again are right as it relates to economic growth development 
and jobs.
    And the combination of the two, and that's what the 
chairman has always driven toward, the development of 
hydrocarbons and the combination of nuclear energy, is the 
right combination. So we're not going to give up on this fight. 
I hope the chairman is right that the Minority Leader will 
support us in the policy you've developed. Our new hurdle will 
be the House again and we'll work closely over there to see if 
we can't get something accomplished this year, but thank you 
for your leadership, Mr. Chairman. It's greatly appreciated.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Domenici. Thank you very much, Senator. I just want 
to say, what one should do as you listened to all statements 
just made by the good Senator from Idaho, we probably ought to 
conclude our remarks by saying we speak of nuclear because it 
has not contributed any of the pollutants we're worried about, 
zero. So it's not like we were for it because we did it once 
and it's our baby. It's because the pollutants that we're 
worried about and the pollutants that are going to ruin China 
come from coal, come from those kinds of products which they're 
going to all have to produce because everybody's scared of 
nuclear. Nuclear produces none excepting fear and trauma from 
those who are scared and question what we do with the waste.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
            Questions Submitted by Senator Pete V. Domenici
                       twenty year facility plan
    Question. Given the strong support demonstrated by the Secretary 
for your 20 year facility plan can you help me understand how this 
budget supports these new priorities?
    Answer. The 20-year facility plan is not a budget document and 
reflects a most aggressive and optimistic view of future funding for 
the Office of Science. Affordability of these facilities will depend 
upon many factors in the future, and the list of facilities may change 
as science priorities evolve and mature. In the fiscal year 2005 
request, funding is provided for the top 5 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. We consider the above facilities to be near-term priorities 
for the next decade.
        international thermonuclear experimental reactor (iter)
    Question. Can you explain why the Department purposefully ignored 
congressional direction in this regard?
    Answer. We believe the Department has not ignored Congressional 
direction because 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. Where appropriate, domestic fusion 
experimental, theoretical and enabling technology research is 
reoriented more toward the needs of ITER. This research is performed by 
existing fusion scientists and engineers. Only a very small amount, on 
the order of $1 million of the ITER preparations request of $38 
million, is for industrial preparations at this time. 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 the domestic fusion 
research is not reduced to any significant extent.
    Question. Can you please update the subcommittee on the ongoing 
negotiations to pick a location for the project?
    Answer. The ongoing negotiations are centered on the two host 
candidates, Japan and EU. These two governments are communicating with 
each other and trying to find a solution. On the periphery, all of the 
negotiating parties are still discussing various technical aspects of 
the two candidate sites; however, this is not likely to be decisive as 
both sites are considered to be fully acceptable.
    Question. What does the funding curve look like for this large 
international project?
    Answer. Assuming the site negotiations are successful and the ITER 
International Agreement is completed, fiscal year 2006 would be the 
earliest time to start the ITER construction project. According to a 
preliminary cost and schedule estimate--which has yet to be validated 
according to the project management guidelines for capital assets set 
out in DOE Order 413.3 and OMB Circular A-11--the profile of the U.S. 
funding share would begin in fiscal year 2006, peak around fiscal year 
2010 at about $190 million, and end in fiscal year 2013.
    Question. How much funding is the United States expected to provide 
on an annual basis going forward and how does that compare with our 
international partners on this project?
    Answer. The U.S. contributions to the project, mainly in the form 
of hardware, but also including some personnel to work on the project 
and some cash for common expenses, would be about 10 percent of that 
required for the total project. That is essentially the same as all of 
the non-host partners.
                 who controls the hydrogen initiative?
    Question. Who is ultimately responsible for the overall hydrogen 
initiative, and what controls will be implemented to ensure the 
taxpayers are getting best deal for the research dollars?
    Answer. Within the Department of Energy, the Offices of Energy 
Efficiency and Renewable Energy (EE), Fossil Energy (FE), Nuclear 
Energy, Science and Technology (NE), and Science (SC) participate in 
the hydrogen initiative. As stated in the DOE Hydrogen Posture Plan, 
the Office of Energy Efficiency and Renewable Energy leads the effort 
and is responsible and accountable for DOE's success or failure in 
carrying out the Plan.
    The Hydrogen Posture Plan includes performance-based milestones 
that will be used to track progress of the hydrogen initiative. Based 
on a recommendation by the National Academies, the Hydrogen, Fuel 
Cells, and Infrastructure Technologies Program is establishing an 
independent systems-analysis activity to help prioritize research, 
evaluate program risks, and ensure that results meet requirements. The 
Program will undergo periodic peer reviews of its plans and research 
such as the one just recently performed by the National Academies.
    The approach of the Department's four offices working together has 
been to:
  --Update internal planning documents annually to support the 
        administration's request for the President's Hydrogen 
        Initiative;
  --Ensure EE, FE, NE and SC budget submissions to OMB support the DOE 
        Posture Plan and that there are no gaps or redundancies in 
        requested budgets;
  --Plan solicitations and evaluate proposals; and
  --Evaluate funded research.
    No conflicts have arisen between the four DOE offices participating 
in the hydrogen initiative thus far. Should conflicts arise in the 
future, the Under Secretary for Energy, Science and the Environment 
will ensure program and budget integration, as all of the Assistant 
Secretaries and Directors of the four offices involved in the effort at 
DOE report to the Under Secretary.
    The Department also works closely with the Department of 
Transportation, which currently has a small role, but whose 
participation will grow more important as hydrogen technologies advance 
toward commercialization.
               r&d vs. funding for demonstration projects
    Question. How is DOE deciding on and managing the balance between 
funding for the necessary research for the required breakthroughs and 
funding for demonstration projects using current technology platforms?
    Answer. A continuum of research and development, from basic science 
to demonstration, will be needed to develop a long-term hydrogen 
economy.
    Basic science will be performed in areas that are only conceptual 
but have the potential for making major impacts. An example would be 
photoelectrochemical production of hydrogen (direct solar conversion 
without the intermediate step of electrolysis). Although conversion 
efficiencies are orders of magnitude too low, the potential benefit is 
great because of the large renewable resource available. This research 
may take decades to come to fruition.
    Exploratory and applied research will be done in areas where there 
is proven performance but a large gap still exists between current 
technology and what is needed to meet consumer requirements. An example 
is hydrogen storage, where approaches such as metal hydrides are 
proven, but we still need improvement factors of two to three times 
current values to meet our requirements. As performance improvements 
are made, cost targets become more important.
    Demonstrations are appropriate when technology has matured to the 
point that system integration issues must be addressed and performance 
under real-world operating conditions must be evaluated. Further 
research or significant progress may still be needed to reduce cost, 
but system performance must be validated. Demonstrations may uncover 
operating issues not previously considered, such as performance in 
certain climates, and will guide and refocus future R&D efforts.
    The National Academies' hydrogen report recommended that the 
Department shift away from some development areas towards more 
exploratory work. Exploratory research involves the application of 
novel ideas and new approaches to ``established'' research topics, and 
is likely to catalyze more rapid advances than basic research and more 
innovative advances than applied research. The Department is doing this 
through the Hydrogen Storage Grand Challenge, which includes the 
establishment of three ``Centers of Excellence'' led by national 
laboratories along with multiple university and industry partners. This 
could be a model for ``expert'' centers focusing on other priority 
research areas.
                   centers for excellence in hydrogen
    Question. How do you plan to fund your soon-to-be announced centers 
for excellence in hydrogen storage, and future R&D efforts?
    Answer. Funding for the Hydrogen Storage Grand Challenge 
solicitation was requested in the fiscal year 2004 budget. However, due 
to the number of and funding associated with Congressionally-directed 
projects in the fiscal year 2004 hydrogen account, no funds are 
available to start the Centers of Excellence and other projects 
selected under the Grand Challenge this year. These efforts will be 
initiated in fiscal year 2005 with fiscal year 2005 funds, subject to 
the availability of funds.
                            storage centers
    Question. Will you start any activity this year for these storage 
centers to begin the important groundwork?
    Answer. No. Due to the number of and funding associated with 
Congressionally-directed projects in the fiscal year 2004 hydrogen 
account, no funds are available to start research in the Centers of 
Excellence and other projects selected under the Grand Challenge this 
year.
                          omb funding request
    Question. Your [EE] budget has an unusually large funding increase 
for Program Funding within the Renewable section. Funding increased by 
67 percent from $12.3 million in fiscal year 2004 to $20.7 million. How 
did you get this funding request by OMB and how do you intend to use 
the funding?
    Answer. Of the proposed $8.4 million increase, $3 million is for a 
new activity, the Climate Change Technology Program (CCTP). These funds 
will generally be used for support services in developing a CCTP 
strategic plan and conducting analyses.
    Excluding this new activity, the increase we request is $5.4 
million, or 44 percent. Much of this proposed increase is in direct 
response to the committee's exhortations that EERE emphasize better 
stewardship through stronger project management and increased 
competition in contracting.
    We plan to spend $3.6 million to hire additional Federal staff in 
order to move away from the practice of using the laboratories to 
oversee their own contracts, cooperative agreements, and grants. We 
believe these inherently Federal activities should be performed by 
Federal employees. Our fiscal year 2005 budget request includes an 
increase of 22 FTE over the budgeted level of 84 FTE for fiscal year 
2004, mostly for project management staff at the Golden Field Office.
    It is important to note that hiring Federal staff instead of using 
laboratory personnel for these 22 FTEs will allow more of EERE's 
funding to be devoted to actual R&D activities. In fact, we calculate 
that filling these 22 FTE positions using laboratory personnel would 
cost roughly $5.8 million, compared to $3.6 million for Federal staff. 
This action will therefore ``save'' an estimated $2.2 million in 
program funding, which is captured in the Program Direction budget 
line. We do not show the ``savings'' by program in the budget 
justification materials because program budgets generally do not 
include a line item corresponding to overhead costs for laboratory 
staff to manage contracts. These costs are built into each budgetary 
line as appropriate. The entire amount of the ``savings'' within each 
program is redirected from formerly unstated program overhead costs to 
actual program activities that contribute to program goals.
    Of the remaining portion of the increase ($1.8 million), $1.2 
million will be used to sustain the current on-board staff level of 84 
FTE. The remaining $0.6 million will be used mostly for support 
services, information technology investments, consolidation of legacy 
business practices and systems, and management services for 
implementing our strategic management system.
                         nuclear energy budget
    Question. Based on this anemic budget should the committee assume 
that the nuclear energy is no longer a priority for this 
administration?
    Answer. The President's budget request increases the funding for 
the Department's nuclear energy program by 1.2 percent to about $410 
million for fiscal year 2005. This budget advances the policy direction 
for the Nation's energy security established by the National Energy 
Policy and allows the Department's priority efforts in programs such as 
Generation IV and the Nuclear Hydrogen Initiative to proceed 
vigorously. The Department's request more than doubles the fiscal year 
2004 request for each of these programs, demonstrating the 
administration's commitment to dealing with not just the short-term 
issues of the energy market, but longer-term, strategic issues.
    In addition, the President's fiscal year 2005 budget also lays the 
groundwork for one very important element of the administration's 
effort to expand our future use of nuclear energy with the creation of 
a new national laboratory, the Idaho National Laboratory. This new 
laboratory's central mission is to pursue research, development, 
demonstration and education associated with nuclear energy.
    Two of the Department's nuclear R&D programs have ended with the 
fiscal year 2005 budget.
  --We request no funding for the Nuclear Energy Research Initiative 
        (NERI) for fiscal year 2005, but the activity will continue as 
        an annual competitive research grants program for university 
        researchers that is tied to mainline programs such as 
        Generation IV and Nuclear Hydrogen Initiative. We believe that, 
        to be relevant, the NERI program must be tied more closely to 
        the Department's mainline nuclear energy programs. We also 
        believe that NERI's greatest benefit is in its support for the 
        Nation's university nuclear technology programs. The 
        restructuring of NERI addresses both of these important 
        concerns.
  --The Nuclear Energy Plant Optimization program has accomplished the 
        most important mission it was designed for: addressing many of 
        the aging material and generation optimization issued which 
        have been identified as the key long-term issues facing current 
        operating plants. We are confident that industry will continue 
        supporting the research objectives highlighted by NEPO because 
        these objectives are consistent with industry's interest in the 
        long-term, reliable, and economic operation of existing nuclear 
        power plants.
    We are requesting less for two other programs:
  --The Advanced Fuel Cycle Initiative requires less funding in fiscal 
        year 2005 because the Department has decided against the rapid 
        development of commercial-scale UREX+ technology. Instead, we 
        are focusing on longer-term, higher-payoff research at 
        laboratory scale in next-generation fuel cycle technologies 
        including advanced aqueous and pyroprocessing spent fuel 
        treatment, advanced transmutation and Generation IV fuels, and 
        detailed systems analysis and modeling.
  --The Department has requested only minimal funding for the Nuclear 
        Power 2010 program in fiscal year 2005 to enable the 
        continuation of ongoing licensing demonstration and related 
        analysis projects. Future requirements for the program will be 
        reviewed as Congress completes work on comprehensive energy 
        legislation and the Department assess the responses and 
        requirements associated with its recent solicitation related to 
        New Plant Licensing Demonstration Projects.
             nuclear energy technologies/nuclear power 2010
    Question. Can you please update me on the status of the Nuclear 
Power 2010 program and explain to me how this money will be used and 
how it will benefit the companies participating in this program?
    Answer. The Nuclear Power 2010 program is a joint government/
industry cost-shared effort to identify sites for new nuclear power 
plants, develop advanced nuclear plant technologies, evaluate the 
business case for building new nuclear power plants, and demonstrate 
untested regulatory processes. These efforts are designed to pave the 
way for an industry decision by the end of 2005 to order a new nuclear 
power plant which will be built and begin commercial operation early in 
the next decade.
    As an initial step in the demonstration of the untested regulatory 
processes, the Department has established cost-shared cooperative 
projects with three nuclear power generating companies to demonstrate 
the Nuclear Regulatory Commission (NRC) Early Site Permit (ESP) 
licensing process. Under these cooperative projects, each of the three 
power generation companies (Dominion, Exelon, and Entergy) prepared and 
submitted, in the fall of 2003, an ESP application to the NRC. The 
program will support the analysis and regulatory interactions required 
to allow the NRC to issue Early Site Permits to all three sites during 
fiscal year 2006.
    In fiscal year 2003, the Department initiated a cost-shared project 
with an additional power company, Tennessee Valley Authority (TVA), to 
evaluate the environmental, seismic and geo-technical suitability of a 
commercial nuclear plant site in Alabama. This project is expected to 
be completed in October 2004 and will provide important input for a TVA 
decision to proceed with ordering and building a new nuclear power 
plant.
    The remaining critical untested regulatory process is the combined 
Construction and Operating License (COL) process. The COL process is a 
``one-step licensing'' process which results in resolution of all 
health and safety issues associated with construction and operation of 
a new nuclear power plant. The importance of this new ``one-step 
licensing'' process is that all regulatory and licensing issues are 
resolved before a power company makes a major investment and begins 
construction of the plant. In fiscal year 2003, the Department 
initiated a cost-shared project with industry to develop generic 
guidance for the COL application preparation and to resolve generic COL 
regulatory process issues. This project will be completed in fiscal 
year 2005.
    In November 2003, the Department solicited power company proposals 
to initiate New Nuclear Plant Licensing Demonstration Projects. Under 
these cost-shared projects, power companies will conduct the necessary 
activities to select an advanced reactor technology and prepare a 
license application to build and operate a new nuclear power plant. 
These projects will also provide for NRC design certification of a 
standardized nuclear power plant design. The Department expects to 
receive two or three and proposals from industry teams.
    This work and a variety of smaller studies in cooperation with a 
range of industry partners will advance the public/private effort aimed 
at the deployment of new nuclear power plants around the beginning of 
the next decade.
    Question. Do you have an estimate as to how much time the DOE 
proposed contribution of $10 million will save companies in this 
licensing process?
    Answer. The Nuclear Power 2010 cooperative licensing demonstration 
projects with the power generation companies has made it possible for 
the companies to seek Early Site Permits (ESPs) and begin planning for 
a combined Construction and Operating License (COL). Successful 
demonstration of the licensing processes will encourage future 
decisions to build new nuclear plants by elimination of industry 
concerns over regulatory risk and reduction in the overall license 
process duration. It is estimated an overall reduction of at least 1 
year in the ESP licensing application and approval process can be 
realized from the current projection of 4\1/4\ years. Similar time 
savings is expected to be realized in the COL licensing process. The 
savings for COL applicants are in addition to more than 2 years in 
savings projected to be realized as a result of having certified 
standardized Generation III+ designs available.
    Perhaps more important than the funding provided to support this 
work is the Department's partnership with the industry in exploring the 
development of new nuclear power plant projects. Without such 
aggressive government support, which flows from the National Energy 
Policy and public encouragement provided by senior administration 
officials, it is possible that industry would be more hesitant to 
pursue these activities.
    Question. Do you have an estimate as to what you believe the 
companies will expend over the next year?
    Answer. As part of the Nuclear Power 2010 program cost-shared 
projects, power companies are expected to invest an amount at least 
equal to DOE spending. For ongoing activities in fiscal year 2005, 
industry is expected to spend at least $4.5 million on the Early Site 
Permit Demonstration projects and an additional $1.8 million for 
generic activities and guidance development for COL applications.
    The Department expects to have a firm estimate of industry planned 
expenditures for fiscal year 2005 and the overall requirement for the 
licensing and development of Generation III+ designs after assessing 
the industry responses to its recent solicitation for New Nuclear Plant 
Licensing Demonstration projects. This solicitation was issued in 
November 2003 and we expect to receive responses from industry in 
spring 2004. The most recent industry estimates provided to the 
Department project an industry cost-share of approximately $60 million 
to $80 million per year through 2010 to obtain a combined Construction 
and Operating License and complete associated first of a kind 
engineering activities.
                       idaho national laboratory
    Question. Following the establishment of the Idaho National 
Laboratory, what role do you see for the other laboratories that 
currently contribute to the nuclear energy program?
    Answer. We anticipate that several of the Department's national 
laboratories will continue to play key roles in implementing the Office 
of Nuclear Energy Science and Technology's research and development 
agenda. While the Idaho National Laboratory will develop a prominent 
and central role in the nuclear energy technology program, the 
expertise and capabilities of several other labs--chiefly Oak Ridge 
National Laboratory and Los Alamos National Laboratory--will be 
essential in the success of our research efforts.
    Question. Do you have a transition plan and budget estimate 
prepared that will guarantee the success of the nuclear research into 
the future and continue to draw on the experience of the other national 
laboratories?
    Answer. The execution of our nuclear energy R&D programs is guided 
by multi-year program plans that have been jointly developed by our 
Federal and national laboratory personnel. These program plans identify 
R&D activities will evaluate undertaking over the next 10 years and 
include estimates of the out-year budgets necessary to carry out those 
efforts. The continued participation of the national laboratories in 
executing the multi-year program plans is essential to the overall 
success of the programs. As an example, the attached chart displays the 
organization of the Department's Generation IV Nuclear Energy Systems 
and Advanced Fuel Cycle Initiative programs--note that this 
organization highlights important roles for several national 
laboratories. We expect that this approach will endure as these 
programs progress.
    The attached chart illustrates the program integration for the 
Generation IV and Advanced Fuel Cycle Initiatives.




    Question. Can you explain what would happen if full funding of $48 
million isn't provided for costs associated with the restructuring of 
the Idaho National Lab restructuring plan?
    Answer. The $43.8 million identified in the President's budget 
request for Laboratory Transition and Restructuring will assure that 
all current INEEL personnel remain employed through the contract 
transition period, thus enabling the new contractors to hire the staff 
that best fit their very different requirements. Without this funding, 
we would not be in a position to facilitate an effective transition of 
the laboratory staff.
    Question. Would funding shortfalls delay the Idaho upgrades or will 
this put the entire nuclear energy R&D effort at risk with further 
delays?
    Answer. Shortfalls in the restructuring request could require the 
Department to explore taking funds taken from the infrastructure or 
other programs at the site including the nuclear energy R&D efforts. 
Alternatively personnel could be terminated before the new contractors 
have an adequate opportunity to review their qualifications.
    Question. The Budget Request includes $46 million for ``one-time 
costs associated with restructuring the Idaho lab.'' Since EM was the 
previous landlord for this Lab, why aren't these one-time costs being 
paid by EM, instead of NE?
    Answer. Most of the workers who may not find immediate employment 
with either new contractor will be support personnel who perform 
landlord type functions that benefit the entire site. As NE is now the 
site landlord, it falls to NE to fund this work since that office 
controls the affected functions.
    Question. The Idaho Lab will have a difficult challenge 
establishing its research programs. In the past, the Idaho Lab could 
tax EM programs for LDRD to fund internal research. Now those EM funds 
are being swept into another contract. I am hearing that future EM 
funds can not be taxed to support the new INL. Is this correct and can 
you explain that logic?
    Answer. The Idaho Cleanup Contract is designed to only fund those 
activities that directly support accelerated cleanup. As the cleanup 
work is not expected to continue indefinitely, it is not appropriate 
for the lab to rely on the cleanup contractor to fund ongoing research 
activities.
    Question. Aren't you worried that the new INL will have too small a 
base of funding to derive any meaningful LDRD funding?
    Answer. We believe that there will be adequate the funding 
available for LDRD projects in the future as the INL becomes a world 
class research center for nuclear technology development.
                          university programs
    Question. How can progress in university programs be maintained 
when the overall pot of R&D funds, for universities and labs is 
slashed?
    Answer. Over the past several years, the Department has had a 
substantial positive impact on the Nation's university nuclear 
engineering programs as evidenced by increasing student enrollments, 
re-establishing stronger academic programs, improving the performance 
and use of their research and training reactors, and attracting 
minorities to the nuclear engineering discipline. The University 
Programs budget for fiscal year 2005 is essentially equal to our fiscal 
year 2004 appropriation when it is considered without the one-time 
funding of $2.5 million for spent fuel transportation. In fiscal year 
2005 the Office of Civilian Radioactive Waste Management will assume 
responsibility for university reactor spent fuel transportation and, 
therefore, the University Programs budget reflects the transfer of this 
activity. Funding for faculty and student research at our Nation's 
nuclear universities remains constant for fiscal year 2005.
    In fiscal year 2005, the Department will integrate researchers from 
the Nation's universities into the Department's mainline nuclear energy 
R&D activities. The Department will use competitive, peer-reviewed 
solicitations focused on the university community to select the best 
ideas for meeting the technology challenges of our various research 
efforts. Funding for this university-based research will be derived 
from the Department's primary nuclear energy R&D programs, including 
the Generation IV Nuclear Energy Systems Initiative, the Advanced Fuel 
Cycle Initiative, and the Nuclear Hydrogen Initiative. Overall, the 
proposed funding for university R&D is $1.8 million higher in fiscal 
year 2005 than fiscal year 2004.
    Question. I was pleased that additional regional consortia, now six 
in total, were created to enable students to have access to important 
research reactors. But how does addition of new consortia match with 
proposed 10 percent cut in the university program budgets?
    Answer. The six consortia, under the Innovations in Nuclear 
Infrastructure and Education (INIE) program, are an unqualified 
success. Funding for this important and highly successful program is 
essentially equal to the level of fiscal year 2004, which supported the 
increase from four to six consortia.
                 louisiana energy services--enrichment
    Question. In written response to questions in last year's review of 
the fiscal year 2004 budget, you stated:

    ``The Administration places a high priority on ensuring nuclear 
nonproliferation safeguards are in place and that access to sensitive 
technology is controlled. The information available to the Department 
indicates that URENCO has acted responsibly with regard to the control 
of sensitive technology and the employment of non-proliferation 
safeguards.
    ``The Department believes that LES's plans for the deployment of 
centrifuge technology in the United States are of considerable national 
benefit. Deployment of an LES plant will help assure the important 
energy security objective of maintaining a reliable and economical U.S. 
uranium enrichment industry.
    ``The Department believes there is sufficient domestic demand to 
support multiple commercial uranium enrichment plant operators in the 
United States and that competition is important to maintain a viable, 
competitive domestic uranium enrichment industry for the foreseeable 
future.''

    Does this response from the Department still stand?
    Answer. Yes, we understand that URENCO continues to follow 
nonproliferation safeguards and controls on access to sensitive 
technology in accordance to agreements with the U.S. Government 
regarding to LES' deployment of centrifuge technology.
    The Department also continues to believe there is sufficient 
domestic demand to support multiple commercial uranium enrichment plant 
operators in the United States and that competition is important to 
maintain a viable, competitive domestic uranium enrichment industry for 
the foreseeable future. Currently, domestic uranium enrichment capacity 
is less than half of U.S. nuclear fuel requirements. Over the next two 
decades, U.S. demand for electricity is forecasted to grow by 50 
percent. Without the deployment of reliable and economical advanced 
technology and assuming nuclear power maintains its current share of 
demand, the share of U.S. nuclear fuel requirements met by foreign 
suppliers could rise to 80 percent in 20 years.
                          radiopharmaceuticals
    Question. Is the Department's policy of requiring that researchers, 
who require new radiopharmaceuticals, pay the full production costs 
coordinated with the National Institutes of Health such that vital 
research in improved applications of radiopharmaceuticals is continuing 
at a rapid pace?
    Answer. The Department's program requires that researchers pay for 
isotope development and direct production costs. Isotope production 
costs are accrued on a batch basis. The Department must obtain funding 
for the direct production cost for each batch before production can 
commence. Research customers have not been able to purchase the 
required isotopes in the manner currently required by the Department. 
Recognizing this and the impact this approach could have on medical 
research, the Department has engaged with the NIH. We are working with 
that agency to develop an approach to address this issue and to ensure 
that vital isotope-based medical research is not impeded.
    Question. Are the two agencies, DOE and NIH in agreement that this 
is the appropriate place for these costs to be borne?
    Answer. There have been positive discussions at the staff level. 
The Department continues to seek an agreement with the NIH that will 
lead to a resolution of this issue.
                          barter arrangements
    Question. As part of DOE's fiscal year 2005 budget request for its 
Nuclear Energy Program, DOE is proposing to employ a ``barter 
arrangement'' to support the continuation of the technetium-99 
activities currently being undertaken by USEC at the Portsmouth Site. 
Please describe the nature of the ``barter arrangement'' that DOE is 
contemplating?
    Answer. At the end of fiscal year 2004, substantial quantities of 
both USEC and the Department's uranium inventories will remain 
contaminated with technetium-99 above the commercial standard for use 
as feed in a uranium enrichment process. Currently, processing the 
uranium at Portsmouth is the only economical means to remove enough 
technetium-99 contamination to allow it to be used as feed to the 
Paducah Gaseous Diffusion Plant. Because the cost to continue the 
technetium-99 removal activities is between one-third and one-half the 
replacement or market value, both USEC and the Department may benefit 
from the continuation of this program. A barter arrangement would help 
achieve realization of the full economic value of the uranium.
    Question. Has DOE completed its evaluation of the need for 
additional legal authority to carry out the proposed ``barter 
arrangement?'' If so, please provide a copy of the evaluation. If not, 
when will this evaluation be completed? When it is completed, please 
provide a copy.
    Answer. The Department has performed an informal evaluation and 
concluded that an additional authorization is not needed. Under section 
3(d) of the Atomic Energy Act (AEA), the Department is to effectuate 
programs that encourage the ``widespread participation in development 
and utilization of atomic energy for peaceful purposes.'' All of the 
material, with the exception of Freon, that is currently being 
contemplated for barter is ``source material'' as defined by section 
11(z) of the Atomic Energy Act (AEA). Under section 63 of the AEA the 
Department is authorized to distribute source material, and under 
section 66 of the AEA the Department is ``authorized and directed . . . 
to effectuate the provisions of this Act'' to purchase or otherwise 
acquire supplies of source material. In addition, under section 161(g) 
of the AEA the Department is authorized to acquire, sell, lease, grant 
and dispose of real and personal property that the Department has 
acquired in connection with carrying out functions under the AEA or 
property that will be used to carry out objectives under the AEA. 
Pursuant to these existing authorities, the Department is authorized to 
enter into any of the barter arrangements that are currently being 
contemplated.
    Question. What products or services is DOE contemplating using as 
``barter'' under the proposed arrangement? Is DOE considering the 
option of transferring uranium from DOE's stockpile to USEC as part of 
a ``barter arrangement?''
    Answer. The products or services being considered for a possible 
barter arrangement are excess assets related to the Department's former 
uranium enrichment program, or services that are incidental to 
activities necessary to the final disposition of that programs legacy. 
The selection of materials is subject to negotiation and agreement by 
the other party.
    Question. Section 3112 of the 1996 USEC Privatization Act includes 
a provision that explicitly requires DOE to undertake an evaluation of 
the impact of any sales or transfers of natural or low-enriched uranium 
on, among other things, the domestic uranium mining, conversion, and 
enrichment industry. In the event that any ``barter arrangement'' were 
established employing uranium from DOE's stockpile, would DOE agree 
that the provision in section 3112(d) would apply to any such transfer? 
Does DOE consider a ``sale or transfer'' to include a ``barter''? If 
so, please provide the analysis to support this conclusion.
    Answer. The Department is not currently considering proposing to 
barter material that is subject to subsection 3112(d). However, if the 
Department were to use material subject to 3112(d), it would comply 
with the provisions of 3112(d). ``Sale or Transfer'' is a broad term 
which encompasses arrangements in addition to normal commercial sales 
such as barter transfer.
    The Secretary is sensitive to his responsibility for the domestic 
uranium industry as detailed in the USEC Privatization Act and 
subsection 1014 of the Energy Policy Act of 1992, and has carefully 
considered the proposed activities. In addition to restoring the 
economic value to contaminated uranium inventory, any barter proposal 
would sustain 154 workers employed during fiscal year 2005 in the 
domestic uranium industry.
    Question. Section 3112(d) also requires the recipient of any such 
uranium sales or transfers to pay the ``fair market value of the 
material.'' In a barter arrangement, how would DOE address this ``fair 
market value'' requirement?
    Answer. The Department is not contemplating a barter of material 
that is subject to subsection 3112(d). However, the barter would be an 
arms' length transaction for value that would take into consideration 
the ability to monetize the asset in a fashion adequate to meet the 
financial needs necessary to provide the services at the Portsmouth 
facility.
                ceramic ion transport membranes project
    Question. For the past 7 years the DOE-Office of Fossil Energy (FE) 
and Office of Energy Efficiency and Renewable Energy (EERE) have 
supported a development project that uses ceramic Ion Transport 
Membranes (ITM) to produce hydrogen from natural gas. Selected through 
a competitive solicitation in 1997, the ITM Syngas project has been co-
funded since that time by DOE-FE (75 percent), and DOE-EERE (25 
percent). However the fiscal year 2004 funding for the project was 
reduced by EERE from $1.3 million to $200 thousand. The ITM Syngas 
project is currently in Phase 2 with the objective of operating a Sub-
scale Engineering Prototype (SEP) that will demonstrate full conversion 
of natural gas to synthesis gas. Achieving this objective is critical 
to gaining the technical understanding to proceed to the project's next 
phase, a pre-commercial demonstration of the ITM Syngas technology. 
From the beginning of the project, EERE had committed to supporting the 
project through the end of Phase 2, and financial participation through 
completion of the SEP demonstration is necessary to maintain the 
project on schedule. After demonstrating full product conversion in the 
ITM Syngas process, smaller units could be developed that would be 
amenable to distributed hydrogen production.
    In view of this critical stage of the ITM Syngas project, will DOE-
EERE revise its fiscal year 2005 budget to provide $1.3 million for the 
project?
    Answer. The ITM Syngas project was one of several hydrogen 
production projects for which EERE funding was reduced in fiscal year 
2004 due to a shortfall caused by the large number of Congressionally-
directed projects. The Department plans to meet its total obligations 
identified in the ITM cooperative agreement, subject to Congressional 
appropriations, the extent of fiscal year 2005 Congressionally-directed 
projects, and the results of the annual merit review that helps to 
guide our prioritization of research projects. EERE will determine its 
fiscal year 2005 contribution to the project following the completion 
of the fiscal year 2005 appropriation process.
                                 ______
                                 
              Questions Submitted by Senator Thad Cochran
                 biomass r&d and national laboratories
    Question. Mr. Garman, you mention in your written testimony that 
the Department is interested in working with industry and the National 
Laboratories to reach your goals of a large-scale biorefinery and 
advanced technologies to transform the Nation's domestic biomass 
resources into high value power. I believe that our National Labs 
provide a valuable service and conduct important research. What are you 
doing to ensure that this research and development is not overly 
entangled with the industries which fund such activities?
    Answer. Our National Bioenergy Center facilitates the coordination 
of biomass research and development across the National Laboratories. 
The Center is focused on enabling long-term research needed to convert 
a wide variety of domestic biomass resources to fuels, chemicals, and 
heat and power in a sustainable manner. Through partnerships with 
industry, the Department fosters the nearer term research and 
development that leverages the National Laboratories' foundational, 
enabling work. The public/private partnerships advance biomass 
conversion processes and integrate them into commercial systems and 
facilities for testing and performance validation. The National 
Laboratories are involved with industry's research and development 
through Cooperative Research and Development Agreements (CRADAs). These 
CRADAs are carefully constructed to avoid duplicative efforts and to 
ensure that our participation is an appropriate Federal role.
                      biomass r&d and universities
    Question. What role do you see our Nation's universities playing in 
this ongoing research and development?
    Answer. Universities play an important role in the Biomass Program. 
One example is the Biomass Refining Consortium for Applied Fundamentals 
and Innovation (CAFI). With support from the National Laboratories, 
Federal Government, and industry, this group of universities focuses on 
various possible pretreatment technologies to identify options that 
enable the integrated industrial biorefinery. In addition, universities 
are collaborating with the National Laboratories on a variety of 
research projects as listed below:
  --Colorado School of Mines.--Impact of Water Structure Modifying 
        Agents and Cellulase Mutations on Cellulase-Cellulose 
        Interactions,
  --University of Arkansas.--X-Ray Crystallographic Studies of 
        Cellulases,
  --Purdue University.--Building A Bridge To The Corn Ethanol Industry 
        Follow-On Project--Phase II,
  --University of Colorado.--Boulder, Mechanistic Model Development for 
        Biomass Thermochemical Conversion Process,
  --Cornell University.--Molecular Modeling of the Interaction of 
        Cellulose with Cellulases and Catalysts,
  --Cornell University.--Improving T. fusca Cellulases by Protein 
        Engineering,
  --Dartmouth University.--The Role of Biomass in America's Energy 
        Future,
  --University of Pittsburgh.--Biorefinery Optimization Software.
    Universities are also funded in fiscal year 2004 through the 
following congressionally-directed projects: Iowa State University, 
Iowa State University Center for Catalysis, Purdue University & the 
Midwest Consortium for Sustainable Biobased Products and Bioenergy, 
University of Louisville, Louisiana State University Agriculture 
Center, Mississippi State, and the University of North Dakota. While we 
do not support continuation of Congressionally directed projects, we 
expect that many universities would receive funds through a competitive 
awards process.
    The Biomass Program continues to fund multi-disciplinary programs 
at universities to develop graduate programs that focus on biomass. The 
approach is to foster collaboration among various departments including 
business, science, and engineering. The Biomass Program also sponsors 
research internships at the National Renewable Energy Laboratory 
involving undergraduate and graduate students majoring in science and 
engineering. These internships allow the students to gain hands-on 
research experience under the guidance of prominent researchers.
                                 ______
                                 
               Question Submitted by Senator Larry Craig
                   funding a commercial biomass plant
    Question. A biotechnology company is interested in building a 
commercial bio-ethanol production facility in the State of Idaho. This 
plant would use agricultural wastes--primarily wheat straw--as its 
feedstock. Using an enzyme-based process, the plant would convert the 
carbohydrates from the wheat straw into hydrocarbons for ethanol. The 
construction of this plant would demonstrate the long-term viability of 
using agricultural products to provide both energy and chemicals that 
have thus far been derived from petroleum. The success of this project 
will create new jobs in the agriculture, energy, technology, research, 
and construction sectors in Idaho and elsewhere. It will contribute to 
accomplishing the President's goal of reducing the greenhouse-gas 
intensity of the economy because the CO2 emitted by burning 
ethanol is roughly equal to the CO2 absorbed by growing the 
wheat--meaning that burning ethanol created from this process would add 
no net CO2 to the atmosphere. Completion of this facility 
would also demonstrate a realistic way to begin reducing our Nation's 
dependence on foreign oil.
    This cutting-edge project would be eligible for the loan guarantee 
program described in the energy bill conference report. Because that 
bill has not been sent to the President by the Congress, and because 
this project can serve multiple national interests simultaneously, I 
seek your assistance in identifying existing authorities that would 
ensure the rapid construction of this facility.
    Please identify any existing programs, funds or authorities that 
could be used by this company to secure financing and commence 
construction on this vitally important project.
    Answer. The Department of Energy does not have any program funding 
available to support this effort at this time. The Department of 
Agriculture (USDA) conducts a loan guarantee program under Section 9006 
of the Farm Bill that has funded small grain-based ethanol plants. 
However, because the proposed plant is a first-of-a-kind facility with 
a high degree of technical and financial risk, this project may not 
receive funding under the USDA program. The Department is unaware of 
any other Federal programs that would fund this project.
                                 ______
                                 
               Questions Submitted by Senator Ted Stevens
                 alaska examination of geothermal sites
    Question. In September 2003, Assistant Secretary David Garman and 
Dr. Roy Mink traveled to Alaska to examine geothermal sites, determine 
their viability for electricity production, and to assess ways in which 
the Department of Energy can assist in developing this energy resource. 
What steps has the Geothermal Technologies division and the Office of 
Energy Efficiency and Renewable Energy taken towards this end?
    Answer. The Geothermal Technologies Program has reached out to help 
Alaska define its geothermal resource and to begin building a base for 
development of that resource. A database of potential geothermal 
resources has been developed that targets two areas in Alaska for 
possible power plant developments (Akutan and Unalaska).
    The Program is also providing assistance to private developers, one 
working with the Native Corporation to establish a basis for 
development of a power plant at Akutan and another developer who has an 
interest in working with the Native Corporation for a potential power 
plant at Dutch Harbor (Unalaska). We are also working with the Kotzebue 
Electric Association to evaluate existing geothermal data and provide a 
basis to evaluate potential use of geothermal thermal energy to protect 
the town sewer system from freezing.
    As a result of the September 2003 trip, the Geothermal Technologies 
Program has included additional funding opportunities for Alaska. The 
Geothermal Outreach funding opportunity announcement (State Energy 
Program) closes on April 6, 2004. The Geothermal Resources Exploration 
and Definition funding opportunity announcement will be released on 
March 18, 2004, and the Power Plant Development funding opportunity 
announcement will be released near the end of March 2004. These 
announcements will provide up to $5 million of geothermal funding in 
fiscal year 2004.
    DOE also provided $100,000 to the Alaska Division of Energy to 
support development of a working group to promote geothermal energy 
awareness in Alaska.
                     assistance to alaska companies
    Question. Given the extraordinarily high cost of energy in rural 
Alaska, many utility companies are exploring the possibility of 
harnessing wind energy to supply rural communities with electricity. 
What assistance is the Office of Energy Efficiency and Renewable Energy 
providing to these companies?
    Answer. The Department of Energy supports wind power projects in 
Alaska through several local and State organizations. There are ongoing 
wind projects with Kotzebue Electric Association, the City of Unalaska, 
and TDX Corporation (St. Paul Island) that are aimed at providing lower 
cost energy alternatives to rural Alaskan communities. Through the 
Department's Tribal Energy Program, renewable energy studies are 
underway for Southeast Alaska, the Yukon-Kuskokwim Delta region, and 
the Bristol Bay region. National Wind Technology Center personnel 
provide expert technical support to these projects by supplying 
anemometers, evaluating the wind resources, conducting wind workshops, 
and sponsoring local representatives to attend technical workshops.
         evaluation of renewable energy sources on public lands
    Question. In February 2003, the Department of Energy and the 
Department of the Interior released a report evaluating renewable 
energy resources on public lands. Alaska was excluded from this report. 
Will the Department of Energy undertake a similar evaluation of 
renewable energy resources on public lands in Alaska?
    Answer. The Geothermal Technologies Program is working with the 
United States Geological Survey on a limited geothermal resource 
assessment for the western United States, including Alaska. 
Comprehensive energy legislation pending in the Congress requires 
thorough annual assessments of all renewable energy resources, 
including solar, wind, biomass, ocean, geothermal, and hydroelectric, 
in all 50 States.
                  tidal energy projects cost in alaska
    Question. The use of tidal energy is currently being explored in 
Alaska. As you know, the coast of Alaska has exceptional energy 
producing potential. Tidal energy projects have high capital costs. Is 
the Office of Energy Efficiency and Renewable Energy exploring 
opportunities to harness tidal energy?
    Answer. The Department is not currently funding research in tidal 
energy. Since there are only two areas of the Nation with a significant 
tidal flux (Cook Inlet, Alaska; Bay of Fundy, Maine) the application of 
tidal energy is not considered widely applicable.
                   renewable energy program in alaska
    Question. Please describe in detail the Department of Energy's 
(DOE) renewable energy program in Alaska.
    Answer. Some of the activities DOE is funding in renewable energy 
in Alaska are described below. All of these projects were 
Congressionally directed. We strongly support competitive awards to 
ensure that the Department's program goals are advanced and taxpayer 
dollars are spent wisely.
Biomass
    The Department is supporting an ethanol production facility with 
Sealaska Corporation in Ketchikan that will utilize wood residues 
produced from various forest industry operations in a process to 
produce fuel grade ethanol. Regional Biomass Energy Program funds 
support a biomass energy specialist at the State level who assists 
developers with regulatory and utility issues, provides technical 
assistance, and in some cases provide financial assistance. The 
Regional Biomass Program also contributed to the Dutch Harbor Fish Oil 
Demonstration Project which demonstrated blending fish oil with diesel 
oil to power engine generator sets that provides electricity to the 
town of Dutch Harbor.
Wind
    DOE has been supporting wind power projects in Alaska for several 
years through various local and State organizations. There are ongoing 
wind projects with Kotzebue Electric Association, the City of Unalaska, 
and TDX Corporation (St. Paul Island) that are aimed at providing lower 
cost energy alternatives to rural Alaskan communities. National Wind 
Technology Center personnel provide expert technical support by 
supplying anemometers, evaluating the wind resources, conducting wind 
workshops, and sponsoring local representatives to attend technical 
workshops. The Department has also tested cold weather wind turbines to 
mitigate performance problems in extreme-cold climates (e.g. icing on 
blades and gear box freezing).
Geothermal
    The Department assisted the Alaska Energy Authority in completing a 
statewide assessment of geothermal resources. The assessment concluded 
that geothermal resources near the community of Akutan have the 
potential to displace a substantial portion of the 4.3 million gallons 
of diesel per year used for generating power and heat in the community 
and fish processing plant. The Department has also supported site 
specific feasibility investigations. This past September, Assistant 
Secretary Garman accompanied the Geothermal Program Manager to Alaska 
to examine several geothermal sites to determine their viability for 
electricity production. The Geothermal Technology Program is supporting 
a geothermal working group to promote geothermal energy awareness in 
Alaska. This group will be visiting Nevada on a trade mission to learn 
about successes and procedures used by Nevadans to develop geothermal 
energy.
Hydropower
    The Department has supported a number of hydropower technology 
development efforts in Alaska over the years. Currently, DOE is 
supporting the Alaska Village Electric Corporation in a hydropower 
feasibility study at Scammonbay, and a Power Creek hydro-electric 
project in Anchorage.
State Energy Program
    The State Energy Program provides base-level funding for Alaska to 
maintain energy specialists in State government. Funding is used to 
conduct resource assessments, fund projects, and provide technical 
assistance and workshops.
Tribal Energy Program
    Renewable energy studies are underway for Southeast Alaska, the 
Yukon-Kuskokwim Delta region, and the Bristol Bay region.
                                 ______
                                 
               Questions Submitted by Senator Harry Reid
   for inspiration and recognition of science and technology (first)
    Question. In the fiscal year 2004 Conference Report we carried 
language encouraging the Department to support competitors in the For 
Inspiration and Recognition of Science and Technology (FIRST) robotics 
competition, a brainchild of Dean Kamen, the inventor of the Segway and 
several other remarkable devices. Do you mind describing what the 
Department has done to follow-up on this direction?
    Answer. Brookhaven National Laboratory (BNL) scientists and 
engineers provided significant support to students of William Floyd 
High School, Mastic Beach, NY, in the form of technical guidance and 
assistance in the fabrication of the components to build a robot. BNL 
is providing the funding necessary to purchase the competition kits for 
Longwood High School, Middle Island, NY, and Port Jefferson High 
School, Port Jefferson, NY, to participate for the FIRST event. 
Additionally, special times for operation of the machine shop were 
provided by BNL. The FIRST competition is exciting and rewarding with 
the per team costs typically running between $10,000 to $15,000. The 
Office of Science provided $20,000 to BNL to support these three high 
school teams' participation in the FIRST event.
                  iowa environmental/education project
    Question. Is the Iowa Environmental/Education Project, something 
that has been described to me as a giant, $200 million roadside 
terrarium, a worthy investment of Federal funds that will generate 
useful, cutting edge science or is it just a huge waste of Federal 
taxpayer dollars?
    Answer. This Congressionally directed project will develop an 
environmental and ``green energy'' education center on a 30 acre 
Environmental Protection Agency Brownfield site in Coralville, Iowa. It 
will not be a cutting edge research facility. The project includes an 
indoor tropical rain forest, aquarium, educational center, and 
galleries on the prairie eco-system, Midwest geology, and agriculture.
                            user facilities
    Question. We have a large capital investment in the Office of 
Science user facilities that serve many users at universities and 
laboratories. Are we operating these facilities at maximum capacity in 
the fiscal year 2005 budget to meet the needs of these scientists?
    Answer. Overall, Office of Science user facilities are operating at 
95 percent of optimum in the fiscal year 2005 request, 3 percent better 
than in fiscal year 2004. (This metric is straightforward but perhaps 
too simplistic, and we are working to develop a more sophisticated 
metric for the fiscal year 2006 President's Budget.) It is always 
difficult to find the right balance among competing priorities for 
facility operations, research, construction, etc. We are satisfied that 
we have allocated the funding in the request to achieve the best 
balance possible.
        international thermonuclear experimental reactor (iter)
    Question. As I mentioned in my opening statement, I am pleased that 
the United States has resumed its participation in the ITER (``EATER'') 
project. However, the dollar levels look somewhat low, particularly in 
light of our commitment to fund 10 percent of the total. Are the funds 
in the budget adequate to fulfill our international requirements?
    Answer. The fiscal year 2005 budget request for ITER is adequate 
because the funds are for preparations for a subsequent ITER 
construction project. The plan is for the construction project to start 
in fiscal year 2006, at which time the U.S. funding requirement would 
increase significantly.
    Question. As a follow-up, the U.S. participation seems fairly 
modest compared to that of several of the international partners. Are 
you satisfied that it appears that the United States will be just a 
junior partner in ITER. Is a larger role something we should aspire to?
    Answer. The Department is satisfied that the 10 percent role is 
appropriate for the United States. With the exception of the host, all 
of the ITER Parties would be at approximately the same level of 
participation. Each Party would receive the same benefits in terms of 
equal access to the scientific and technological results from ITER, as 
well as an equal role in planning the ITER scientific program. 
Accordingly, a larger financial contribution for the United States is 
not considered necessary.
    Question. Dr. Orbach, as I understand it, the Department is getting 
ready to select a site for a U.S. ITER Project Office. Could you please 
explain the process for that selection?
    Answer. The process for selection of the host for a U.S. ITER 
Project Office consists of review by an independent Evaluation 
Committee of Federal and non-Federal employees. This process will be 
managed by the Chicago Operations Office. The conclusions of the 
Evaluation Committee will be forwarded to the Office of Fusion Energy 
Sciences for selection of the host by the director of that office.
    Question. Given the importance of the ITER project to fusion 
research and to the fusion community, has an expert independent review 
board been appointed to guide that selection?
    Answer. We are in the process of identifying members of such a 
board.
                 funding for concentrating solar power
    Question. I see that you have a $2 million request for funding for 
the Concentrating Solar Power portion of the solar energy budget. While 
I realize this is an improvement from the $0 you requested last year it 
is a far cry from what I expected given that your office, the National 
Academy, and many other national organizations all now agree that CSP 
has merit and promise. Despite your words to the contrary, are you 
giving up on Concentrating Solar Power?
    Answer. We are not giving up on Concentrating Solar Power (CSP). As 
you pointed out, last year we did not request any funding for CSP. In 
light of recent studies we sought from an independent engineering firm, 
a draft of which was reviewed by the National Research Council, we 
propose $2 million to support a more thorough investigation of the 
appropriate R&D course needed to realize the potential for CSP. The 
fiscal year 2005 budget request will be used to maintain CSP facilities 
at Sandia National Lab, to provide analytical support to States, and to 
develop a comprehensive program plan to help inform the fiscal year 
2006 budget development process and a longer term R&D plan.
    Question. If not, what do we need to do to get this program back on 
track?
    Answer. DOE will develop a Concentrating Solar Power (CSP) program 
plan which will use recommendations from the independent review studies 
and take a systems approach to identify the highest value technology 
R&D investments. These findings will then be used to inform the fiscal 
year 2006 budget development process and a longer term R&D plan.
                  national renewable energy laboratory
    Question. In the last three conference reports we have carried 
language directing the National Renewable Energy Laboratory (NREL) to 
deploy some of their technologies in Nevada in partnership with 
industrial and university partners. It is my understanding that this 
effort is working out well for everyone involved, but I would be 
interested in your thoughts.
    Answer. As a matter of principle and administration policy, we do 
not support earmarks. Nevertheless, over the past 2 years, the 
Department has worked closely with NREL and various State interests in 
order to make the most effective use of these directed funds. A 
competitive process was used to select projects that would bring 
laboratory, university, and industrial partners together in the State 
of Nevada to help develop the solar, geothermal, wind, and related 
hydrogen resources in the Southwest. Per fiscal year 2004 Congressional 
direction, the Department will continue these efforts and look for 
additional opportunities to form alliances between Nevada's university 
system, other Nevada State agencies, and industry to establish centers 
of renewable energy expertise in the State. The ``RE Centers of 
Expertise'' will likely include, but not be limited to, research and 
development, training for future workers in renewable energy, and 
technology demonstration and performance validation.
                       biomass rationale for cuts
    Question. Biomass seems to have taken a substantial cut in the 
fiscal year 2004 request. By all accounts this program has been very 
successful. Why are you cutting back at this time?
    Answer.

                                                 FUNDING SUMMARY
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                           Fiscal Year                 Fiscal Year
                                             Fiscal Year       2004      Fiscal Year       2004      Fiscal Year
              Program/Activity                   2004       Comparable       2004      Unencumbered      2005
                                               Request    Appropriation    Earmarks   Appropriation    Request
----------------------------------------------------------------------------------------------------------------
Biomass Program (EWD and Omnibus                  69,750        86,471        42,805        43,666        72,596
 Appropriation)............................
Biomass Program (Interior).................        8,808         7,506   ...........         7,506         8,680
                                            --------------------------------------------------------------------
      Total, Biomass Program...............       78,558        93,977        42,805        51,172        81,276
----------------------------------------------------------------------------------------------------------------

    Excluding all the Congressionally-directed projects in fiscal year 
2004, we are actually seeking $30 million more in fiscal year 2005 than 
was appropriated last year toward the research and development (R&D) 
goals established in our program plan and budget submissions. Our R&D 
goals have been developed in consultation with the U.S. Department of 
Agriculture, National Laboratories and the Biomass R&D Advisory Board 
established by Congress.
    In order to fund Congressionally-directed projects in fiscal year 
2004, we have had to modify our program goals. Furthermore, we will 
experience delays in achieving our key milestones and the broader 
market acceptance of power, fuels and products derived from biomass. We 
urge the committee to provide us the flexibility to spend Biomass funds 
in accordance with our program plans, which will provide the best 
potential for producing long-term positive returns on the taxpayers' 
investment.
                high temperature superconductor program
    Question. Do you think that the High Temperature Superconductor 
program should be moved back into your organization, particularly in 
light of the wholesale redirection of funds away from superconductors 
that the Electricity Transmission and Distribution program has 
undertaken?
    Answer. The new Office of Electric Transmission and Distribution 
(OETD) has voiced its strong support for High Temperature 
Superconductivity (HTS). The funding of the High Temperature 
Superconductor Program is not a result of the office in which the 
program is housed, but rather the fact that Congress appropriated 
$10.972 million less for transmission and distribution R&D in fiscal 
year 2004 than in fiscal year 2003, the year before the new office was 
created. Of the $69.467 million appropriated for R&D within OETD, 
$25.75 million was for Congressionally Directed Activities, leaving 
only $42.49 million ($6.285 million less than in fiscal year 2003) for 
all R&D work.
        financial assistance to geothermal development in alaska
    Question. What percentage of the division's budget will be 
dedicated to providing financial assistance to geothermal development 
in Alaska?
    Answer. The fiscal year 2004 budget for the Geothermal Technologies 
Program is $26 million. The program provides opportunities for Alaskan 
entities to participate in open and competitive funding opportunity 
announcements. Current and upcoming opportunities are valued at a total 
of $5 million, or 19 percent of the program's budget. Alaskan proposals 
will be considered alongside others in open competition.
                                 ______
                                 
              Questions Submitted by Senator Patty Murray
                        genomics: gtl facilities
    Question. Dr. Orbach, I understand you have recently published a 
strategic plan for new facilities supporting DOE's missions. PNNL, 
along with other research Institutions in the State of Washington, is 
very interested and, indeed, believe we have a strong research 
infrastructure to be the location of one of the GTL facilities in your 
strategic plan and facilities plan.
    What is your position on the schedule for the various facilities 
with the genomics program, including the proteome analysis facility?
    Answer. Our 20-year facilities plan lays out the time sequence of 
the scientific user facilities, including those advocated by our 
Genomics program. As the Genomics program evolves we hope to be able to 
proceed with the construction and operation of the Genomics facilities. 
PNNL, along with other research institutions in the State of Washington 
should be in a strong position to successfully compete for one or more 
of these facilities. I should also note that while the facilities plan 
lists four large Genomics facilities, it is conceivable that evolving 
scientific needs and the competitive solicitation process for each 
facility could lead to us to fund multiple distributed facilities at a 
smaller scale. As available funding allows, we intend to let the 
science drive the ultimate makeup of these facilities.
                    ultra high-speed super computers
    Question. The Department of Energy has recently announced an 
aggressive computing program, including ultra high-speed super 
computers. What is your position on competition?
    Answer. The Department believes that competition is critical to 
ensuring effective stewardship of the taxpayers' investment in science 
as well as selection of the best ideas to ensure the scientific 
leadership of the country. We have just announced a solicitation to the 
Office of Science laboratories to begin installation of a leadership 
class computer for open science. The award will be made on the basis of 
peer reviewed open competition.
                   hydrogen in the pacific northwest
    Question. What are the unique assets that research institutions and 
the natural resources of the Pacific Northwest provide that will make 
hydrogen a reality in the Northwest?
    Answer. The Pacific Northwest uses renewable energy resources to 
produce much of its energy. These resources can be tapped to produce 
hydrogen. Hydropower is a carbon free source of inexpensive electricity 
that can produce hydrogen via electrolysis. Wind can also be harnessed 
to create hydrogen via electrolysis, with Washington and Oregon alone 
possessing over 8,000 megawatts of developable wind generation 
potential.
    The Northwest is home to many organizations with the ability to 
play a part in developing a hydrogen infrastructure. These include 
State and city governments, the Bonneville Power Administration, fuel 
cell developers (Ballard, Avista labs, IdaTech, etc.), major regional 
universities, heavy truck and aerospace manufactures, Pacific Northwest 
National Laboratory, and Idaho National Engineering and Environmental 
Laboratory.
                  time scale for hydrogen in northwest
    Question. In what time scale do you see hydrogen being a viable 
source of energy in the Northwest?
    Answer. Hydrogen is not a source of energy, but an energy carrier 
that can be produced from multiple energy resources. Because of the 
many technical and cost hurdles associated with a transition to a 
hydrogen economy, we don't expect wide scale use of hydrogen--in the 
Northwest or elsewhere--before 2020.
                    industry-laboratory cooperation
    Question. Can you tell me more about industry's role in research 
development and demonstration projects in the effort to develop a more 
robust grid; specifically efforts underway involving national 
laboratory and industry cooperation?
    Answer. Industry-laboratory partnerships enable the full 
development and/or deployment of new and promising technologies that 
form the cornerstone of DOE's efforts to modernize the Nation's 
Electric Transmission infrastructure.
    Within the High Temperature Superconductivity's (HTS's) Strategic 
Partnership Initiative (SPI), Los Alamos National Laboratory (LANL), 
Oak Ridge National Laboratory (ORNL), IGC SuperPower, Waukesha Electric 
Systems, Southwire Company, and American Superconductor are the primary 
partners working together to develop High Temperature Superconducting 
(HTS) wire, and four types of HTS electric power equipment prototypes, 
including cables, motors, generators and transformers. This technology 
will enable distribution and transmission cables that have three to 
five times the capacity of conventional copper cables and higher 
efficiency (especially useful in congested urban areas), and power 
equipment with half the energy losses and half the size of conventional 
equipment.
    Examples of current research and development projects--all 
involving DOE-Industry cost sharing--include the Boeing Phantom Works 
with Argonne National Laboratory to design, fabricate and test a 35 
kilowatt hour superconducting flywheel energy storage system as a power 
risk management system that will give power users and utilities a full-
scale device to manage both cost and reliability risks; the General 
Electric HTS Generator Project involving LANL and ORNL to install a 100 
MVA prototype generator; the IGC SuperPower project with LANL to 
develop and install a transformer component at a HTS substation; and 
the Long Island Power Authority project with LANL involving the 
installation of a HTS cable system.
    Lawrence Berkeley National Laboratory has the lead for the national 
laboratory/industry/university consortium that was formed to support 
cutting-edge research in Transmission Reliability R&D, provided support 
on the summer 2003 Blackout Investigation, and is integral to projects 
for developing reliability tools.
    The Pacific Northwest National Laboratory (PNNL) is part of the 
national laboratory/industry/university consortium that was formed to 
support research on Transmission Reliability R&D to transform the 
Nation's distribution system. PNNL conducts evaluations of the 
technological and institutional aspects of recent reliability events on 
the Nation's electric power system, and is the lead for research 
activities in real-time monitoring and control of the power grid. PNNL 
partners with the GridWise Alliance, in which IBM, SEMPRA, the 
Pennsylvania, New Jersey, Maryland Interconnection (PJM) and others 
work to modernize the Nation's electric distribution system in 
potentially revolutionary ways.
    In fiscal year 2004, PNNL has provided support on the summer 2003 
Blackout Investigation. PNNL supports development of communication and 
control architectures and technologies, as well as the integration of 
multi-vendor distributed energy resources into the distribution system. 
PNNL supports development of technologies for improved load/demand 
management while responding to market prices and electricity supply/
demand conditions.
    Sandia National Laboratory (SNL) participates in a national 
laboratory/industry/university consortium to support research on 
Transmission Reliability R&D. SNL also works to develop advanced 
superconductors based on the sol-gel chemical deposition process. For 
energy storage, SNL develops improved energy storage system components 
including power conversion electronics and modular multi-functional 
energy storage systems.
    Argonne National Laboratory performs research and development for 
the HTS Program Activity. Argonne utilizes unique expertise in ceramics 
and materials science to improve conductor performance and to 
investigate deposition processes, such as metal-organic chemical vapor 
deposition. Argonne also performs research on superconducting electric 
motors, transmission cables, and flywheel electricity systems.

                          SUBCOMMITTEE RECESS

    Senator Domenici. So that's it. We stand in recess. Thanks.
    [Whereupon, at 11:23 a.m., Wednesday, March 3, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]
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