[Senate Hearing 108-8]
[From the U.S. Government Publishing Office]



                                                          S. Hrg. 108-8
 
 PROPOSED FISCAL YEAR 2004 BUDGET REQUEST FOR THE DEPARTMENT OF ENERGY
=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

 TO RECEIVE TESTIMONY REGARDING THE PRESIDENT'S FY 2004 BUDGET FOR THE 
                          DEPARTMENT OF ENERGY

                               __________

                           FEBRUARY 25, 2003


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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                 PETE V. DOMENICI, New Mexico, Chairman
DON NICKLES, Oklahoma                JEFF BINGAMAN, New Mexico
LARRY E. CRAIG, Idaho                DANIEL K. AKAKA, Hawaii
BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
CRAIG THOMAS, Wyoming                BOB GRAHAM, Florida
LAMAR ALEXANDER, Tennessee           RON WYDEN, Oregon
LISA MURKOWSKI, Alaska               TIM JOHNSON, South Dakota
JAMES M. TALENT, Missouri            MARY L. LANDRIEU, Louisiana
CONRAD BURNS, Montana                EVAN BAYH, Indiana
GORDON SMITH, Oregon                 DIANNE FEINSTEIN, California
JIM BUNNING, Kentucky                CHARLES E. SCHUMER, New York
JON KYL, Arizona                     MARIA CANTWELL, Washington
                       Alex Flint, Staff Director
                     James P. Beirne, Chief Counsel
               Robert M. Simon, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
                 Pete Lyons, Professional Staff Member
















                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Abraham, Hon. Spencer, Secretary, Department of Energy...........     3
Bingaman, Hon. Jeff, U.S. Senator from New Mexico................     2
Domenici, Hon. Pete V., U.S. Senator from New Mexico.............     1

                                APPENDIX

Responses to Additional Questions................................    47















 PROPOSED FISCAL YEAR 2004 BUDGET REQUEST FOR THE DEPARTMENT OF ENERGY

                              ----------                              


                       TUESDAY, FEBRUARY 25, 2003

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:05 a.m., in 
room SD-366, Dirksen Senate Office Building, Hon. Pete V. 
Domenici, chairman, presiding.

          OPENING STATEMENT OF HON. PETE V. DOMENICI, 
                  U.S. SENATOR FROM NEW MEXICO

    The Chairman. Could we have order, please?
    Good morning, everyone. And thanks to the Senators who are 
here. In particular, we want to thank you, Mr. Secretary, for 
coming today and spending some time with the committee. We look 
forward to your testimony regarding the President's budget and 
any other matters the Senators might want to inquire of you 
this morning.
    I am pleased to be joined today by the ranking member of 
the committee, Senator Bingaman. The Department of Energy, I 
think we all know on this committee, has a very extensive 
presence in the State of the chairman and the ranking member. 
And I am sure we will have some questions of you regarding 
those activities.
    On a general nature, the President has requested a total of 
$23.4 billion for the Department of Energy, which represents a 
$1.3 billion or 5.9 percent increase over what he requested in 
last year's budget. For the most part, I believe this is a 
rather well-focused DOE budget.
    As the committee prepares to consider legislation to 
establish a comprehensive national energy policy, we will be 
giving serious review to the President's budget proposals as 
they impact on that activity, proposals for civilian energy 
programs under the committee's jurisdiction: Energy supply, the 
Office of Science, environmental management, fossil energy, and 
energy conservation.
    The President's budget is focused on key goals for these 
programs: Reducing dependence on energy imports, achieving a 
cleaner, healthier environment, improving our energy 
infrastructures, and maintaining a world-class scientific 
research capacity.
    Facing the budget realities, the Department necessarily has 
to order and reorder program priorities to find the funding to 
support the promising programs and new initiatives to meet 
these goals. There are many issues for the committee to discuss 
with the Secretary. And we look forward to that exchange.
    I look forward to working with you, Mr. Secretary, as this 
committee works on its national energy policy legislation.
    I would now like to recognize Senator Bingaman for his 
opening statement, and indicate now that we are going to call 
on Senators in the order of their arrival, if that is 
satisfactory with you, Senator Bingaman.
    Senator Bingaman. That is fine.
    The Chairman. I yield to you.

         STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR 
                        FROM NEW MEXICO

    Senator Bingaman. I thank you very much, Mr. Chairman. I 
also welcome the Secretary and appreciate him being here.
    I will just mention several disappointments that I have had 
with trying to review the President's budget request for the 
Department of Energy. My general impression is that it gives a 
signal that energy issues are not a very high priority for the 
administration this year. Some of the specifics that lead me to 
conclude that are that: The energy efficiency budget is 
proposed to be lower than last year's request and, in fact, 
lower than the amount that we appropriated 2 years ago. Also, 
how else do you explain a 60-percent cut to research and 
development to increase domestic oil production?
    Clearly, there are some other major problems in the budget 
that concern me as well. There are surprising cuts and program 
terminations across the board, across the broad range of energy 
technologies, in wind energy, geothermal, biomass energy, the 
Nuclear Energy Research Initiative, methane hydrates, the oil 
exploration and production accounts. Cuts for oil exploration 
and development, research and development are particularly hard 
to understand.
    As we all know, we are at a point in our history where 
crude oil prices are very high. Gas prices are beginning to 
close in on $2 a gallon. And as I read the President's budget 
proposal, it is to cut the R&D that would continue to support 
responsible domestic oil production by 60 percent.
    I know a reasonable amount about these R&D activities 
related to domestic oil production. They benefit the 
independent producers, many of whom are in our State and who 
are not able to afford their own research and development 
programs. As I read the budget, much of that work is 
essentially being terminated in the budget.
    In this area of hydrogen, the Hydrogen Initiative, there, 
it seems to me that while we are seeing increased focus on 
hydrogen vehicles and developing transportation from hydrogen 
vehicles 20- to 30-years in the future, we are actually seeing 
reductions in the efforts on energy technologies that are 
nearer term, and that includes vehicle technologies.
    So there are some serious issues that I want to have a 
chance to ask questions on. And I will look forward to that 
after we hear the Secretary's statement.
    Thank you.
    The Chairman. Thank you very much, Senator Bingaman.
    Mr. Secretary, we would be pleased to hear from you now.

  STATEMENT OF HON. SPENCER ABRAHAM, SECRETARY, DEPARTMENT OF 
                             ENERGY

    Secretary Abraham. Mr. Chairman, thank you. I want to thank 
you and the members of the committee, Senator Bingaman, with 
whom we worked closely during the last Congress and continue to 
have many issues that would come together, and all the members, 
the new members of the committee as well. We look forward to 
working with them.
    As you indicated, our fiscal year 2004 budget request for 
$23.4 billion is a sizeable increase over the previous request 
for 2003. We believe it will allow the Department of Energy to 
help make America safer and more secure.
    What I would like to do is begin with a brief review of the 
budget with a discussion of our programs related to national 
defense. These programs, as you know, include maintaining our 
nuclear stockpile, rebuilding the capabilities of our defense 
complex, preventing the spread of nuclear weapons and 
materials, and continuing our outstanding naval reactors 
program. Our 2004 budget submission includes a total of $8.8 
billion for these programs, which constitutes about a $925 
million increase over the submission last year.
    As everybody knows, one of the most important duties the 
Energy Secretary has is to certify the safety, security, and 
effectiveness, reliability, of our nuclear stockpile. To meet 
this challenge, our 2004 budget request proposes $6.4 billion 
in spending for stockpile stewardship and the rebuilding of our 
defense complex, about a $532 million increase over the 2003 
budget submission.
    We will be using the additional funding to advance the 
scientific and manufacturing capabilities we need to ensure our 
long-term ability to certify the nuclear weapons in the 
stockpile. We will also continue to refurbish aging weapons, 
dismantle warheads and bombs that are retired from the 
stockpile, continue to restore the capability to manufacture 
and certify war reserve plutonium pits for the stockpile, and 
proceed with our work to rebuild and revitalize the physical 
infrastructure of the nuclear weapons complex.
    At the same time, we must expand our already productive 
efforts to prevent the spread of nuclear weapons and materials. 
Our 2004 nonproliferation budget submission totals more than 
$1.3 billion, which is a 30-percent increase over last year. 
This additional funding will enhance our ability to detect and 
prevent the proliferation of weapons of mass destruction and 
protect or eliminate nuclear weapons, weapons-useable nuclear 
material, and the infrastructure which supports them.
    We are engaged in several aggressive cooperative 
nonproliferation programs, most notably with Russia, and 
through the extensive nonproliferation work of the 
International Atomic Energy Agency. As we carry out our 
national security duties, our responsibility extends to 
cleaning up the legacy of half a century of nuclear defense 
work here at home. Our budget submission includes $7.2 billion 
for environmental management, the highest amount ever requested 
for these programs.
    Those funds will allow us to continue with our reform 
cleanup effort, which will accelerate completion of 
environmental cleanup programs by approximately 35 years, 
reduce risk to the public and the environment, and save 
taxpayers more than $50 billion in program costs.
    Turning to the energy policy area, the 2004 energy budget 
submission of $2.5 billion will allow us to continue our wide-
ranging energy efforts, including the research and development 
work that will lead to the eventual transformation of our 
energy economy.
    Two programs illustrate the ways we can more safely employ 
abundant domestic energy sources. The first is our $63 million 
budget request for a new Advanced Fuel Cycle Initiative, which 
will help us devise a better fuel cycle for our nuclear 
powerplants that cost less overall, is more environmentally 
benign, more proliferation resistant, and points to a 
sustainable long-term future for nuclear energy.
    The second grows out of President Bush's Clean Coal Power 
Initiative. In order to take full advantage of this low-cost 
and abundant domestic energy resource, we are increasing our 
concentration on carbon sequestration research with a $62 
million request, an increase of about 40 percent from last 
year.
    And as you all know, in the State of the Union address, 
President Bush spoke of the remarkable potential of hydrogen as 
the transportation fuel of the future. The President's new 
Hydrogen Fuel Initiative, together with our FreedomCAR 
Initiative announced a year ago, will intensify our research 
and development effort to promote a personal transportation 
fleet powered by hydrogen fuel cells, as well as the 
infrastructure to support it.
    The administration is following its national hydrogen 
energy roadmap, the result of a 12-month collaborative effort 
between industry and government to help us chart, as well as 
ultimately realize our objectives. Over the next five years, we 
will spend about $1.7 billion for FreedomCAR and the Hydrogen 
Fuel Initiative, doubling the fiscal year 2003 spending, or 
near doubling it, and advancing a commercialization decision 
from the year 2030 to the year 2015.
    Mr. Chairman, the Department's responsibilities are very 
wide ranging. And in the time I have today, I can only give a 
glimpse of the work that we are doing. The many important 
programs I have not had time to mention in these opening 
remarks include programs designed to promote domestic energy 
production and international energy trade and investment, our 
projects to further develop wind, solar, hydro power, biomass 
technologies, and to increase industrial, commercial, and 
residential energy work and energy efficiency, as well as the 
work of our Office of Science on which we rely to fulfill all 
of our responsibilities.
    The Office of Science is pioneering the theoretical and 
practical advance of scientific knowledge through its work on 
the human genome, on nanoscience and nanotechnology, and 
computing and networking and on fusion, which we plan to 
buttress by jointing the international thermal nuclear 
experimental pact or project.
    These programs offer the prospect of invaluable short-term 
and long-term benefits to the people of America and the world. 
Mr. Chairman, there are many other productive and promising 
initiatives underway at the Department of Energy. I look 
forward to discussing them with you here today in the question 
and answer session. I thank you for the opportunity to 
participate.
    The Chairman. Thank you very much, Mr. Secretary.
    [The prepared statement of Secretary Abraham follows:]
        Prepared Statement of Hon. Spencer Abraham, Secretary, 
                          Department of Energy
                              introduction
    Mr. Chairman and Members of the Committee, it is a pleasure to be 
here today to discuss the President's Fiscal Year 2004 budget request 
for the Department of Energy. In doing so, I want to stress the ways 
this budget is going to help us accomplish our various missions related 
to defense, energy, environment and science.
    To promote energy independence for our country, while dramatically 
improving the environment, we have developed an ambitious, long-term 
vision of a zero-emissions future free of reliance on imported energy. 
With this budget, we begin in earnest to research and develop advances 
in energy technology that will not merely reduce or ameliorate 
environmental challenges, but eliminate them. These technological 
advances will not merely contribute to our Nation's energy security but 
guarantee it, and will provide energy and environmental solutions not 
just for America, but also for the world.
    The President's FY 2004 Budget of $23.4 billion for the Department 
of Energy (DOE) continues the Administration's commitment to ensure 
national defense and safeguard the Nation's energy security through 
advances in science and technology, as well as fulfill our obligation 
as environmental stewards to surrounding communities. While DOE's 
national policy objectives have not changed, this budget reflects a new 
approach toward conducting business at the Department of Energy. 
Reengineering efforts that we began in FY 2002 have taken shape: 
programmatic activities are better focused to achieve primary mission 
objectives; budget priorities are set with improved measurable 
performance criteria; and corporate management initiatives reflect 
aggressive implementation of the President's Management Agenda.
    This Budget reflects and addresses the critical challenges we face 
today and will continue to face in the coming decades. I have charted a 
course for the Department that emphasizes DOE's critical contributions 
to our Nation's national security and provides forward-reaching 
solutions to America's energy problems. These priorities are to:

   meet our responsibilities to maintain the nuclear stockpile;
   expand and make more comprehensive our non-proliferation 
        activities;
   accelerate the environmental cleanup program;
   develop 21st century cutting edge advanced fuel cell and 
        alternative energy technologies;
   maintain coal as a major, affordable, domestically produced, 
        energy resource through the Coal Research Initiative;
   build and maintain a stable and effective national defense 
        program to respond to the guidance in the Nuclear Posture 
        Review with special emphasis on revitalizing laboratory and 
        production plant infrastructure;
   continue our leadership to ensure nuclear power remains a 
        key energy resource; and
   maintain a world class scientific research capability.

    The FY 2004 Budget is focused to deliver on these priorities.
    As part of the Department's Strategic Planning process these 
priorities translate into six overlapping Departmental goals that form 
our core mission of National Security. All of the Department's planning 
and budgeting for FY 2004 drives toward these six goals:

   Maintain a safe, secure and reliable nuclear deterrent;
   Control nuclear proliferation;
   Reduce dependence on energy imports;
   Achieve a cleaner, healthier environment;
   Improve our energy infrastructure to ensure the reliable 
        delivery of energy; and
   Maintain a world class scientific research capability.

    Formulation of this year's budget reflects significant management 
changes occurring within the Department. Guided by the President's 
Management Agenda and the management reforms I started in FY 2001 and 
incorporated more fully into the budgeting process in 2002, this budget 
implements integrated, long-term program planning and performance 
accountability. The Department is implementing a five-year programmatic 
and planning framework to provide an unprecedented opportunity to 
consider future impacts in determining current year funding priorities. 
This budget was formulated to deliver measurable results to reach the 
Department's strategic goals. This achievement is a significant step 
toward reaching our key goal to focus DOE activities to adhere to the 
primary mission of national security. By streamlining program 
activities and management structures, the Department of Energy will 
more effectively and efficiently manage and produce the results 
expected by American taxpayers.
 president's management agenda and national energy policy coordination
    Rising to the challenge of the President's Management Agenda, the 
Department is beginning to improve how it manages, budgets, and plans 
for all programs, projects and activities. By improving management, 
performance, and accountability, the Department is striving for a level 
of performance that keeps DOE programs safe, on track, and on budget. A 
system of scorecards is being used to evaluate the effectiveness of 
various programs and allocate resources to achieve this end. 
Performance measures are improving to ensure that they are specific, 
quantifiable, concise, comprehensive, and relevant to the American 
taxpayer. Also, in accordance with the President's commitment to an 
expanded and effective electronic government, DOE is centrally managing 
information technology investments and other capital assets to reduce 
waste, increase productivity and provide increased services at lower 
cost.
    Research and Development Investment Criteria. The President's 
Management Agenda calls for consistent and sufficient evaluation of 
future research and development (R&D) investments and past performance. 
In response, the Department developed internal guidance for programs to 
score their R&D activities against the Administration's applied R&D 
investment criteria. This approach focuses R&D dollars on long-term, 
potentially high-payoff activities that require Federal involvement to 
be both successful and achieve public benefit. The Department will 
continue to work to develop consistent scoring and benefits estimation 
methods, to permit comparison of applied R&D programs across the 
Department.
    The applied R&D scorecard process is an important way the 
Department is integrating performance into the budget. The scorecard 
process is in its second year of development. The goal is to develop 
high analytical justifications for applied research portfolios in 
future budgets. This will require the development and application of a 
uniform cost and benefit evaluation methodology across programs to 
allow meaningful program comparisons.
    The Department's Science programs also participate in the 
government-wide effort to evaluate basic research efforts against the 
criteria of quality, relevance, and performance. As a part of this 
first year effort for basic research programs, the Office of Science 
has incorporated the principles of the investment criteria into the 
formulation of its congressional budget narrative.
    Program Assessment Rating Tool. In addition to the use of R&D 
investment criteria, the Department implemented a new tool to evaluate 
the management effectiveness of selected programs. The Program 
Assessment Rating Tool (PART) was developed by the Office of Management 
and Budget (OMB) to provide a standardized way to assess the 
effectiveness of the Federal government's portfolio of programs. While 
OMB's objective for FY 2004 was to evaluate 20% of each government 
agency, the Department of Energy reviewed nearly 60% of its activities 
through the PART process. The Departmental elements that participated 
were: Environmental Management; Science; Fossil Energy; Nuclear Energy; 
Energy Efficiency and Renewable Energy; the Power Marketing 
Administrations; and the National Nuclear Security Administration.
    The structured framework of the PART provides a means through which 
programs can assess their activities differently than through 
traditional reviews. While some of the programs received less than 
favorable scores, the information exchange between the Department and 
OMB proved quite valuable. The current focus is to establish outcome- 
and output-oriented goals, the successful completion of which will lead 
to benefits to the public, such as increased national security and 
energy security, and improved environmental conditions. The Department 
will incorporate feedback from OMB into the FY 2005 budget and planning 
process, and will take the necessary steps to continue to improve 
performance. The results of the reviews are reflected in the 
Department's FY 2004 Budget. The refocusing of the Fossil Energy Oil 
and Gas program was supported by the results of the PART review.
    National Energy Policy Office: The Department of Energy has 
established a National Energy Policy Office to provide strategic 
direction within DOE and, together with the Office of the Vice 
President, overall coordination within the Federal Government with 
respect to implementing national energy plan recommendations and 
activities to assure dependable, affordable and environmentally 
responsible production, delivery and use of energy. This Office's 
mission is to achieve measurable performance results and consistency in 
implementing our national energy goals through effective policy 
development, planning and management strategies that are integrated 
into DOE's budgeting process and that foster interagency and 
intergovernmental coordination, generate public-private collaboration 
and enhance international cooperation. Through such coordination and 
integrated policy planning and budgeting, the Office will assure 
performance results that advance and safeguard our national energy 
security objectives by (1) assuring access to reliable and affordable 
energy supplies through a balanced and diversified portfolio of energy 
sources and modernization of energy infrastructure; (2) securing 
continuous improvement in energy efficiency and conservation through 
technology research development and deployment to manage effectively 
and extend our energy resources, reduce demand and lower costs; (3) 
assuring environmental progress and sustainable growth; and (4) 
assuring that a robust market guides pricing, technology deployment, 
energy efficiency, fuel selection and energy systems.
                 reducing dependence on energy imports
    The FY 2004 budget request implements many of the recommendations 
of the President's National Energy Policy (NEP) that emphasize federal 
investment on future energy solutions. This budget was formulated using 
a rigorous performance evaluation process as directed in the 
President's Management Agenda, to focus research and development 
resources where they make the most difference. As a result, the FY 2004 
request for energy programs maintains high performing energy programs 
focused on the Nation's energy future. Hydrogen as a source of energy 
supply holds the promise of an ultra-clean and secure energy option for 
America's future. Another longer-term potential energy solution still 
at the level of basic scientific pursuit is fusion energy, which if 
successful, could help reduce the Nation's reliance on energy imports.
    President Bush spoke of the remarkable potential of hydrogen as the 
transportation fuel of the future in his State of the Union Address. 
This Administration is determined to move us forward to a world in 
which new, abundant, safe and clean fuels replace our current energy 
sources.
    The President's new Hydrogen Fuel Initiative, together with the 
FreedomCAR initiative, announced one year ago to develop hydrogen fuel-
cell technology for vehicles, will dramatically increase our investment 
in the complex research and development effort to produce a personal 
transportation fleet powered by hydrogen fuel cells, and the 
infrastructure to support it. It will, to borrow the striking image 
used by the President, make it possible for the first car driven by a 
child born today to be powered by hydrogen, and pollution-free.
    The FY 2004 Budget proposes $169 million to continue to implement 
FreedomCAR to bring a full range of emissions-free, affordable cars and 
light trucks closer into being. The companion initiative, Hydrogen 
Fuel, focuses on the supply side of hydrogen power--to conduct the 
research and development necessary to help industry establish a 
delivery infrastructure and to resolve storage issues. With the 
proposed total funding of $272 million for Hydrogen Fuel and FreedomCAR 
initiatives in FY 2004, DOE will help lead in the design and 
development of the technologies and infrastructure needed to create a 
new energy future.
    Our Hydrogen Fuel and FreedomCAR partnerships represent public-
private sector efforts of great complexity. The participation of 
government is important for coordinating the high-risk R&D work of 
numerous private sector partners and our national network of science 
laboratories. Government coordination will help resolve one of the 
difficulties associated with the development of a commercially viable 
hydrogen fuel-cell vehicle: the ``chicken and egg'' question. Which 
should come first, the vehicle, or the infrastructure of manufacturing 
plants, distribution and storage networks, and the convenient service 
stations needed to support it? Our hydrogen programs answer the 
question by proposing to help industry in developing both the vehicle 
and the infrastructure in parallel, by conducting research and 
development on critical technical issues. By so doing, we believe that 
we can advance industry's commercialization decision by 15 years, from 
2030 to 2015.
    Our hydrogen programs are exactly the right kind of effort for 
government to invest in because we believe that the potential public 
benefits of a hydrogen personal transportation fleet are so large 
compared to the costs. The hydrogen programs will tangibly, and 
positively, affect the life of every single American, beginning with 
the cars we drive and extending to the way we heat our homes and power 
our businesses. The public benefits we expect include increased energy 
security through decreased dependence on oil imports, and improved 
environmental conditions.
    The achievements of the FreedomCAR and Hydrogen Fuel programs will 
come from the private sector, which will create the products that 
ultimately must win favor in the free market. The Federal government 
will assist, aid, coordinate, sponsor, and fund. But we will not pick 
one technology over another, or insist that our partners follow a path 
we dictate.
    Over the next five years, we plan to request approximately $1.7 
billion for FreedomCAR and the Hydrogen Fuel Initiative. Our FY 2004 
Budget nearly doubles FY 2003 spending for our hydrogen and fuel cell 
R&D partnerships with the private sector. We have drawn a roadmap to 
zero emissions and energy independence with the hydrogen programs, and 
we plan to vigorously pursue this exciting ride into the future. The 
funding will be focused on overcoming the daunting challenges of fuel 
cell cost; hydrogen production using fossil fuels, nuclear energy and 
renewable energy sources; on-board hydrogen storage; infrastructure; 
and development of uniform codes and standards.
    There is a great deal of work to be done, but the promise of these 
programs is real and achievable. Hydrogen presents us with the 
possibility of a transformed transportation sector, along with many 
other possible commercial, residential and industrial applications.
    Fusion Energy: Nuclear fusion, the physical process that powers the 
sun, is an energy source of the future that could transform the way we 
produce electricity. By reproducing the sun's process for transforming 
matter into energy, we may be able to create a new energy source that 
would produce no greenhouse gases or other polluting emissions, produce 
no high-level nuclear waste or fissionable materials, and be 
extraordinarily safe to operate. And, if successful, fusion power could 
have a prominent role in the production of hydrogen later in this 
century.
    Fusion's potential is too great to ignore and this Administration 
wants to grasp it by rejoining the International Thermonuclear 
Experimental Reactor (ITER). ITER is an international fusion energy 
research and development project designed to take the next major step 
in the development of fusion energy. The Department of Energy is the 
lead U.S. agency in this effort. We have dedicated $12 million within 
the Fusion Energy Sciences program budget for FY 2004 to support 
research directly tied to our participation in the ITER projects. ITER 
will be one of the world's largest international cooperative research 
and development project. It will take about 10 years to build at a cost 
of approximately $5 billion. It is expected to operate for about 20 
years.
    We estimate our investment in ITER over the next 10 years will 
total $500 million, plus contingency and inflation. This is obviously a 
major investment that reflects the seriousness we attach to this 
venture into new realms of scientific understanding. There is enormous 
potential in fusion, and we want to lead in its development with our 
ITER partners.
    Weatherization & Intergovernmental Activities: In FY 2004, we are 
requesting $357 million for Weatherization & Intergovernmental 
Activities, $2.5 million less than our FY 2003 budget request.
    The Weatherization and Intergovernmental Program activities support 
the President's National Energy Policy recommendations for rapid 
deployment of clean energy technologies and energy efficient products. 
The program's funding request also supports the President's commitment 
to increase funding for the Weatherization Assistance Program, which 
improves the energy efficiency of dwellings occupied by low-income 
Americans, by $1.4 billion over ten years.
    Our Weatherization Assistance Program request ($288.2 million, 
$11.1 million above the FY 2003 amended budget request) supports 
weatherization of approximately 126,000 low-income homes. Based on 
historic data, the program anticipates that low-income families will 
save $1.80 in energy costs for every dollar invested over the life of 
the efficiency improvements. The Weatherization Assistance Program was 
assessed using the Administration's PART and was rated Moderately 
Effective.
    Nuclear Energy: Over the last thirty years, nuclear power has risen 
to become the second most important source of electric energy in the 
United States and at the same time, the most operationally economic. 
The benefits of nuclear power as a clean, reliable and affordable 
source of energy are key to the economic and environmental 
underpinnings of this Nation. A central mission of the Department's 
nuclear program is to help enhance the basic technology and through 
some of the most advanced civilian technology research conducted today, 
chart a course to the next leap in technology. In FY 2004, we are 
proposing a $388 million investment in nuclear research and development 
and for the Nation's nuclear science, technology, and education 
infrastructure.
    This budget request responds to the President's priorities to 
deploy new generation capacity to fortify U.S. energy independence and 
security while making significant improvements in environmental 
quality. It continues the important work started over the last two 
years to deploy new nuclear plants in the U.S. by the end of the 
decade, to develop advanced, next generation nuclear technologies and 
proposes exciting new priorities--a new Nuclear Hydrogen Initiative to 
use high temperature nuclear energy systems for clean hydrogen 
production as part of the President's new hydrogen fuel initiative.
    With these successes, we are able to pursue research that can 
optimize the use of the first repository and possibly reduce the need 
for future repositories. For years, countries around the world have 
pursued advanced technologies that could treat and transmute spent 
nuclear fuel. For the last three years, the U.S. has been a participant 
in this research. As one of my capstone initiatives, the FY 2004 budget 
request proposes an aggressive research and demonstration program, the 
Advanced Fuel Cycle Initiative, to explore advanced, proliferation-
resistant fuel treatment technologies, fuels, and fuel cycle 
technologies. 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.
    However, in order to realize the full potential of this program and 
create waste forms that are sufficiently clean of long-lived, highly 
toxic species, to significantly reduce the time in which the material 
is hazardous, the efforts of AFCI must be integrated with advanced 
reactor research and development underway as part of our Generation IV 
nuclear energy systems initiative.
    Two years ago, we launched the Generation IV program with nine 
other leading nuclear nations to develop advanced reactor technologies 
for commercial deployment after 2010 but before 2030. These reactor 
technologies offer significant advances in the area of sustainability, 
proliferation-resistance and physical protection, safety and economics. 
The international community has converged on six promising technologies 
for possible joint development, which include two gas-cooled, two 
liquid-metal-cooled, a molten salt-based reactor concept. While the 
Department has not yet decided upon which of these technologies it will 
eventually focus, all of the technologies are of considerable interest.
    The Generation IV initiative is also closely linked to our new 
Nuclear Hydrogen Initiative, aimed at demonstrating economic 
commercial-scale production of hydrogen using nuclear power as early as 
2015. The use of hydrogen using high temperature advanced reactors such 
as advanced gas-cooled or liquid metal cooled reactors can provide the 
heat necessary for the process. These technologies offer the potential 
for large-scale, emission free, hydrogen production, key to providing 
for our Nation's long term energy security and reducing reliance on 
imported oil. Today, through electrolysis, we can convert water to 
hydrogen using electricity, but we believe that for the future, high 
temperature nuclear energy systems coupled with thermo-chemical water 
splitting processes offer more efficient technology for the production 
of large quantities of hydrogen without the release of greenhouse 
gases.
    Finally, this budget request allows the realignment of the mission 
of the Idaho National Engineering and Environmental Laboratory, 
revitalizing the site as the Department's leading center of nuclear 
research and development. While environmental cleanup remains a 
priority at INEEL for the next few years, the longer term focus of the 
site will transition to nuclear R&D, in areas such as Generation IV 
technologies, advanced fuel cycle technologies, and space nuclear power 
and propulsion technologies. This budget request contains more than 
$100 million within the Office of Nuclear Energy, Science and 
Technology budget for the INEEL infrastructure, security, and for 
research.
                achieve a cleaner, healthier environment
    Protecting the environment is compatible with increasing the supply 
of dependable, secure energy. President Bush said: ``Sustained economic 
growth is the solution, not the problem, because a nation that grows 
its economy is a nation that can afford investments and new 
technologies.'' By harnessing the power of American science and 
technology, we can achieve both energy independence and a cleaner, 
healthier environment. The FY 2004 Budget embodies a commitment to 
current and future generations of Americans to accelerate the cleanup 
of environmental damage resulting from Cold War nuclear programs, 
reduce the polluting effects of energy sources, and develop secure 
energy technology options for the future.
    Environmental Management: The budget request for Environmental 
Management (EM) activities totals $7.2 billion, approximately 5 percent 
above the comparable FY 2003 request and the FY 2003 appropriation, to 
accelerate risk reduction and closure. This is the highest amount ever 
requested for these programs. Although only a small portion of this 
activity is within the jurisdiction of this Committee, I would like to 
highlight these within the context of the entire program budget. The 
request includes:

   Defense Site Acceleration Completion ($5.8 billion);
   Defense Environmental Services ($995 million);
   Non-Defense Site Acceleration ($171 million);
   Non-Defense Environmental Services ($292 million);
   Uranium Enrichment Decontamination and Decommissioning Fund 
        ($418 million).

    The Environmental Management program was created in 1989 to safely 
manage the cleanup of the environmental legacy from 50 years of nuclear 
weapons production and nuclear energy research at 114 sites around the 
country. The scope of the program includes stabilization and 
disposition of some of the most hazardous materials known. In February 
2002, the EM program released a Top-to-Bottom Review, which revealed 
that process rather than cleanup results had been the basis for 
performance and cleanup approaches.
    Following this review, the EM program committed to devote the next 
eighteen months to developing and implementing several key management 
reforms that would drive accelerated risk reduction and project 
completion. In one year, we have begun developing and implementing four 
management reforms, which serve as the basis for the EM program's 
accelerated risk reduction cleanup initiatives. These reforms are:
    Acquisition Strategy--We are implementing a strategy that will both 
increase competition by enlarging the pool of potential contractors 
competing for our work and increasing the accountability of our 
contractors to deliver real, meaningful cleanup.
    Configuration Control--EM has begun implementing a strict 
configuration management system that baselines a number of key, 
critical program elements, such as Performance Management Plans, EM 
corporate performance measures, and life-cycle costs. Strict 
configuration control and monitoring of these key elements will 
facilitate a high confidence level that the goals and direction of the 
accelerated cleanup initiatives are being met.
    Human Capital--This reform strongly supports the President's 
Management Agenda. EM is building a more robust organizational and 
performance accountability system that holds each manager and employee 
accountable for actions and results. Individual performance management 
is being fully integrated into EM organizational goals. We have 
completed two phases of senior executive reassignments between both the 
Field and Headquarters.
    New Budget Structure--We have developed and begun implementing a 
new budget structure, which complements other management reform 
initiatives by focusing on completion and endpoints, and communicating 
EM's goals and objectives. The new budget structure clearly identifies 
scope and resources that directly support the accelerated cleanup and 
risk reduction mission.
    Since the release of the Top-To-Bottom Review, significant progress 
has been made with respect to these management reforms. In addition, EM 
has made efforts to identify and implement changes in ten areas 
emphasized in the Top-To-Bottom Review that are critical to the success 
of the program. EM has focused these activities into special projects, 
each with a complex-wide perspective. Successful execution of these 
projects is crucial to improving the performance of the program and 
eliminating many of the barriers that have hindered previous 
initiatives to accelerate cleanup and reduce life-cycle cost.
    In FY 2004, the EM program will continue making progress in 
implementing management reforms and making changes in the areas 
emphasized in the Top-To-Bottom Review. The EM FY 2004 Budget request 
has been tailored to meet our mission of accelerated risk reduction and 
completion. The most impressive aspect of this budget is that it fully 
reflects each site's new accelerated risk reduction and cleanup 
strategies. The strategic groundwork has been laid and the EM program 
is moving forward. Through the implementation of accelerated cleanup 
strategies, the EM program anticipates that cleanup will be completed 
at least 35 years earlier than originally anticipated (2035) and life-
cycle savings of greater than $50 billion will be achieved. The budget, 
in addition to accelerating our current programs, includes $90 million 
for the construction of new facilities for the conversion of depleted 
uranium hexafluoride at our two gaseous diffusion plants at Paducah, 
Kentucky and Portsmouth, Ohio.
    Civilian Radioactive Waste Management: The President's February 
2002 recommendation and Congress' July 2002 approval of Yucca Mountain, 
Nevada as the Nation's high level nuclear waste repository was a 
seminal step in advancing the Department's goal to ensure the safe and 
secure disposition of dangerous nuclear materials away from the hands 
of terrorists. The budget requests $591 million for the Department's 
repository program. This request coupled with the FY 2003 requested 
amount would support the completion of work needed for the submission 
of a license application to the Nuclear Regulatory Commission in 2004 
and the development of transportation capabilities needed to initiate 
repository operations by 2010. However, the $131 million reduction from 
the President's FY 2003 budget request together with the four month-
long continuing resolution, has introduced a high risk in our ability 
to meet a December 2004 license application date. We are assessing the 
impacts of this reduction in terms of additional funding needs to close 
the FY 2003 budget shortfall.
    National Climate Change Technology Initiative (NCCTI): The FY 2004 
Budget includes $40 million to continue support for the competitive 
solicitation program under the NCCTI proposed in the FY 2003 amended 
budget. This unique program will spur innovation through competition 
based on various technologies' potential to reduce, avoid, or capture 
greenhouse gas emissions. Because of the diverse energy technologies 
involved, the expanded competitive solicitation program will cut across 
three programs in the Department in the FY 2004 request: $24.5 million 
is proposed within the portfolio of the Energy Efficiency and Renewable 
Energy activities ($15 million in renewable energy and $9.5 million in 
energy conservation); $2.3 million is proposed within the Nuclear 
Energy Science and Technology program; and $13.2 million is proposed in 
the Fossil Energy program. These collaborative programs will focus 
climate change research and development investments on high-priority 
areas, where breakthrough technologies can slow the growth in 
greenhouse gas emissions, and selecting projects based on their ability 
to contribute to greenhouse gas mitigation.
    The President's Coal Research Initiative. The FY 2004 Budget 
continues to meet the President's commitment to spend $2 billion on 
clean coal research over 10 years by providing $320.5 million for the 
President's Coal Research Initiative. This request for coal research is 
over two and one-half times the average request from 1995-2000. Since 
last year, the Department has made significant progress on a new 
generation of environmentally-clean coal technologies.
    Our ``first round'' solicitation in the Clean Coal Power 
Initiative--the centerpiece of the President's clean coal commitment--
attracted three dozen proposals for projects totaling more than $5 
billion. On January 15, 2003, we announced the first winners of this 
competition--eight projects with a total value of more than $1.3 
billion, more than one billion dollars of which would be provided by 
the private sector. Industry has again stepped to the table, offering 
both good ideas and significant private sector cost-sharing.
    In FY 2004, we are requesting $130 million as the next 
``installment'' of the Clean Coal Power Initiative. The President's 
Clean Coal Power Initiative is especially significant because it 
directly supports the President's Clear Skies initiative. The first 
projects, for example, included an array of new cleaner and cheaper 
concepts for reducing sulfur dioxide, nitrogen oxides, and mercury--the 
three air pollutants targeted by the Clear Skies initiative. To ensure 
that even more effective pollution control concepts continue to emerge 
as candidates for future clean coal competitions, we are requesting 
$22.0 million for research into even cleaner and more affordable 
innovations for existing plants.
    Northeast Home Heating Oil Reserve: We are requesting $5.0 million 
for the Northeast Home Heating Oil Reserve. The $3.0 million decrease 
from last year's request reflects cost savings realized from 
recompeting our commercial storage contracts. The 2-million barrel 
reserve remains ready to respond to a presidential order should there 
be a severe fuel oil supply disruption in the Northeast. A key element 
of this readiness is a new online computerized ``auction'' system that 
we implemented during the last year to expedite the bidding process. 
Installing and testing the electronic system (including tests with 
prospective commercial bidders) has been a major element of the Office 
of Fossil Energy's role in implementing the ``e-government'' 
initiatives in the President's management agenda.
                  improving our energy infrastructure
    Failure to meet increasing energy demand with increased energy 
supplies and vulnerability to disruptions from natural or malevolent 
causes could threaten our Nation's economic prosperity, alter the way 
we live our lives, and threaten our national security.
    DOE will continue assist in meeting this homeland security 
challenge. To that end, the FY 2004 budget proposal maintains an 
analytical capability to support the Department's energy security 
responsibilities. Included in the budget is $4.3 million for Energy 
Assurance activities to continue to support energy security activities 
led by the Department of Homeland Security. This is a key concern 
underlying the President's NEP recommendations.
    The FY 2004 Budget includes a breadth of activities that will help 
improve the Nation's energy infrastructure. The Distributed Energy and 
Electric Reliability Program supports research, development, and 
deployment of electric reliability technologies that will upgrade 
America's aging electric power infrastructure during the transition to 
competitive electricity markets. The FY 2004 budget request is $76.9 
million for Electric Reliability to develop technologies that will 
relieve congestion on transmission and distribution systems, reduce 
consumption and increase energy supplies during periods of peak demand, 
accelerate the introduction of advanced systems to improve the 
efficiency of market operations, and reduce environmental emissions, 
including greenhouse gases. In FY 2004, the Electric Reliability 
activity will complete a national interest transmission bottleneck 
assessment to identify congestion on the transmission system and work 
with regions, states and localities to remove bottlenecks where 
benefits outweigh the costs. In addition, the activity will work with 
transmission operators to deploy real time monitoring and control 
technologies to operate the existing grid more reliably and electricity 
markets more efficiently. The Department also proposes $47.8 million 
for the High Temperature Superconductivity (HTS) activity to improve 
the reliability of transmission system components through the 
development and testing of the 100-MW prototype HTS generator, new 
designs of HTS power cables, and the 10-MW prototype HTS transformer.
    As directed by the NEP, DOE will continue to work to remove 
constraints on the interstate transmission grid to help ensure that our 
Nation's electricity can flow more freely. In FY 2004, DOE and its 
Power Marketing Administrations (PMAs) will continue efforts to help 
ease the West Coast energy problems and help meet the region's long-
term power and infrastructure needs. Last fiscal year, the Department's 
Western Area Power Administration participated in negotiations with two 
private companies to secure private sector financing for construction 
of ``Path 15'' transmission facilities that will relieve the critical 
transmission bottleneck between northern and southern California. This 
project, scheduled to be operational in late 2004, will reduce the 
likelihood of blackouts in Northern California. Finally, each PMA 
continues to work directly in the development of regional transmission 
organizations in response to the Federal Energy Regulatory Commission's 
Order 2000. This activity is consistent with the Administration's 
support for competitive wholesale electric energy markets.
         maintaining a world class scientific research capacity
    We propose to spend $3.3 billion in FY 2004 on our Science 
programs. The Science budget will fund real, programmatic increases of 
over $170 million, due in large part to the planned completion of 
construction projects which will occur this year.
    The FY 2004 budget request for the Office of Science supports the 
President's goal of ensuring continued U.S. leadership in science, and 
will enable the Office of Science to continue to support the 
Department's missions in energy, environment and national security. The 
Office of Science has provided approximately 40 percent of all federal 
funds in the physical sciences over the past decade. It is also the 
steward, and by far the principal funding agency, of the Nation's 
research programs in high-energy physics, nuclear physics and fusion 
energy sciences, as well as being the federal government's largest 
single funder of materials and chemical sciences. The Office of Science 
also supports unique or critical pieces of U.S. research in scientific 
computation, climate change, geophysics, genomics, and the life 
sciences. This research is conducted at both the Department's national 
laboratories and at approximately 250 universities nationwide. The 
Office of Science manages the construction and operation of some of the 
Nation's most advanced research and development facilities--a vital 
part of the Nation's scientific infrastructure used by over 18,000 
researchers annually.
    The Administration's FY 2004 evaluation of the Office of Science 
found that it had clearly defined purposes and was generally well 
managed, and cited its process of external reviews of construction 
projects as a ``. . . widely recognized effective practice.'' The 
Office is automating many of its routine operations and by the end of 
FY 2004, 100% of grant and contract proposals will be received 
electronically. The Office is now in the process of implementing a 
restructuring to improve oversight of our laboratories by removing a 
layer of line management and instituting clear chains of 
responsibility, in accordance with the principles of the President's 
Management Agenda.
    The Office of Science FY 2004 budget request is $3.311 billion, 
slightly higher than the FY 2003 request. The Office of Science 
research programs are managed in six major areas, and also include a 
restructured and enhanced effort in science education. Let me now 
address some highlights within the Office of Science budget.
    The capabilities of terascale computing are transforming the 
conduct of science, bringing scientific simulation through 
computational modeling to parity with theory and experiment as a 
scientific tool. The Office of Science's program in Advanced Scientific 
Computing Research is at the center of efforts to realize the full 
potential of scientific simulation to solve mission related problems. 
In FY 2004, $14 million is dedicated to a new Next Generation 
Architecture program to optimize computer architecture to meet the 
special requirements of scientific problems. This effort will include 
both evaluation of the impact of alternative architectures on 
application performance, and software research on next generation 
operating systems.
    The FY 2004 request for the Office of Science's Basic Energy 
Sciences program increases funding for the President's initiative in 
nanoscience by $64 million, to $193 million. This will allow 
construction to proceed on a Nanoscience Research Center at Oak Ridge 
National Laboratory, as well as new construction of Nanoscience 
Research Centers at Lawrence Berkeley National Laboratory and Sandia 
National Laboratory in partnership with Los Alamos National Laboratory. 
The FY 2004 request continues funding for construction of the 
Spallation Neutron Source, which, following a rebaselining and 
rescoping exercise in 2001, is now on budget and schedule for 
completion in June of 2006.
    The FY 2004 budget request for the Office of Sciences Biological 
and Environmental Research program provides $59 million, an increase of 
$24 million, for the continued growth of the Genomes to Life program, 
and $25 million, an increase of $22 million, for the Climate Change 
Research Initiative. This initiative will extend research in climate 
modeling, atmospheric composition and the regional impacts of climate 
change.
    The High Energy Physics program supports almost 90 percent of U.S. 
research in high-energy physics. This research has the goal of 
developing a deeper understanding of the basic nature of matter, space, 
time and energy. The FY 2004 request will reflect an increasing 
emphasis on non-accelerator-based research projects. Funding will be 
increased for the Supernova Acceleration Probe at Lawrence Berkeley 
National Laboratory, a space-based experiment to explore the nature of 
``Dark Energy,'' an unknown force that is accelerating the expansion of 
the universe.
    The Department's nuclear physics research program is the principal 
sponsor of nuclear physics research in the U.S., providing 85% of 
federal support. This research seeks a deeper understanding of the 
properties of nuclear matter. To support recent results from neutrino 
physics experiments, which point to new physics beyond the Standard 
Model, FY 2004 funding has been increased to support non-accelerator-
based experiments used to investigate the physics of neutrinos in 
international collaborations at the Sudbury Neutrino Observatory, 
KamLand and elsewhere.
    In response to the President's call for a ``qualified teacher in 
every classroom,'' in FY 2004 the Office of Science will begin in FY 
2004 a pilot program at Argonne National Laboratory, funded at $1 
million, to exploit the resources of the national laboratories to 
provide 4-8 weeks of professional development for K-14 science and 
mathematics teachers, competitively selected and matched with 
laboratory mentors working in their field of instruction. Intensive 
follow-up and performance measures will be applied to assess the 
results of this pilot. This initiative will help improve the quality of 
instruction in science and mathematics, and address a critical national 
problem, developing a technically trained and educated workforce for 
the 21st century.
                               conclusion
    Mr. Chairman and Members of this Subcommittee, that concludes my 
prepared statement. I will be glad to answer any questions you may have 
at this time.

    The Chairman. I think, since we have so many Senators, we 
will use the 5-minute rule, if that is satisfactory. So we can 
use it on the chairman and the ranking member, also, until we 
get down to you, John, before we have to leave.
    Mr. Secretary, I am sure that you are aware that heating 
oil prices have hit a record high. Gasoline prices have hit $2 
a gallon. And crude oil prices remain about $36 a barrel. Oil 
supply remains constrained as a result of the Venezuelan strike 
that cut oil production from 3 million barrels a day to less 
than a million barrels.
    I would like to ask you, what is the administration doing 
to minimize the economic disruption as a result of the high 
price of the natural gas and oil?
    Secretary Abraham. Well, in the short term, as I think you 
know, the administration has provided relief in the form of 
additional LIHEAP assistance. I believe the President directed 
the Secretary of Health and Human Services to add an additional 
$200 million of LIHEAP assistance very recently. Obviously, 
both the Congress and the President are beginning work on an 
economic stimulus package, hopefully to provide help to our 
constituents around the country as well.
    The challenges we have, though, on energy prices are ones 
that all too often repeat themselves, as this committee knows. 
In fact, I recall that when I first testified at the Energy 
Committee a couple of years ago, we had high prices as well. In 
fact, a comparison shows that these trends are similar to the 
ones we had at that time. People thought we were pushing for 
changes in energy policy and energy legislation because there 
was a crisis. And once the crisis abated, prices went down. 
People said, well, we do not really need to take action.
    In my opinion, the most important thing we can learn from 
this competitive cycle is that we do need to have and implement 
a strong, comprehensive national energy policy. And it is not a 
case where these problems will go away. They will not, as we 
know, in the statistics you just referenced. So we need to take 
action, I think, to try to address this, so that in the long 
term we do not have a consistently repeating cycle of extremely 
high prices for energy commodities or shortages.
    We care a lot about this. We have put in place an energy 
hot line so that consumers can let us know if they are seeing 
people take advantage of this situation, something we want to 
prevent. But the best way to deal with it is through 
comprehensive legislation.
    The Chairman. Mr. Secretary, let me just be specific. Could 
you share with us what you know about Venezuelan production? Is 
it returning to its previous market conditions? Or just where 
are things with reference to us being able to expect a return 
to the marketplace of their production?
    Secretary Abraham. Well, it is my understanding, Mr. 
Chairman, that the crisis in Venezuela that had essentially 
shut production has passed. But it is also the case that it 
takes a fair amount of time to fully restore production to the 
levels that existed before the strike. We were given an 
estimate of anywhere from 60 to 90 days between the point when 
things started to come back on line to when that would be fully 
done. I know that we are monitoring that closely. I cannot give 
you a specific date as to when it will be at full strength. But 
obviously, the disruption caused by that strike has been felt 
particularly hard here in this country because of the extensive 
amount of work that we do in terms of the purchase of 
Venezuelan crude.
    The Chairman. Let me just be more specific. We hear and 
know how long it took after the Iranian situation, when they 
had the big turmoil, how long it took to get full production 
back. Could you tell us for the record what is the expectation 
of the United States as to how will Venezuelan oil come back 
onto the market and when we can expect it?
    Secretary Abraham. I do not think I can give you a more 
specific answer than the estimate I just did. But I would be 
glad to take that for the record, Mr. Chairman, and provide you 
with that.
    The Chairman. All right. And let me ask with reference to 
the Strategic Petroleum Reserve, as it applies to the question 
I asked. Has the administration agreed to postpone the delivery 
of Strategic Petroleum Reserves in order to keep the supplies 
in the market more level?
    Secretary Abraham. Yes. As I think the committee knows, we 
had made a decision to fill the Reserve to its full 700 million 
barrel capacity. That was being done at a pace about 120,000 
barrels a day. We have made decisions to defer the receipt of 
shipments from the royalty in kind program. We made that 
decision as it applied to January, February, and March, to try 
to keep that crude in the market. We are monitoring that as we 
continue to monitor all of these issues to determine whether we 
would continue or extend into the next period a deferral.
    The Chairman. Let me talk a little bit with you about the 
funding of science programs just as briefly as I can. I think 
in order to fund programs within the amount that the OMB and 
the President have allocated to you, you have had to cut back 
or freeze some of the expenditure in the physical science 
areas. Would you share with me the concern that we must do more 
to increase our talent pool in the physical sciences and that 
increased budgets for the Office of Science are critically 
important in future years?
    Secretary Abraham. Mr. Chairman, as you and I think 
everybody on this committee is aware, the laboratories that are 
in the Department of Energy are, as some have said, the crown 
jewels in terms of America's science and technology leadership. 
And as in other areas of science, the National Institutes for 
Health and the National Science Foundation, there has been a 
tremendous amount of support and focus here on Capitol Hill. I 
recall that as a cosponsor to such legislation when I was in 
the Senate. There has been a lot of focus on those programs, 
maybe not enough on that which goes on in the basic science, 
perhaps because it is not as easy to appreciate that type of 
work as in the applied sort of context where we can understand 
the direct connection.
    But people tend to, therefore, not know that it was in 
these labs of the Department of Energy that the human genome 
project got its start. And we are now engaged in an exciting 
program to develop a means by which we could have a--we can 
address the problems of retina disease with an artificial 
retina.
    The budget we have submitted has, as sort of an underlying 
component, the fact that a number of major projects, for 
example the Spallation Neutron Source in Tennessee, are coming 
to completion. So when those programs are finished, it will 
mean that there actually is a little gain in terms of the 
overall budget, about a 4-percent gain in real terms, when you 
do not have to continue funding programs that are completed. 
But we intend to focus on this a lot and look forward to 
working with the committee to identify, as we move forward, 
other areas in which we might want to enlarge our science 
commitment.
    The Chairman. Senator Bingaman, I am going to allow you 2 
or 3 minutes extra, because I have one additional question.
    Senator Bingaman. Go ahead.
    The Chairman. Mr. Secretary, in preparing for the 
introduction and the markup of a comprehensive energy bill, a 
matter that has come to my attention as being one of the most 
difficult has to do with electricity, the whole area. And in 
particular, we are engaged right now in a very heated 
discussion, Senators to Senators, on the standard market design 
issue.
    I know that many times the Department chooses to say that 
is an issue for FERC, for the Federal Energy Regulatory 
Commission. But I want to suggest to you that there is no more 
important issue with reference to putting together a bill than 
how we handle the issue of the SMD. Regulate more, regulate 
less, leave it up to the States, have the Federal Government do 
more?
    And in the omnibus appropriation bill, you have been 
directed to study for us and give us your views with reference 
to these standard market design. And you are supposed to do 
that by April 30.
    Secretary Abraham. Right.
    The Chairman. I do not think you have a more difficult 
assignment. And I want to urge that you be sure you use neutral 
experts, so that we get a report that is really helpful to us 
and does not just repeat the likes or dislikes of certain 
individual people, but rather what is good for the country. Are 
you already disposed and starting to put together that study?
    Secretary Abraham. We look forward to sharing that with 
everyone when we complete it, as you mentioned, by April 30. We 
have, throughout the process of work on energy legislation, 
consulted with a wide array of people with different 
perspectives on this. And we have also encouraged, you know, 
FERC to engage in consultation with stakeholders across the 
spectrum to ensure that really any final rule they might have 
consider such things as not just concerns about reducing cost 
to consumers and improving reliability, but also that we take 
into account regional differences that I think have to be 
acknowledged in any kind of final product.
    And so all of those are part of what we are trying to 
assess right now in preparing this report for Congress.
    The Chairman. Thank you very much.
    Senator Bingaman.
    Senator Bingaman. Thank you very much, Mr. Chairman.
    Mr. Secretary, the International Energy Agency announced 
that member countries will release oil from their Strategic 
Petroleum Reserves in case there is an attack on Iraq as a way 
to calm the markets. Are we taking the same approach as the 
IEA? Have we said anything, have you said anything about----
    Secretary Abraham. No.
    Senator Bingaman [continuing]. About willingness to 
coordinate a draw down with other IEA countries in the case of 
an attack on Iraq?
    Secretary Abraham. I do not know that I have said anything 
prior to right now. What I would say to you today is this, that 
we will and we can act quickly to use the Strategic Petroleum 
Reserve to fortify efforts by producers to offset any severe 
disruption, if it is needed. But we would make that kind of 
decision on the release of oil reserves only in consultation 
with our IEA partners in the event of an actual severe 
disruption in supply.
    One of the--I think the top recommendation of Vice 
President Cheney's task for report on energy a couple years ago 
said, and I quote from it, it says, ``The NEPD group recommends 
that the President direct the Secretaries of Energy and 
Interior to promote and enhance oil and gas recovery from 
existing wells for new technology.''
    The program in your Department that is intended to 
accomplish this, the Petroleum Oil Technology R&D Program, is 
proposed for a 60-percent cut in this budget. How do you 
explain such lack of priority for this, if in fact you are 
interested in enhancing recovery through new technology?
    Secretary Abraham. Well, first of all, we are interested in 
enhancing our energy recovery from domestic production. That 
policy has not changed. The issue that comes to play here is a 
question of the effectiveness of the program as currently run. 
Both we in the Department and the Office of Management and 
Budget conducted comprehensive efforts to try to evaluate 
programs, not just in our agency, but throughout the 
Government, and deemed some of these programs to be among the 
least effective in terms of the way they are presently 
operated. And we want to make them better.
    And we do not think that continuing the program at the 
previous level is justified, in light of our own evaluation and 
that of OMB. We are in the process of trying to make the 
program more effective in the future. And one of the jobs of 
our fossil energy program right now is to try to reexamine 
those areas, both the oil and gas program and natural gas 
programs, to try to produce a more effective blueprint for the 
future.
    Senator Bingaman. And your thought is by cutting the fund 
60 percent, you can get a more effective program?
    Secretary Abraham. The thought was that continuing to spend 
the money on a program that is ineffective is not a wise use of 
taxpayer money. And I wanted to come back to this committee 
with a program in the future that I felt that I could 
competently present as something that will get the job, not 
something that can be deemed ineffective by evaluators.
    Senator Bingaman. One of the other issues of great concern 
around here is environmental cleanup. New technologies for 
environmental cleanup at DOE sites obviously are important to 
us, those of us who have States or are from States that have a 
large DOE presence. Last year we were told that the research 
program in the Office of Environmental Management would be 
transferred to the Office of Science. There appears to have 
been no transfer of funding along with this program, as I 
understand it.
    The EM program has had its budget reduced by $136 million, 
from $200 million to $64 million, in this budget request. And 
at the same time the program in the Office of Science that was 
supposed to pick up this research has seen its budget reduced. 
In that case, not as much. In that case, only from $112 million 
to $109 million.
    What has happened to this program? And what has happened to 
this $136 million that seems to have been lost in the transfer?
    Secretary Abraham. Well, I would not say it is lost. As I 
mentioned in my opening comments, the overall budget for 
environmental management and cleanup is actually the highest 
budget submission that has ever been made. It is basically 
being used to help us move to an acceleration of cleanup to 
actual risk reduction at the sites, as opposed to just managing 
the risk.
    We really believe that--and I was, as I have shared with 
the committee before, quite frustrated when I was given a 
blueprint for the environmental cleanup program to learn the 
plan was a 70-year plan at the cost of hundreds of billions of 
dollars. The communities who had had these sites were going to 
see no actual progress in terms of finality and cleanup for 70 
years.
    And so we have worked with all of our sites to determine 
what are the highest risks, to start actual risk reduction on a 
more accelerated basis. Our plan will now mean that we finish 
this work not in 2070, but in 2035. And so as opposed to 
focusing as many resources on developing new technologies for 
cleanup, we are actually doing cleanup, which I think is our 
top priority.
    We are not ending those programs, but we are trying, at 
least in the initial period, to substantially reduce the actual 
risk itself.
    Senator Bingaman. Let me just ask one follow-up very 
quickly. I am right, though, that this program, this 
environmental cleanup program, has now been shifted to the 
Office of Science.
    Secretary Abraham. Basically.
    Senator Bingaman. And it is expected that the Office of 
Science should perform this program, in addition to its other 
responsibilities, for less of a budget in 2004 than it had in 
2003 before it got the program.
    Secretary Abraham. Well, the answer is that we feel that 
the expertise in our science division is the right kind of 
expertise to advance new technologies. We are not emphasizing 
new technologies at this point, as much as we are advancing 
actual cleaning up the sites, which we believe is the principal 
mission of our Department.
    Senator Bingaman. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Bingaman.
    Senator Alexander?
    Senator Alexander. If Senator Kyl has to leave, I think I 
would be glad to--no? Okay.
    Thank you, Mr. Chairman.
    Mr. Secretary, thank you for being here. I have a question 
about research and development, following up the Chairman's 
point about the Office of Science, and also, if I have time, 
about transmission.
    As we look at the comprehensive energy bill, it has many 
parts. And use and generation and regulation often wind up on 
the front page. R&D and transmission are not usually getting as 
much attention. I am a big believer in research and development 
is this country's secret weapon, whether it is our great 
universities that have helped us do that or our laboratories or 
just the brainpower of the United States.
    And as we think about, as you were indicating, how we fight 
wars or cure disease or have clean energy, that our real ace in 
hole in this country is R&D. I have been very pleased to see 
the country make a commitment to double the funding over the 
next number of years for NIH. I am concerned that we may not be 
making the same kind of ambitious plans for the physical 
sciences, particularly in terms of computational sciences.
    I wondered if you would want to comment further on that? 
Would it not be a good idea to make the same sort of bold 
ambitious commitment to increasing our support for physical 
sciences that we have done in the area of health sciences?
    Secretary Abraham. Well, let me harken back to my days on 
the other side of the table here. And as a member of the 
Senate, along with others who are here today, I was one of 
those who supported the doubling of the NIH budget. The 
progress and success there has been very impressive.
    It came about because there was a tremendous amount of 
interest in both Washington and Capitol Hill, but also at the 
grassroots level, because it is probably in some ways easier to 
generate that sort of excitement about curing diseases that 
afflict people in virtually all of the members' constituencies. 
It is a little harder, really, to educate and give people a 
better appreciation of how basic research helps contribute to 
the ultimate application.
    So certainly we are trying to move more in this direction. 
In effect, as I mentioned before, our budget results in a 4\1/
2\-percent increase for science. That is not obviously going to 
double the budget in five years. But because of programs that 
are finished, there is new money available to effectively make 
that net increase larger for this time.
    I would urge members of this committee and others to take a 
look at the physical sciences, as you are suggesting, the way a 
lot of members did for life sciences in the past.
    Senator Alexander. Thank you. I agree with that. And I 
intend to do that. When the lights go off and the air gets 
dirty or when we begin to understand the tremendous advances 
from our studies in DNA, it helps bring it down to the 
grassroots level.
    Let me switch to transmission for just a minute, which is 
usually a back page issue. As a part of a comprehensive energy 
research or energy bill, are there suggestions that you have 
that we should be considering about how to make the 
transmission of energy more efficient, as we look ahead? 
Because this is the easiest way to have more energy available 
and reduce pollutants in the air, if we can figure out how to 
do that.
    Secretary Abraham. Superconductivity, one of the programs 
that is part of our electricity reliability operation at the 
Department, is an important long-term technology. And it is one 
which we support. High temperature superconductivity is a 
budget area that we have supported in both the 2003 and 2004 
budget, I think at sizeable amounts.
    We do need this to address the point I think you were 
getting at, which is the tremendous projected growth in 
electricity demand over the next 20 years; the need to support 
that growth with sufficient transmission capabilities. The 
transmission system in this country was studied by our 
Department as an outgrowth of the national energy plan with a 
grid study we conducted.
    We discovered that the existing grid is, in many cases, 
very old. In many cases, it is not capable of meeting the 
demand levels that we project. And, frankly, it is set up in a 
way, not surprisingly, that was largely fostered by the way 
electricity used to be transmitted; that is, a powerplant 
downtown in the city or in a community with lines out to the 
homes. It did not contemplate the long-term haul kinds of 
approaches we have today.
    And so to meet that growth, I think it is important to have 
an energy bill that would include incentives for this. We need 
to have the incentives. We also need to be able to do it more 
efficiently, because I do not know that we can build enough new 
transmission by itself over the next 20 to 50 years to meet the 
demand. I think we have to make it more efficient, so that we 
can send more over longer distances without as much 
transmission growth as would be otherwise needed.
    Senator Alexander. Thank you.
    The Chairman. Thank you very much, Senator.
    Let us see. Who is next here? Senator Campbell? Senator 
Craig?
    Senator Thomas, here you are.
    Senator Thomas. Thank you. I was holding out for that, 
actually. Thank you.
    Welcome, Mr. Secretary.
    Secretary Abraham. Thank you.
    Senator Thomas. There is obviously nothing more important 
to us currently than energy and our policy, which has to 
include all kinds of things, as you point out, production, 
research, conservation, reliability, all those things. So to 
points I would like to make.
    One is I see a reduction in fossil fuels. I see a change in 
the future. But for the next 20 years fossil fuels are going to 
produce almost all of our energy and alternative supply. Why 
would there be a reduction in fossil fuels?
    Secretary Abraham. In our fossil energy budget, I believe 
the budget submission we made a year ago was about $800 
million. I think the budget submission here is about $746 
million, or something in that range. It really does not 
constitute a reduction in the fossil fuel R&D component, 
however. That stays the same.
    There are some changes, first of all, one of the line items 
we carry is related to the ongoing payments that were made in 
conjunction with the sale of the Naval Petroleum Reserve in 
California. And that has been cut by $36 million, because last 
time we made a $72 million payment in conjunction with the 
funding stream. This year it is $36 million. We also had $40 
million more of advanced appropriations to use.
    Senator Thomas. Good.
    Secretary Abraham. So in reality the numbers do not go down 
that much.
    Senator Thomas. Which brings me to the one I really wanted 
to talk about, and that is Rocky Mountain research.
    Secretary Abraham. Somehow I suspected you might.
    Senator Thomas. Rocky Mountain Oilfield Testing Center has 
been funded since 1994. It is in the heart, of course, of the 
production area of the whole country and has done research. 
Eight percent of the cost of the research they have done has 
been privately funded by working with private companies, and so 
on.
    And now there is a particularly interesting thing that they 
are confronted with and have an opportunity for. One is the 
sequestration of carbon. And the other is to work with the 
private oil company, which is right next to it, and will 
provide most of the opportunity for them to do the research.
    So we are talking about carbon sequestration on the one 
side, and we are talking about enhanced oil recovery on the 
other. And the Rocky Mountain Oilfield Testing Center, RMOTC, 
and Anadarko are going to be working together, as well as some 
others. One of your secretaries, assistant secretaries, was 
out. I went on tour with him in August. He was very impressed 
with what they are doing. And yet I find in the budget no 
funding, a relatively small amount.
    I hope that we might be able to take a look at that and 
compare it to the potential that is there and do something.
    Secretary Abraham. I have obviously been looking forward to 
getting that question from you just as much as I did from the 
Vice President. But----
    Senator Thomas. Well, we have three Senators, you know.
    Secretary Abraham. I am well aware. I do not mean to make 
light of it, though. And let me just say first and foremost 
that we regard the test center as an asset. The issue has been 
that in a tight budgetary climate we are trying to determine 
where the money that we have proposed could be best spent and 
where we hoped that perhaps private sector interest, that 
benefit from a facility like this, might step in to keep these 
kinds of programs going. Because we concluded that this was 
something that was so beneficial to private industry that we 
felt they had the ability to support this. But obviously we 
will continue to look forward to talking with you more about 
this.
    Senator Thomas. And the fact is that most of the research 
is conducted by the private, by the cost. But there needs to be 
some coordinating agency there. And quite frankly, you are 
talking about $23 billion here. This is $3 million or $4 
million to keep this thing going. And so I urge you to take a 
long look at it.
    Secretary Abraham. Will do.
    Senator Thomas. And finally, just an observation: I 
certainly agree with your comments on reliability in 
electricity. We need to take a look. Times have changed. And 
the delivery is much different. Appreciate all the efforts that 
your department made in the last time around. And hopefully, 
with emphasis on local control and RTOs and so on, work with 
FERC to make this thing work. So appreciate your being here.
    The Chairman. Thank you very much.
    Senator Craig.
    Senator Craig. Mr. Chairman, thank you.
    Mr. Secretary, welcome before the committee. Several 
questions that I was going to ask have been asked. Let me 
express to you the same concern that the chairman has spoken 
to, the physical sciences and our lack of funding versus the 
biological sciences. I understand the politics. And I think you 
have explained it well.
    At the same time, we will begin to lag, if we have not 
already begun, in the physical sciences. And the Department of 
Energy has that great opportunity to invest in them through our 
national laboratory system in a way that probably no other 
agency has. And I am committed now to, if you will, stabilizing 
the growth in NIH. We are seeing the results of that. We are 
funding most of those research programs today. We are getting 
yield. Now it is time to redirect ourselves back to the 
physical sciences.
    I hope you would not run from that. I know you will not. 
Certainly I will not. And I think a good many other of our 
Senators will. We have heard Senator Alexander speak to it.
    In dealing with that and in dealing with research, I am 
looking at my laboratory and what can get done there and what 
should be done there and the reality of 2003 and 2004 budgets. 
You came to us with an 2003 budget, requested an $18 million 
level. And I am talking specifically about nuclear research 
funding. Senator Domenici and I worked to lift that research to 
$58 million. That is still $20 million short, below last year's 
level.
    We are contemplating, or we may have to contemplate, 
layoffs. And that--before we get to the 2004 funding. That 
would be a complication and an inability, once again, to 
stabilize. You hire people, and then you remove them, and then 
you want to hire them back later on. The instability of budgets 
and consistencies are awfully important. I would hate to see 
Argonne West have to do that at a time when you are advancing, 
as you and I and others have agreed, a nuclear agenda for this 
country. You do not dispose and then bring back. You try to 
stabilize and grow that. And certainly that is one area.
    I have not been shy about this, nor the next generation 
concept of nuclear reactor design and the development of that. 
The President has spoken to that, certainly. And if you are 
interested in a hydrogen economy, you have to be committed to a 
nuclear program. They do go hand in glove much more so, I 
think, than most people realize. And so I do appreciate the 
beginning effort, the advance fuel cycle and all of that. We 
are going to try to advance that very aggressively here, 
because they do work cooperatively together. And I appreciate 
that.
    Senator Bingaman asked the question as it relates to the 
zeroing out of research in E&M. You know, we are unique as a 
laboratory system in our country. For example, we have a waste 
stream in Idaho called the high level waste, the cow sign 
process found nowhere else in DOE. And yet we really do not 
have the technologies that are proven to get rid of it or to 
handle it effectively.
    And yet we are zeroing that out. I would hope that we could 
reinvest a bit in that research. Because in the cleanup process 
there is a lot we know and a lot we could get done. And I 
applaud you for your acceleration of it. I think that is 
extremely important downstream, as it relates to resource 
allocation, but also as it relates to cleanup.
    But we also have pieces of that cleanup that we do not 
understand all that well, that will require some research. And 
that is a complication that I think we are going to have to 
deal with.
    So I guess my one question would be: How do we invest in 
the research that we will need to complete the cleanup?
    Secretary Abraham. Well, as I indicated before, our 
principal goal is to make very strong gains in terms of 
immediate risk reduction. We concluded in the evaluation we 
did, a top-to-bottom review, which Under Secretary Card, who is 
here today, along with Secretary Roberson conducted, that we 
were, as a Department, focused on managing risk more than we 
were on reducing it. And that is why it was going to take 70 
years to complete the effort.
    We decided that what we needed was to change the priorities 
to make risk reduction first and foremost, and that is what is 
reflected in this effort. We decided that the science division 
was more capable than the EM division of running the kind of 
advanced research program that engage in seeking new 
technologies. And so we have moved it there.
    As I acknowledged before, we are not turning our back on 
new technology, but we really believe that our mission, as the 
Department, is first and foremost to reduce the risk. And so we 
have moved money in that direction, which is why we have the 
highest submission we have ever had for environmental 
management; an ongoing commitment, which I discussed last year 
when we brought forward our new accelerated cleanup program.
    I do not want to mislead the committee into thinking that 
we have on the drawing board plans to ramp up dramatically the 
R&D in environmental cleanup until we have really made better 
progress on risk reduction. We think that should be funded 
first.
    We also have, as I think the committee knows, some target 
dates we are trying to meet. The closure of Rocky Flats is on 
track for a 2006 completion. When that happens, some $600 
million or so per year that we spend there will literally cease 
to be needed, because it will be done. And then we will have 
more flexibility, I think, with regard to funding other 
programs.
    That is not to diminish their importance, only to establish 
that our top priority right now is to close some of these sites 
that are well on the path to finishing and, where we saw very 
substantial, immediate high-risk problems to try to reduce that 
risk.
    Senator Craig. My time is up. I will come back for a second 
round, Mr. Chairman.
    The Chairman. Thank you very much.
    Senator Feinstein.
    Senator Feinstein. Thank you very much, Mr. Chairman.
    Good morning, Mr. Secretary. Since we last talked about Los 
Alamos, I have been following developments there as closely as 
I possibly can. And I just want you to know that tomorrow Bruce 
Darling is going to testify before a House committee. And I 
believe that what you are going to see is that really 
substantial changes are in the process of being made at Los 
Alamos. And I think they are changes that will be sustained.
    The University has taken some, I think, very strong and 
aggressive steps. And I think that is going to become more 
evident tomorrow. So because we have talked about this, I just 
wanted you to know that.
    I wanted to ask you a question about an article in the 
Washington Post entitled, ``U.S. Explores Developing Low Yield 
Nuclear Weapons.'' The byline is Walter Pincus. And he begins 
with the point that the administration is reviving interest in 
developing low yield nuclear devices that could be used to 
destroy targets, such as reinforced bunkers holding chemical or 
biological weapons.
    Secretary of Defense Donald Rumsfeld was asked that 
question. And he stated, ``I don't believe there is anything 
currently underway by way of developing new nuclear weapons.'' 
Is that true?
    Secretary Abraham. It is true that we are not looking at 
designing a new weapon. The question that is, I think, posed 
here is part of a design issue that both in the 2003 and again 
in the 2004 budget we have proposed funding for. And that is to 
study the possibility of redesigning an existing weapon to 
perform what we now, through the nuclear posture review 
efforts, conclude is a potential need in our arsenal.
    And so this would not be the building of some new weapon 
system. It would be whether or not to convert an existing 
weapon to be able to perform a certain type of function as it 
is known, a robust earth penetrator capability.
    Senator Feinstein. And what you are saying then is that the 
budgetary needs in this budget and the next budget is just to 
study the issue. Is that correct?
    Secretary Abraham. It is to study the design components 
that would be needed, if you were to make that type of 
conversion of an existing weapon, as I understand it.
    Senator Feinstein. And how much is in the budget for that?
    Secretary Abraham. $15 million.
    Senator Feinstein. And that is 2004 budget.
    Secretary Abraham. And I believe there was a similar amount 
which was in the 2003 budget, I believe, as it was finalized.
    Senator Feinstein. And then the 2005 budget would be how 
much?
    Secretary Abraham. I do not have a projection.
    Senator Feinstein. Okay.
    Secretary Abraham. I could get that to you for the record, 
though.
    Senator Feinstein. Okay. Thank you.
    Yesterday I went to the floor to really put in the 
Congressional Record the evidence of fraud and manipulation in 
the Western energy market that has been recently uncovered. And 
as you well know, there are many specific incidents where 
traders have pled guilty now to fraud. And many firms have paid 
fines or admitted wrongdoing.
    In addition, last month FERC uncovered one of the most 
egregious examples of fraud and manipulation that affected the 
Western energy market. And the transcripts really used the 
word, you know, we are going to manipulate the market. And this 
was, of course, Reliant. And these transcripts were released on 
January 31 of this year.
    Now despite what I think is at least clear and convincing 
evidence of fraud, FERC chose just to give Reliant a slap on 
the wrist. Now it may be $13.8 million. But nonetheless, if you 
look at the differential in the California marketplace of all 
energy costing $7 billion one year and $28 billion the next 
year, you see that once you get into the area of manipulation, 
the stakes become very, very large indeed.
    The Department of Energy budget says that FERC is 
committed, and I quote, ``to remedying individual market 
participant behavior as needed to ensure just and reasonable 
market outcomes.''
    What FERC could have done was rescind the company's 
authority to sell power at market-based rates. And that would 
send a very clear message to the rest of the marketplace that 
fraud and manipulation is not going to be tolerated. FERC did 
not do that.
    I am really--and I recognize that FERC is a different 
entity. But nonetheless, it is part of the energy structure of 
the Federal Government. I would like to know your views on how 
this regulatory body, empowered to provide just and reasonable 
rates, is going to be able to do so if it does not take the 
action to send a strong message to the entire community.
    Secretary Abraham. Well, I guess I would say this: I would 
give FERC strong marks for the way it has moved aggressively to 
try to do a much more effective job of oversight and 
investigation. I think that since the sort of shift in 
direction that I think transpired when the chairman came on 
board, Chairman Wood, that they have been much more effective 
in doing that.
    Senator Feinstein. I agree with that, incidently.
    Secretary Abraham. And I would certainly like to see where 
instances of manipulation, fraud, whatever have transpired, I 
think they should take aggressive action. I do not know enough 
about the facts of the particular case here to comment on 
whether this was the right action there. But I would share your 
view that people trying to manipulate power markets or any of 
our markets need to realize that that will not be tolerated and 
that there will be a sufficient price to pay.
    One of the things which I know we proposed in the energy 
legislation that the Senate worked on last year was much 
increased fines and penalties in these areas. And I do not 
remember if we got around to getting that through on the Senate 
bill. But I know the administration would be very open to 
significantly increasing the fines and penalties, whether 
criminal or civil, in these areas. I would support that.
    Senator Feinstein. Thank you very much.
    Just one last quick question, if I might, Mr. Chairman. One 
of the problems is making the information public. Do you 
support the making of this information public?
    Secretary Abraham. I do not know what the reasons are to 
not make it public. I don't know if there is a legal 
impediment. So I would have to take that for the record. If 
there is a legal reason, I may be able to answer that on the 
record.
    Senator Feinstein. Thanks.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    Good morning and welcome, Mr. Secretary. In looking at the 
goals of the administration when it comes to your particular 
budget, and certainly in keeping with the President's message 
in the State of the Union and his emphasis on reduction of 
imported energy sources, we see the emphasis here on the 
Hydrogen Fuel Initiative, the FreedomCAR research, 
weatherization, and nuclear energy.
    And I would like to know from the administration's 
perspective, where from your Department's perspective, 
increased domestic production fits in. Of course, coming from 
Alaska, our focus is the oil and natural gas that we have 
available and how this is going to fit into your budget.
    Secretary Abraham. Well, in terms of our budget, I am not 
sure if I can give you specific dollar attribution. What I can 
say is that it is our view that on both the issues that relate 
to natural gas, as well as domestic oil production, that there 
are obviously impediments with respect to access, which have 
been major issues of the Senate. It has been debated many 
times. And I am sure we will again this year debate the 
question of ANWR.
    There are also issues that relate to access to natural gas 
in the Rocky Mountain region and other parts of the country 
that have been, I know, part of the challenge. And so I think 
it is more of a regulatory, in my opinion, challenge, dealing 
with existing statutes or regulations that have made it more 
difficult. It is difficult to cite some of the transmission or 
distribution capabilities, the pipelines and so on.
    I think, you know, our focus is more on that part of the 
equation right now. We believe the product is there. It is 
whether or not we will be able to explore and develop it and 
then get it to market that obviously poses a big challenge.
    Senator Murkowski. Well, we both agree that that is the 
problem. And we are trying to figure out a way to, for instance 
with the natural gas, how we make that happen. The simple 
recognition that we have a supply/demand gap that is growing 
at, I think, an alarming rate--we have a hearing on that this 
afternoon--and the recognition that we need to do more to bring 
our gas to market. And I think when we look at those sizeable 
sources of natural gas for the country, it is going to be 
coming out of Alaska. And we need to figure out how to make 
that happen.
    One of the things that you had mentioned, of course, with 
the electricity, talking about incentives, and we recognize 
that in the past there have been incentives for afforded for 
oil and gas developments across the country. And I would just 
like your two cents' worth here on the possibility of 
incentives or what we are calling now fiscal enablers for the 
Alaska natural gas pipeline.
    Secretary Abraham. Well, this is an issue which aroused 
much debate during the work that was done in the last Congress 
on the energy bill. And we worked with Alaska Senators and 
industry as well to try to come up with something that we felt 
was an appropriate level of support to that effort.
    The administration did support some proposals in the area 
of loan guarantees. There was, as you know, as you well know, 
there were requests for a very substantial robust support for 
essentially putting a floor on price that could be triggering 
additional backing. We did not support that. And in light of 
the price projections we have today, as well as the prices we 
have today, it is our view that there is ample incentive for 
industry to bring this gas to market.
    But we are looking forward to continuing that discussion 
with the interested parties to see if there might be a proposal 
that we could all come to agreement on. And we have not ruled 
support totally off the table. We are just trying to find what 
we think is an appropriate level of taxpayer incentives here 
that we think is justified under the circumstances.
    Senator Feinstein. Well, we will look forward to working 
with you on that, recognizing, too--and I think it was Senator 
Craig that had mentioned that with the President's emphasis on 
the Hydrogen Initiative, he suggested that you look to nuclear 
to make that happen. We would also submit that natural gas can 
help you make that happen, too. But again, and as you point 
out, it is the access issue. So we look forward to working with 
the administration and seeing how we can make that happen in a 
more expedited manner to meet the demands that we know we are 
going to be facing.
    Secretary Abraham. We do, as well.
    Senator Feinstein. Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator.
    Senator Bunning.
    Senator Bunning. Thank you, Mr. Chairman.
    Welcome, Mr. Secretary. As you well know, we have been 
working on a problem in Paducah for a long time. I am going to 
bring up some things that may be unpleasant, but I am going to 
bring them up anyway.
    During the Cold War, workers who were employed at the 
Department of Energy sites across the country served our 
country by helping to make nuclear weapons. Any of these 
workers subsequently became ill due to their work with 
radioactive and toxic substances at the sites. The DOE has 
worked to align the physicians' panel rule for the Energy 
Employees' Occupational Illness Compensation Program Act with 
compensation with congressional intent.
    However, workers's claims for the physicians' panel under 
subtitle D of the act are backlogged. Your staff indicates that 
only 20 of over 14,000 requests for assistance with claims 
relative to State workers' compensations have been sent to the 
physicians' panel and only 6 of those claims have been 
processed.
    Paducah alone has over 1,900 claims with zero having been 
processed. How long is it going to take for the DOE to process 
these cases? What are the major obstacles the DOE is facing 
that has led to this massive backlog?
    Secretary Abraham. First, just a little context. This is an 
issue where I strongly share your concerns about the 
bureaucratic hurdles, but also the need for us to act. I 
supported that legislation, I believe, when I was in the Senate 
and was very directly involved in the formulation of the rule 
that just very recently went into effect to govern this whole 
physician panel process. The rule has only been in effect for a 
brief period of time. But we are trying now to implement it 
effectively.
    One of the things which we did, as you know, is, in the 
creation of that rule, to make sure it was, in my judgment, as 
friendly to the worker in these situations as it could be in 
terms of trying to minimize the potential for challenges to be 
made.
    The problem now is one that I think takes an initial in-
depth sort of effort to resolve site by site. Once those first 
cases by each site, at each facility, are conducted for the 
first time, we envision this process moving very rapidly. To 
give you a perspective on that, it is our belief that we will 
be in a position to achieve a production rate of about 100 
cases per week by August of this year.
    And the challenge, as I understand it--I am trying to 
relate what our environment safety health division told me. The 
challenge at each site is to try to get all of the facts 
together. That usually happens in the first case or first two 
or three cases to try to really understand exactly what the 
exposure rates were, what people were doing. And so once that 
is in place, we will be fairly able to systematically apply 
that to all the other applicants at that site. But getting the 
first case in each facility, all the facts understood fully so 
we can move to the physician panel with the information, is, I 
gather, the hard part.
    And so once we get past that part, we assume that in each 
facility's case that this will move fast. And we want it to 
move fast. We believe, as I said, that we will be in a position 
to be processing 100 cases a week by this summer.
    Senator Bunning. Mr. Secretary, it would really help if the 
DOE would inform some of the claimants, people who have made 
claims, where you are at and where you want to get to. Because 
they are left completely in the dark, figuring, oh, they are 
going to ignore us.
    The Department of Labor, as you well know, has handled the 
other section of that law very well. I mean, they have 39,000 
claimants, under section subtitle B, almost 20,000 of those, 
and issued $475 million in payments to 6,600 claimants since 
July 1, 2001. This is a far cry from the six claimants that DOE 
has been able to handle.
    And I just really believe the--it is like sitting on an 
airplane and having no news for 5 hours. And you are on the 
tarmac. And you wonder what the heck is going on. And finally 
the pilot takes you back to the gate and says: You can get off 
the plane.
    We do not want that with our workers down in Paducah.
    Secretary Abraham. And we do not want it either. And your 
work on this, in terms of keeping the pressure on us, is 
effective in a sense, because it makes us always keep this as a 
top priority. I would note that on the DOL, the Department of 
Labor, program, it is our Department, though, that provides a 
substantial amount of the information which is part of that.
    Senator Bunning. I understand that.
    Secretary Abraham. And we have been working on that. It is 
also the case that certain workers, the ones who have been able 
to be processed fairly quickly, are ones in which, because of 
the way that the structure of this legislation has been made, 
causation is not required for them to receive their claim. It 
is a mandatory, automatic settlement. It gives a little bit at 
the front end. I think it has allowed the Department of Labor 
program to move fast. And I am glad it has moved fast. And I 
want ours to move fast, as well.
    Senator Bunning. Just so the physician panel gets organized 
and we get the process. Thank you.
    The Chairman. Thank you very much, Senator.
    Senator Akaka.
    Senator Akaka. Thank you. Thank you very much.
    And I have several questions. And I would like to add my 
welcome to Mr. Secretary.
    Spence, it is nice to see you again, to see you here in the 
Senate.
    As you know, Mr. Secretary, I have a strong interest in 
hydrogen programs. Hawaii and all islands of the Pacific share 
a common need for an alternative, reliable energy, a source 
that we will need to import. Hydrogen is a primary contender. 
And I am optimistic that in my lifetime I will be able to see 
hospitals, homes, and even military bases and cars running on 
locally produced sources of hydrogen.
    Naturally, I am pleased to see the President's initiative 
for hydrogen fuel cell research and development and the goal to 
have cars on the road by 2020. But I have concerns that the 
initiative will focus on personal mobility rather than 
providing milestones in the short term for robust 
infrastructure, for stationary and even portable applications.
    I understand that the Department has established long-term 
goals. But what are the milestones in the short term that 
demonstrate a sound pathway for the hydrogen economy of the 
future? Most of the technologies will use the same proton 
exchange membrane, PEM, technology, whether stationary or 
mobile sources, such as cars and trucks. So why are we not 
focusing on stationary sources, as well?
    Secretary Abraham. Well, first of all, Senator, part of our 
fuel cell work is on stationary applications. We have put a 
higher emphasis in this budget on the applications, the 
transportation applications. But it does not mean that some of 
the things we are learning in that process are not equally 
applicable to stationary application. And we are continuing our 
work on distributed energy, as well as stationary fuel cell 
development.
    The principal thrust of the things that we will be doing in 
the Hydrogen Fuel Initiative are to try to address the 
infrastructure questions. How do we get the hydrogen to the 
user, whether it is stationary or it is for transportation 
application? How do we more efficiently store hydrogen? And so 
a major part of the investment will be on storage. That, 
obviously, especially is relevant to motor vehicles, because we 
are talking about a fairly small contained area. But it also 
will be beneficial, if we learn those principals, to reduce the 
size of stationary storage facilities, as well. I will come 
back to that in a minute.
    Obviously, we want to reduce the cost of the fuel cell 
itself. Right now for transportation application it is 
considerable greater cost and, thus, not very competitive with 
existing internal combustion engine-driven vehicles. You do not 
have to improve as much to make a stationary fuel cell for 
power generation, whether for a home or a business. You do not 
have to make it as great an improvement to be competitive in 
that market. And so we think that, as we reduce the cost of the 
technology, that it will have an even quicker potential effect 
on stationary applications.
    And then, of course, we have the cost of producing the 
hydrogen, which will likewise, if we learn how to bring down 
that cost or if we create a more competitive environment in 
which people are trying a number of sources, we will reduce the 
cost of hydrogen production. That will be good news, whether it 
is for stationary or, I think, for transportation, as well.
    So those are sort of the priorities. And I think a number 
of them can have effect on both stationary, as well as 
vehicles.
    Senator Akaka. Thank you. The Department of Energy is 
requesting $26.6 million in the fiscal year 2004 budget for the 
natural gas technology program. This program supports 
innovative and breakthrough technologies, such as the gas 
hydrates program. The reliance on new natural gas sources, such 
as methane hydrates, could help reduce carbon dioxide emissions 
and our reliance on international sources of fossil fuels.
    Last fall, an international team of researchers in ocean 
drilling programs successfully brought 3,000 meters of gas 
hydrate core samples to the sea surface, while maintaining sub-
sea floor pressures. This achievement provides several 
breakthroughs for the education and study of gas hydrates that 
may bring us closer to safe, reliable recovery of hydrates. We 
need to continue and increase this commitment to invest in 
basic research.
    Why has the Department's funding request decreased? 
Starting with the fiscal year 2002 request of $4.7 million, the 
requests have declined over $1 million from fiscal year 2003 to 
the proposed fiscal year 2004 budget request of $3.5 million. 
Is the Department not committed to innovative research in gas 
hydrates? Does the funding request reflect the Department's 
commitment to the program?
    Secretary Abraham. It does not reflect either a lack of 
interest in or belief in the potential for this. We have talked 
with and worked with you and your office on this before. I 
reassure you today that there has been no change in our overall 
view of this. I think some of the factors that have affected 
our funding submissions have been--both the extent to which 
there has been an interest in the private sector, which we have 
seen at least some indication lately might be picking up. It 
also has had, to some extent, been a function of the time 
horizon. Although that resumed when we envision commercial 
potential for this resource.
    The budget which we have here is designed to allow for 
ongoing fundamental studies of hydrate properties, detection 
and quantification of naturally occurring deposits, which we 
think are essential to sort of lay the groundwork for potential 
use. But I would reassure you that it is one of the other areas 
that we are seeing, along with hydrogen and some of the work we 
are doing on fusion, as having some real long-term potential. 
And it is not a case where we wish to send a signal to the 
contrary. In terms of the priorities we have established, we 
just have not established it as high as the conference has. But 
we hope to work on it. And maybe in the future there will be 
more opportunities in our budget submission on this.
    Senator Akaka. Thank you very much for your response. My 
time has expired, Mr. Chairman.
    The Chairman. Thank you very much, Senator.
    I am very pleased that we have been able to go through. 
Everybody has had one round. And perhaps we will have a second 
round for those who would desire it.
    I have only about ten minutes, and I will have to leave. 
Senator Craig, perhaps you could wrap up for me.
    I want, as briefly as I can, to go through three or four 
issues. Mr. Secretary, the Yucca Mountain and the funding for 
Yucca Mountain and just what is meant in the President's budget 
statement saying that the administration is recommending that 
the amounts of budget authority and associated outlays in 2004 
and 2005 that exceed 2003 levels be scored as an adjustment to 
the proposed discretionary spending caps for those years. 
Frankly, I have been at that for 23 years, and I do not know 
what that means. And I have never seen any language indicating 
what it is.
    I would just greatly appreciate it, if you would get us the 
language. I am not going to sit by and watch another change in 
the Budget Act that affects trust funds without knowing what we 
are doing. So I would very much appreciate the language----
    Secretary Abraham. We will----
    The Chairman. If it is intended to be in the budget 
resolution, we need it soon, if you could.
    Secretary Abraham. We will provide it as soon as possible.
    The Chairman. Thank you very much. Mr. Secretary, there has 
been a lot of discussion here today about science programs. And 
I think you know that I am a very staunch advocate for 
research, basic research in particular. And clearly, I am an 
advocate of as much of that as you can in your Department, that 
it be adequately funded. And so I am a staunch advocate of the 
laboratory directed research program, which allocates 6 percent 
across the board of your research money to be used as seen fit 
by the laboratory directors to do research that they think is 
paramount for our country.
    We always argue with the House as to how much. We are now 
at 6 percent. I think you know--if you do not, let us let the 
record show--that many years ago, it used to be 10 percent. And 
believe it or not, during the atomic energy days, it was 20 
percent. They knew that if these great laboratories were given 
latitude into basic research, not requiring specificity by the 
Congress, that this basic research would impact the big issues 
of our day. Some of the greatest research projects that we have 
ever had came from that latitude and that freedom.
    And so I hope you are an advocate of at least 6 percent. 
And we look forward to your support when we go to conference 
with the House on appropriations.
    Secretary Abraham. We do support it. There is always a 
debate on this when I testify before the appropriations 
committees about the nature of the application. One of the 
things which I have been pleased with is that I believe an 
overwhelming percentage of those expenditures are not only on 
positive and worthwhile projects, but also ones consistent with 
the mission of the Department. That is the one thing we have 
tried to inject into the thinking of the labs. But as you know, 
obviously, with these resources, they make the decision. But we 
hope they will try to make sure it is consistent with----
    The Chairman. Yes. But, Mr. Secretary, you know when this 
Department is a world leader in nanotechnology, one would not 
assume that this should fall in the lap of one of the nuclear 
laboratories. But it does. Because there is direct relationship 
between nanotechnology and the nuclear weapons safety in the 
future. So that is a huge, huge program for mankind. And it has 
only a little, tiny bit of money, as we look through the 
Department's budget.
    But I want to continue to make sure that you know that 
there are among us many who advocate that you continue on those 
programs and that you strengthen the Department and these 
programs, rather than weaken it. If we do not have some of 
those left in there that are really prominent programs, we will 
not be a science, we will not be part of America's science. It 
will all be elsewhere.
    Secretary Abraham. Director Orbach, who heads our science 
division, not in the NNSA side of the building, but on the 
energy science side of the building, has made nanotechnology a 
major priority in this budget. I believe that we have about 
$195 million devoted to that. It is a new and growing area with 
five national labs engaged in various projects separate from 
the work we are doing at Sandia and other places.
    The Chairman. And let me also suggest that you are finally 
coming back as a department in terms of nuclear research. Some 
people think nuclear disappeared. Others think it is going to 
be an energy source in the future. Any way you look at it, 
America must be involved. And we must know what the future is.
    I commend you for coming around to funding advanced fuel 
cycle initiatives, which we started here. They are absolutely 
imperative. And you funded them, requested in your budget a 
high level. But the other two programs that went with it, the 
Nuclear Energy Research Initiative, NERI, and the one that is 
Nuclear Energy Plant Optimization, which is terribly important 
because you want to make sure the existing nuclear powerplants 
are optimally prepared for the future, you have zeroed those 
out or cut them substantially.
    Frankly, I do not think we can do that. And we are going to 
have to find a way to find that money.
    Secretary Abraham. I would only comment as follows. First 
in the overall research budget and overall budget for our 
nuclear energy science and technology division, we have 
substantially increased that budget. Some of that is new money. 
And some of it we had to find within the program. We tried to 
identify where we thought the priorities were.
    The NEPO budget, as I recall, was somewhere in the range of 
$4 million or $5 million, not unimportant money. But I know 
that the industry itself engages somewhere in the estimated 
range of $70 million to $80 million a year of its own research 
on more efficient operation. And we felt that the small amount 
that we were previously supporting with was really not that 
relevant to the total package there. And that is, I think, the 
thinking which we have.
    We are also, in the program that you are well familiar 
with, our GEN-IV program, as well as the advanced fuel cycle, 
looking for ways to improve efficiency in the areas where we 
think our research dollars play a bigger role, because they 
really focus on the more high risk kinds of research that will 
be less likely conducted in the private sector.
    The Chairman. Well, I commend you. First of all, we have 
gone in a period of four years from no research in these areas 
that I have just alluded to to substantially involving our 
Nation once again, in particular, fuel cycle research. I mean, 
clearly Yucca is not the end of the fuel cycle problems, but 
what do we even after Yucca that works. And the next thing will 
be some of the transitional research that we are working on now 
for the fuel cycle.
    For the Senators present, again, thank you all for coming. 
Senator Bingaman is next. And then right down the line, Senator 
Alexander. I am going to go to the floor for a bit. And I want 
to remind Senators, if you have prepared statements, let us 
make them part of the record now.
    Mr. Secretary, the things that we asked you to produce, 
would you do them as quickly as possible?
    Thank you all very much.
    Senator Craig, will you be the chairman while I am gone?
    Senator Bingaman, I yield to you.
    Thank you all very much.
    Senator Bingaman. Thanks very much, Mr. Chairman.
    Going back to the issue that Senator Bunning raised about 
the subtitle D of the act we passed compensating DOE employees 
and contractor employees for occupational illnesses, could you 
give me three items of information related to our State? And 
that is, in this backlog of over 14,000 claims, how many of 
those have come from New Mexico?
    Secondly, how many of those that have come from New Mexico, 
if any, have been sent to the physicians' panel?
    And then the third item, my information is that there is 
not a single New Mexican who has received compensation as yet 
under subtitle D. Could you verify that for me?
    Secretary Abraham. I will. As I indicated to Senator 
Bunning, we are in the process of trying it, take the finished 
rule and apply it in a way that is highly effective for the 
employees. And we will get that information to you, sir.
    Senator Bingaman. Okay. On February 7, there were a group 
of 1,000 heating oil dealers that asked your Department for a 
release of heating oil from the Northeast home heating oil 
reserve because of the spiking prices for heating oil. Have you 
been able to respond to that request? Could you tell us what 
your response has been?
    Secretary Abraham. We have not released oil from the 
Northeast Home Heating Oil Reserve. We are of the opinion that 
both Congress, as well as we, have a pretty high standard in 
terms of the kind of threshold of disruption in supply that 
would be need to be reached, to release oil from the reserve. 
And I will give you at least our thinking on that.
    The reserve itself has about two million, I believe, 
barrels of oil. That is about, in a peak cold period, 2 days' 
worth of demand in the Northeast. It is not a large margin at 
all. We really believe that that amount needs to be maintained, 
except in cases where the formula that is part of the Energy 
Policy Act is met, where there is a real, clear disparity 
between the price of crude and the price of home heating oil. 
That has not been the case. That formula has not been met; both 
prices have been rising.
    Or a situation where there really is a unique impediment to 
getting delivery; ports and harbors that are iced in and so on. 
Two million barrels is not a lot. And we really feel that 
unless there is an emergency situation in supply, it should not 
be released.
    Senator Bingaman. Let me ask about State energy programs. 
Your proposal to the Congress is to cut the funding in that 
area from the appropriated level of $45 million to $38.8 
million this next year. One of the pressing concerns that 
States have is the lack of funding to support their energy 
emergency preparedness responsibilities. Could you tell me what 
your thoughts are as to how they are going to meet those 
responsibilities with this reduced budget?
    Secretary Abraham. Senator, I would have to double check 
and provide for the record any specific numbers with regard to 
meeting those challenges. I am not sure that there has been a 
reduction that would affect emergency preparedness. But I would 
want to check that.
    I would say that since, primarily since 9/11, our 
Department has, through its energy assurance division, been 
working very closely with every one of the States on issues 
that relate to security preparedness to provide advice, 
counsel, information with respect to potential threat issues 
that might affect the energy sector. I think we worked with 
every one of the 50 governors' offices. And I feel very 
positive about what is going on through that operation. But I 
would have to check as to whether or not the budget has in any 
way--I do not believe it has diminished that capability. But I 
would like to provide that answer for the record.
    Senator Bingaman. Let me ask one other question. This 
relates to your Hydrogen Initiative, the hydrogen fuel cell 
future that the President talked about. A key issue that needs 
to be addressed as part of that is where does the hydrogen come 
from, and how do we produce the hydrogen.
    Secretary Abraham. Right.
    Senator Bingaman. And obviously, advocates for renewable 
energy believe that renewable energy has a role to play in 
producing hydrogen in the future, particularly because it can 
do so without emissions and without adverse environmental 
effects in many cases.
    The President's budget proposes to cut wind energy research 
and development, geothermal energy research and development, 
biomass energy research and development. My question is: Does 
that make sense in the context of trying to develop a hydrogen 
program? Should you not be at least maintaining current levels 
of effort with regard to the research on those renewable energy 
sources in an effort to be in a position to produce the 
hydrogen you are going to need for this hydrogen fuel cell 
future?
    Secretary Abraham. The collective budget for renewable 
energy programs, including the hydrogen work we are doing, has 
actually increased over last year. We have shifted some from 
some of those into the hydrogen area. I believe our solar 
budget is about $80 million. It was about $80 million last 
year. I think wind maybe changed from $44 million to $42 
million. But they are very small changes.
    As it relates to hydrogen, though, in our hydrogen fuel 
cell program, the Hydrogen Fuel Initiative Program, we 
actually, I believe, allocated about $38 million to research on 
producing the hydrogen. Of that $38 million, I believe $17 
million or so is going to be directed to research in the area 
of renewables as the source, about $12 million for natural gas, 
about $5 million for coal, and $4 million for nuclear. So 
almost half of the new initiative's hydrogen production budget 
is going to be spent on renewable energy production sources.
    Senator Bingaman. Thank you, Mr. Chairman.
    Senator Craig [presiding]. Senator Alexander.
    Senator Alexander. Thank you, Mr. Chairman.
    May I continue along the same lines as Senator Bingaman? 
You know, where is the hydrogen going to come from and go to a 
couple of the other sources you mentioned, specifically nuclear 
and coal? Given the amounts of hydrogen that would be 
envisioned for something as bold as the President has proposed, 
is there any possibility it could be produced without nuclear 
power?
    Secretary Abraham. Well, we think two things at this point. 
First, a lot more research is required for us to determine 
where the cost effective options exist. Nuclear is certainly a 
potential source. Another source, which I touched on briefly in 
my opening statement, is the work we are going to be doing on 
an international, as well as domestic, basis, nuclear fusion, 
which has real potential, although quite a ways down the road, 
to emerge as both the source of electricity production, but 
also as a producer of hydrogen.
    So we think nuclear has a potential to overplay here, but 
it is clearly a case in our judgment that the more possible 
source that are being researched the better, because if we 
could create some diversity in the sources, we not only 
hopefully have them in the competition that brings down the 
price, but obviously that affords us the maximum range of 
options.
    Senator Alexander. I hope the research will include some of 
the practical barriers to creating nuclear power. Because, 
unless I have missed something, there are not very many 
utilities planning to build nuclear powerplants.
    Secretary Abraham. No. And we have, from the very first 
weeks of the administration, focused on this issue. What are 
the things that need to happen, if we are to sustain even the 
existing facilities, let alone create an environment in which 
new ones might emerge? We concluded several things were needed. 
Number one was we needed to make really a national statement of 
support, which the President's energy plan did. I think there 
had been for some time a real lack of that kind of signal.
    Second, we decided that clearly we had to address the issue 
of nuclear waste and its disposal. And we were very successful 
in the last Congress with the help of a lot of people on this 
committee passing the resolution to move forward with Yucca 
Mountain. I applaud the Congress in support of that.
    Third, we decided we needed to work on the liability 
issues. And one thing that is unfinished in terms of our energy 
legislation is the Price-Anderson reauthorization, which has to 
happen before people are going to contemplate investments, 
unless they know what the liability structure is going to be.
    And then we need to do more research in the advanced fuel 
cycle area and the generation core area. We are doing that in a 
robust fashion.
    Senator Alexander. Well, I hope you will continue to do 
that and let us know what the obstacles are, as we look for 
sources of cleaner energy. Because the production of hydrogen, 
we just use fossil fuels. We create more environmental issues 
at the same time we are solving them.
    My last question has to do with coal gasification. Talk 
about that just a little bit. For a while that seemed like a 
promising initiative. And many private companies were working 
with it. And then it slowed down, because it didn't seem 
competitive anymore. Now there seems to be a resurgence of 
interest in coal gasification. And if were promising and could 
be produced without excessive pollutants itself would be an 
important solution and alternative, it seems to me.
    What is--you have reduced funding a little bit there. Talk 
about it just for a moment.
    Secretary Abraham. We do not rule out any area like coal 
gasification that has the potential to be part of this mix of 
cleaner energy. In the most recent round of announcements of 
our Clean Coal Power Initiative, I think at least one or more 
of the programs were in that area.
    We have tried to put more of a focus, quite frankly, in 
this budget on carbon sequestration, which we viewed as being a 
particular challenge to us in terms of the ability to use the 
coal reserves this country has. Also on powerplant initiatives, 
we will be trying to develop powerplants of the future that 
would allow us to generate electricity using coal without the 
attendant emissions.
    So those have had higher priority. But there clearly is a 
role for coal gasification.
    Senator Alexander. So gasification is still a viable 
alternative in your arsenal of solutions.
    Secretary Abraham. Yes.
    Senator Alexander. Mr. Chairman, thank you.
    Senator Craig. Thank you, Senator.
    Senator Thomas.
    Senator Thomas. Thank you. I was going to talk a little bit 
about coal, as you might suspect. And there are some research 
things going on with regard to hydrogen by using coal as the 
medium. In fact, there has been a program down in Arizona that 
is now being talked about moving to Wyoming where the coal 
would be. Let me just kind of--and I guess it is out of our 
budget. But your budget determines what you do.
    It seems to me it is terribly important that we give some 
thought to the future. And I know you are, kind of 20/20 
vision, of where we are going to be. Too often, we find 
ourselves dealing with the issue that is going to happen next 
year. But we are going to have to look like at capacity. They 
have to have gas. And now that is one of the problems we have 
had, a price differential from the wellhead to the market, 
depending on the pipeline capacity, has caused people not to 
develop, but their cost of permitting on public lands. Public 
lands in the West is where most of our potential is. I know 
that you are not in that business. But nevertheless, as you 
look forward, that is one of the views that we have.
    We need to continue to look at marginal wells. That is one 
of the things that I think that RMOTC is going to be trying to 
do in terms of working with Anadarko. And, of course, you 
mentioned the electric reliability issue, which certainly times 
have changed. And now we have merchant generators. And there 
has to be a way to move those things around.
    So I am just interested in how much of a sort of a view of 
the future you are able to put together collectively and sort 
of hand out to the rest of us to work on, so that we can move 
forward and accomplish these things.
    Secretary Abraham. Well, I would just say that at the very 
beginning of the administration, when we put together our 
energy plan, we emphasized the real need to have diversity of 
sources and diversity of fuel. And underlying all of our 
efforts has been an attempt to make sure we keep that diversity 
in place.
    We simply are not in a position, notwithstanding calls by 
some to take huge components of our energy reserves out of 
play. Coal, which provides 50 percent of electricity 
generation, nuclear, which provides somewhere between 17 and 20 
percent, any of the mixes, we want to promote more efficiency 
in our budget. I think the highest is as high as any 
appropriated level in the last 20 years on energy efficiency, 
renewable energy. And those sources have to be a greater part 
of this mix.
    But at the end of the day, we do not want to see dependency 
on even one part of that mix. And I think that is the strategy. 
And then at the same time we recognize that having the product 
and not being able to make it available, because of either 
inability to access the product or to get it to the user has to 
be addressed as well. And your leadership on the electricity 
issues is critical, will continue to be critical in making sure 
people understand that if we do not address some of these 
impediments that deal with access, deal with investment in 
transmission and generation, that we are going to find 
ourselves having a hard time meeting the estimated 45-percent 
increase in electricity demand that we foresee over the next 20 
years.
    At the same time, we really do believe that it is important 
and we tried in this budget, as well as the President's State 
of the Union address, to say even as we go ahead maintaining 
and working on existing programs, we need to think in terms of 
a very significant leap forward in the future, because we 
cannot continue to just be limited by too much imported energy 
and the kinds of constraints we have today.
    That is why we look forward to working with this committee 
on programs like our Hydrogen Initiative, because we really 
think that initiatives in fusion and other new technology 
ultimately are the solution, not just to the issue of energy 
security, but also at the same time the questions of 
environmental safety.
    Senator Thomas. Thank you. And I appreciate your work. 
Thank you, Mr. Secretary, for being here.
    Senator Craig. Senator, thank you.
    Mr. Secretary, I heard Senator Akaka talk about methane 
hydrate research legislation passed 3 years ago. He and I were 
the principal sponsors of. We think it is important. We think 
it does have potential, deserves some investment. You know, 
when we began to pump, and you were a part of putting fixed 
amounts and billions of dollars into the NIH, and we all did 
that with all the right reasons and are beginning to see the 
results, as it relates to biological sciences and human health 
and all that. And we certainly mentioned genome and the role 
that DOE has played.
    But when it comes to advancing research dollars in the 
physical sciences, the chairman is right. The natural base is 
our laboratories. And to give them flexibility, NIH had the 
natural system of the team to dole out the dollars to the 
research applications and to screen them, to have some measure 
of value to them. We do that. We do not have that mechanism, if 
you will, the physical sciences in the way that they do.
    And yet at the same time, you are hearing it here. And it 
is growing the Congress, a sense that we are under investing in 
that area. And that is where we can have probably the greatest 
impact.
    Some of this concern that I think all of us have about 
energy is we ought to get out of the way of the market and let 
it work and give it more flexibility in certain areas where the 
Government does not play a dominant role. We play a dominant 
role in nuclear. We do not in a variety of the other areas.
    But we have created phenomenal impediments. I sat down with 
the mining industry yesterday to see their phenomenal decline 
since 1993, when an administration decided to force them off 
the public lands. And so we are going into the foreign sources 
for our metals, much like we had to do with oil, with 
hydrocarbons, simply because it was an attitude in this 
country. That we can correct by stepping back and stepping out 
of the way, if you will, with reasonable sidebars for 
environmental concerns, but reasonable ones. And certainly that 
advances that.
    We know that LDRD is the approach that we have had here in 
the physical sciences. Your advocacy of that, I think, would be 
tremendously helpful in allowing some flexibility there.
    Senator Feinstein and I will reintroduce the Fusion Energy 
Science Act again this year. We will update it to include the 
initiatives you have talked about in it. Potentially, that 
might be incorporated in the new energy policy that I trust 
this Congress can pass this year. At some point, the public is 
going to grow awfully weary of energy spikes and cost run-ups, 
when they know that this Congress has simply failed to advance 
the market and failed to create the initiatives out of the 
policies of a Congress that would not allow that to happen. And 
I hope we can overcome that this year.
    Let me go back to some of my parochial concerns. A question 
to you, a commitment, Mr. Secretary, to work with me to offset 
the impacts of 2003 budgets as we move to build an 2004 base 
out there as it relates specifically to the kind of research in 
E&M and in other areas that both Senator Bingaman spoke to, 
that Senator Domenici and I have.
    Secretary Abraham. Well, clearly, as I have said, we have 
tried to put a greater focus on cleanup. And that will continue 
to be part of the accelerated cleanup program, but within our 
budget as we move ahead, as I have mentioned, we are hoping for 
real progress to be made in closing sites and freeing up more 
research dollars, as well as dollars for other application.
    And we will be glad to continue working with you on that.
    Senator Craig. Well, we do not want to, if you will, kill 
the program before our initiatives get there. And I think we 
are running that risk at this moment if we are not careful.
    The Chairman expressed his concern as it relates to Yucca 
Mountain and legislation and scoring. Mr. Secretary, would you 
like to explain for the committee your proposal and the need 
for it?
    Secretary Abraham. Well, our proposal is designed to try to 
address the fact that we have been collecting, as you know, 
monies from rate payers to the tune of some $12 million, which 
has, I suppose, earned some interest along the way as well, for 
the purpose of the Yucca Mountain expenditures.
    We are now entering the time frame in which, if we have 
appropriated sufficient funds, we would begin to ramp up the 
work there, now that Congress has acted on its resolution. That 
would be additional funding, obviously, for the work connected 
to resolving the technical issues, as part of the licensing 
process and then the construction phase, which would obviously 
begin very substantially at the end of licensing.
    The mechanism which we are proposing, and have not 
finalized according to Senator Domenici and the rest of the 
committee, as well as the budgeteers, is a mechanism to try to 
accommodate what sort of adjustments in the discretionary 
budget caps are appropriate to accommodate that growth without 
it having to be offset. We view this as a little bit different 
kind of expenditure, because these are dollars that have been 
explicitly collected for these applications.
    And we are trying to find a mechanism to make sure that, as 
that ramp up occurs, it is not, in our judgment, appropriate to 
take it out of other Department of Energy programs or anyone 
else's, because this is special money that was paid by rate 
payers. So we are trying to find a mechanism to do that that is 
one that the Budget Committee and others can support.
    Senator Craig. Well, I appreciate your willingness to try 
to do that. And certainly, I think all of us are extremely 
interested in that. I have always been--I think all of us are 
frustrated about funds that are collected or trust funds that 
are established and tucked inside the general fund of our 
Government and then, if you will, used as leverage or offset 
against other expenditures. Well, we cannot spend the money 
there, because it is offsetting something somewhere else, even 
though there is a need. And certainly the collection was a 
commitment for that purpose.
    My time is up. We have been joined by Senator Wyden.
    Senator, do you have----
    Senator Wyden. I do have questions. But I think Senator 
Akaka has one or two. I do have some questions afterward.
    Senator Craig. All right.
    Senator Akaka.
    Senator Akaka. Thank you. Thank you very much.
    I have just one question on the OSR, DOE's offsite source 
recovery program. The Department of Energy manages the offsite 
source recovery program basically to provide safe and secure 
storage facilities for low-level radioactive waste. I 
understand there are about 18,000 sources that pose high 
security risk that come under this program.
    And right now you have probably collected thus far about 
3,000 sources. Given the serious news, the national security 
aspect of this and other radioactive material program, which 
were originally created to safeguard public health and the 
environment, will you please explain, Mr. Secretary, why no 
funding is requested in the Department's fiscal year 2004 
budget documents? Will the Department be able to ensure the 
safety without those funds and the security or the sources 
already stored at an OSR site, or how will the Department of 
Energy collect and score the sources that remain out there 
without these funds?
    Secretary Abraham. My understanding is that the funding 
might be in the defense part of our budget. But I would have to 
take that part for the record. What I would just like to 
emphasize to you is that we take this as seriously as you do, 
Senator. One of the concerns which Chairman Meserve of the 
Nuclear Regulatory Commission and I have shared is a concern 
about sources which others may not in the past have been as 
focused on, radiological sources that do not rise to the 
weapons level potential that are nonetheless the possible 
source of material that could be used for a radiological 
dispersal device or other type of usage.
    We are working together. Our teams are working together. We 
will, in the next month or so, have a blueprint for additional 
actions on accountability, as well as security as it relates to 
that. In just a couple of weeks I will be headed to Vienna, 
where the United States is, at my request, actually going to be 
chairing, along with the Russian Federation and the 
International Atomic Energy Agency, an international conference 
on these issues. Because it is not just in the United States 
where there has been a certain tendency in the past perhaps not 
to put as much focus on securing these types of materials.
    We hope to launch from this conference that the IAEA, the 
United States and Russian Federation will be hosting a 
significantly increased worldwide awareness among G77 nations 
about possible threats and the need to be more effective in 
terms of accounting for and dealing with securitizing those 
kinds of materials.
    So it is something that I take very seriously. And I 
believe that I could actually take for the record and respond 
to you as to the issue of sufficient funding.
    Senator Akaka. Thank you for your response.
    Mr. Chairman, I have questions that I will submit for the 
record.
    Senator Craig. Thank you very much, Senator.
    Now let me turn to Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman.
    I want to welcome the Secretary, who is an old friend. We 
have written many laws together, particularly in the technology 
area. Mr. Secretary, I want to go over the question of gasoline 
prices with you. Because, as you know, they are just soaring. 
They are going through the stratosphere on the west coast. And 
I am very troubled about the administration's policy on this 
issue. And I want to zero in specifically on what we are 
talking about.
    I understand Senator Bingaman asked some questions about 
the Strategic Petroleum Reserve earlier. Your view was that the 
administration's decision is they are going to be flexible with 
respect to when oil is released. There is currently a 
moratorium on filling the Reserve through March. In effect, I 
guess the oil companies are allowed to delay the delivery of 
oil that they are obligated right now to send to the Strategic 
Reserve.
    I think this is a very regrettable policy. And I want to be 
very precise in terms of getting your assessment on a 
particular issue. I think reasonable people can differ with 
respect to when the oil ought to be released. What I think is a 
no-brainer, however, is that this country must have a clear 
policy, a policy that markets understand and a policy that 
consumers understand.
    For example, the Wall Street Journal editorial pages, not 
exactly a left-wing organ, so to speak, they said that if there 
was a firm declaration, that the administration is prepared to 
release oil, a statement that we would be prepared to protect 
our consumers and our businesses, that that alone would have a 
stabilizing effect on markets.
    Why is it that we cannot get a clear statement on this 
issue, and particularly a firm declaration that we will use it 
when we need it? And I would be interested in your response.
    Secretary Abraham. I think we will use it when we need it. 
The question that obviously, as you said, people can differ is: 
What constitutes the threshold of when it should be used? We do 
not believe it should be used to address price fluctuations. We 
do believe it should be used when there is severe supply 
disruptions. And that, obviously, is subject to a lot of 
different people's perspectives.
    But as I said earlier today, we are prepared to use and can 
act quickly, if we decide that a severe disruption constitutes 
a basis for that. We would make that decision on consultation 
with our IEA partners in the event of the sort of disruption 
that we think would be an appropriate time to use the Reserve.
    Senator Wyden. So at what point would the administration be 
willing to use it, so that a message can be sent to markets and 
consumers? I mean, as I say, you have people like the Wall 
Street Journal editorial page saying: Fine. Let us have a 
debate about when it ought to be done.
    But the market would benefit from a firm declaration. And I 
would very much like to see that, at a minimum. There are some 
other questions I want to ask about that. But can you tell us 
when, in terms of the kind of strong statement that the markets 
and consumers would benefit from, that the administration will 
act?
    Secretary Abraham. I do not think I can amplify on what I 
have said or what the administration has said. I mean, the Wall 
Street Journal is a fine publication. But it does not govern 
our policy on this issue or any other. We think the Reserve is 
there to provide energy security in times of severe disruptions 
in supply, unavailability at a level that we feel constitutes a 
basis for using it, not in other circumstances. And we believe 
that the circumstances that rise to that level have not yet 
been met.
    Senator Wyden. Let me ask just a couple of other questions 
on this point. The current high oil prices seem to be causing 
American consumers to spend nearly $100 million more per day on 
energy compared to one year ago. So people come up at town 
meetings and they want to know what is the Government going to 
do for them?
    What would the Department of Energy say to the people of 
Oregon and the people around the country who are paying these 
enormous sums, $100 million per day, in energy costs? What is 
your answer to that?
    Secretary Abraham. Well, I can assure the Senator that if 
they are coming up to you, they are also coming up to the 
Secretary of Energy when the opportunity is provided. The 
circumstances that have caused the prices to rise in recent 
weeks have been building for some time, as you know. We in the 
independent analysis division, the Department of Energy 
Information Administration, had already forecast a rising set 
of prices in this season compared to last year.
    It is not that much different, I might point out, than it 
was 2 years ago during the winter season in terms of comparable 
prices. The difference, the main difference, is that today we 
have had other factors that have come into play, some beyond 
our control. A strike in Venezuela, which, as you know, 
significantly shut down one of our four largest energy trading 
partners. We have had a much colder winter than last winter. 
And that has contributed in part to this. We also have had a 
stronger economy in this winter than we did in the last winter. 
And that has also been a factor.
    As I said at the outset, when Senator Domenici asked a 
similar question, the thing that one would note is the 
recurrent patterns, whether it is a 2-year cycle between these 
kinds of price increases or shorter or longer cycles, there 
does seem to be a cycle. And that is a pattern that I think at 
least can be at the short term effectively addressed. It can be 
addressed in a longer term by passing energy legislation 
designed to try to increase domestic production, moving forward 
with our Hydrogen Initiative that I know you are quite 
interested in, to try to move us past the level where we are so 
dependent on energy imports.
    And those are some of the things at least that I hope we 
can work together on.
    Senator Wyden. The thing that troubles me about this, Mr. 
Secretary, is I think there is a double standard. I think that 
the administration is willing to cut breaks for oil companies 
and is not willing to cut them for the consumer. And I want to 
be real specific about what concerns me and then get your 
assessment about it.
    Since December, the Bush administration has allowed the oil 
companies to delay the delivery of ten million barrels that 
they are obligated to deliver to the Strategic Petroleum 
Reserve. The administration obviously took this action. Tight 
supplies resulting from the strike in Venezuela drove up the 
prices. And clearly, it looks to me, and I think a lot of 
people that I represent, is that the administration is willing 
to cut oil companies a break and say, all right, your 
deliveries can be delayed, but consumers cannot be cut a break 
when you have tight supplies and prices going through the 
stratosphere.
    And it just looks like a double standard to say that tight 
supply provides a basis to give oil companies a break on the 
deliveries of oil they owe to the Reserve, but not to give the 
consumer a break. What is your response to that?
    Secretary Abraham. My response is that while it might 
appear that way, it is actually quite the contrary. The oil 
companies who are putting oil into the Reserve do so under our 
royalty-in-kind exchange program. That is, they are using this 
to offset royalty obligations to the United States, when they 
have the deferral, as we have done the last couple of months. 
They have to pay a premium for that. In other words, they have 
to send more oil to the reserve ultimately than they would have 
otherwise, because they got the chance to keep that oil in the 
marketplace.
    Moreover, the reason and the rationale for keeping it in 
the marketplace, as my former my colleague from Michigan, 
Senator Levin, writes me often, is the fear that the more oil 
we take out of the market, the tighter the market even becomes 
from what it would otherwise be. And the belief that we have is 
that taking even more oil out of the market will drive up the 
cost to consumers.
    In other words, the oil companies are going to end up 
paying more, because they have to pay a premium for this. In 
other words, like interest almost. And the consumers are paying 
less actually, because there is more oil in the market, thus, 
to at least a modest amount, reducing or increasing supply at a 
time when prices are already too high.
    Senator Wyden. We can continue the point. I guess I would 
say, Mr. Secretary, it is not very plausible to me that somehow 
this is being hard on the oil companies. The oil companies 
sought and have desired the particular course of action the 
administration is taking. Consumers are trying to get another 
course of action.
    I just hope that you will take the counsel of some pretty 
independent people, including the ones that I am citing, Wall 
Street Journal editors and witnesses who sat where you are 
sitting even as recently as the week before last. They said at 
a minimum state a policy that you are going to protect the 
consumer and businesses and others that are getting hammered 
all up and down the West Coast, when we have this tight market. 
People are being pinched like never before.
    And it sure looks to me like it is a double standard here. 
The oil companies have gotten something they wanted. You 
described the deferral in a different way. And again, 
reasonable people can have a difference of opinion with respect 
to this. The oil companies are plenty happy with the 
administration's decision. And consumers are getting hosed 
because they are not getting any protection from the Strategic 
Reserve.
    Secretary Abraham. Well, I am glad to take your advice, as 
I always do, and include it in the considerations which we 
have. I would, though, say that, at least in terms of the 
deferrals, we have had strong and quite wide-spectrum advice in 
terms of the political spectrum that taking more oil out of a 
market at a time when there is already constraint in the market 
is not going to help consumers. It is going to raise the cost 
of their gasoline or home heating oil.
    And that if we are charging oil companies extra to do that, 
it seems to me we are offsetting any benefit they might have 
reached. In fact, that is the reason we will charge them a----
    Senator Wyden. We will find common ground on other things 
like the Cox-Wyden fuel cell bill and the like. But you ought 
to know how strongly people feel about this. I mean, my State 
has the second highest unemployment rate in the country. I also 
was in California visiting my mother. Gasoline is well over $2. 
People are looking to their government to stand up for them. 
And it looks to me, as I have said, that there is a double 
standard and we disagree passionately on this issue. The other 
ones we agree on. But I hope you will send a message to markets 
and to consumers on this issue. Because I think it is going to 
pound our economy at a time when we are very vulnerable.
    Thank you, Mr. Chairman.
    Senator Craig. Senator, thank you.
    A couple of concluding questions. Mr. Secretary, we have 
held you here a good long while. And we appreciate your 
presence. I reflect some of the concern that my colleague from 
Oregon does. Idaho is about to start farming. And with these 
increased fuel costs, it is going to be an expensive 
agricultural year in Idaho.
    While I have been out of the State the last week, I have 
talked about darned if you are and darned if you do not. We 
could have had two markets. And if you could have freed up 
supply into one and kept it restricted in another, maybe we 
could have priced it out in a way that we would have been able 
to determine for Senator Wyden whether your wisdom was good or 
bad.
    I do not think we have that kind of a market. I think we 
also have restricted refinery capacity that also creates this 
problem, when we have an overload of fuel demand in the 
Northeast because of the cold winter. Put that all together, 
the perfect storm has not quite come. But it certainly does 
drive up price. And consumers are frustrated. There is no 
question about it.
    There is probably a no-win proposition when Congress 
continues to spin its wheels, as it has for the last 24 months 
in its inability to produce a national energy policy for this 
country. So your urgency there, the President's urgency, in 
pushing us toward that, to overcome our political stupidity to 
get there is going to be awfully critical in the coming months. 
I think we have an opportunity to get there. And your 
championing that is going to be most helpful.
    Secretary Abraham. If I could just comment. You know, I 
noticed in the job I have that when energy prices are high, as 
they were when we took office 2 years ago and today, it is 
usually our fault, my fault. But when they go down the credit 
goes to the marketing working. But the fact is we care very 
much about what the impact of this is.
    And what I find sometimes frustrating, Senator, and you 
have just put your finger on it, is that when there is a 
problem like this, a crisis situation, in fact when there was 
two years ago, and we asked for action on an energy policy, we 
were told that we were exploiting the crisis to try to force 
through undesirable or at least controversial legislation. That 
was not the case.
    And then when the crisis abated, everybody said, well, 
there is not a crisis, so we do not need an energy bill. And 
now we find ourselves, two years later, facing higher prices. 
And once again, we are saying this should be, yet again, a 
reminder to us of why we need to take the action you have 
recommended. I hope we will.
    Senator Craig. My last question to you, Mr. Secretary, 
while I am out in the State and across the country, it is 
unique the number of people who are coming up to me with 
devices and interests and concepts and ideas that relate to 
homeland security, in an effort to see if I cannot get them in 
to visit with our new Secretary of Homeland Security certain 
that what they have will make the world a safer place.
    What they recognize is a very large pot of money that is 
sitting there, or will be ultimately utilized by the Department 
of Homeland Security. Congress also recognized that. And 
Congress directed the Department of Homeland Security to 
utilized DOE national labs to carry out the security research 
agenda.
    My question to you, as Secretary Ridge begins to put in 
place the contractual mechanism to do work at DOE labs, I will 
be pushing to ensure that the labs, such as Idaho and others, 
have an opportunity to participate in an equal sense. Can I get 
your pledge to strongly support those efforts and actually to 
advance that agenda with the Secretary?
    Secretary Abraham. Absolutely. We are in the process of 
formulating a memorandum of understanding with the Department 
of Homeland Security. One of the issues that we wrestled with 
in the period during which the development of the Department's 
outline was taking place was the question of how to provide the 
technological support to that Department in dealing with 
detection equipment, in dealing with preparedness, in dealing 
with other new technologies that might be used by first 
responders and so on.
    And I think we are close to having a system where our 
national labs, not just one lab, as was initially suggested, 
but all the labs, can be teammates in this effort. And clearly, 
regardless of what the name of your department is, I do not 
think there is a department right now that does not put the 
protection of the homeland at the top of its agenda. And I know 
the labs will not only do great work, but make sure those 
issues that they are asked to work on have the highest priority 
they require.
    Senator Craig. Spence, does DOE intend to move the energy 
assurance research over to Homeland Security?
    Secretary Abraham. Yes. There is a part of the overriding 
role, in terms of critical energy infrastructure in particular, 
that will be at the Department of Homeland Security. However, 
we will still have a component in our Department that works on 
energy assurance as well, simply because of other 
responsibilities we have.
    Secretary Ridge and I, who worked together in the past, as 
well as since his ascension to this job, have collaborated on a 
variety of different projects that have dealt with these 
critical infrastructure challenges of working with the 
industries that are affected, at least in my sector. And I know 
he is doing the same in other sectors as well.
    Senator Craig. The reason I ask that, I note the 2004 
budget has no money in that area.
    Secretary Abraham. That is an area that----
    Senator Craig. How we carry that out, or how do you carry 
that out, I will be fascinated to learn.
    Secretary Abraham. Well, as I said, the principal 
responsibility for this has moved over there. But we will--
again, our electricity reliability work will have a role to 
play.
    Senator Craig. Lastly, and I say this only as a comment in 
passing, because of your mission as it relates to standard 
market design and FERC, there are a good many of us on this 
committee that take that issue very seriously and are extremely 
frustrated at this moment by the chairman of FERC and where he 
is headed with that.
    We are not restructuring an industry to create a super 
regulatory agency at the Federal level. That is an even more 
restrictive agency than certainly the dynamics of State utility 
commissions or agencies. And your observation and analysis of 
that--and I think as the chairman spoke, the independence of 
that review will be extremely valuable and useful to this 
committee and to the Senate, and the Congress as a whole.
    Secretary Abraham. Well, we, as I said, intend to do our 
best to provide good guidance here. And as I also indicated, we 
believe that there clearly are a lot of factors that have to be 
taken into account. I would stress, as I did in my comments 
before, the importance of distinctions and distinguishing 
between regions, based on the uniqueness of their energy 
capabilities, markets, and so on. And I know that that will be 
reflected upon many other things in the report we provide.
    Senator Craig. Mr. Secretary, thank you very much for your 
time and your presence before the committee. This is one 
Senator that appreciates your leadership. And we thank you for 
it.
    Secretary Abraham. Thank you, Senator.
    [Whereupon, at 12:14 p.m., the hearing was adjourned.]
                                APPENDIX

                   Responses to Additional Questions

                              ----------                              

              Responses to Questions From Senator Domenici
           workforce development for teachers and scientists
    Question 2. Secretary Abraham, I appreciate the emphasis in your 
testimony on a $1 million pilot program for improving the science and 
math qualifications of teachers in our K-14 educational system in 
answer to the President's call for ``qualified teachers in the 
classroom.'' However, I must note that such programs were conducted 
some years ago by the DOE. I know from many personal testimonies that 
these programs were highly successful in New Mexico.
    I really question whether you need any pilot program at all. My 
recommendation is that you simply restart the successful program of a 
few years ago at levels far higher than $1 million.
    Would you be willing to verify that the infrastructure from these 
past successful programs is still largely intact and provide an 
estimate of how large a program the Department could undertake in FY 
2004 in this vital area?
    Answer. Our National laboratories have continued to support 
fellowship and internship opportunities through their education and 
workforce development offices. In some respects, these offices have 
dramatically improved their quality assurance and efficiency due to the 
outside evaluations and mentor training being conducted. Our entire 
application, placement, tracking and evaluation system is online. The 
President's FY 2004 Budget allows for a robust pilot program.
            international thermonuclear experimental reactor
    Question 3a. The budget request only suggests that $12 million be 
reprogrammed from existing programs the U.S. role in ITER for FY 2004.
    Do you really anticipate that such a small amount of reprogrammed 
funding will be taken as a commitment by the international community?
    Answer. The very positive signal given to the international 
community was the President's decision to join the ongoing 
negotiations. This action was much appreciated by the participants in 
the ongoing negotiations.
    The funding in FY 2004 was our early estimate of the monies needed 
to participate in the preparatory activities planned for FY 2004, well 
before the beginning of construction that we understand is planned for 
FY 2006.
    Actual commitment by any of the participants in the ITER 
negotiations will come at the end of the negotiations, at the time of 
signing an agreement to build the project.
    Question 3b. Is the Administration prepared to request the 
increased budgets in future years to meet this $500 million commitment 
without negatively impacting other Science programs?
    Answer. The Administration is prepared to request the future 
funding necessary to fulfill the United States' negotiated commitments 
to the ITER project, while maintaining a robust Science program.
    Question 3c. Since ITER represents only one of several promising 
fusion research directions, will the Department continue to fund 
alternatives to the ``tokamak'' path towards fusion that is the focus 
for ITER?
    Answer. Yes, the Department is committed to continuing to fund 
alternative approaches to fusion energy. ITER is specifically a science 
experiment targeted at the phenomena of burning plasma physics, and the 
tokamak configuration is the only approach that can deliver the 
required physics capability at this time. Our strategy is to continue 
down an optimal path toward a practical fusion power source, using the 
results from our domestic research program (including a strong 
alternative concepts element) as well as the results from ITER.
                                 budget
    Question 6. Mr. Secretary, I appreciate the significant increase in 
budgets requested for Nuclear Energy, up almost 19 percent from last 
year. I especially appreciate your enthusiastic support for the 
Advanced Fuel Cycle Initiative, that I've championed for several years. 
But I'm puzzled why a program like Nuclear Energy Research Initiative 
or NERI, that is the largest supporter of university-based research in 
this vital field, is targeted for a cut by more than two. And I'm also 
puzzled why the Nuclear Energy Plant Optimization or NEPO program is 
targeted for no funding, when the nation depends strongly on our 
existing nuclear plants to avoid having to replace them with more 
polluting alternatives.
    Can you please discuss the rationale for halving the NERI budget 
and killing the NEPO budget just when we are undertaking other 
important ventures to secure a future for nuclear energy in the nation?
    Answer. First, I think it is important to make it clear that we 
believe that both the Nuclear Energy Research Initiative (NERI) and the 
Nuclear Energy Plant Optimization (NEPO) program have been important 
and very successful activities. The important initiatives that we 
believe will form the base of our nuclear energy research program in 
the future--the Nuclear Hydrogen Initiative, the Generation N nuclear 
systems initiative, and the Advanced Fuel Cycle Initiative--all grew 
out of the success of innovative NERI research and development.
    While the funds requested for NERI in FY 2004 represent a reduction 
from previous years, the budget request will allow us to support those 
projects that are continuing in the NERI and international NERI 
programs. During the coming year, we will refine and detail our plans 
for the Nuclear Hydrogen Initiative, Generation IV, and the Advanced 
Fuel Cycle Initiative. Once this is done, the Department will then be 
in a position to pursue new and innovative NERI research in areas that 
are complementary to our entire research portfolio.
    Regarding the NEPO program, we have successfully leveraged a small 
Federal investment with industry to address technical issues associated 
with the long term operation of the Nation's existing 103 nuclear power 
plants. With limited resources, however, we believe that it appropriate 
that we focus our research investment on more long term, high risk 
efforts that the private sector cannot support on its own. It is our 
hope that industry, which invests between $80 and $90 million annually 
on research, will choose to continue some of the NEPO projects. We are 
now working with the Electric Power Research Institute on a new, 
comprehensive strategic plan to guide our future joint research 
efforts.
    Question 8. Mr. Secretary, I compliment the leadership from the 
President and your Department in the new Hydrogen Fuel Initiative and 
in the FreedomCAR Initiative of last year. I concur that these new 
studies have immense promise for future reductions in our reliance on 
imported oil.
    Could additional funding be effectively utilized in FY2004 to 
advance these hydrogen initiatives even faster?
    I'd encourage your Department to develop demonstration projects 
that can move beyond the R&D phase for hydrogen fuel systems as soon as 
possible. When do you anticipate that significant demonstration of 
these technologies can be considered?
    Answer. The Department, working with industry, academia, and other 
stakeholders, devoted an entire year to developing a hydrogen roadmap--
a realistic, cost-effective plan to achieve the President's vision. We 
studied the problems, proposed realistic goals and a timetable to 
achieve them, and we submitted to Congress an honest budget to fund our 
detailed plan that has a high probability of success. We recognized 
that after a certain point, additional funding does not lower 
technology risks because of the learning time needed to find solutions 
to the difficult technology barriers.
    Within our FY 2004 budget request, we have planned a significant 
integrated vehicle and infrastructure demonstration. This ``learning'' 
demonstration will help us evaluate cost, performance, reliability and 
safety associated with the technology so that the R&D can be refocused 
as needed to meet our milestones. Since widespread demonstration 
activities such as large Federal purchases are expensive, we do not 
plan to undertake this until the technology gets closer to meeting 
customer requirements and industry gets closer to realizing a business 
case to justify large private investments.
                          beryllium at paducah
    As you probably know, at least five former Paducah workers have 
recently been told that they have contracted chronic beryllium disease 
despite the fact that beryllium was not known to be used at the plant.
    Question 29. What funds are in the Fiscal Year 2004 request to 
eliminate beryllium at the entire site including USEC and DOE areas?
    Answer. As a result of positive test results during plant worker 
health screening, sampling for beryllium contamination was conducted at 
a small number of suspect DOE facilities. However, no beryllium 
contamination was detected that required action and therefore funding 
for beryllium elimination is not included as a stand-alone budget item 
or as part of a larger budget item. A beryllium sampling task has been 
initiated to evaluate additional DOE facilities and some United States 
Enrichment Corporation facilities, and is supported with site funding 
in Fiscal Year 2003. If and when the need arises for additional 
sampling or elimination of beryllium, then funding would be made 
available from within the existing budget.
                                 ______
                                 
              Responses to Questions From Senator Bingaman
                       office of science earmarks
    Question 12. Please provide a list of earmarks mandated for the 
Office of Science in the Omnibus Appropriations Act for FY 2003 and 
explain the impact of funding these earmarks on the other programs of 
the Office. What other scientific programs, specifically, will have to 
be cut to accommodate these spending mandates?
    Answer. The FY 2003 President's request for BER was $504,215,000. 
The omnibus appropriation for BER was $530,000,000, an addition of 
$25,785,000 above the request. The conference report direction was 
$59,636,000 resulting in $33,851,000 in unfunded congressional 
direction.
    In order to accommodate the unfunded projects, about 150 projects 
at the National Laboratories and Universities will not be funded. 
Approximately 200 scientists, 90 students, and 45 research technicians 
will not receive funding.
    We will reduce the BER Life Sciences program by $8.3 million. This 
will impact Structural Biology, Genomes to Life, Carbon Sequestration, 
and Human Genome research activities. Of particular concern is the 
reduction of about $5.0 million to our Genomes to Life research. This 
research program has just taken off to an enthusiastic and high profile 
start and the loss of these funds will mean that none of the more than 
100 formal proposals and applications that scientists are preparing for 
an April 22, 2003, deadline will be funded. Genomes to Life builds on 
the success of genomics, structural biology, and high performance 
computing research, all DOE strengths. The research will result in 
rapid technology development and research results that will underpin 
potential benefits to DOE and the Nation. These include developing long 
term biotechnology strategies for the clean up of contaminated DOE 
sites by harnessing complex microbial communities and enhancing U.S. 
energy security by increasing biological sources of fuels like hydrogen 
that decrease our dependence on foreign oil and by reduction of new 
atmospheric carbon dioxide emissions to zero through understanding the 
Earth's natural carbon cycle and the development of biotechnology 
strategies for enhanced carbon capture and sequestration, central to 
the Administration's Climate Change Research and Technology 
Initiatives. Furthermore, Genomes to Life research underpins 
fundamental biological research at many agencies, including NIH, NSF, 
USDA, and DHS, and therefore makes unique contributions to DOE's energy 
security, environmental security, and national security missions as 
well as to national health and food security.
    Our Climate Change Science subprogram will be reduced by $10.7 
million including the Atmospheric Radiation Measurement Program (ARM), 
Climate modeling, Atmospheric Sciences, Ecological Processes, Carbon 
Sequestration, and Integrated Assessment research activities. This 
Climate Change Science subprogram makes unique contributions to DOE's 
energy security mission. This reduction slows progress: to improve 
climate models needed to predict and understand regional climate; to 
understand the environmental and economic impacts of different levels 
of atmospheric carbon dioxide; and to develop new ocean- or land-based 
strategies for sequestering excess atmospheric carbon dioxide.
    In the Environmental Remediation subprogram, the Natural and 
Accelerated Bioremediation Research and the Cleanup Research, including 
the Environmental Management Sciences Program, will be reduced by $11.7 
million. The Environmental Remediation subprogram makes unique 
contributions to DOE's environmental security mission. This reduction 
slows progress to develop more cost-effective, science-based strategies 
for cleaning up DOE's contaminated sites. DOE is under growing pressure 
to clean up its waste sites on an accelerated schedule. Delays in 
fundamental research needed to develop radical new cleanup strategies 
could mean that these new approaches will not be developed in time to 
help DOE reduce its cleanup costs and meet its aggressive cleanup 
schedule.
    Our Medical Applications and Measurement Science subprogram will be 
reduced $3.2 million impacting the Radiopharmaceuticals, Boron Neutron 
Capture Therapy, and Measurement Sciences research activities. The 
Medical Applications and Measurement Science subprogram makes unique 
contributions to the human health care in the United States and the 
world. The reduction will delay the development of technology to image 
gene expression and image changes in brains of patients with 
neurological diseases and the development of small biosensors for rapid 
diagnosis of disease.
            institutions that will be impacted by unfunded 
                    fy 2003 congressional direction
    (Many other institutions will also be affected but they cannot be 
identified at this time since they have pending applications/proposals 
that are still pre-decisional.)

Universities/Institutions
California, University of at Berkeley
California, University of at Los Angeles
Chicago, University of
Columbia University
Harvard University
Massachusetts Institute of Technology
Massachusetts, University of
Michigan Technical University
Michigan, University of
Monterey Bay Aquarium Research Institute
Nebraska, University of
Nevada, University of
New Hampshire, University of
New Mexico, University of
North Carolina State University
Oklahoma, University of
Oregon State University
Oregon, University of
Pennsylvania State University
Princeton University
State University of New York at Albany
Virginia Institute for Marine Sciences
Woods Hole Oceanographic Institute
  
Laboratories
Lawrence Berkeley National Laboratory
Lawrence Livermore National Laboratory
Oak Ridge National Laboratory
Pacific Northwest National Laboratory
Argonne National Laboratory
Los Alamos National Laboratory
  
Federal Government
National Aeronautics and Space Administration

                                                    OFFICE OF SCIENCE FY 2003 CONGRESSIONAL DIRECTION
                                                                 [Dollars in thousands]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   Conference    General
                    State                                Project title           appropriation  reduction  Rescission  Subtotal   SBIR    STTR     Net
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama......................................  University of South Alabama            3,000         18         19         2,963      76     4      2,883
                                                Cancer Center.
Arizona......................................  Institute for Biomedical Science       2,000         11         13         1,976      50     3      1,923
                                                & Biotechnology, University of
                                                Arizona.
California...................................  Vocational Education Programs at         500          3          3           494      12     1        481
                                                the Los Angeles Trade Technical
                                                College.
California...................................  Fuel Cell Advanced Materials and         500          3          3           494      12     1        481
                                                Demonstration Project at
                                                Humboldt State University.
California...................................  National Center for Neurogenetic         650          3          4           643      16     1        626
                                                Research and Computational
                                                Genomics at the University of
                                                Southern California.
California...................................  Magnetic Resonance Microscope at         500          3          3           494      12     1        481
                                                the Children's Hospital of Los
                                                Angeles.
Delaware.....................................  PET/CT Scanner at Christiana             500          3          3           494      12     1        481
                                                Care Health System.
Florida......................................  University of Southern Florida         1,200          7          8         1,185      30     2      1,153
                                                Center for Biological Defense.
Florida......................................  Barry University Minority              1,000          6          6           988      25     1        962
                                                Science Center.
Hawaii.......................................  Natural Energy Laboratory in             500          3          3           494      12     1        481
                                                Hawaii.
Illinois.....................................  Riverside Hospital Regional            1,000          6          6           988      25     1        962
                                                Cancer Center.
Illinois.....................................  Bioengineering Research Program          500          3          3           494      12     1        481
                                                at the University of Illinois,
                                                Chicago.
Illinois.....................................  CT Scanner at Edward Hospital...         500          3          3           494      12     1        481
Indiana......................................  Purdue University Technology           4,600         26         30         4,544     114     6      4,424
                                                Incubator in Northwest Indiana.
Indiana......................................  University of Notre Dame College       1,000          6          6           988      25     1        962
                                                of Engineering
                                                Multidisciplinary Research
                                                Facility.
Indiana......................................  Indiana Genomics Initiative at           500          3          3           494      12     1        481
                                                Indiana University.
Iowa.........................................  University of Northern Iowa              500          3          3           494      12     1        481
                                                Existing Business Enhancement
                                                Program.
Louisiana....................................  Stanley Scott Cancer Center.....         500          3          3           494      12     1        481
Louisiana....................................  University of Louisiana-               1,000          6          6           988      25     1        962
                                                LaFayette National Wetlands
                                                Research Center.
Maine........................................  University of Southern Maine           1,000          6          6           988      25     1        962
                                                School of Applied Sciences,
                                                Engineering, and Technology.
Maryland.....................................  Morgan State University Center           500          3          3           494      12     1        481
                                                for Environmental Toxicology.
Massachusetts................................  Pioneer Valley Life Sciences             500          3          3           494      12     1        481
                                                Initiative between the
                                                University of Massachusetts and
                                                the Baystate Medical Center.
Massachusetts................................  Hampshire College National               250          1          2           247       6  ......      241
                                                Center for Science Education.
Massachusetts................................  University of Massachusetts at           500          3          3           494      12     1        481
                                                Boston Multidisciplinary
                                                Research Facility and Library.
Massachusetts................................  Boston University Photonics              250          1          2           247       6  ......      241
                                                Center.
Michigan.....................................  Western Michigan University              500          3          3           494      12     1        481
                                                Nanoscience Research and
                                                Computational Institute.
Michigan.....................................  Nanotechnology Applications at           450          3          3           444      11     1        432
                                                Western Michigan University in
                                                Partnership with Altair.
Mississippi..................................  North Mississippi Health               1,000          6          6           988      25     1        962
                                                Services Positron Emission
                                                Tomography Cancer Center.
Missouri.....................................  University of Missouri-Columbia        2,000         11         13         1,976      50     3      1,923
                                                Nuclear Medicine and Cancer
                                                Research Program.
Nevada.......................................  Nevada Cancer Institute.........       1,000          6          6           988      25     1        962
Nevada.......................................  Linear Accelerator at the              1,000          6          6           988      25     1        962
                                                University Medical Center of
                                                Southern Nevada.
Nevada.......................................  Nevada Space Grant Consortium at         100          1          1            98       2  ......       96
                                                the Desert Research Institute.
New Jersey...................................  Drew University Hall of Science.         500          3          3           494      12     1        481
New Jersey...................................  Public Health Research Institute         500          3          3           494      12     1        481
                                                Rapid Detection for
                                                Bioterrorism Program in New
                                                Jersey.
New Mexico...................................  Operations and Capital                10,000         58         64         9,878     248    15      9,615
                                                Investments at the Mental
                                                Illness and Neuroscience
                                                Discovery Institute (MIND).
New York.....................................  Environmental Systems Center at          500          3          3           494      12     1        481
                                                Syracuse University.
New York.....................................  Audubon Biomedical Science and           500          3          3           494      12     1        481
                                                Technology Park at Columbia
                                                University.
New York.....................................  Center for Sustainable Energy at         500          3          3           494      12     1        481
                                                the Bronx Community College.
New York.....................................  New York University Genomics             450          3          3           444      11     1        432
                                                Project.
Ohio.........................................  Wittenberg University Science          3,800         22         24         3,754      95     6      3,653
                                                Center, Infrastructure &
                                                Equipment.
Oklahoma.....................................  Legume Genome Initiative at the          500          3          3           494      12     1        481
                                                University of Oklahoma.
Pennsylvania.................................  Green Chemistry Project at               500          3          3           494      12     1        481
                                                Carnegie Mellow University.
So. Carolina.................................  Medical University of South            1,000          6          6           988      25     1        962
                                                Carolina.
Texas........................................  Center for Environmental               1,000          6          6           988      25     1        962
                                                Radiation Studies at Texas Tech
                                                University.
Washington...................................  Inland Northwest Natural                 500          3          3           494      12     1        481
                                                Resources Research Center at
                                                Gonzaga University.
                                               International Water Institute...         250          1          2           247       6  ......      241
                                                   Total.......................      50,000        292        314        49,394   1,235    74     48,085
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Question 12. Last July, the National Renewable Energy Laboratory 
issued a report (``Hydrogen Supply: Cost Estimate for Hydrogen Pathways 
- Scoping Analysis''), that stated that ``on-board liquid (methanol or 
naptha) reforming or direct FC (fuel cell) technology could . . . 
eliminate costly hydrogen delivery and dispensing infrastructures, as 
well as avoid regulatory issues regarding hydrogen handling.'' However, 
in the Department's budget request for Fuel Cell Technologies, the 
budget for Fuel Cell Processor R&D is cut by almost 25%--from a request 
of $25.3 million in FY 2003 to $19 million for FY 2004. The 
accompanying budget documents state that this cut reflects a 
``decreased emphasis on on-board fuel processing technologies.'' 
Shouldn't we be keeping this option open?
    Answer. On-board generation of hydrogen from liquid fuels is a 
bridging strategy that could lead to introduction of fuel cell 
technology without requiring an extensive hydrogen infrastructure or 
on-board hydrogen storage technology. Because liquid fuels (i.e. 
methanol, naphtha, or gasoline) do not provide the feedstock 
flexibility compared to hydrogen, on-board generation of hydrogen is 
not a long-term strategy. Since the energy required during start-up to 
extract hydrogen on-board the vehicle could take away the efficiency 
advantage of a fuel cell, we have scheduled a go/no-go decision on this 
technology for June 2004.
    Until this decision is made, it would not be prudent to initiate 
new projects that would, in effect, prematurely determine the outcome 
of this decision point. The FY 2004 request fully funds all of our 
laboratory and industry cooperative agreements currently underway.
    Question 15. I am also concerned about your request for State 
Energy Programs, which is only $38.8 million compared to the FY 2003 
omnibus appropriation of $45 million. One pressing concern that the 
states have raised is the lack of funding to support their energy 
emergency preparedness responsibilities and an equally important non-
budget need for improved coordination and communications between the 
federal government and the states on emergency preparedness. Has DOE 
assessed the current status of the states' energy emergency planning (a 
mandatory feature of State energy programs)? Will you provide monetary 
or technical support for regional energy emergency planning and 
coordination? Who in the Department has the responsibility for 
coordinating with the states on energy emergency preparedness?
    Answer. The 1990 statutory revision of the State Energy Program 
(SEP) included emergency planning as a mandatory requirement (P.L. 101-
440). DOE assesses development of these plans by the States and ensures 
that they are updated annually with current points of contact. DOE 
provides guidance and technical assistance on both developing and 
implementing State Emergency Plans. Through the EERE Regional Offices, 
DOE promotes and participates in regional energy meetings that address 
current energy issues and regional energy dependencies, including 
preparation for energy emergencies.
    In most States, the Energy Emergency Plan is provided as an input 
to the comprehensive State Emergency Plan. A recent review of the 
status of the State Energy Emergency Plans found that 55 of the 56 
State Energy Offices have revised and updated their plans since the 
events of 9/11.
    The DOE Office of Energy Assurance (OEA) is the department's lead 
during an energy emergency. EERE and its Regional Offices provide an 
important role in working with the States in support of their emergency 
preparedness efforts. EERE and OEA continue to work with NASEO and the 
States to comply with any new initiatives that may come down from the 
Department of Homeland Security. Additionally, the Energy Information 
Administration (EIA) continues to provide valuable and timely 
information to both the States and the Federal Government.
                                 ______
                                 
               Responses to Questions From Senator Craig
                            argonne layoffs
    Question 21. On the ground in Idaho right now we are dealing with a 
shortfall in the FY 2003 budget for Argonne West. With the help of 
Chairman Domenici, the Senate was able to lift the Advanced Fuel Cycle 
research budget up to $58 million, from the requested level of only $18 
million for FY 2003. Unfortunately, this is still a cut of $20 million 
below last year. Depending on how DOE allocates the cut, the potential 
effect of this budget might be the dismantling of the Argonne West 
nuclear research program and a layoff of 300 researchers. Given the 
Administration's commitment to growing the nuclear energy program, we 
cannot allow this to happen.
    Will you commit to work with me, to mitigate the impacts of this 
lower budget in 2003, and leave Idaho with something to build on in FY 
2004?
    Answer. Senator Craig, our plans to create a national command 
center for nuclear energy research in Idaho require that we preserve 
the irreplaceable technical expertise at Argonne National Laboratory 
West. We agree that it is important to mitigate any adverse impacts 
from the FY 2003 Omnibus appropriation and we are committed to do our 
part to rebuild the Idaho nuclear research infrastructure.
                  invest in research to clean up idaho
    The FY 2004 budget continues the decline in research related to the 
Environmental Management program; this program is referred to as the 
Science and Technology Program. In Idaho, this program will be zeroed 
out in FY 2004.
    Given the massive undertaking of much of the remaining clean up--
and the untested technologies for performing it--I continue to believe 
that the EM program needs a research component. In fact, waste streams 
in Idaho, such as the high-level waste ``calcine'' are found no where 
else in DOE, and technologies for dealing with them are unproven.
    Question 23. How will DOE invest in the research that will be 
needed to complete the clean up?
    Answer. The Department has requested in the FY 2004 budget over $29 
million in the Office of Science to support scientific research to 
address cleanup problems identified by the Office of Environmental 
Management. The Environmental Management cleanup program does face some 
difficult challenges as it moves forward to address the clean up of the 
nuclear weapons complex. The Department has also included in the FY 
2004 budget request over $63 million for critical, high-payback 
technology development and deployment activities where step 
improvements can be gained, as well as for activities supporting 
closure sites. The Office of Environmental Management is currently 
funding development of a fiber optic sensor designed to assess moisture 
content within the calcine bins, as well as conducting an engineering 
evaluation of alternative retrieval strategies for calcine waste at 
Idaho.
    Question 24. Energy assurance is a key national security mission of 
the DOE. Following 9/11, the Department commissioned a task force to 
look at vulnerabilities in this area. They determined that SCADA 
systems represented a high priority vulnerability to our nation's 
energy supplies. Subsequently, the Department management has informed 
the Idaho delegation of their intent to establish a SCADA Test Bed at 
INEEL.
    Does DOE intend to move forward with that or do they intend to 
transfer this to the Department of Homeland Security?
    If the former, why are there no dollars in the President's Budget 
for FY04 to move forward?
    Answer. The Department of Energy continues to believe that SCADA 
systems represents a high priority vulnerability to the nation's energy 
supplies. The President's FY04 Budget does not contain funding for a 
SCADA Test Bed at INEEL because in the months after September 11, the 
Department placed a higher priority on the identification and 
correction of energy infrastructure vulnerability assessments. DOE 
remains very interested in reducing vulnerabilities to the energy 
system related to SCADA systems.
    As you know, the Homeland Security Act transferred the DOE Office 
of Energy Assurance to the new agency. Through the competencies gained 
by this transfer, the Department of Homeland Security will play a 
crucial role in working with all critical infrastructure sectors to 
overcome vulnerabilities to terrorist attack. The Department of Energy 
is currently reconstituting the Office of Energy Assurance and will 
coordinate with the DHS in working within the energy sector on these 
issues. The addition of DHS vulnerability assessment capabilities will 
allow the DOE to increasingly focus on research activities such as the 
SCADA Test Bed. For that reason, projects such as the SCADA Test Bed 
are likely to receive more attention as the Department prepares its 
FY05 budgetary submissions.
                                 ______
                                 
               Responses to Questions From Senator Akaka
            funding for the off-site source recover program
    The Department of Energy manages the Off-site Source Recovery 
Program to provide safe and secure storage facilities for low-level 
radioactive waste. According to a recent report by the Monterey 
Institute, about 18,000 sources come under this program, including 
Plutonium-238 and other materials that pose high security concerns due 
to their radioactivity. The program has collected about 3,000 sources 
that are being stored at a temporary facility until a final disposal 
site is built.
    Question 20a. Given the serious new national security aspect of 
this and other radioactive material programs, which were originally 
created to safeguard public health and the environment, why is there no 
funding requested for the program in the President's FY 04 budget?
    Answer. The Department of Energy takes seriously the new national 
security aspects of this source recovery program. In June 2002, the 
Secretary of Energy chartered an interagency review with the Chairman 
of the U.S. Nuclear Regulatory Commission to ensure the Department's 
resources are spent wisely, to focus our recovery efforts on those 
sealed sources which pose the greatest concern.
    The Department of Energy requested a total of $1.989 million in the 
FY 2004 budget for the Off-Site Source Recovery Program to conduct 
surveillance and maintenance. This funding is in two parts, the first 
of which is for $1.5 million in the Non-Defense Environmental Services 
Appropriation, Non-Closure Environmental Activities Account.
    The second part is for $489,000 in the Defense Environmental 
Services Appropriation, Non-Closure Environmental Activities Account.
    In addition, the Congress provided $10 million to the Off-Site 
Source Recovery Program in the FY 2002 emergency supplemental 
appropriations. This funding specified that the Off-Site Source 
Recovery Program was to recover 5,000 sources in eighteen months. The 
funds were actually received and made available for source recovery in 
October 2002, and the eighteen-month period ends in March 2004. 
Therefore, approximately one-third of this $10 million, or about $3.3 
million, will be expended in the first half of FY 2004.
       safety and security at the off-site source--recovery site
    Question 20b. Will the Department of Energy be able to ensure the 
safety and security of the sources already stored at the OSR site`?
    Answer. Yes. The sources being recovered are being stored in 
accordance with the Department of Energy's requirements for safeguards 
and security of the material. In the case of sources that are declared 
waste and stored as waste, appropriate physical security measures are 
in place to protect this stored waste.
                 collect and store sources at osr site
    Question 20c. How will the Department of Energy collect and store 
the sources that remain out there?
    Answer. The Department of Energy's Off-Site Source Recovery Program 
(OSRP) has recovered over 5,000 sources in the past several years. The 
program has recovered over 1,000 sources since the beginning of FY 
2003, and is well on the way to meeting the goal of 5,000 sources in 
eighteen months which was set by Congress. The OSRP has a database 
where source owners have reported and continue to report excess and 
unwanted sources. The Department of Energy and the U.S. Nuclear 
Regulatory Commission (NRC) have developed a prioritization methodology 
which the NRC has approved and the Department has implemented.
                    final disposal facility by 2006
    According to a Los Alamos National Laboratory report on the Off-
Site Source Recovery Program, ``for planning purposes, it is assumed 
that some form of [final] disposal option might become available in 
2006.''
    Question 20d. Will the Department of Energy have a final disposal 
facility ready by 2006?
    Answer. The sources being recovered by the Off-Site Source Recovery 
Program exceed the U.S. Nuclear Regulatory Commission's limit for class 
C waste, which is commonly referred to as Greater Than Class C waste. 
Currently, there are no existing disposal facilities for this type of 
waste. The first step the Department of Energy must take to develop 
this disposal is to perform the appropriate analysis under the National 
Environmental Policy Act. This process is expected to take 
approximately two years.
                                 ______
                                 
              Responses to Questions From Senator Bunning
                     continued funding for paducah
    I have worked hard to obtain adequate funding for cleanup at the 
Paducah plant. I was pleased that Paducah received $134 million for 
Fiscal Year 2003 from the Omnibus Appropriations Bill. The DOE's budget 
request for cleanup at the Paducah plant is $118 million, which is $45 
million above the FY 2003 request of $73 million. Kentucky thus far has 
failed to sign onto the DOE's accelerated cleanup plan.
    Question 25. If Kentucky fails to sign onto the DOE's accelerated 
cleanup plan this year, will the DOE continue to ask for substantial 
funding for Paducah?
    Answer. Consistent with the Department's environmental management 
reform initiative, sites not having an accelerated cleanup plan will be 
funded at their baseline level of funding which includes keeping 
operations safe. With an agreed-upon plan, additional funding would be 
provided for pulling work forward, accelerating risk reduction and 
closure.
                construction of duf6 facility at paducah
    Since you appeared before the Energy Committee last year, the DOE 
issued a contract for the construction and operation of DUF6 plants 
that treat and dispose of waste. The DOE's request for construction of 
the DUF6 plant at the Paducah plant is $45 million. It is my 
understanding that even with a DUF6 plant at Paducah and Portsmouth, it 
will take at least 20 years to process uranium at both sites.
    Question 26a. What is the date that the DOE expects to begin 
construction of the DUF6 facility at the Paducah Plant`?
    Answer. The Department expects to begin construction, particularly 
ground breaking and site preparation, by July 2004, in accordance with 
the mandate in Public Law 107206, 2002 Supplemental Appropriations Act 
for Further Recovery from and Response to Terrorist Attacks on the 
United States.
             balance of unobligated funds for duf6 project
    Question 26b. What is the balance of unobligated funds available 
for the DUF6 project from previous years appropriations and from 
unexpended balances from DOE/USEC Memorandum of Understandings?
    Answer. There is approximately $20 million of unobligated funds 
available from the United States Enrichment Corporation Memorandum of 
Understanding for the DUF6 project.
                                 ______
                                 
                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                 Washington, DC, February 28, 2003.
Hon. Spencer Abraham,
Secretary, U.S. Department Energy, Washington, DC.
    Dear Mr. Secretary: I would like to take this opportunity to thank 
you for appearing before the Senate Committee on Energy and Natural 
Resources on February 25, 2003, to give testimony regarding the 
Department of Energy's FY04 Budget request.
    Enclosed herewith please find a list of questions which have been 
submitted for the record. If possible, I would like to have your 
response to these questions by March 14, 2003.
    Thank you in advance for your prompt consideration.
            Sincerely,
                                          Pete V. Domenici,
                                                          Chairman.

    [Note: Responses to the following questions were not 
received at the time this hearing went to press.]

                    Questions From Senator Domenici
    Question 1. What is the Administration doing to minimize the 
economic disruption as a result of the high price of oil and gas?
    Question 4. Mr. Secretary, I appreciate the strong emphasis on 
completing site cleanup as quickly as possible. But as part of that 
emphasis, budgets for EM Science and Technology programs have been 
decimated. I'm concerned that the Department is losing important 
opportunities to introduce improved science into the cleanup effort by 
such reductions. And in the case of programs like WERC, the Waste 
Management Education and Research Consortium, which has a superb record 
for training new talent for the EM programs, I fear that the failure to 
request funding is short-sighted.
    How do you justify your proposal to stop funding the WERC program, 
especially when the Department has recently renegotiated a multi-year 
contract for WERC? Isn't the Department concerned with losing the 
contributions and expertise of the WERC program and its record of 
contributions to EM program goals?
    Question 5. Mr. Secretary, FY2004 is the third year of flat budget 
requests for the Office of Science. I appreciate that the completion of 
some construction projects in FY2004 enabled your proposals for 
expanded funding of Genomes to Life and Nanoscience. But I think the 
Department and Administration must start requesting significant 
increases in the budgets for the Office of Science.
    Since that Office is the largest supporter of research in most 
physical sciences, I fear that we are seriously jeopardizing the 
competitiveness of our nation by short-changing developments in these 
areas. In fact, our rush to fund health sciences through the NIH, 
without comparable funding to the Office of Science, may prevent us 
from realizing our goals in the health sciences. After all, many 
developments in health sciences also require advances in the physical 
sciences, we need strong health and physical sciences to truly enable 
advances.
    Do you share my concern that we must do more to increase the 
nation's talent pool in the physical sciences and that increased 
budgets for the Office of Science are critically important in future 
years?
    Question 7. Mr. Secretary, the budget request mentions that the 
Administration will propose a ``cap adjustment mechanism'' to provide 
greater flexibility for funding the Yucca Mountain accounts in FY2004 
and FY2005. I'm receiving daily questions about this proposal. But, 
since I have yet to see the details of the Administration's proposal, 
it's impossible for me to complete an assessment of it.
    How quickly will the Administration provide draft legislation to 
Congress?
    Question 9. Mr. Secretary, I note that funding requests for 
Electric Reliability and High Temperature Superconductivity remain flat 
between FY2003 and FY2004. That surprises me a little, given the 
importance to the nation of maintaining and improving reliability of 
our electricity supplies, and the potential immense impact that high 
temperature superconductivity can make to increase efficiency of many 
electrical processes.
    Are you confident that we are doing as much as we can do to improve 
our electric reliability and to utilize high temperature conductors as 
quickly as possible?
    Question 10. Secretary Abraham, the FY2003 Omnibus Appropriations 
Bill includes a provision directing you to conduct an independent cost 
benefit analysis of FERC's proposed rulemaking on Standard Market 
Design. The provision directs you to submit the analysis no later than 
April 30, 2003.
    What steps will you take to assure that this study will be 
independent?
    Can you commit to having the DOE analysis submitted by the end of 
April?
                                 ______
                                 
                    Questions From Senator Bingaman
    Question 11. According to a Reuters story quoting you on February 
12--the Administration is closely monitoring crude oil inventories and 
will decide to release oil from the SPR when it is needed to ``address 
severe supply issues''. Can you elaborate on exactly what would 
constitute a ``severe supply issue'' that would lead to a Presidential 
decision to drawdown the SPR?
    Are you doing anything to prepare for a drawdown, such as running 
simulations or other tests of the operational capability to release oil 
from the SPR?
    Question 13. It appeared last year that insurance arrangements on 
the part of some DOE contractors, State laws, or the lack of a current 
corporate entity to participate in worker's compensation awards was 
causing problems in implementing Subtitle D. These situations were 
characterized as ``missing payor'' problems. Does DOE need additional 
legal authority to pay Subtitle D claims where these circumstances 
exist? Will you work with us to fix any problems in coverage under 
Subtitle D?
    Question 14. The President's request for the Energy Information 
Administration is the same amount this year as it was last year ($80.1 
million) which translates into a reduction in real terms. At a time 
when timely and accurate energy data is critically important to policy 
makers, consumers and all participants in energy markets, EIA has been 
doing an excellent job on a tight budget.
    However, EIA is continually being asked to take on more tasks such 
as the weekly natural gas storage report they took over from industry 
last year. And there is other data that we need.
    For example, one of the witnesses (Matt Simmons) at our February 13 
oil hearing pointed out that we currently only measure ``primary oil 
stocks'' which are defined as petroleum storage in excess of 50 
thousand barrels. We have no good data on smaller secondary or tertiary 
stocks. Thus, we have no way to measure what stock levels are or what 
should constitute minimum operating levels for stocks.
    We also have no real-time data on oil production. Without this 
data, according to Mr. Simmons, there is no system for alerting us when 
stocks drop too low until it is too late and actual physical shortages 
appear.
    I am concerned that EIA is not being allocated adequate resources 
in your budget request to provide the data we need. Why hasn't funding 
for the EIA been increased this year?
    Question 16. Mr. Secretary, as you know both the House and Senate 
versions of the H.R. 4--the national energy bill contained significant 
provisions designed to emphasize the federal government's leadership 
responsibilities with respect to energy efficiency and energy 
conservation provisions which were supported by the Administration. I 
am disappointed that your budget request for the Federal Energy 
Management program (FEMP) does not reflect this Congressional support. 
In fact, FEMP funding would be cut by about 14 percent compared to your 
request for FY2003. While the federal government made progress in 
improving its energy efficiency during the 1990's, your budget 
documents state that energy consumption actually increased slightly in 
2001 and energy costs increased by 14%. Given that, it seems unwise to 
backslide on energy efficiency or to waste taxpayer dollars on energy 
bills that could be reduced through efficiency measures. Could you 
provide for the record the impact of this reduction on the FEMP support 
provided by DOE?
    Question 17. What will happen to the Yucca Mountain program if the 
Administration's proposal is not adopted and the program continues on 
level funding?
    What is the current status of the various lawsuits against the DOE 
for failing to meet its contractual obligation to begin disposing of 
the utilities' waste? What effect may judgments against DOE in those 
cases have on DOE's ability to pay for the development of the 
repository?
                                 ______
                                 
                      Questions From Senator Akaka
    Question 18. As you know, Mr. Secretary, I have a strong interest 
in Hydrogen programs. Hawaii and all islands in the Pacific share a 
common need for an alternative, reliable energy source that we will not 
need to import. Hydrogen is a primary contender, and I am optimistic 
that in my lifetime I will be able to see hospitals, homes, and even 
military bases and cars running on locally- produced sources of 
Hydrogen.
    Naturally, I am pleased to see the President's initiative for 
Hydrogen fuel cell research and development, and the goal to have cars 
on the road by 2020. But I have concerns that the initiative will focus 
on personal mobility, rather than providing milestones in the short-
term for a robust infrastructure for stationary and even portable 
applications.
    I understand that the Department has established long-term goals, 
but what are the milestones in the short-term that demonstrate a sound 
pathway for the Hydrogen economy of the future? Most of the 
technologies will use the same Proton Exchange Membrane (PEM) 
technology--whether stationary or mobile sources such as cars and 
trucks, so why aren't we focusing on stationary sources as well?
    Question 19. The Department of Energy is requesting $26.6 million 
in the FY04 budget for the Natural Gas Technologies Program. This 
program supports ``innovative and breakthrough technologies'' such as 
the gas hydrates program. The reliance on new natural gas sources such 
as methane hydrates could help reduce carbon dioxide emissions and our 
reliance on international sources of fossil fuels. Last fall, an 
international team of researchers in the Ocean Drilling Program 
successfully brought 3,000 meters of gas hydrate core samples to the 
sea's surface, while maintaining sub-sea floor pressures. This 
achievement provides several breakthroughs for the identification and 
study of gas hydrates that may bring us closer to safe, reliable 
recovery of hydrates. We need to continue and increase this commitment 
to invest in basic research.
    Why has the Department's funding request decreased? Starting with 
the FY02 request of $4.7 million, the requests have declined over $1 
million from FY03 to the proposed FY04 budget request of $3.5 million. 
Is the Department not committed to innovative research in gas hydrates? 
Does the funding request reflect the Department's commitment to the 
program?
    A large portion ($13.9 million) of the funding in Natural Gas 
Technologies Program will shift to the relatively new Sustainable 
Supply Initiative. I think you would agree that we should not sacrifice 
the future for short-term gain. Are the funding decreases in existing 
programs such as methane hydrates being diverted from long-term and 
high-risk research with public benefits, to a near-term focus on 
sustainable supply? How will this bring us closer to using gas hydrates 
for energy sources in the long run?
                                 ______
                                 
                      Question From Senator Craig
    Question 22. I am aware that you will be hosting a conference in 
Vienna on Radiological Dispersion Device threat mitigation and 
radiological security. In my view, laboratories that have a lead on 
fuel cycle issues such as Argonne, are uniquely positioned to 
participate heavily in these programs as they relate to nuclear and 
radiological security because they have the relevant expertise. 
Unfortunately, such opportunities seem to go preferentially to NNSA 
laboratories.
    To mitigate the nuclear energy funding shortfall for Argonne 
described above, the following potential opportunities outside of 
Nuclear Energy have been identified. Please provide an individual 
reaction to possible participation by non-NNSA labs such as Argonne for 
each of the following program areas:

   Fissile Materials Disposition (NA-26/DP)--Providing 
        expertise such as irradiation studies, purification process 
        expertise, systems analyses, etc. to support the program 
        offices in existing and expanding fissile material disposition 
        programs.
   U.S. Orphan Source Disposition (EM-20/NA-10)--Expanding 
        existing off-site source recovery project (OSRP) and /or 
        acquiring a portion of the existing project to bring a final 
        resolution to problematic orphan sources in the U.S. Designing 
        the processes to dismantle actinide sources and introduce the 
        materials into the fuel cycle research stream.
   RDD Threat Mitigation (NA-25)--Reducing the threat of 
        radiological dispersion devices (RDD) through the enhanced 
        security and education outside the United States.
   Mobile Melt and Dilute (NA-24)--Design, test, and 
        demonstrate a mobile system for down-blend of at risk weapons 
        usable materials outside of the U.S.
                                 ______
                                 
                     Questions From Senator Bunning
    Question 27. The DOE's request for maintenance and storage of the 
39,000 current DUF6 cylinders at the Paducah plant is $4 million, which 
is an $8 million reduction over the previous year's request. Why did 
you reduce the funding for safe storage of the cylinders?
    Question 28. Under Section 502 of the Fiscal Year 02 Supplemental 
Appropriations Act, the Secretary of Energy was given authority to 
expend funds reserved in the USEC Fund in the Treasury for the 
construction and operation of the DUF6 facilities thirty days after a 
contract was awarded. It is my understanding that the Fund currently 
contains approximately $373 million. Does the DOE plan to use any of 
the $373 million for the cost of constructing or operating the DUF6 
facilities? If not, is legislation required to assure authorization for 
the DOE to access the Fund?
    Question 30. The DOE has requested approximately $14.9 million for 
the former worker medical screening program. In the Fiscal Year 03 
Appropriations bill, Paducah, Portsmouth, and Oakridge obtained $3.5 
million. How much of the $14.9 million is designated for the three 
gaseous diffusion plants?
    Question 31. During the Cold War, workers employed at the 
Department of Energy sites across the country served our country by 
helping to make nuclear weapons. Many of these workers subsequently 
became ill due to their work with radioactive and toxic substances at 
the sites. The DOE has worked to align the Physician's Panel rule for 
the Energy Employees Occupational Illness Compensation Program Act with 
Congressional intent. However, workers' claims for the Physician Panel 
under Subtitle D of the Act are backlogged. Your staff indicates that 
only 20 of the 14,000 requests for assistance with claims related to 
state worker compensation have been sent to the Physicians Panel and 
only 6 of those claims have been processed. Paducah alone has over 
1,900 claims with 0 having been processed. How long is it going to take 
for the DOE to process these cases? What are the major obstacles the 
DOE is facing that has led to this massive backlog?
    Question 32. The Department of Labor has been tasked with reviewing 
claims for cancer, beryllium disease, and silicosis under Subtitle B of 
the Energy Workers Compensation Program Act. The DOL has received over 
39,000 claims, recommended decisions on almost 20,000 of those, and 
issued $475 million in payments to 6,600 claimants since July, 2001. 
This is a far cry from DOE's 6 claims that have been processed in the 
same amount of time. Is the DOE the right agency to be implementing the 
compensation program under Subtitle D or would the Department of Labor 
serve the sick workers better?
    Question 33. The DOE General Counsel has indicated that the DOE 
does not have entities who will pay claims for many workers whose 
claims have been approved by the Physicians Panels. This problem 
involving thousands of claims has not been solved in states such as 
Kentucky, Iowa, Missouri, Ohio, and Colorado. This problem was revealed 
to Congress nearly a year ago, and was identified by your advisory 
committee nearly 18 months ago. Last year, I co-sponsored legislation 
that would give the Department of Labor a role in helping to solve some 
of the obstacles to DOE's implementation of this program. I believe 
that you don't fix something that isn't broken, but we know this is 
broken so it should be fixed. Does the DOE have any recommendations of 
how to fix this problem?
    Question 34. If USEC does not choose Paducah to operate its new 
centrifuge plant, the Paducah plant will shut down operations in 2010. 
The Paducah community has worked hard to increase the job market in the 
community when the plant closes. The DOE has requested only $15 million 
for the Office of Worker and Community Transition, which helps workers 
and communities adversely impacted by downsizing or closing of DOE 
facilities. This request is a 41.6% decrease from DOE's Fiscal Year 
03's request. For Paducah, the DOE has requested $280,000. Why has the 
DOE decreased funding for this office?
    Question 35. Currently, Bechtel Jacobs is the contractor at the 
Paducah plant. The DOE has indicated that it is considering re-
competing the cleanup contract at the Paducah plant. When does the DOE 
expect to make a decision on this? If the DOE re-competes the contract, 
do you think it will negatively impact cleanup efficiency at the plant 
or start-up time for the DUF6 facility?
    Question 36. The funding request for FERC is $199 million. Kentucky 
has the lowest residential electricity rates in the country. The FERC's 
proposed Standard Market Design rule, or SMD, appears to penalize 
states with low costs to benefit those with high costs. Do you believe 
that FERC's SMD rule will negatively affect Kentucky's rates?
    Question 37. TVA recently announced a rate increase for its 
customers. Currently, TVA is not subject to FERC jurisdiction for its 
rates, charges, and terms, and therefore, is not subject to any 
oversight other than by themselves and Congress. Placing TVA under FERC 
would require it to be subject to the same regulatory requirements as 
other utility companies. What do you think of FERC overseeing TVA for 
how it operates its transmission grid and how it charges its customers 
for wholesale electricity? Do you think FERC oversight will bring more 
competition into TVA's region that right now operates under its 
monopoly?
    Question 38. Coal continues to play a large role for energy in our 
country. The DOE request for the past two years for the President's 
Coal Research Initiative has remained stagnant at approximately $320 
million. The budget request for Kentucky coal research and development 
is $802,000. Do you think that funding for coal research and 
development is adequate to bring new clean coal technology into the 
commercial sector quickly?

                                    

      
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