[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]


 
                 PRIORITIES IN THE DEPARTMENT OF ENERGY
                      BUDGET FOR FISCAL YEAR 2006

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON ENERGY

                          COMMITTEE ON SCIENCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 27, 2005

                               __________

                           Serial No. 109-11

                               __________

            Printed for the use of the Committee on Science


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

                                 ______


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                          COMMITTEE ON SCIENCE

             HON. SHERWOOD L. BOEHLERT, New York, Chairman
RALPH M. HALL, Texas                 BART GORDON, Tennessee
LAMAR S. SMITH, Texas                JERRY F. COSTELLO, Illinois
CURT WELDON, Pennsylvania            EDDIE BERNICE JOHNSON, Texas
DANA ROHRABACHER, California         LYNN C. WOOLSEY, California
KEN CALVERT, California              DARLENE HOOLEY, Oregon
ROSCOE G. BARTLETT, Maryland         MARK UDALL, Colorado
VERNON J. EHLERS, Michigan           DAVID WU, Oregon
GIL GUTKNECHT, Minnesota             MICHAEL M. HONDA, California
FRANK D. LUCAS, Oklahoma             BRAD MILLER, North Carolina
JUDY BIGGERT, Illinois               LINCOLN DAVIS, Tennessee
WAYNE T. GILCHREST, Maryland         RUSS CARNAHAN, Missouri
W. TODD AKIN, Missouri               DANIEL LIPINSKI, Illinois
TIMOTHY V. JOHNSON, Illinois         SHEILA JACKSON LEE, Texas
J. RANDY FORBES, Virginia            BRAD SHERMAN, California
JO BONNER, Alabama                   BRIAN BAIRD, Washington
TOM FEENEY, Florida                  JIM MATHESON, Utah
BOB INGLIS, South Carolina           JIM COSTA, California
DAVE G. REICHERT, Washington         AL GREEN, Texas
MICHAEL E. SODREL, Indiana           CHARLIE MELANCON, Louisiana
JOHN J.H. ``JOE'' SCHWARZ, Michigan  VACANCY
MICHAEL T. MCCAUL, Texas
VACANCY
VACANCY
                                 ------                                

                         Subcommittee on Energy

                     JUDY BIGGERT, Illinois, Chair
RALPH M. HALL, Texas                 MICHAEL M. HONDA, California
CURT WELDON, Pennsylvania            LYNN C. WOOLSEY, California
ROSCOE G. BARTLETT, Maryland         LINCOLN DAVIS, Tennessee
VERNON J. EHLERS, Michigan           JERRY F. COSTELLO, Illinois
W. TODD AKIN, Missouri               EDDIE BERNICE JOHNSON, Texas
JO BONNER, Alabama                   DANIEL LIPINSKI, Illinois
BOB INGLIS, South Carolina           JIM MATHESON, Utah
DAVE G. REICHERT, Washington         SHEILA JACKSON LEE, Texas
MICHAEL E. SODREL, Indiana           BRAD SHERMAN, California
JOHN J.H. ``JOE'' SCHWARZ, Michigan  AL GREEN, Texas
VACANCY                                  
SHERWOOD L. BOEHLERT, New York       BART GORDON, Tennessee
               KEVIN CARROLL Subcommittee Staff Director
          DAHLIA SOKOLOV Republican Professional Staff Member
           CHARLES COOKE Democratic Professional Staff Member
                     COLIN HUBBELL Staff Assistant


                            C O N T E N T S

                             April 27, 2005

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

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

                           Opening Statements

Statement by Representative Judy Biggert, Chairman, Subcommittee 
  on Energy, Committee on Science, U.S. House of Representatives.    13

Statement by Representative Michael M. Honda, Ranking Minority 
  Member, Subcommittee on Energy, Committee on Science, U.S. 
  House of Representatives.......................................    15
    Written Statement............................................    16

Prepared Statement by Representative Lynn Woolsey, Member, 
  Subcommittee on Energy, Committee on Science, U.S. House of 
  Representatives................................................    17

Prepared Statement by Representative Lincoln Davis, Member, 
  Subcommittee on Energy, Committee on Science, U.S. House of 
  Representatives................................................    18

Prepared Statement by Representative Jerry F. Costello, Member, 
  Subcommittee on Energy, Committee on Science, U.S. House of 
  Representatives................................................    19

Prepared Statement by Representative Eddie Bernice Johnson, 
  Member, Subcommittee on Energy, Committee on Science, U.S. 
  House of Representatives.......................................    19

Prepared Statement by Representative Al Green, Member, 
  Subcommittee on Energy, Committee on Science, U.S. House of 
  Representatives................................................    20

                               Witnesses:

Dr. Raymond L. Orbach, Director of the Office of Science, 
  Department of Energy, Washington, DC
    Oral Statement...............................................    20
    Written Statement............................................    21
    Biography....................................................    35

Mr. Douglas L. Faulkner, Principal Deputy Assistant Secretary for 
  Energy Efficiency and Renewable Energy, Department of Energy, 
  Washington, DC
    Oral Statement...............................................    36
    Written Statement............................................    38
    Biography....................................................    44

Mr. Mark R. Maddox, Principal Deputy Assistant Secretary for 
  Fossil Energy, Department of Energy, Washington, DC
    Oral Statement...............................................    45
    Written Statement............................................    47
    Biography....................................................    51

Mr. Robert Shane Johnson, Deputy Director for Technology, Office 
  of Nuclear Energy, Science, and Technology, Department of 
  Energy, Washington, DC
    Oral Statement...............................................    51
    Written Statement............................................    53
    Biography....................................................    61

Mr. Kevin M. Kolevar, Director of the Office of Electricity 
  Delivery and Energy Reliability, Department of Energy, 
  Washington, DC
    Oral Statement...............................................    62
    Written Statement............................................    63
    Biography....................................................    65

Discussion.......................................................    66

              Appendix: Answers to Post-Hearing Questions

Dr. Raymond L. Orbach, Director of the Office of Science, 
  Department of Energy, Washington, DC...........................    90

Mr. Douglas L. Faulkner, Principal Deputy Assistant Secretary for 
  Energy Efficiency and Renewable Energy, Department of Energy, 
  Washington, DC.................................................    95

Mr. Mark R. Maddox, Principal Deputy Assistant Secretary for 
  Fossil Energy, Department of Energy, Washington, DC............    98

Mr. Robert Shane Johnson, Deputy Director for Technology, Office 
  of Nuclear Energy, Science, and Technology, Department of 
  Energy, Washington, DC.........................................   103

Mr. Kevin M. Kolevar, Director of the Office of Electricity 
  Delivery and Energy Reliability, Department of Energy, 
  Washington, DC.................................................   106


   PRIORITIES IN THE DEPARTMENT OF ENERGY BUDGET FOR FISCAL YEAR 2006

                              ----------                              


                       WEDNESDAY, APRIL 27, 2005

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

    The Subcommittee met, pursuant to call, at 10:11 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Judy 
Biggert [Chairman of the Subcommittee] presiding.



                            hearing charter

                         SUBCOMMITTEE ON ENERGY

                          COMMITTEE ON SCIENCE

                     U.S. HOUSE OF REPRESENTATIVES

                 Priorities in the Department of Energy

                      Budget for Fiscal Year 2006

                       wednesday, april 27, 2005
                         10:00 a.m.-12:00 p.m.
                   2318 rayburn house office building

1. Purpose

    On Wednesday, April 27, 2005, the Energy Subcommittee of the House 
Science Committee will hold a hearing on the Department of Energy's 
fiscal year 2006 (FY06) budget request.

2. Witnesses

          Dr. Ray Orbach is the Director of the Office of 
        Science at DOE. He has held this position since 2002. Prior to 
        joining the Department, Dr. Orbach was Chancellor of the 
        University of California at Riverside.

          Mr. Douglas Faulkner is the Principal Deputy 
        Assistant Secretary for Energy Efficiency and Renewable Energy 
        (EERE). Before assuming his post in EERE, Mr. Faulkner's 
        federal career included service as a senior policy advisor to 
        two Secretaries of Energy.

          Mr. Mark R. Maddox is the Principal Deputy Assistant 
        Secretary for Fossil Energy (FE) at DOE. Prior to joining FE, 
        Mr. Maddox served as Senior Policy Advisor to the Secretary of 
        Energy. Prior to coming to DOE in 2003, Mr. Maddox was Director 
        of Communications and Public Affairs for a division of Lockheed 
        Martin, Inc. that is now called Affiliated Computer Services 
        State and Local Solutions, Inc.

          Mr. Robert Shane Johnson is the Deputy Director for 
        Technology, the Office of Nuclear Energy, Science and 
        Technology. He has previously served as Associate Director for 
        Advanced Nuclear Research, and as the Associate Director for 
        Technology and International Cooperation. Prior to coming to 
        DOE, he was employed with Duke Power Company and Stoner 
        Associates, Inc.

          Mr. Kevin Kolevar is the Director of the recently 
        renamed Office of Electricity Delivery and Energy Reliability 
        (a merger of the Office of Electricity Transmission and 
        Distribution, and the Office of Energy Assurance) at DOE. Prior 
        to his appointment, Kolevar served as Chief of Staff to then-
        Deputy Secretary of Energy Kyle McSlarrow, and as a senior 
        advisor to the U.S.-Canada Task Force that investigated the 
        2003 blackout. Before coming to DOE, Kolevar served on the 
        staffs of Senators Spencer Abraham and Connie Mack.

3. Overarching Questions

          How does the Department determine the appropriate 
        balance between near- and longer-term technologies in its 
        applied programs? When technologies are proven and ready for 
        wider use, how does the Department help get them into the 
        marketplace? What is the appropriate role for industry in this 
        effort?

          How is White House guidance to science and technology 
        agencies reflected in the activities funded by the DOE budget? 
        In particular, does the DOE budget reflect the emphasis on 
        potentially high-payoff activities that will help achieve the 
        long-term national goals of security and energy independence? 
        Should other policy considerations, such as current energy 
        prices and supplies, factor into these decisions?

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

4. Background and Issues

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

A) OVERALL DOE R&D

BACKGROUND:

    The $5.4 billion DOE R&D funding request for FY06 is divided among 
the five offices represented at this hearing: The Office of Science 
(SC) funds basic research at universities and 10 National Laboratories. 
The Office of Science contributes over 40 percent of all federal funds 
for civilian physical sciences research. The other four offices run 
applied R&D programs.
    U.S. Energy Context: The applied energy R&D request of $1.95 
billion represents 3.1 percent of the civilian science and technology 
budget.\1\ The research is designed to affect the energy sector of the 
economy, which constituted 7.2 percent of the gross domestic product 
(GDP) in 2002.\2\ Energy may have an even larger influence on policy 
than its direct economic impact, due to its implications for foreign 
policy, and because virtually every other product or service in the 
economy requires some input of energy for its production and/or 
delivery.
---------------------------------------------------------------------------
    \1\Not including Department of Homeland Security funding.
    \2\ Numerator (energy expenditure) from the EIA's Annual Energy 
Review 2002 Table 3.4 on page 77. Denominator (GDP) from the year 2002 
data in the President's 2005 Budget: Historical Tables, page 184.
---------------------------------------------------------------------------
    DOE R&D in Budget Context: The President is proposing to spend 
$60.8 billion on all civilian R&D in the fiscal year (FY) 2006 budget, 
or about 2.3 percent of the total proposed $2.57 trillion budget.\3\ Of 
the amount proposed for total civilian R&D, 8.9 percent would go to 
DOE. Table 1 below breaks down the proposed DOE R&D budget.
---------------------------------------------------------------------------
    \3\ To calculate civilian R&D the Committee began with the Federal 
Science and Technology (FS&T) budget (The Budget of the United States: 
Analytical Perspectives, pp. 66-67) and subtracted defense and homeland 
security basic and applied research.



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

Does the proposed budget strike the appropriate balance between the 
physical sciences and the life sciences? Funding for medical and life 
science research at the National Institutes of Health (NIH) has more 
than doubled over the past decade, while funding for research in the 
physical sciences has remained flat (see Figure 1). Given the 
contribution to the economy of physical science research through 
technology development and the need in biosciences for the tools 
created by physics research, some experts fear the balance in federal 
research funding may have shifted too far. DOE is the largest single 
funder of non-defense physical science research.




What are the criteria the Department uses to ``graduate'' activities 
from the laboratory to the demonstration phase? Demonstration projects 
are both a useful step in developing technologies and a means to 
stimulate commercialization of mature technologies. However, in 
particular programs, such as the hydrogen initiatives and in the 
FutureGen project, there seems to be an emphasis on very expensive 
demonstration projects even though there are still major obstacles to 
be overcome by basic research (i.e., high technical risk). Recently the 
Department has characterized some of these major projects as ``learning 
demonstrations,'' and said they are necessary to understand the 
challenges facing new technologies. The specific characteristics that 
distinguish a ``learning demonstration'' from other demonstrations are 
unclear. It is also unclear whether demonstrations could take place at 
a smaller scale that would provide the same lessons at a lower price.

Does the proposed budget strike the appropriate balance among applied 
energy programs? The proposed budget reflects a continuing shift in 
emphasis away from energy efficiency R&D, with the exception of 
activities supporting the President's hydrogen initiatives. Other 
trends are less clear. (See Figure 2.)




    Assuming the budget proposal is approved, since FY01, funding for 
hydrogen and fuel cell activities will have increased by 172 percent; 
funding for Nuclear Energy, including shifts related to new laboratory 
costs, will have increased by 39 percent; and funding for Fossil Energy 
R&D will have increased by 11 percent (even with the elimination of oil 
and gas R&D programs). Funding for Office of Electricity Delivery and 
Energy Reliability programs, despite a decline in the request for FY06, 
will have increased by 87 percent, following a large increase in the 
wake of the August 2003 blackout. In contrast, funding for Renewable 
Energy R&D, excluding the Hydrogen fuel initiative, will have dropped 
by 13 percent; and funding for Energy Efficiency R&D (excluding fuel 
cells), which received a significant increase in FY02, will have been 
reduced by 15 percent.

Is the proposed management approach to large demonstration projects 
such as FutureGen and Next Generation Nuclear Plant the right mechanism 
to ensure efficient operation and oversight of federally funded 
projects? The Fossil Energy and Nuclear Energy Offices have chosen a 
unique management structure for two large demonstration projects. The 
structure would create private-sector consortia--project integrators--
to manage both oversight and operations. One immediate question posed 
by this proposed arrangement is: what is the liability of the Federal 
Government in the event that the private-sector partners walk away from 
the project before the demonstration is completed?

B) OFFICE OF SCIENCE

BACKGROUND:




    Budget Highlights: As shown in Table 2, the Administration's FY06 
budget request for DOE's Office of Science proposes a reduction of 3.8 
percent, from the $3.6 billion FY05 enacted level. The Administration 
describes this as a 1.6 percent decrease if one excludes $79.6 million 
in Congressional earmarks. This request is nine percent below the $3.8 
billion authorized in H.R. 6, the Energy Policy Act of 2005, which was 
passed by the House on April 21, 2005 by a vote of 249-183.

ISSUES:

If budgets continue to decline, will research grants continue to suffer 
a disproportionate share of the cuts? Over the last several years, 
funding from the Office of Science has been approximately equally split 
between research grants and facilities (both operations and 
construction). Over the last two years, the proportion of funding for 
research grants has declined. The proposal for FY06 would exacerbate 
this trend: the cuts to research grants are proportionally larger than 
for facilities funding, with research grants cut 10 percent (versus a 
four percent cut to the Office of Science). If this trend were to 
continue, DOE's Science programs could potentially change in character, 
with DOE acting primarily as a facility provider for research 
activities funded by others. This trend might also have a 
disproportionate effect on the 15,000 graduate students supported 
through DOE grants. It is not clear whether DOE has made a deliberate 
choice to move toward a facility-based program or the emphasis on 
facilities is a temporary condition to cope with tight budgets.

Do the current trends imply closure of major Office of Science 
facilities or even an entire National Laboratory? In 2004, the Office 
of Science released a 20-Year Facilities plan that prioritize the needs 
of the scientific community over the next two decades. That plan 
implicitly assumed increases in funding similar to those included in 
H.R. 6, Energy Policy Act of 2005 (and its predecessor legislation). 
The trends in the past two years' budget requests are at odds with the 
plan. The budget and future projections create a conflict between 
demand for new facility construction and operation of existing 
facilities. For example, in the Nuclear Physics budget, the need to 
operate the Relativistic Heavy Ion Collider (RHIC) at Brookhaven 
Laboratory and the Continuous Electron Beam Accelerator Facility at the 
Jefferson Laboratory compete for funds with the plan to construct the 
Rare Isotope Accelerator facility. Similar competition arises between 
the proposed international fusion experiment, ITER, and the operation 
of domestic facilities. DOE has not explained how it will deal with 
planning for facilities given the tight fiscal environment expected for 
the next few budget cycles.

How does DOE make tradeoffs between operation of existing facilities 
and construction of new ones? The emphasis in the FY06 request is on 
fully funding operations for the newest facilities such as the 
Spallation Neutron Source ($74 million) and the four new Nanoscale 
Science Research Centers ($43 million) at Oak Ridge, Sandia, Argonne, 
and Brookhaven National Laboratories. There are several recently 
constructed facilities that will have operations severely curtailed, 
however. For example, RHIC will only operate for 12 weeks under the 
proposal, seven of which are required for warm-up and calibration 
activities. This compares with 32 weeks during FY05. As a result, 
physics activities at this facility will have been reduced by 80 
percent.

C) OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY

BACKGROUND:




    Budget Highlights: The largest increase in the account is for the 
Hydrogen R&D Initiatives, consisting of FreedomCAR and the Hydrogen 
Fuel Initiative, which total $283 million ($29 million, 11 percent) 
within EERE. EERE R&D programs excluding hydrogen-related activities 
were cut by a total of $77 million (-10 percent) to $692 million. Total 
hydrogen funding at DOE is $358 million, up $48 million (16 percent), 
including contributions from the program budgets of Fossil Energy ($22 
million, up $5 million or 29 percent); Nuclear Energy ($20 million, up 
$11 million or 124 percent); and Science ($33 million, up $3 million or 
11 percent).

ISSUES:

Does the proposed budget achieve the appropriate balance among EERE 
programs? EERE funds R&D on a range of alternative technologies, 
including biomass, wind, solar, and geothermal energy. Energy 
efficiency and renewable energy are important future sources of energy 
with minimal impact on the environment. Continuing the trend of recent 
years' budget requests, an increasing amount of EERE funds have been 
requested for the President's hydrogen initiatives, including fuel and 
vehicle programs. Since 2001, funding for EERE R&D programs not 
included in the hydrogen initiatives has decreased by 13 percent. 
Hydrogen must be made from other energy sources. Renewables and energy 
efficiency R&D can contribute to the success of the transition to 
hydrogen: efficiency improvements in vehicles will help reduce the 
technical challenges facing automakers; and renewables can provide an 
environmentally friendly energy source for hydrogen manufacture. Both 
the National Academy of Sciences and the American Physical Society have 
noted that more R&D will be needed in alternative energy sources to 
help enable a hydrogen economy and to reduce greenhouse gas emissions. 
In the event that the technical challenges for hydrogen are too great, 
renewable biofuels provide one of the few alternatives to foreign oil 
for transportation.

What are the appropriate roles for government in long-term and near-
term R&D? The Administration has emphasized long-range high-risk 
research as the most important role for government, especially given 
the well-documented difficulties in securing private funding for long-
range R&D. On the one hand, the Committee has been concerned that some 
long range efforts, like the transition to hydrogen, have skipped over 
important basic scientific research questions in a rush to 
commercialization. On the other hand, there appear to be numerous 
technologies that could benefit from additional technology transfer and 
deployment activities, yet DOE continues to focus on incremental 
research. According to the Alliance to Save Energy, technologies exist 
today that have the potential to save consumers over $4 billion in 
energy costs per year in 2010. What emphasis should the Department 
place on assisting efficiency technologies into the marketplace? How is 
DOE coordinating its existing deployment programs with its technology 
development efforts?

D) OFFICE OF FOSSIL ENERGY

BACKGROUND:





    Budget Highlights: The Office of Fossil Energy has two accounts 
that fund research, development and demonstration activities: the 
Fossil Energy Research and Development account, and the Clean Coal 
Technology account. Clean coal demonstration projects in the R&D 
account are limited to $68 million, essentially equal to last year's 
funding. The budget includes $18 million to continue design of a coal 
power plant with carbon dioxide exhaust capture and sequestration known 
as FutureGen.
    The Clean Coal Technology account had large appropriations in the 
1990s which were then allocated to specific projects. Several of these 
projects were not undertaken or canceled, and large balances remain in 
the account. The appropriators deferred (forward-funded) $257 million 
of this funding to FY06. The budget proposes to defer the funding again 
(to FY07), and to transfer the uncommitted funding to the Fossil Energy 
account to cover part of the $650 million proposed federal share of the 
FutureGen project.

ISSUES:

What would the impact be of the proposed elimination of the oil and gas 
research programs? Over the last several years, the Department has 
consistently requested cuts to the oil and gas research programs. 
Evaluations of these programs by the Office of Management and Budget 
have consistently rated them ``ineffective.'' H.R. 6, passed by the 
House of Representatives on April 21, 2005, funds an ultra-deepwater 
and unconventional oil and gas R&D program, using mandatory spending.

Does the proposal in the budget propose to move FutureGen from the 
Clean Coal program into Fossil Energy have policy implications? DOE 
would provide funding for the FutureGen demonstration project to build 
a new coal gasification power plant that would include the 
sequestration of carbon dioxide and potentially the production of 
hydrogen. Gasification turns the coal into a synthetic gas that can be 
burned in a turbine like natural gas, or used as a chemical feedstock. 
(The Clean Coal program has funded at least three previous coal 
gasification power plants, and gasification is commonly used in 
petroleum refining.) The proposed transfer of Clean Coal funds to the 
Fossil Energy R&D account would reduce the restrictions that help 
prevent cost-overruns in large demonstration projects.

Does the proposed budget for FutureGen follow the requirements in law 
that demonstration projects be cost shared with industry on a fifty-
fifty basis? The FY06 request details the funding for this project, and 
shows that $620 million of the $950 million cost of the project (over 
65 percent) would come from the Federal Government. The Energy Policy 
Act of 1992 requires that demonstration programs receive no more than 
50 percent of their funding from federal sources.

What are the advantages and disadvantages to the management structure 
proposed for FutureGen? The current plan for FutureGen would have a 
consortium act as the intermediary between the Department and the 
organization that will own and operate the FutureGen project. This 
approach appears to be a departure from the Department's usual approach 
of signing a cooperative agreement with the project performer.

Why does DOE propose to cut funding for stationary fuel cells? Many 
analysts view the stationary fuel cell programs funded by Fossil Energy 
as an important stepping-stone to low-cost transportation fuel cells 
that are at the heart of the transition to a hydrogen economy. While 
fuel cell funding is up in the transportation programs of EERE, 
stationary fuel cell funding in Fossil is cut by 12 percent.

E) OFFICE OF NUCLEAR ENERGY, SCIENCE AND TECHNOLOGY

BACKGROUND:




    Budget Highlights: The Department's budget proposes to eliminate 
the Nuclear Energy Research Initiative (NERI), which funds university 
researchers, and the Nuclear Energy Plant Optimization (NEPO) program, 
which is targeted toward boosting output from existing nuclear plants. 
The Department has proposed that funds for NEPO be allocated to other 
Nuclear R&D programs and the NERI be integrated into the Department's 
nuclear energy R&D programs. It is unclear whether this merger will 
allow NERI'S focus on fundamental research questions to continue.

ISSUES:

How will the reorganization of the Idaho laboratory complex affect 
DOE's overall nuclear energy R&D program? In 2003, DOE proposed to 
revamp the contracts of Idaho National Environmental and Engineering 
Laboratory and the co-located Argonne West National Laboratory, and 
merge them into one research unit as the lead nuclear energy laboratory 
for the country. What role will other national laboratories with 
significant nuclear expertise, such as Argonne National Laboratory, 
play in nuclear energy R&D after Idaho National Laboratory begins 
operations?

What are the advantages and disadvantages to the management structure 
proposed for Next Generation Nuclear Plant? The current plan for NGNP 
would have a consortium act as the intermediary between the Department 
and the organization that will own and operate the project. This 
approach appears to be a departure from the Department's usual approach 
of signing a cooperative agreement with the project performer. One 
immediate question posed by this proposed arrangement is: what is the 
liability of the Federal Government in the event that the private-
sector partners walk away from the project before the demonstration is 
completed?

Does the Nuclear Energy R&D program intend to stimulate the 
revitalization of a domestic nuclear energy industry? The domestic 
nuclear industry has shrunk considerably since the last nuclear power 
plant was ordered in the 1970s. Will the U.S. industry be willing and 
able to participate under proposed plans?

F) OFFICE OF ELECTRICITY DELIVERY AND ENERGY RELIABILITY

BACKGROUND:




    Budget Highlights: Two new initiatives from FY04, GridWise and 
GridWorks, were cut by a total of $1.3 million (-12 percent). These 
programs are focused on developing communications and control 
technologies along with advanced cables, switches, and monitors to 
improve the transmission and distribution of electricity.

ISSUES:

What will cuts to energy storage R&D imply for other DOE programs? 
Energy Storage programs resided in EERE prior to the creation of the 
Office of Electric Transmission and Distribution and its subsequent 
reorganization into the Office of Electricity Delivery and Energy 
Reliability. The storage of energy is an important tool for improving 
the stability and reliability of the grid, and is vital to emerging 
energy resources such as wind and solar-generated electricity. Such 
sources can only generate power intermittently (when the wind is 
blowing, for example), and they would be much more attractive if the 
energy they generate could be stored for later use. Funding for Energy 
Storage R&D in FY04 was $8.8 million, but has been cut considerably. In 
FY06, the request for Energy Storage again received a large cut $1 
million (-25 percent) to $3 million, following on last year's cut of 
$4.8 million, (-55 percent) to $4 million.

How is the work of the Office of Electricity and Energy Assurance 
coordinated with the other applied energy offices? The work of the R&D 
programs in electricity transmission and distribution is important for 
the successful integration of the energy resources being developed in 
the applied energy R&D offices. Does the Office undertake any joint 
research efforts? How are the results of the R&D transmitted to the 
other offices?

5. Witnesses Questions

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

Questions for Dr. Orbach

Given the reduced funding outlook for Office of Science, do you plan to 
revise your 20-Year Facilities Plan? How will you make the choices 
between building new and running existing facilities, and between 
facilities and funding for research grants?

Will the Department be able to simultaneously support three facilities 
for nuclear physics--the Relativistic Heavy Ion Collider, the 
Continuous Electron Beam Accelerator Facility and the Rare Isotope 
Accelerator? If not, when and how will the Department make a decision 
about the future of its nuclear physics facilities?

Given limited funds, many in the fusion research community have 
indicated that the U.S. should drop its participation in ITER if it 
would require deep cuts in funding for the domestic program. Do you 
agree? If we do go ahead with ITER, how would you continue to support a 
domestic program and what would it look like?

Does the Department intend to support a high energy physics (HEP) 
facility in the U.S. after 2010? Would that be necessary given U.S. 
participation in HEP experiments at the European Large Hadron Collider 
(LHC)?

Questions for Mr. Faulkner

How does your Office determine the proper balance between shorter-term 
and longer-term projects in its portfolio?

What steps is the Department taking to ensure that technologies for 
shorter-term gains in energy efficiency and alternative sources make 
the transition into the marketplace?

Both the National Academy of Sciences and the American Physical Society 
have noted that more R&D will be needed in alternative energy sources 
to help enable a hydrogen economy. How does the budget for renewable 
energy R&D address this need?

Questions for Mr. Maddox

Using the definitions in Office of Management and Budget Circular A-11, 
what is the proposed mix of funding in the fiscal year 2006 budget 
request between basic research, applied research, development, 
demonstration, and deployment activities for your Office? Please 
provide the comparable fiscal year 2005 numbers.

What is the rationale for eliminating the oil and gas technology 
research and development programs at the Department?

Questions for Mr. Johnson

Why are the Nuclear Energy Research Initiative and the Nuclear Energy 
Plant Optimization programs being eliminated?

What role will other National Laboratories with significant nuclear 
expertise, such as Argonne National Laboratory, play in nuclear energy 
R&D after Idaho National Laboratory begins operations?

Please explain the ownership and management structure the Department is 
proposing for the Next Generation Nuclear Plant. What advantages and 
disadvantages does this approach have? What happens if the industrial 
partners fail to fulfill their obligations?

Questions for Mr. Kolevar

How does your Office determine the proper balance between shorter-term 
and longer-term projects in its portfolio?

What is the rationale for the proposed reduction in the fiscal year 
2006 budget for energy storage, given its likely contribution to 
improving grid stability and enabling the connecting of intermittent 
sources (such as wind) to the grid?

What is the rationale for cuts to Gridwise and Gridworks, given that 
these programs were just created last year? What impacts will these 
cuts have on the ability of these programs to help modernize the 
electric grid and turn prototype technologies into useful and widely 
used technologies for the grid? What is the proper role for the 
industry in these research efforts?
    Chairwoman Biggert. The Subcommittee will come to order.
    First, I would like to welcome everyone to the first Energy 
Subcommittee hearing of the 109th Congress. I would like to 
welcome our new Ranking Member, Mr. Honda. And I would also 
like to welcome our witnesses, Dr. Raymond Orbach, Director of 
the Office of Science, Mr. Douglas Faulkner, Principal Deputy 
Assistant Secretary for Energy Efficiency and Renewable Energy, 
and Mr. Mark Maddox, Principal Deputy Assistant Secretary for 
Fossil Energy, and Mr. Robert Shane Johnson, Director for 
Technology, the Office of Nuclear Energy, Science, and 
Technology, and Mr. Kevin Kolevar, Director for the Office of 
Electricity Delivery and Energy Reliability.
    As our witnesses should know, spoken testimony is limited 
to five minutes each, after which the Members of the Energy 
Subcommittee will have five minutes each to answer questions. 
So hold that, because we have a few things to do first.
    And I apologize for starting late. We have to have a quorum 
before we can start, and we are going to, unfortunately, have 
to recess shortly because of a vote that will be coming up and 
a photograph on the House Floor.
    So I will recognize myself for five minutes for an opening 
statement.
    And I want to welcome everyone to this Energy Subcommittee 
hearing on the Administration's priorities for research and 
development in the Department of Energy Budget for fiscal year 
2006.
    It is no secret that we are operating in the most 
constrained budget environment in many years. Such an 
environment is especially important for Congress to scrutinize 
the plans and question the priorities of any and all 
departments when it comes to spending limited resources. The 
Department of Energy is no exception. I am as fiscally 
conservative as they come, and while I agree that we should be 
able to find savings in just about every corner of the federal 
budget, I do not believe that we should be cutting corners when 
it comes to our search for energy solutions and the science 
behind them.
    As the Nation struggles--as the Nation pays unprecedented 
prices for oil and natural gas, it struggles to contain the 
resulting inflationary pressure. It seems counterintuitive to 
reduce funding for applied energy research and development 
programs that could help ease our demand for energy or lead to 
alternative sources of it, namely our energy efficiency and 
renewable energy programs.
    The same can be said for the basic science programs funded 
by the Department of Energy. As the Nation emerges from an 
economic slowdown and confronts global competition on a variety 
of fronts, it also seems counterintuitive to cut, by almost 
four percent, the basic, fundamental research that is the 
foundation of American innovation and creativity and 
competitiveness.
    But in some specific ways, this is what the 
Administration's budget proposes to do. Based on an analysis by 
Subcommittee staff, funding for every applied energy R&D 
program has increased over the course of the last five years, 
some substantially. However, this is misleading when it comes 
to one program in particular. When you exclude the significant 
increases provided for the President's hydrogen and FreedomCAR 
initiatives, the Energy Efficiency and Renewable Energy, EERE, 
program, actually has suffered a percentage decline in the 
double digits over the course of the last five years.
    Don't get me wrong. I strongly support the hydrogen and 
FreedomCAR initiatives, but are we sacrificing short and mid-
term successes in many sectors for the sake of one long shot in 
one sector, transportation over the long-term. If so, this is a 
wise choice, especially considering that a National Academy of 
Sciences study estimates that for every dollar spent on 
efficiency initiatives alone between 1978 and 2000, more than 
$4 of economic benefits were realized? We will explore this 
more today.
    At this point, I have become accustomed to lamenting 
proposed reductions to the nuclear energy R&D program. That is 
not the case this year. I am particularly pleased with the 
proposed funding levels for the Advanced Fuel Cycle Initiative.
    As costs mount over the Federal Government's failure to 
complete Yucca Mountain, I think it is time that we revisit the 
issue of using advanced reactors to recycle some of the spent 
nuclear fuel scattered across this country. This is even more 
critical if a plan to encourage the construction of new plants 
succeeds. That plan, which President Bush is expected to 
outline later today, would provide federal risk insurance to 
companies that construct new nuclear power plants.
    As for the other basic research supported by the DOE, this 
subcommittee has noticed a trend. Three years ago, Office of 
Science funding for facilities equaled that for research 
grants. Today, funding for research grants is less than for 
facilities. Considering that DOE's user facilities are over-
subscribed by a factor of three in the case of basic energy 
sciences programs within the Office of Science, this may have 
been a prudent decision in light of fiscal constraints. 
However, I do not believe this is sustainable, especially 
considering that DOE's research grants help fund the education 
and training of approximately 23,500 graduate students, 
technicians, postdocs, and faculty.
    Finally, when it comes to new facilities, I am very 
concerned about the significant amount of our limited resources 
that this budget has allocated to the international fusion 
experiment, known as ITER, which doesn't even have a home yet. 
And considering that the patience of this committee is growing 
thin as we continue to wait for the DOE to respond to our 
written questions from a Full Committee hearing on the 
President's budget held over two months ago, I must again 
express skepticism and concern about the moving target that is 
the U.S. contribution to the ITER project. I certainly hope 
this is something we can nail down and soon. I would hate for 
this lingering question to erode support for this project.
    On that note, I will conclude by saying that I am looking 
forward to hearing the testimony of the witnesses here today. 
We are going to discuss programs that matter a great deal to 
our nation's energy security and our economic future. During 
these tight fiscal times, we must set priorities and use 
limited resources wisely. We are here today to make sure the 
proposed fiscal year 2006 budget meets these standards.
    Thank you.
    And at this time, I would recognize our Ranking Member of 
this subcommittee, Mr. Honda, for his opening statement.
    Mr. Honda. Thank you, Chairwoman Biggert, and thank you for 
holding this important hearing today, my first as a Ranking 
Member of this subcommittee. And I regret that I will not be 
able to be here in its entirety, and I apologize to all of you 
in advance.
    I also extend my thanks to the distinguished panel of 
witnesses for taking the time to be here today to tell us in 
greater detail about the budgets of your respective programs.
    It probably comes as no surprise to anyone that I am 
disappointed by the five-percent decline in the Department of 
Energy's non-defense R&D budget. I expect to hear talk about 
times of tight budgets and the need to make tough choices, but 
I continue to believe that we do not really need to be in this 
budget situation, rather that it was created by tax cuts for 
the wealthiest of Americans here.
    What troubles me the most is that these R&D funding cuts 
are coming at a time when other nations are increasing their 
investments in basic scientific research and development and as 
well as commercializing technology. When other nations are 
posing a greater challenge than ever to U.S. competitiveness in 
the global marketplace, we are making it easier for them to 
catch up and even surpass us rather than investing in what made 
the United States great.
    The President's own Council of Advisors on Science and 
Technology, PCAST, has decried prior under-funding of physical 
sciences and the DOE Office of Science, in particular. Without 
additional funds, our national labs will be forced to continue 
to defer maintenance and deteriorate. Our best and brightest 
students will choose not to pursue careers in math, science, 
and engineering and innovation at our companies will suffer.
    I am fortunate to come from the San Francisco Bay Area and 
to have had many opportunities to visit Department of Energy 
facilities, the Stanford Linear Accelerator Center, Lawrence 
Berkeley National Lab, and the Lawrence Livermore National Lab. 
And during those visits, as well as at hearings in this room, I 
have learned about the critical role DOE plays in advancing 
U.S. science.
    I have learned, as you all know, that DOE is the leading 
source of federal funds and facilities for research in the 
physical sciences, providing 42 percent of the federal 
investment in these disciplines. In subfields such as high-
energy and nuclear physics, nuclear medicine, heavy-element 
chemistry, plasma physics, and the magnetic fusion and 
catalysis, DOE is the primary government sponsor.
    I have learned that DOE's significant investment in major 
user facilities located at the universities and National 
Laboratories sets it apart from other agencies. More than 
19,000 researchers use DOE's scientific facilities every year, 
nearly half of who are university faculty members and students. 
Were it not for DOE, these vital scientific facilities would 
not exist in the United States.
    I appreciate the efforts you put forth, Dr. Orbach, to 
maintain funding levels for these facilities within the fiscal 
year 2006 budget request. Unfortunately, as you have explained, 
these funding levels come at the cost of cuts to support for 
investigators and their research projects, which means the 
facilities will not be used to their full potential.
    I applaud the work you have done with the scientific 
community to develop plans on how you would spend additional 
funds responsibly. Your Office of Science Strategic Plan and 
Twenty Year Outlook on Facilities for the Future of Science 
provide a clear rationale for why additional funding for DOE 
science is warranted and a road map on how these funds should 
be spent.
    Unfortunately, we are only in the first budget cycle 
covered by these plans, and already funding levels are 
insufficient to address the needs identified in them. This is 
an inauspicious beginning.
    I am also perplexed by cuts to the Energy Efficiency R&D 
and Renewable Energy R&D programs. Just the other day, as the 
House passed an energy bill that provided incentives to explore 
for more oil and gas, President Bush said ``with $55 oil we 
don't need incentives to oil and gas companies to explore--what 
we need is to put a strategy in place that will help this 
country over time become less dependent.''
    It seems to me that the best way to achieve this laudable 
goal is to become less dependent on oil and gas, is to use less 
energy, and to develop other sources of energy. And yet the 
fiscal year 2006 DOE budget cuts research in these critical 
areas, in such fields as Building Technologies, which is at 
minus 12 percent, Industrial Technologies, which is at minus 25 
percent, and the Biomass program, which is at minus 18 percent.
    But we can not afford to wait until the need grows even 
greater and then suddenly ramp up our investment, because that 
will not work. Research takes both money and time, so we must 
keep investing steadily to make the progress that is needed. 
And if we fail to invest in renewable energy and energy 
efficiency now, talented scientists and engineers will apply 
their skills elsewhere and will not be available when the need 
becomes even more pressing.
    There are many questions that must be answered about this 
budget request and the direction in which DOE is headed in the 
future. I hope the witnesses will provide us with those 
answers.
    Thank you, Madame Chair, and I yield back the balance of my 
time.
    [The prepared statement of Mr. Honda follows:]

         Prepared Statement of Representative Michael M. Honda

    Chairwoman Biggert, thank you for holding this important hearing 
today, my first as the Ranking Member of this subcommittee. I regret 
that I will not be able to be here for the entire hearing, and I 
apologize to the witnesses in advance for having to leave.
    I also extend my thanks to the distinguished panel of witnesses for 
taking the time to be here today to tell us in greater detail about the 
budgets of your respective programs.
    It probably comes as no surprise to anyone that I am disappointed 
by the five percent decline in the Department of Energy's Non-Defense 
R&D budget. I expect to hear talk about ``times of tight budgets'' and 
the need to make tough choices, but I continue to believe that we do 
not really need to be in this budget situation, rather that it was 
created by tax cuts for the wealthiest Americans.
    What troubles me the most is that these R&D funding cuts are coming 
at a time when other nations are increasing their investments in basic 
scientific research and development, as well as in commercializing 
technology. When other nations are posing a greater challenge than ever 
to US competitiveness in the global marketplace, we are making it 
easier for them to catch up and even surpass us, rather than investing 
in what made the United States great.
    The President's own Council of Advisors on Science and Technology 
has decried prior under-funding of physical sciences, and the DOE 
Office of Science in particular. Without additional funds, our national 
labs will be forced to continue to defer maintenance and deteriorate; 
our best and brightest students will choose not to pursue careers in 
math, science, and engineering; and innovation at our companies will 
suffer.
    I am fortunate to come from the San Francisco Bay Area and to have 
had many opportunities to visit Department of Energy facilities--the 
Stanford Linear Accelerator Center, Lawrence Berkeley National Lab, and 
Lawrence Livermore National Lab. During those visits, as well as at 
hearings in this room, I have learned about the critical role DOE plays 
in advancing U.S. science.
    I have learned, as you all know, that DOE is the leading source of 
federal funds and facilities for research in the physical sciences, 
providing 42 percent of the federal investment in these disciplines. In 
subfields such as high-energy and nuclear physics, nuclear medicine, 
heavy-element chemistry, plasma physics and magnetic fusion and 
catalysis, DOE is the primary government sponsor.
    I have learned that DOE's significant investment in major user 
facilities located at universities and national laboratories sets it 
apart from other agencies. More than 19,000 researchers use DOE's 
scientific facilities every year, nearly half of who are university 
faculty members and students. Were it not for DOE, these vital 
scientific facilities would not exist in the U.S.
    I appreciate the efforts you put forth, Dr. Orbach, to maintain 
funding levels for these facilities within the Fiscal Year 2006 budget 
request. Unfortunately, as you have explained, these funding levels 
come at the cost of cuts to support for investigators and their 
research projects, which means the facilities will not be used to their 
full potential.
    I applaud the work you have done with the scientific community to 
develop plans on how you would spend additional funds responsibly. Your 
Office of Science Strategic Plan and Twenty Year Outlook on Facilities 
for the Future of Science provide a clear rationale for why additional 
funding for DOE science is warranted and a roadmap on how these funds 
should be spent.
    Unfortunately, we are only in the first budget cycle covered by 
these plans and already funding levels are insufficient to address the 
needs identified in them. This is an inauspicious beginning.
    I am also perplexed by cuts to the Energy Efficiency R&D and 
Renewable Energy R&D programs. Just the other day, as the House passed 
an Energy Bill that provided incentives to explore for more oil and 
gas, President Bush said that ``with $55 oil we don't need incentives 
to oil and gas companies to explore.. . .What we need is to put a 
strategy in place that will help this country over time become less 
dependent.''
    It seems to me that the best way to achieve this laudable goal, to 
become less dependent on oil and gas, is to use less energy and to 
develop other sources of energy. And yet the Fiscal Year 2006 DOE 
budget cuts research in these critical areas, in such fields as 
Building Technologies (-12 percent), Industrial Technologies (-25 
percent), and the Biomass program (-18 percent).
    We cannot afford to wait until the need grows even greater and then 
suddenly ramp up our investment, because that will not work. Research 
takes both money and time, so we must keep investing steadily to make 
the progress that is needed. And if we fail to invest in renewable 
energy and energy efficiency now, talented scientists and engineers 
will apply their skills elsewhere and will not be available when the 
need becomes even more pressing.
    There are many questions that must be answered about this budget 
request and the direction in which DOE is headed in the future, and I 
hope the witnesses will provide us with those answers.

    Chairwoman Biggert. Thank you, Mr. Honda.
    [The prepared statement of Ms. Woolsey follows:]

           Prepared Statement of Representative Lynn Woolsey

    Thank you, Madame Chairman.
    I am pleased to be here today, because this hearing is an important 
one. We need real energy independence in the United States. But energy 
independence will only come about when we start focusing our efforts on 
clean, renewable sources of energy.
    In considering the Fiscal Year 2006 Budget, I hope that the 
Department of Energy is focused on the important goal of energy 
independence. More than ever before, America's energy requirements have 
become an issue of national security. Nothing hurts our security as 
much as our dependence on Middle East oil.
    We need to pursue clean, environmentally friendly, renewable 
sources of energy. This is the best and only way to ensure both 
America's energy independence while also preserving the environment for 
future generations.
    In the process, we must not focus our efforts on stop-gap measures 
like oil drilling in the Arctic National Wildlife Refuge. Drilling in 
Alaska will do little to reduce our current dependence on foreign oil, 
because it will take more than ten years to process what little oil may 
be there.
    If we spend half the time promoting policies that encourage the use 
of renewable energy that we do discussing drilling in ANWR, we can 
develop a sensible energy policy that ensures real energy independence. 
I hope the DOE Budget for Fiscal Year 2006 takes this into 
consideration.
    I yield back.

    [The prepared statement of Mr. Davis follows:]

           Prepared Statement of Representative Lincoln Davis

    Good morning. I appreciate the opportunity to have this hearing and 
the witnesses who are here today.
    The activities of the Oak Ridge National Laboratory, near my 
District, are being hurt by budget cuts. It is my hope that today's 
hearing will underscore the fact that if we do not finish what we 
started in planning for and supporting these programs, our nation's 
computing, energy, and life science research programs will suffer.
    Last May, DOE Secretary Abraham announced that Oak Ridge was the 
winner of a DOE competition to establish a leadership-class computing 
facility. Secretary Abraham stated that the U.S. must ``make the 
commitment necessary to regain the clear-cut lead'' in supercomputing.
    Last year, the President signed the DOE High-End Computing 
Revitalization Act of 2004, drafted in the House Science Committee, in 
November 2004. And yesterday afternoon, the House approved H.R. 28, a 
bill to strengthen agency efforts to support the supercomputing 
enterprise.
    With all this momentum, I was surprised by the President's FY06 
request for high-end computing. The Center for Computational Sciences 
at Oak Ridge, home to the leadership computing facility Secretary 
Abraham commended, received only $25 million in the budget--a figure 
well below FY05 and even FY04 levels.
    That money is not enough to even operate the two supercomputing 
machines being purchased in FY05, and it does not allow any hardware 
upgrades to those computers. DOE does not appear to be fulfilling the 
vision articulated by Secretary Abraham just a year ago, which was to 
regain the lead in high-end computing.
    A second issue that I have deals with the DOE's Genomics ``Genomes 
to Life'' program. I understand that DOE is currently planning a set of 
four core research facilities. The scope and scale of the four 
facilities is impressive, and the cost estimates for each run to 
approximately $250 million. I do not understand why DOE is planning big 
budgets for start-up initiatives when it is not providing needed 
funding for its current programs.
    Due to time constraints, I ask that the questions I have today be 
submitted for the Record. I hope that the Department of Energy will 
respond to these questions to me in writing.
    In summary, I feel that it is unfair and unjustified for Oak Ridge 
and other DOE national labs to go through the planning process, set 
goals, be promised the funding, and have the rug pulled out from 
underneath them. I hope that the Department of Energy will rethink its 
budget policies. The Oak Ridge supercomputing facility is an economic 
jewel to Tennessee and to our nation. I hope that the proposed budget 
cuts do not tarnish that jewel.

Supercomputing Questions:

        1)  Does DOE intend in FY 2007 to resume hardware acquisition 
        to actually establish a true leadership class computing 
        facility?

        2)  What are the Department's long-term plans for the 
        leadership facility awarded last year to the team led by Oak 
        Ridge National Lab?

        3)  How does contribute to establishment of a leadership class 
        computer?

        4)  How does the Department justify the newly proposed 
        ``Research and Evaluation Prototypes,'' funded at $13.2 
        million, a ``new start'' in FY06 when the budget also includes 
        a significant cut to the Center for Computational Sciences, an 
        established program?

Genomes to Life/Priorities Question:

    Given the constrained budgets faced by DOE in the coming fiscal 
years, which already are constraining operation of existing user 
facilities, will DOE reconsider the scale and scope of these four GTL 
start-up facilities, so that the cost of each is reduced?

    [The prepared statement of Mr. Costello follows:]
         Prepared Statement of Representative Jerry F. Costello
    Good morning. I want to thank the witnesses for appearing before 
our committee to discuss the Department of Energy's FY 2006 budget 
request. Today's hearing serves as an opportunity to review the 
proposed research and development budgets and to clarify the 
President's energy-related science and technology priorities.
    The Department of Energy's Fossil Energy Research and Development 
program impacts my congressional district because the coal industry is 
of great importance to the economy and livelihood of my constituents in 
Southern Illinois. My home state has almost one-eighth the coal 
reserves in the United States and the largest reserves of bituminous 
coal in the Nation. We have long supported the coal industry through 
programs that finance research, development, and commercialization of 
new technologies and uses of coal. As a result, I am proud to say that 
Illinois is a national leader in developing clean and efficient coal 
technologies.
    The Administration's budget for FutureGen and the base coal R&D 
programs appears to be one of the best budget requests in recent years. 
I would like to express my support for protecting the base coal R&D and 
welcomed the inclusion of $18 million for the FutureGen clean coal 
power plant project for FY06. Further developing the technology to burn 
coal as cleanly as possible is a great national investment and it will 
benefit the economy of Southern Illinois. I have led the effort to 
locate FutureGen in Illinois, including leading a bipartisan effort in 
the House to secure funding for the project. I also hosted a roundtable 
discussion regarding FutureGen and what it means for Illinois and was 
pleased to have Mr. Mark Maddox in attendance. This year, I initiated a 
bipartisan letter to the House Energy and Water Development 
Subcommittee to express congressional support for the Administration's 
FY06 fossil energy coal programs. We are asking that coal research and 
demonstration programs be funded at or above a higher level in order to 
achieve the intended goals that support the FutureGen vision of coal 
fueled generation of electricity and hydrogen with essentially zero 
emissions. I will continue to be a strong advocate for implementing the 
coal research programs, which includes the clean coal technology 
program and the FutureGen project because they are significant to my 
District. I am committed to working with my colleagues, the 
Administration, and industry to ensure the project continues to move 
forward as planned and will continue to advocate its site location in 
Southern Illinois.
    I welcome our panel of witnesses and look forward to their 
testimony.

    [The prepared statement of Ms. Johnson follows:]

       Prepared Statement of Representative Eddie Bernice Johnson

    Thank you, Madam Chairman. I greatly appreciate you calling this 
hearing and I am especially grateful that our distinguished witnesses 
have agreed to take time out of their busy schedules to answer our 
questions today.
    The purpose of this hearing is to provide an opportunity to explore 
issues affecting the entire Research and Development (R&D) budget.
    As I said at the Research and Development budget hearing we had in 
February, I have a lot to say today about the budget we have before us. 
The budget includes severe cuts to almost every major government 
program and creates a deficit in 2006 that is likely to top $400 
billion. This budget can be categorized as reckless and irresponsible.
    Programs to promote efficiency and renewable energy would be 
reduced to about $1.2 billion or four percent. Double-digit cuts to 
many programs in this category were hidden by a 16 percent increase to 
$260 million for a program to develop hydrogen as an efficient fuel 
source.
    The reductions prompted critics to question the White House's 
energy priorities. In addition, this plan would reduce the Department's 
extensive science and technology programs by about four percent, or 3.5 
billion, while environmental cleanup activities would be reduced by 
eight percent, to $6.5 billion.
    What really disturbs me about the Department of Energy's budget is 
that it assumes $2.4 billion revenue in oil and gas leasing at the 
Arctic National Wildlife Refuge, even though Congress has never 
approved a plan opening this land for oil exploration.
    Members of Congress must be fiscally responsible when it comes to 
making decisions about our budget during these trying times. Our 
greatest responsibility is to leave our children a world that is safer, 
more prosperous, and more secure.
    This budget fails that test. It is fiscally irresponsible. It is 
morally irresponsible. And it demonstrates a failure to lead.

    [The prepared statement of Mr. Green follows:]

             Prepared Statement of Representative Al Green

    First and foremost, I'd like to thank Chairwoman Biggert and Mr. 
Honda for initiating a hearing regarding the FY06 budget request for 
the Department of Energy's civilian research and development programs. 
As a freshman Member, I am particularly intrigued by the activities and 
roles that research and development play as we move forward in 
attempting to provide a comprehensive energy strategy. It is my 
understanding that a lot of our energy strategy framework is based upon 
research and development initiatives of this department, so I take 
particular pride in having the opportunity to discuss these valuable 
programs and priorities with the people that are directly shaping the 
focus of our energy policy. I find that both my constituents and I are 
concerned with an array of energy issues, and I also relish the 
opportunity to find out answers for them. In addition to the focus on 
energy with the discussion of the energy bill, there has been a 
heightened awareness of our energy infrastructure because of the 
Northeastern energy grid black in 2003, skyrocketing gas prices, and 
revolving blackouts in California about four years ago. A major concern 
that I have is that the proposed budget seems to de-emphasize the 
necessity for energy efficiency and renewable energy by continuing to 
reduce funding for energy efficiency and renewable energy R&D, with the 
exception of activities supporting the Administration's hydrogen 
initiatives so I hope that we touch on such a discussion. Again, I'd 
like to reiterate my thanks to all of the panelists for their 
willingness to share their particular insights on the various research 
and development initiatives proposed in the FY06 budget, and I hope 
that the Science Committee will continue to have a strong relationship 
with the Department of Energy research and development sectors in the 
future.

    Chairwoman Biggert. I think that we will begin until the 
bells go off when we have to have to recess.
    But let us start with Dr. Orbach. I wish more Members were 
here right now, but I am sure they read all of the 20 pages of 
your testimony and know it word for word.
    Please proceed for five minutes.

 STATEMENT OF DR. RAYMOND L. ORBACH, DIRECTOR OF THE OFFICE OF 
         SCIENCE, DEPARTMENT OF ENERGY, WASHINGTON, DC

    Dr. Orbach. Thank you, Chairman Biggert and Ranking Member 
Honda. Thank you both for your opening remarks. They were very 
helpful and I am very grateful for your interest and commitment 
for science and for the country.
    This is an opportunity for me to discuss with you the 
fiscal year 2006 budget for the Office of Science. And as you 
both noted, scientific leadership for the United States is 
critical for our economy, for our scientific literacy, for the 
excitement of discovery, and for education in order to attract 
the very best to science careers.
    I made the decisions for this budget on that basis, namely 
how would we use the funds available to us in this budget 
climate to maintain scientific leadership for the future. The 
results were difficult in many cases, but I believe that what 
we have presented to you is a budget that will maintain U.S. 
leadership for the future.
    We will be beginning in fiscal year 2006 major operations 
of our facilities. Chairman Biggert has already discussed ITER, 
which has its first contribution for construction contained in 
our 2006 budget. We also will be putting two 20-teraflop 
computers, the largest machines available to the civilian 
world, on the floor in 2006 at Oak Ridge National Laboratory, 
and shortly, we will be announcing a national competition for 
opportunities on these machines for scientific discovery. We 
will be starting the Spallation Neutron Source at Oak Ridge 
National Laboratory, which is, by an order of magnitude, the 
most intense neutron source in the world for spallation 
neutrons. It will give our scientists an edge over everyone 
else, not just for structure, but also for dynamics.
    We are beginning the operation of four of our five 
nanocenters. Everyone is investing in nanotechnology, but what 
will set the United States apart will be these nanocenters, 
which will have within them all of the facilities that our 
scientists will need for construction and for structure of 
these materials as they are being grown, and in addition, 
because they are next to light sources and the Spallation 
Neutron Source, the dynamics of these materials as well.
    Finally, we will be beginning construction of the Linac 
Coherent Light Source at Stanford Linear Accelerator. This will 
be the brightest x-ray source in the world by 10 billion times 
in the hard x-ray range. That is a range where crystal 
structures for biological materials are important. More 
importantly, it is so bright that we will be able to do the 
structure of a single macromolecule. About half of the proteins 
that we would like to determine structures of do not 
crystallize, and so we can not use conventional light sources 
for their structure. But we will be able to measure one 
molecule at a time so that we can look at cell wall structures, 
for example, for the first time.
    In addition, this light source is a very fast source. Its 
timing is of the order of less than a femtosecond, that is 
10-15 seconds. It is so fast that we will 
be able to see the formation of the chemical bond as a chemical 
reaction is taking place. This will mean that we will be 
opening up a whole new field of science, namely ultra-fast 
science.
    I have just given you a snapshot of where we are making our 
investments so that our scientists will have opportunities that 
nobody else will have. In this budget climate, it comes at a 
cost, and both of you have outlined that cost. And it was a 
choice that we had to make between the future. And we made 
those choices with--difficult choices. We think they are in the 
interest of the country.
    Most of you are ardent supporters of the Office of Science, 
and we are very grateful for that. We believe this budget will 
maintain U.S. scientific leadership for the future, and we 
thank you very much for your support.
    [The prepared statement of Dr. Orbach follows:]

                Prepared Statement of Raymond L. Orbach

Chairman Biggert and Members of the Subcommittee:

    Thank you for the opportunity to testify today about the Office of 
Science's Fiscal Year (FY) 2006 budget request. I am deeply 
appreciative of your support for basic research, Madame Chairman, and 
the support we have received from the other Members of this 
subcommittee. I am confident that our FY 2006 request represents a 
sound investment in our nation's future. Through this budget we will 
position the Office of Science to be ready for the opportunities of the 
next decade.
    This budget, Madame Chairman, will enable thousands of researchers 
located across our nation to work on some of the most pressing 
scientific challenges of our age. These researchers will demonstrate 
the scientific and technological feasibility of creating and 
controlling a sustained burning plasma to generate energy through 
participation in ITER (Latin for the way, ITER is an international 
fusion collaboration); use advanced computation and modeling tools to 
resolve complex scientific problems; restore U.S. leadership in neutron 
science with the start of operations at the Spallation Neutron Source 
(SNS); expand the frontier of nanotechnology through operation of 
Nanoscale Science Research Centers (NSRCs); pursue an understanding of 
how the universe began; contribute to our understanding of climate 
change including the potential of carbon sequestration; develop the 
knowledge that may enable us to harness microbes and microbial 
communities to improve energy production and environmental remediation; 
and contribute basic research that underpins the President's Hydrogen 
Fuel Initiative.
    The Office of Science requests $3,462,718,000 for the FY 2006 
Science appropriation, a decrease of $136,828,000 from the FY 2005 
appropriation, for investments in basic research that are critical to 
the success of Department of Energy (DOE) missions in national security 
and energy security; advancement of the frontiers of knowledge in the 
physical sciences and areas of biological, environmental, and 
computational sciences; and provision of world-class research 
facilities for the Nation's science enterprise (see Figure 1).
    The Office of Science, within a period of budget stringency, has 
chosen its priorities so that the U.S. will continue its world primacy 
in science. We have made the hard decisions that will enable our 
scientists to work on the finest machines whose scale and magnitude 
will give them opportunities not found elsewhere. As a consequence, we 
have made difficult choices. But these have been taken with one end in 
mind: the Office of Science will support a world-class program in 
science and energy security research with this budget.
    This budget request supports the following programs: Basic Energy 
Sciences, Advanced Scientific Computing Research, Biological and 
Environmental Research, High Energy Physics, Nuclear Physics, Fusion 
Energy Sciences, Science Laboratories Infrastructure, Science Program 
Direction, Workforce Development for Teachers and Scientists, and 
Safeguards and Security.
    The Office of Science supports research across the scientific 
spectrum from high energy physics to biology and environmental 
research; from fusion energy sciences to nuclear physics, from basic 
energy sciences to advanced scientific computation research. We provide 
42 percent of the federal funding for the physical sciences in the 
United States, and are the stewards of support for fields such as high 
energy physics, plasma physics, catalysis, and nuclear physics. We 
build and operate the large scientific facilities used by over 19,000 
faculty, students, and postdocs each year. They include synchrotron 
light sources, neutron sources, high energy and nuclear physics 
accelerators, fusion energy experiments, dedicated scientific computing 
resources, specialized environmental research capabilities, the 
Production Genome Facility, and will soon include the SNS, five NSRCs, 
and an X-ray free electron laser light source. Roughly half of our 
budget goes to the construction and operation of these facilities; the 
other half is split, roughly equally, between research at the DOE 
laboratories and research at universities. This supports the research 
of approximately 23,500 students, postdocs, and faculty throughout our 
nation.




FY 2006 SCIENCE PRIORITIES

    In his testimony before the House Science Committee, the 
President's Science Adviser, Dr. Jack Marburger indicated, ``Making 
choices is difficult even when budgets are generous. But tight budgets 
have the virtue of focusing on priorities and strengthening program 
management. This year's R&D budget proposal maintains levels of funding 
that allow America to maintain its leadership position in science and 
move ahead in selected priority areas.''
    The priorities the Office of Science has set within the overall 
Federal R&D effort and in support of DOE's mission are clear: Through 
the FY 2006 Budget, we will fully support Presidential initiatives in 
fusion and hydrogen; we will continue strong support for other 
Administration priorities such as nanotechnology and information 
technology; we will complete--on time and within budget--unique 
scientific facilities that will maintain and enhance research in areas 
we believe offer the greatest potential for broad advances in future 
energy technologies. These scientific facilities were prioritized in 
our 20-year facilities outlook, announced in November 2003.
    We will continue moving ahead with our contributions to the 
President's Hydrogen Fuel Initiative. We are supporting U.S. 
participation in the ITER project to pursue the potential of energy 
from fusion.
    One of the biggest science stories of the year 2006 will be the 
start-up of the Spallation Neutron Source at our Oak Ridge National 
Lab, which will provide the most intense--by an order of magnitude--
neutron beam in the world for cutting-edge research.
    The FY 2006 budget will also bring four of our five nanoscale 
science research centers on line, providing tools found nowhere else in 
the world for exploration at the atomic level, offering huge potential 
for the discovery of entirely new ways to build materials.
    We are fully funding construction of the Linac Coherent Light 
Source at the Stanford Linear Accelerator Center, a machine that will 
produce x-rays 10 billion times brighter than any existing x-ray source 
on Earth. When it comes on line in 2009, it essentially will allow 
stop-action photography of atomic motion. Just ask the pharmaceutical 
industry what they could do with a machine that shows them how the 
chemical bond forms during a chemical reaction.
    The Office of Science also will fully fund the National Energy 
Research Scientific Computing Center, a key center for capacity 
supercomputing used by roughly 2,000 researchers every year, and a 
separate open-access leadership class computing facility at Oak Ridge, 
focused on providing the capability to carry out a limited number of 
massive simulations not possible on any other civilian supercomputer in 
the U.S.
    The Department will also expand research underpinning biotechnology 
solutions to the world's energy challenges and research supporting the 
President's climate change science program.
    Our research programs in high energy physics continue to receive 
strong support. We have increased funding for future accelerators such 
as the Large Hadron Collider, scheduled to begin operation in 2007, and 
the proposed International Linear Collider, which is now in an early 
R&D phase. Our nuclear physics program will continue to offer world-
class facilities for use by thousands of researchers from around the 
world.

SCIENCE ACCOMPLISHMENTS

    The Office of Science has proven its ability to deliver results 
over the past 50 years. That legacy includes 70 Office of Science 
sponsored Nobel Laureates since 1954. Our science has spawned entire 
new industries, including nuclear medicine technologies that save 
thousands of lives each year, and the nuclear power industry that now 
contributes 20 percent of the power to our nation's electricity grid. 
It has also changed the way we see the universe and ourselves; for 
example--by identifying the ubiquitous and mysterious ``dark energy'' 
that is accelerating the expansion of the universe and by sequencing 
the human genome. The Office of Science has taken the lead on new 
research challenges, such as bringing the power of terascale computing 
to scientific discovery and industrial competitiveness. The Nation's 
investment in SC's basic research programs continues to pay dividends 
to the American taxpayer. Some of the past year's highlights include:

          Promoting Science Literacy and Fostering the Next 
        Generation of DOE Scientists. In FY 2004, DOE launched a seven-
        part program named STARS: Scientists Teaching and Reaching 
        Students. This program is designed to enhance the training of 
        America's mathematics and science teachers; boost student 
        achievement in science and math, especially in the critical 
        middle school years; and draw attention to the women and men 
        who have done DOE science so very well--and thereby encourage 
        young people and prospective teachers to pursue careers in math 
        and science. STARS is a critical step in leveraging the 
        resources of DOE--and of all our national laboratories--to help 
        create a new generation of scientists who will achieve the 
        scientific breakthroughs and technological advances so 
        essential to our future security and prosperity.

          Nobel Prize in Physics. The 2004 Nobel Prize in 
        physics was awarded to David J. Gross (Kavli Institute, UC 
        Santa Barbara), H. David Politzer (Caltech), and Frank Wilczek 
        (MIT) for their discovery of ``asymptotic freedom'' in the 
        strong force. What they discovered was a surprising fact: as 
        fundamental particles get closer to each other, the strong 
        force between them grows weaker, and the further apart they 
        are, the stronger it is, like stretching a rubber band. This 
        discovery is a key component of the very successful Standard 
        Model of particle physics, which describes three of the four 
        fundamental forces of nature: electromagnetic, weak, and 
        strong. Physicists dream of extending the theory to include the 
        fourth fundamental force, gravity. The Office of Science has 
        supported the research of Wilczek since the 1980's at Princeton 
        and the Massachusetts Institute of Technology (MIT) and has 
        supported Politzer at Caltech from the 1970's.

          Nobel Prize in Physics. The 2003 Nobel Prize for 
        Physics was shared by Argonne National Laboratory (ANL) 
        researcher Alexei A. Abrikosov for his pioneering contributions 
        to the theory of superconductors. The Office of Science has 
        long supported Abrikosov's work on the mechanisms of high 
        temperature superconductivity. Amongst the myriad applications 
        of superconducting materials are the magnets used for magnetic 
        resonance imaging, or MRI, and potential applications in high 
        efficiency electricity transmission and high-speed trains.

          New Physics Emerges From Quark-Gluon Plasma. In 2004, 
        the Relativistic Heavy Ion Collider (RHIC) at the Brookhaven 
        National Laboratory (BNL) delivered gold beams at twice the 
        accelerator design limits and greatly exceeded the expectations 
        of the 1,000-plus international physicists working on the four 
        experiments at RHIC. The goal of RHIC is to recreate the 
        predicted quark-gluon plasma, an extremely dense state of 
        matter thought to have last existed microseconds after the Big 
        Bang. RHIC has announced evidence of a quark-gluon state of 
        matter at high density and temperature, exhibiting the 
        properties of a highly correlated liquid--something new and 
        unexpected- as well as indications of a dense, weakly 
        interacting gluonic matter that has been called a ``Color Glass 
        Condensate''--again something new.

          Wide Acceptance of Open-Source, High-End Cluster 
        Software by Industry and Users. The Oak Ridge National 
        Laboratory (ORNL) Open Source Cluster Application Resources 
        (OSCAR) computing software for high-end computing continues to 
        expand its capability and to increase its user base. The 
        software has been downloaded by more than 130,000 groups around 
        the world and is promoted by vendors such as Dell and Intel. 
        The adoption of this system has expanded the number of software 
        packages available to the cluster community, and continues to 
        reduce cluster total cost of ownership. It has simplified the 
        job of software authors, system administrators, and ultimately 
        the application user by providing a timely and much simpler 
        method of supplying and applying software updates. The 
        Scientific Discovery through Advanced Computing (SciDAC) 
        Scalable Systems Software Integrated Software Infrastructure 
        Center leverages OSCAR technology to simplify deployment for 
        the end-user as well as application developers.

          Advances in Fusion Energy Sciences Contribute to 
        ITER. Efficient burning of the fusion's plasma fuel, a mixture 
        of hydrogen isotopes, requires stably confining the plasma at 
        temperatures of 50-100 million degrees, comparable to those 
        found on the Sun, with magnetic fields designed to hold the 
        plasma in place. Recent application of diagnostics that can 
        measure the magnetic fields deep inside this highly energetic 
        plasma with great precision and advanced computer codes that 
        can model the detailed behavior of the plasma has given 
        scientists unprecedented control over the behavior of the 
        plasma. Experiments on the DIII-D tokamak have led the way in 
        prototyping future experiments on ITER. Scientists are now able 
        to use feedback control systems to confidently operate the 
        plasma at pressures which optimize the fusion power output 
        within a given magnetic field. In addition, experiments and the 
        use of massively parallel computing to benchmark models that 
        validate a whole new theoretical understanding of how plasmas 
        can be insulated from loss of particles and energy give 
        confidence that ITER can achieve the needed gain of 10 (50 
        Megawatts of heating, 500 Megawatts of fusion power production) 
        required to enter the burning plasma regime.

          Using DOE Technology and Know-how to Bring Sight to 
        the Blind. DOE's artificial retina project is a model for 
        success in an era when the boundaries of scientific 
        disciplines, public and private sector roles in science, and 
        federal agency responsibilities are increasingly blurred. 
        Success has come through the strength of partnerships between 
        scientists in the public and private sectors, spanning 
        scientific disciplines from materials to medicine to 
        engineering to surgery, and with funds from both DOE and the 
        National Institutes of Health (NIH). In June 2004, the project 
        reached a major milestone as a sixth blind patient was 
        successfully implanted with an artificial retina device. One 
        patient has had the device since February 2002. All six 
        patients can now read large letters (two-foot large letters one 
        foot away) as well as tell the difference between a paper cup, 
        a plate, and a plastic knife. The patients can also see colors 
        although learning and understanding this process is still a 
        challenge for both patients and scientists. Patients will soon 
        begin using their retinal implants outside the laboratory and 
        will even be able to use them alone at home. These initial 
        patient studies are a key part of a Food and Drug 
        Administration Investigational Device Exemption trial.

          Record Operations Advance Physics at the Frontier. 
        Both the Fermi National Accelerator Laboratory (Fermilab) and 
        the Stanford Linear Accelerator Center (SLAC) set significant 
        new records in data delivery (``luminosity'') in 2004, with the 
        accelerators at each of these centers more than doubling their 
        outstanding performance levels from 2003. On Friday, July 16, 
        the Tevatron proton-antiproton collider at Fermilab set a new 
        luminosity record of 1  1032 cm-2 
        sec-1. The use of the Recycler and 
        Accumulator together to maximize the number of antiprotons 
        available for collisions helped to set the new record. Since 
        January 2004, the peak luminosity of the Tevatron has increased 
        100 percent. The FY 2004 PEP-II/Babar run at SLAC ended as 
        scheduled on July 31, setting new performance records. Since 
        the SLAC facility for B meson research began operations in 
        1999, its accumulated total number of electron-positron 
        collisions (integrated luminosity) has steadily increased to a 
        level about five times higher than the design performance.

PROGRAM OBJECTIVES AND PERFORMANCE

    Underpinning all of SC's programs is a fundamental quest for 
knowledge. Our program history provides a compelling story of how this 
knowledge has already shaped the world around us, and the future 
appears even more promising.
    DOE's Strategic Plan identifies four strategic goals (one each for 
defense, energy, science, and the environment) and seven subordinate 
general goals. The Office of Science supports the Science Goals. 
Detailing Office of Science contributions to DOE's Science goals are 27 
annual performance goals. Progress toward the annual goals is tracked 
quarterly through the Department's Joule system and reported to the 
public annually through the Department's Performance and Accountability 
Report (PAR).
    The one Office of Science annual performance goal that was not met 
in FY 2004 was: ``Focus usage of the primary supercomputer at the NERSC 
on capability computing. 50 percent of the computing time used will be 
accounted for by computations that require at least 1/8 of the total 
resource.'' The allocation process for NERSC resources is based on the 
potential scientific impact of the work, rather than on how well the 
work scales to large numbers of processors. When we proposed this 
measure we did not understand the extent to which users who run large 
jobs also run small jobs. It is critical for users to be able to run 
their software at both scales on the same computer because it 
significantly simplifies their software management. Therefore we are 
reducing the percentage of time dedicated to large jobs at NERSC to 40 
percent. In addition, we have tasked the NERSC Users Group to develop 
science-based measures to better assess NERSC performance.
    As a basic research program, the meaning and impact of our 
performance goals may not always be clear to those outside the research 
community. The Office of Science has created a website (www.sc.doe.gov/
measures) to better communicate what we are measuring and why it is 
important. We are committed to improving our performance information 
and will soon be expanding the information included on the website and 
simplifying the interface so that the program objectives and results 
will be accessible to a wide audience.

ORGANIZATION

    The OneSC Project was initiated to streamline the Office of Science 
structure and improve operations across the Office of Science complex 
in keeping with the principles of the President's Management Agenda. 
The first phase of this multiphase effort is now complete and we have 
realigned the Office of Science organization structure to establish a 
clear set of integrated roles and responsibilities for all Headquarters 
(HQ) and Field elements (Figure 2). Policy direction, scientific 
program development and management functions were defined as HQ 
responsibilities. Program execution, implementation, and support 
functions were defined as Field responsibilities. The major structural 
change implemented is the removal of a layer of management from the 
Office of Science Field structure, in effect removing the layer that 
existed between the Office of Science Director and the Site Office 
Managers located at Office of Science laboratories. In addition, the 
Chicago Office will now serve as the personnel office for Office of 
Science employees in HQ. The second phase of the OneSC initiative will 
entail a reengineering of our business processes and is in the 
preliminary stages of development.




SCIENCE PROGRAMS

BASIC ENERGY SCIENCES

FY 2005 Comparable Appropriation--$1,104.6 Million; FY 2006 Request--
$1,146.0 Million

    The Basic Energy Sciences (BES) program advances nanoscale science 
through atomic- and molecular-level studies in materials sciences and 
engineering, chemistry, geosciences, and energy biosciences. BES also 
provides the Nation's researchers with world-class research facilities, 
including reactor- and accelerator-based neutron sources, light sources 
soon to include the X-ray free electron laser, nanoscale science 
research centers, and micro-characterization centers. These facilities 
provide outstanding capabilities for imaging and characterizing 
materials of all kinds from metals, alloys, and ceramics to fragile 
biological samples. The next steps in the characterization and the 
ultimate control of materials properties and chemical reactivity are to 
improve spatial resolution of imaging techniques; to enable a wide 
variety of samples, sample sizes, and sample environments to be used in 
imaging experiments; and to make measurements on very short time 
scales, comparable to the time of a chemical reaction or the formation 
of a chemical bond. With these tools, we will be able to understand how 
the composition of materials affects their properties, to watch 
proteins fold, to see chemical reactions, and to understand and observe 
the nature of the chemical bond. Theory, modeling, and computer 
simulations will also play a major role in achieving these outcomes and 
will be a companion to experimental work. Also supported is basic 
research aimed at advancing hydrogen production, storage, and use for 
the coming hydrogen economy.
    FY 2006 will mark the completion of construction and the initial 
operation of the Spallation Neutron Source (SNS). The SNS will be 
significantly more powerful (by about a factor of 10) than the best 
spallation neutron source now in existence--ISIS at the Rutherford 
Laboratory in England. We estimate the facility will be used by 1,000-
2,000 scientists and engineers annually from academia, national and 
federal labs, and industry for basic and applied research and for 
technology development. The high neutron flux (i.e., high neutron 
intensity) from the SNS will enable broad classes of experiments that 
cannot be done with today's low flux sources. For example, high flux 
enables studies of small samples, complex molecules and structures, 
time-dependent phenomena, and very weak interactions. The FY 2006 
budget authority request completes funding for the SNS Project. This 
will involve procurement and installation of equipment for instrument 
systems, completion of an accelerator readiness review, commissioning 
of ring and target systems, and meeting all requirements to begin 
operations; and all SNS facilities will be turned over to operations. 
The estimated Total Project Cost remains constant at $1,411,700,000.
    Operations will begin in FY 2006 at four of the five NSRCs: the 
Center for Nanophase Materials at ORNL, the Molecular Foundry at 
Lawrence Berkeley National Laboratory (LBNL), the Center for Integrated 
Nanotechnologies at Sandia National Laboratories/Los Alamos National 
Laboratory (SNL/LANL), and the Center for Nanoscale Materials at ANL. 
The exception is the Center for Functional Nanomaterials at BNL, which 
is scheduled to begin operations in FY 2008. The NSRCs are user 
facilities for the synthesis, processing, fabrication, and analysis of 
materials at the nanoscale. They are designed to promote rapid advances 
in the various areas of nanoscale science and technology and are part 
of the DOE contribution to the National Nanotechnology Initiative. The 
NSRCs are sited adjacent to or near existing BES synchrotron or neutron 
scattering facilities to enable rapid characterization of newly 
fabricated materials. FY 2006 funds are requested for construction of 
NSRCs located at LBNL, at SNL/LANL, and at BNL. Funds are also 
requested to complete the Major Item of Equipment (MIE) for the NSRC at 
ANL.
    The Linac Coherent Light Source (LCLS) will continue Project 
Engineering Design (PED) and FY 2006 budget authority is requested to 
initiate physical construction of the LCLS conventional facilities. 
Funding will be provided separately for preconceptual design of 
instruments for the facility. BES funding will also be provided to 
partially support, in conjunction with the High Energy Physics program, 
operation of the SLAC linac. This will mark the beginning of the 
transition to LCLS operations at SLAC. The LCLS project will provide 
the world's first demonstration of an x-ray free-electron-laser (FEL) 
in the 1.5-15 A (angstrom) range, 10 billion times greater in peak 
power and peak brightness than any existing coherent x-ray light 
source, and that has pulse lengths measured in femtoseconds, the 
timescale of electronic and atomic motions. The advance in brightness 
is similar to that of a synchrotron over a 1960's laboratory x-ray 
tube. Synchrotrons have revolutionized science across disciplines 
ranging from atomic physics to structural biology. Advances from the 
LCLS are expected to be even more dramatic. The LCLS project leverages 
capital investments in the existing SLAC linac as well as technologies 
developed for linear colliders and for the production of intense 
electron beams with radio-frequency photocathode guns. The availability 
of the SLAC linac for the LCLS project creates a unique opportunity for 
demonstration and use of x-ray FEL radiation. The estimated Total 
Project Cost is $379,000,000.
    The FY 2006 budget supports a Major Item of Equipment (MIE) for the 
Transmission Electron Aberration-corrected Microscope (TEAM). The Total 
Project Cost is in the range of $25,000,000 to $30,000,000. The TEAM 
project will construct and operate a new aberration-corrected electron 
microscope for materials and nanoscience research. The projected 
improvement in spatial resolution, contrast, sensitivity, and 
flexibility of design of electron optical instruments will provide 
unprecedented opportunities to observe directly the atomic-scale order, 
electronic structure, and dynamics of individual nanoscale structures.
    Research to realize the potential of a hydrogen economy will be 
increased from $29,183,000 to $32,500,000. This research program is 
based on the BES workshop report Basic Research Needs for the Hydrogen 
Economy. The 2003 report highlights the enormous gap between our 
present capabilities for hydrogen production, storage, and use and 
those required for a competitive hydrogen economy. To be economically 
competitive with the present fossil fuel economy, the cost of fuel 
cells must be lowered by a factor of five and the cost of producing 
hydrogen must be lowered by a factor of four. Moreover, the performance 
and reliability of hydrogen technology for transportation and other 
uses must be improved dramatically. Simple incremental advances in the 
present state-of-the-art cannot bridge this gap. Narrowing the gap 
significantly is the goal of a comprehensive, long-range program of 
innovative high-risk/high-payoff basic research that is intimately 
coupled to and coordinated with the DOE's applied programs.
    In order to accomplish these very high-priority, forefront 
activities, some difficult choices had to be made. In particular, the 
BES support for the Radiochemical Engineering and Development Center at 
ORNL will be terminated. The operations budgets of the remaining 
facilities will be at about the same level as in FY 2005, decreasing 
available beam time and service for users. Core funding for university 
and national laboratory researchers decreases 7.8 percent compared to 
the FY 2005 appropriation. While no research activities will be 
terminated, there will be reductions throughout.

ADVANCED SCIENTIFIC COMPUTING RESEARCH

FY 2005 Comparable Appropriation--$232.5 Million; FY 2006 Request--
$207.1 Million

    The Advanced Scientific Computing Research (ASCR) program 
significantly advances scientific simulation and computation, applying 
new approaches, algorithms, and software and hardware combinations to 
address the critical science challenges of the future. ASCR also 
provides access to world-class scientific computation and networking 
facilities to the Nation's scientific community to support advancements 
in practically every field of science. ASCR will continue to advance 
the transformation of scientific simulation and computation into the 
third pillar of scientific discovery, enabling scientists to look 
inside an atom or across a galaxy; and inside a chemical reaction that 
takes a millionth of a billionth of a second or across a climate change 
process that lasts for a thousand years. In addition, ASCR will shrink 
the distance between scientists and the resources--experiments, data, 
and other scientists--they need, and accelerate scientific discovery by 
making interactions that used to take months happen on a much shorter 
timescale.
    The Mathematical, Information, and Computational Sciences (MICS) 
effort is responsible for carrying out the primary mission of the ASCR 
program. In addition, MICS research underpins the success of SciDAC. 
MICS supports both basic research and the development of the results 
from this basic research into software usable by scientists in other 
disciplines. MICS also supports partnerships with scientific discipline 
users to test the usefulness of the research--facilitating the transfer 
of research and helping to define promising areas for future research. 
This integrated approach is critical for MICS to succeed in providing 
the extraordinary computational and communications tools that DOE's 
civilian programs need to carry out their missions.
    Major elements of the ASCR portfolio related to the SciDAC will be 
re-competed in FY 2006, with attention paid to support for the long-
term maintenance and support of software tools such as mathematical 
libraries, adaptive mesh refinement software, and scientific data 
management tools developed in the first 5 years of the effort. In 
addition, in FY 2006 ASCR is changing the way in which it manages its 
Genomics: GTL partnership with the Biological and Environmental 
Research program. The management of these efforts will be integrated 
into the portfolio of successful SciDAC partnerships. The FY 2006 
budget request includes $7,500,000 for continued support of the 
Genomics: GTL research program. The FY 2006 budget request also 
includes $2,600,000 for the Nanoscale Science, Engineering and 
Technology initiative led by BES, and $1,350,000 for support of the 
Fusion Simulation Project, led by the Fusion Energy Sciences program. 
ASCR's contributions to these partnerships will consist of advancing 
the mathematics and developing new mathematical algorithms to simulate 
biological systems and physical systems at the nanoscale. The FY 2006 
budget request also provides $8,000,000 to initiate a small number of 
competitively selected SciDAC institutes at universities which can 
become centers of excellence in high end computational science in areas 
that are critical to DOE missions.
    The FY 2006 budget also includes $8,500,000 to continue the 
``Atomic to Macroscopic Mathematics'' (AMM) research support in applied 
mathematics needed to break through the current barriers in our 
understanding of complex physics processes that occur on a wide range 
of interacting length- and timescales. Achieving this basic 
mathematical understanding will provide enabling technology to 
virtually every challenging computational problem faced by SC.
    The National Leadership Computing Facility acquired under the Next 
Generation Architecture (NGA) Leadership Class Computing Competition in 
FY 2004 will be operated to provide high performance production 
capability to selected Office of Science researchers. The NGA effort 
will play a critical role in enabling Leadership Class Machines that 
could lead to solutions for scientific problems beyond what would be 
attainable through a continued simple extrapolation of current 
computational capabilities. NGA will continue its focus on research in 
operating systems and systems software and will initiate a new 
competition for Research and Evaluation Prototype Computer testbeds. 
ASCR research efforts in Collaboratory Tools and Pilots and Networking 
will be restructured into an integrated Distributed Network Environment 
activity focused on basic research in computer networks and the 
middleware needed to make these networks tools for science. This change 
will enable the reduced NGA effort to operate computers acquired in FY 
2004 and FY 2005 at the ORNL-Center for Computational Sciences (CCS) as 
tools for science and especially to satisfy the demand for resources 
that has resulted from the successful SciDAC efforts.

BIOLOGICAL AND ENVIRONMENTAL RESEARCH

FY 2005 Comparable Appropriation--$581.9 Million; FY 2006 Request--
$455.7 Million

    The Biological and Environmental Research (BER) program advances 
energy-related biological and environmental research in genomics and 
our understanding of complete biological systems, such as microbes that 
produce hydrogen; develops models to predict climate over decades to 
centuries; develops science-based methods for cleaning up environmental 
contaminants; provides regulators with a stronger scientific basis for 
developing future radiation protection standards; and develops new 
diagnostic and therapeutic tools, technology for disease diagnosis and 
treatment, non-invasive medical imaging, and biomedical engineering 
such as an artificial retina that is restoring sight to the blind.
    The FY 2006 budget includes funds for the continued expansion of 
the Genomics: GTL program--a program at the forefront of the biological 
revolution. This program employs a systems approach to biology at the 
interface of the biological, physical, and computational sciences to 
address DOE's energy, environment, and national security mission needs. 
This research will continue to more fully characterize the inventory of 
multi-protein molecular machines found in selected DOE-relevant 
microbes and higher organisms. It will determine the diverse 
biochemical capabilities of microbes and microbial communities, 
especially as they relate to potential biological solutions to DOE 
needs, found in populations of microbes isolated from DOE-relevant 
sites. Support for Microbial Genomics research as a separate research 
activity is terminated to consolidate all microbial research within 
Genomics: GTL. Support of structural biology, human genome, and health 
effects research is also reduced to support GTL research. GTL research 
will provide the scientific community with knowledge, resources, and 
tools that benefit large numbers of research projects with positive 
impacts on more scientists and students than are negatively impacted by 
the initial reduction.
    In 2003, the Administration launched the Climate Change Research 
Initiative (CCRI) to focus research on areas where substantial progress 
in understanding and predicting climate change, including its causes 
and consequences, is possible over the next five years. In FY 2006, BER 
will contribute to the CCRI from four programs: Terrestrial Carbon 
Processes, Climate Change Prediction, Atmospheric Radiation Measurement 
(ARM), and Integrated Assessment. Activities will be focused on (1) 
helping to resolve the magnitude and location of the North American 
carbon sink; (2) deploying and operating of a mobile ARM Cloud and 
Radiation Testbed facility to provide data on the effects of clouds and 
aerosols on the atmospheric radiation budget in regions and locations 
of opportunity where data are lacking or sparse; (3) using advanced 
climate models to simulate potential effects of natural and human-
induced climate forcing on global and regional climate and the 
potential effects on climate of alternative options for mitigating 
increases in human forcing of climate; and (4) developing and 
evaluating assessment tools needed to study costs and benefits of 
potential strategies for reducing net carbon dioxide emissions.
    The completion of the International Human Genome Project and the 
transition of BER's Human Genome research program from a human DNA 
sequencing program to a DNA sequencing user resource for the scientific 
community which focuses on the sequencing of scientifically important 
microbes, plants, and animals will bring BER's Human Genome Ethical, 
Legal, and Societal Issues (ELSI) program to an end. In FY 2006, ELSI 
research will include activities applicable to Office of Science issues 
in biotechnology and nanotechnology such as environmental or human 
health concerns associated with Genomics: GTL or nanotechnology 
research. Research with these funds will be coordinated across the 
Office of Science.
    BER will focus FY 2006 research activities on higher priorities, 
including GTL and Climate Change Research, in support of DOE goals and 
objectives. Funding reductions are initiated in the Environmental 
Remediation Research subprogram and the Medical Applications and 
Measurement Science Research subprogram. Accordingly, some current 
research activities will be phased out in FY 2005. Based on findings of 
the BER Committee of Visitors for the Environmental Remediation 
Research subprogram, research activities are integrated into a single 
program to increase the efficiency of the activities and to better 
address the BER long-term goals in environmental remediation research.

HIGH ENERGY PHYSICS

FY 2005 Comparable Appropriation--$736.4 Million; FY 2006 Request--
$713.9 Million

    The High Energy Physics (HEP) program provides over 90 percent of 
the federal support for the Nation's high energy physics research. This 
research advances our understanding of dark energy and dark matter, the 
lack of symmetry in the current universe, the basic constituents of 
matter, and the possible existence of other dimensions, collectively 
revealing key secrets of the universe. HEP expands the energy frontier 
with particle accelerators to study fundamental interactions at the 
highest possible energies, which may reveal new particles, new forces, 
or undiscovered dimensions of space and time; explain the origin of 
mass; and illuminate the pathway to the underlying simplicity of the 
universe. At the same time, the HEP program sheds new light on other 
mysteries of the cosmos, uncovering what holds galaxies together and 
what is pushing the universe apart; understanding why there is any 
matter in the universe at all; and exposing how the tiniest 
constituents of the universe may have the largest role in shaping its 
birth, growth, and ultimate fate.
    The HEP program in FY 2006 will continue to lead the world with 
forefront user facilities producing data that help answer key 
scientific questions, but these facilities will complete their 
scientific missions by the end of the decade. Thus, we have structured 
the FY 2006 HEP program not only to maximize the scientific returns on 
our investment in these facilities, but also to invest in R&D now for 
the most promising new facilities that will come online in the next 
decade. This has required a prioritization of our current R&D efforts 
to select those which will provide the most compelling science within 
the available resources. In making these decisions we have seriously 
considered the recommendations of the High Energy Physics Advisory 
Panel (HEPAP) and planning studies produced by the U.S. HEP community. 
This prioritization process will continue as the R&D programs evolve.
    Because of its broad relevance in addressing many of the long-term 
goals of HEP, and its unique potential for new discoveries, the highest 
priority is given to the planned operations, upgrades and 
infrastructure for the Tevatron program at Fermilab. This includes the 
completion of the upgrade to the Tevatron accelerator complex in 2007 
to provide increased luminosity and additional computational resources 
to support analysis of the anticipated larger volume of data. Over the 
last few years, the laboratory has developed and implemented a 
detailed, resource-loaded plan for Tevatron operations and 
improvements, which has resulted in more reliable luminosity 
projections. The Office of Science has reviewed the plan and is 
actively engaged in tracking its progress.
    The FY 2006 request supports initial operations of the Neutrinos at 
the Main Injector (NuMI) project at Fermilab, which has just completed 
construction and will study the puzzling but fundamental physics of 
neutrino masses and mixings. The NuMI beam operates in parallel with 
the Tevatron, also at Fermilab, currently the highest energy 
accelerator in the world.
    In order to fully exploit the unique opportunity to expand our 
understanding of the asymmetry of matter and antimatter in the 
universe, a high priority is given to the operations, upgrades and 
infrastructure for the B-factory at SLAC. Support for B-factory will 
include an allowance for increased power costs and fully funded 
upgrades for the accelerator and detector which are currently scheduled 
for completion in 2006. This includes the completion of the upgrade to 
the accelerator complex and BaBar detector to provide more data; 
additional computational resources to support analysis of the larger 
volume of data; and, increased infrastructure spending to improve 
reliability. Funding for SLAC operations includes support from the BES 
program for the LCLS project, marking the beginning of the transition 
of Linac operations from HEP to BES as B-factory operations are 
terminated by FY 2008 at the latest.
    As the Large Hadron Collider (LHC) accelerator in Europe nears its 
turn-on date of 2007, U.S. activities related to fabrication of 
detector components will be completed and new activities related to 
commissioning and pre-operations of these detectors, along with 
software and computing activities needed to analyze the data, will 
ramp-up significantly. Support of a leadership role for U.S. research 
groups in the LHC physics program will continue to be a high priority 
for the HEP program.
    In order to explore the nature of dark energy, pre-conceptual R&D 
for potential interagency sponsored experiments with NASA will continue 
in FY 2006. These experiments will provide important new information 
about the nature of dark energy and dark matter that will in turn lead 
to a better understanding of the birth, evolution and ultimate fate of 
the universe. At this time, no funding for a space-based DOE/NASA Joint 
Dark Energy Mission past the pre-conceptual stage has been identified.
    The engineering design of the BTeV (``B Physics at the Tevatron'') 
experiment, which was scheduled to begin in FY 2005 as a new Major Item 
of Equipment, is cancelled. This is consistent with the guidance of 
HEPAP which rated BTeV as of lesser scientific potential than other 
projects, although still important scientifically and of the Particle 
Physics Project Prioritization Panel (P5) which supported BTeV but only 
if it could be completed by 2010, which is not feasible given schedule 
and funding constraints.
    The Linear Collider has been judged to be of the highest scientific 
importance by HEPAP as well as by scientific advisory bodies of the 
Asian and European HEP communities. In order to address the opportunity 
for significant new future research options, R&D in support of an 
international electron-positron linear collider is increased relative 
to FY 2005 to support the continued international participation and 
leadership in linear collider R&D and planning by U.S. scientists.
    Recent discoveries and studies have pointed to neutrinos as being 
an extremely important area of research for deepening our understanding 
of the nature of matter and the structure of the universe, and HEP is 
working with the Nuclear Physics program and the National Science 
Foundation to plan a coordinated program in neutrino physics. To 
provide a nearer-term future program, and to preserve future research 
options, R&D for other new accelerator and detector technologies, 
particularly in the emerging area of neutrino physics, will increase.

NUCLEAR PHYSICS

FY 2005 Comparable Appropriation--$404.8 Million; FY 2006 Request--
$370.7 Million

    The Nuclear Physics (NP) program is the major sponsor of 
fundamental nuclear physics research in the Nation, providing about 90 
percent of federal support. NP builds and operates world-leading 
scientific facilities and state-of-the-art instrumentation to study the 
evolution and structure of nuclear matter, from the smallest building 
blocks, quarks and gluons, to the stable elements in the Universe 
created by stars and to understand how the quarks and gluons combine to 
form the nucleons (proton and neutron), what are the properties and 
behavior of nuclear matter under extreme conditions of temperature and 
pressure, and what are the properties and reaction rates for atomic 
nuclei up to their limits of stability. Results and insight from these 
studies are relevant to understanding how the universe evolved in its 
earliest moments, how the chemical elements were formed, and how the 
properties of one of nature's basic constituents, the neutrino, 
influences astrophysics phenomena such as supernovae. Scientific 
discoveries at the frontiers of nuclear physics further the Nation's 
energy related research capacity, in turn contributing to the Nation's 
security, economic growth and opportunities, and improved quality of 
life.
    In FY 2006 the NP program will operate world-leading user 
facilities and make investments that will produce data and develop the 
research capabilities to achieve the scientific goals discussed above. 
The Budget Request reflects a balance in on-going facility operations 
and research support, and investments in capabilities. The FY 2006 
budget request provides the resources to operate the program's user 
facilities at 65 percent of optimum utilization with investments 
allocated so as to optimize their scientific programs. FY 2006 
investments in capital equipment address opportunities identified in 
the 2002 Long Range Plan of the Nuclear Sciences Advisory Committee 
(NSAC) and in subsequent recommendations.
    In FY 2006 the Relativistic Heavy Ion Collider's (RHIC) beams of 
relativistic heavy ions will be used by approximately 1000 scientists 
to continue the exploration of the nature of hot, dense matter and to 
recreate conditions under which nuclear matter dissolves into the 
predicted quark-gluon plasma. RHIC started operations in FY 2000 and 
its first 3 runs have produced over 70 refereed journal papers, 
creating great interest in the scientific community with the 
observation of a new state of nuclear matter. In FY 2006 funds are 
provided for accelerator improvements that will increase accelerator 
reliability and reduce costs, for detector upgrades needed to 
characterize the new state of matter observed and for Research and 
Development to increase the luminosity of the collider. These 
investments are important for optimizing the scientific research and 
productivity of the facility. These investments are made at the expense 
of operating time. FY 2006 funding will support 1,400 hours of 
operations, a 31 percent utilization of the collider. Effective 
operation will be achieved by combining FY 2006-FY 2007 running into a 
single back-to-back run bridging the two Fiscal Years.
    Operations of the Thomas Jefferson National Accelerator Facility 
(TJNAF) in FY 2006 will continue to advance our knowledge of the 
internal structure of protons and neutrons, the basic constituents of 
all nuclear matter. By providing precision experimental information 
concerning the quarks and gluons that form the protons and neutrons, 
the approximately 1,000 experimental researchers, together with 
researchers in nuclear theory, seek to provide a quantitative 
description of nuclear matter in terms of the fundamental theory of the 
strong interaction, Quantum ChromoDynamics. In FY 2006 funds are 
provided to continue R&D activities for a potential 12 GeV Upgrade of 
the Continuous Electron Beam Accelerator Facility (CEBAF). These 
investments will poise the facility for a cost-effective upgrade that 
would allow insight on the mechanism of ``quark confinement''--one of 
the compelling unanswered puzzles of physics.
    In the FY 2006 request funds are provided for the operation of the 
Argonne Tandem Linac Accelerator System (ATLAS) at ANL and the 
Holifield Radioactive Ion Beam Facility (HRIBF) at ORNL, for studies of 
nuclear reactions, structure and fundamental interactions. Included in 
this funding are capital equipment and accelerator improvement project 
funds provided to each facility for the enhancement of the accelerator 
systems and experimental equipment. These low energy facilities will 
carry out about 80 experiments in FY 2006 involving about 300 U.S. and 
foreign researchers.
    In FY 2006, funds are provided to continue the fabrication of a 
next generation gamma-ray detector array (GRETINA) and of the 
Fundamental Neutron Physics Beamline (FNPB) at the Spallation Neutron 
Source (SNS) that will provide the U.S. with world-leader capabilities 
in nuclear structure and fundamental neutron studies, respectively. 
Support continues for completion of the important neutrino experiments 
at the Sudbury Neutrino Observatory (SNO) and KamLAND.
    The research programs at the major user facilities are integrated 
partnerships between DOE scientific laboratories and the university 
community, and the planned experimental research activities are 
considered essential for scientific productivity of the facilities. 
Funding for university and national laboratory researchers and graduate 
students decreases 6.8 percent compared to the FY 2005 appropriation.
    While we have a relatively good understanding of the origin of the 
chemical elements in the cosmos lighter than iron, the production of 
the elements from iron to uranium remains a puzzle. The proposed Rare 
Isotope Accelerator (RIA) would enable study of exotic nuclei at the 
very limits of stability, advancing our knowledge of how the elements 
formed. In FY 2006, R&D activities for the proposed RIA are maintained 
at the FY 2005 Congressional budget request level.

FUSION ENERGY SCIENCES

FY 2005 Comparable Appropriation--$273.9 Million; FY 2006 Request--
$290.6 Million

    The Fusion Energy Sciences (FES) program advances the theoretical 
and experimental understanding of plasma and fusion science, including 
a close collaboration with international partners in identifying and 
exploring plasma and fusion physics issues through specialized 
facilities. This includes: 1) exploring basic issues in plasma science; 
2) developing the scientific basis and computational tools to predict 
the behavior of magnetically confined plasmas; 3) using the advances in 
tokamak research to enable the initiation of the burning plasma physics 
phase of the FES program; 4) exploring innovative confinement options 
that offer the potential of more attractive fusion energy sources in 
the long-term; 5) focusing on the scientific issues of nonneutral 
plasma physics and High Energy Density Physics (HEDP); and 6) 
developing the cutting edge technologies that enable fusion facilities 
to achieve their scientific goals. FES also leads U.S. participation in 
ITER, an experiment to study and demonstrate the sustained burning of 
fusion fuel. This international collaboration will provide an 
unparalleled scientific research opportunity with a goal of 
demonstrating the scientific and technical feasibility of fusion power.
    The FY 2006 request is $290,550,000, an increase of $16,647,000, 
6.1 percent over the FY 2005 Appropriation. The FY 2006 budget 
continues the redirection of the fusion program to prepare for and 
participate in the ITER project. The ITER International Agreement is 
currently being negotiated and is expected to be completed by the end 
of FY 2005. FY 2006 FES funding of $49,500,000 is for the startup of 
the U.S. Contributions to ITER MIE. The total U.S. Contributions to the 
ITER MIE, $1,122,000,000, supports the fabrication of the equipment, 
provision of personnel, limited cash for the U.S. share of common 
project expenses at the ITER site, and ITER procurements. This MIE is 
augmented by the technical output from a significant portion of the 
U.S. Fusion Energy Sciences community research program. Virtually the 
entire FES program provides related contributions to such ITER relevant 
research and prepares the U.S. for effective participation in ITER when 
it starts operations.
    Within the overall priorities of the FY 2006 FES budget, 
$15,900,000 is requested for the National Compact Stellarator 
Experiment (NCSX), a joint ORNL/Princeton Plasma Physics Laboratory 
(PPPL) advanced stellarator experiment being built at PPPL. This fusion 
confinement concept has the potential to be operated without plasma 
disruptions, leading to power plant designs that are simpler and more 
reliable than those based on the current lead concept, the tokamak. FY 
2006 operation of the three major fusion research facilities will be 
reduced from a total of 48 weeks to 17 weeks.
    FY 2006 funding for the Inertial Fusion Energy/High Energy Density 
Physics program is $8,086,000, a reduction of $7,255,000 from the FY 
2005 level. This will be accomplished by reducing the level of research 
on heavy ion beams. In addition, the Materials Research program will be 
eliminated in favor of utilizing the general BES materials effort for 
scientific advances in areas of fusion interest.

SCIENCE LABORATORIES INFRASTRUCTURE

FY 2005 Comparable Appropriation--$42.0 Million; FY 2006 Request--$40.1 
Million

    The mission of the Science Laboratories Infrastructure (SLI) 
program is to enable the conduct of DOE research missions at the Office 
of Science laboratories by funding line item construction projects to 
maintain the general purpose infrastructure and the clean up for reuse 
or removal of excess facilities. The program also supports Office of 
Science landlord responsibilities for the 24,000 acre Oak Ridge 
Reservation and provides Payments in Lieu of Taxes (PILT) to local 
communities around ANL-East, BNL, and ORNL.
    In FY 2006, General Plant Projects (GPP) funding is requested to 
refurbish and rehabilitate the general purpose infrastructure necessary 
to perform cutting edge research throughout the Office of Science 
laboratory complex. FY 2006 funding of $3,000,000 is requested to 
support continued design of the Pacific Northwest National Laboratory 
(PNNL) Capabilities Replacement Laboratory project. Funding of 
$11,046,000 is requested to accelerate decontamination and 
decommissioning (D&D) of the Bevatron Complex at the LBNL.
    No funding is requested under the Health and Safety Improvements 
subprogram to continue health and safety improvements at the Office of 
Science laboratories identified in the Occupational Safety & Health 
Administration (OSHA) and Nuclear Regulatory Commission (NRC) reviews. 
If the Administration determines that health and safety issues remain, 
resources will be requested in future years as necessary.

SCIENCE PROGRAM DIRECTION

FY 2005 Comparable Appropriation--$153.7 Million; FY 2006 Request--
$162.7 Million

    Science Program Direction (SCPD) enables a skilled, highly 
motivated federal workforce to manage the Office of Science's basic and 
applied research portfolio, programs, projects, and facilities in 
support of new and improved energy, environmental, and health 
technologies. SCPD consists of two subprograms: Program Direction and 
Field Operations.
    The Program Direction subprogram is the single funding source for 
the Office of Science federal staff in headquarters responsible for 
managing, directing, administering, and supporting the broad spectrum 
of Office of Science disciplines. This subprogram includes planning and 
analysis activities, providing the capabilities needed to plan, 
evaluate, and communicate the scientific excellence, relevance, and 
performance of the Office of Science basic research programs. 
Additionally, Program Direction includes funding for the Office of 
Scientific and Technical Information (OSTI) which collects, preserves, 
and disseminates research and development (R&D) information of the 
Department of Energy (DOE) for use by DOE, the scientific community, 
academia, U.S. industry, and the public to expand the knowledge base of 
science and technology. The Field Operations subprogram is the funding 
source for the federal workforce in the Field responsible for 
management and administrative functions performed within the Chicago 
and Oak Ridge Operations Offices, and site offices supporting the 
Office of Science laboratories and facilities.

WORKFORCE DEVELOPMENT FOR TEACHERS AND SCIENTISTS

FY 2005 Comparable Appropriation--$7.6 Million; FY 2006 Request--$7.2 
Million

    The mission of the Workforce Development for Teachers and 
Scientists (WDTS) program is to provide a continuum of educational 
opportunities to the Nation's students and teachers of science, 
technology, engineering, and mathematics (STEM).
    The Scientists Teaching and Reaching Students (STARS) education 
initiative was launched in FY 2004 to promote science literacy and help 
develop the next generation of scientists and engineers. In support of 
this effort, additional FY 2006 funding is requested for both the 
Laboratory Science Teacher Professional Development (LSTPD) activity 
and the Middle School Science Bowl. The LSTPD activity is a three-year 
commitment experience for K-14 teachers and faculty. The LSTPD will run 
at five or more DOE national laboratories with about 105 participating 
STEM teachers, in response to the national need for science teachers 
who have strong content knowledge in the classes they teach.
    The Faculty Sabbatical activity, which is being initiated in FY 
2005 for 12 faculty members from Minority Serving Institutions (MSI), 
will have five positions available in FY 2006. The Faculty Sabbatical 
is aimed at providing sabbatical opportunities to faculty members from 
MSIs to facilitate the entry of their faculty into the research funding 
mainstream. This activity is an extension of the successful Faculty and 
Student Teams (FaST) program where teams consisting of a faculty member 
and two or three undergraduate students from colleges and universities 
with limited prior research capabilities work with mentor scientists at 
a national laboratory on a research project that is formally documented 
in a paper or presentation.
    In the FY 2006 request, the Pre-Service Teachers (PST) activity 
will be run at one national laboratory, as opposed to twelve national 
laboratories in FY 2005, and students will be recruited from 
participating National Science Foundation (NSF) programs.

SAFEGUARDS AND SECURITY

FY 2005 Comparable Appropriation--$67.2 Million; FY 2006 Request--$68.7 
Million

    The Safeguards and Security (S&S) program ensures appropriate 
levels of protection against unauthorized access, theft, diversion, 
loss of custody, or destruction of DOE assets and hostile acts that may 
cause adverse impacts on fundamental science, national security or the 
health and safety of DOE and contractor employees, the public or the 
environment. The SC's Integrated Safeguards and Security Management 
strategy encompasses a tailored approach to safeguards and security. As 
such, each site has a specific protection program that is analyzed and 
defined in its individual Security Plan. This approach allows each site 
to design varying degrees of protection commensurate with the risks and 
consequences described in their site-specific threat scenarios.
    The FY 2006 request meets minimum, essential security requirements. 
Protection of employees and visitors is of primary concern, as well as 
protection of special nuclear material and research facilities, 
equipment and data. Priority attention is given to protective forces, 
physical security systems, and cyber security.

CONCLUSION

    The Office of Science occupies a unique and critical role within 
the U.S. scientific enterprise. We fund research projects in key areas 
of science that our nation depends upon. We construct and operate major 
scientific user facilities that scientists from virtually every 
discipline are using on a daily basis, and we manage civilian national 
laboratories that are home to some of the best scientific minds in the 
world.
    Madame Chairman, we have made some difficult decisions this year 
within the President's budget request for the Office of Science--
consistent with our research priorities--which will allow us to build 
on the solid foundation created over the last four years, propel us 
into new areas of great scientific promise, and maintain America's 
world-class stature in science.
    I want to thank you, Madame Chairman, for providing this 
opportunity to discuss the Office of Science research programs and our 
contributions to the Nation's scientific enterprise. On behalf of DOE, 
I am pleased to present this FY 2006 budget request for the Office of 
Science.
    This concludes my testimony. I would be pleased to answer any 
questions you might have.

                    Biography for Raymond L. Orbach
    Dr. Raymond L. Orbach was sworn in as the 14th Director of the 
Office of Science at the Department of Energy (DOE) on March 14, 2002. 
As Director of the Office of Science (SC), Dr. Orbach manages an 
organization that is the third largest federal sponsor of basic 
research in the United States and is viewed as one of the premier 
science organizations in the world. The SC fiscal year 2005 budget of 
$3.6 billion funds programs in high energy and nuclear physics, basic 
energy sciences, magnetic fusion energy, biological and environmental 
research, and computational science. SC, formerly the Office of Energy 
Research, also provides management oversight of the Chicago and Oak 
Ridge Operations Offices and 10 DOE non-weapons laboratories.
    Prior to his appointment, Dr. Orbach served as Chancellor of the 
University of California (UC), Riverside from April 1992 through March 
2002; he now holds the title Chancellor Emeritus. During his tenure as 
Chancellor, UC-Riverside grew from the smallest to one of the most 
rapidly growing campuses in the UC system. Enrollment increased from 
8,805 to more than 14,400 students with corresponding growth in faculty 
and new teaching, research, and office facilities.
    In addition to his administrative duties at UC-Riverside, Dr. 
Orbach maintained a strong commitment to teaching. He sustained an 
active research program; worked with postdoctoral, graduate, and 
undergraduate students in his laboratory; and taught the freshman 
physics course each winter quarter. As Distinguished Professor of 
Physics, Dr. Orbach set the highest standards for academic excellence. 
From his arrival, UC-Riverside scholars led the Nation for seven 
consecutive years in the number of fellows elected to the prestigious 
American Association for the Advancement of Science (AAAS).
    Dr. Orbach began his academic career as a postdoctoral fellow at 
Oxford University in 1960 and became an Assistant Professor of Applied 
Physics at Harvard University in 1961. He joined the faculty of the 
University of California, Los Angeles (UCLA) two years later as an 
Associate Professor, and became a Full Professor in 1966. From 1982 to 
1992, he served as the Provost of the College of Letters and Science at 
UCLA.
    Dr. Orbach's research in theoretical and experimental physics has 
resulted in the publication of more than 240 scientific articles. He 
has received numerous honors as a scholar including two Alfred P. Sloan 
Foundation Fellowships, a National Science Foundation Senior 
Postdoctoral Fellowship, a John Simon Guggenheim Memorial Foundation 
Fellowship, the Joliot Curie Professorship at the Ecole Superieure de 
Physique et Chimie Industrielle de la Ville de Paris, the Lorentz 
Professorship at the University of Leiden in the Netherlands, and the 
1991-1992 Andrew Lawson Memorial Lecturer at UC-Riverside. He is a 
fellow of the American Physical Society and the AAAS.
    Dr. Orbach has also held numerous visiting professorships at 
universities around the world. These include the Catholic University of 
Leuven in Belgium, Tel Aviv University, and the Imperial College of 
Science and Technology in London. He also serves as a member of 20 
scientific, professional, or civic boards.
    Dr. Orbach received his Bachelor of Science degree in Physics from 
the California Institute of Technology in 1956. He received his Ph.D. 
degree in Physics from the University of California, Berkeley, in 1960 
and was elected to Phi Beta Kappa.
    Dr. Orbach was born in Los Angeles, California. He is married to 
Eva S. Orbach. They have three children and seven grandchildren.

    Chairwoman Biggert. Thank you very much, Dr. Orbach.
    And Mr. Faulkner, you are recognized for five minutes.

    STATEMENT OF MR. DOUGLAS L. FAULKNER, PRINCIPAL DEPUTY 
ASSISTANT SECRETARY FOR ENERGY EFFICIENCY AND RENEWABLE ENERGY, 
            THE DEPARTMENT OF ENERGY, WASHINGTON, DC

    Mr. Faulkner. Thank you, ma'am.
    Madame Chairman, Ranking Member, as my entire statement is 
part of the record, I will briefly summarize.
    The President's budget includes $1.2 billion for my office, 
the Office of Energy Efficiency and Renewable Energy, and I am 
pleased to outline our priorities for the funding.
    Our top priority is to reduce America's dependence on 
foreign oil. Since the majority of oil we consume is used to 
fuel transportation, we are seeking increases in both our 
vehicle technologies programs and our hydrogen and fuel cell 
programs, proposing to spend nearly $349 million in these 
areas. Our work, conducted in partnership with auto makers and 
energy providers, among others, includes gasoline-electric 
hybrid vehicles, propulsion, new generations of spark and 
compression ignition internal combustion engines, vehicle 
systems, lightweight materials, and of course, hydrogen fuel 
cells and the elements of hydrogen refueling infrastructure to 
support them.
    Our next priority is to reduce the burden of energy prices 
on the disadvantaged. To this end, we are proposing $230 
million for the low-income weatherization program, an increase 
over last year's appropriated levels.
    Another priority of my office is to increase the viability 
and deployment of renewable energy technologies. To this end, 
we are seeking approximately $260 million. This funding 
includes our work on solar, wind, biomass, geothermal, 
hydropower, and the facilities and activities needed to support 
these programs.
    Our next priority is to increase the energy efficiency of 
buildings and appliances. To this end, we are seeking more than 
$75 million for our building technology program, ENERGY STAR, 
Rebuild America, and building code training and assistance 
activities.
    Our fifth priority is to spur the creation of the domestic 
bioindustry, which we also addressed in previous priorities. In 
pursuit of this priority, we are seeking over $72 million for 
our biomass technologies program. Our work in this area 
includes lowering the cost of sugars derived from discarded or 
under-utilized cellulosic materials from which ethanol and 
other chemicals or products could be made.
    Our sixth priority is to increase the efficiency and 
performance of distributed power generation, which can enhance 
the reliability of the entire electricity grid. We propose to 
spend nearly $57 million on our distributed energy program. 
That includes work on advanced reciprocating engines, 
microturbines, thermally-activated technologies, and the 
packing and integration of these technologies into compact, 
affordable systems.
    Our seventh priority is to increase the energy efficiency 
of industry. And to that end, we are seeking $56.5 million for 
our industry and technologies program. Technologies we are 
working on are as varied as continuous-melt electric arc 
furnaces, cookless iron-making, and high-pressure superboilers. 
We are also continuing efforts to communicate best energy 
efficiency practices among a wide variety of industrial 
partners.
    Our eighth priority is to assist the largest single energy 
user in the U.S. economy: the Federal Government. We want them 
to lead by example on using energy more efficiently and 
procuring more energy from renewable resources. In pursuit of 
this goal, we operate FEMP, the Federal Energy Management 
Program and our Departmental Energy Management Program with 
over $19 million of funding.
    Madame Chairman, this is an extremely diverse portfolio of 
activities, and sometimes they are challenging to manage. This 
is why our ninth priority has been to change and continuously 
improve the way we do business. The National Academy of Public 
Administration, in a study it released a few years ago, five 
years ago, in the last Administration, found that the Office of 
Energy Efficiency and Renewable Energy, suffered from 
fragmentation management flaws, including emphasis on process 
over product, lack of staff motivation, lack of commitment to 
organizational goals, poor communications, which is usually due 
to uncoordinated and poorly designed information support 
systems and weak decision-making processes.
    Following the complete reorganization of our office in July 
of 2002, the Academy went in and evaluated our office again. 
After an 18-month study, the Academy found that my office had 
strengthened program management and executed a sound business 
model. In the words of the Academy, ``EERE has demonstrated 
that much can be achieved in a relatively short period if top 
management is committed to doing so. The leadership of DOE 
should examine what this office has accomplished and consider 
whether a similar approach would benefit other parts of the 
Department.''
    While there is still a great deal yet to do to improve our 
performance, we are embracing the thoughtful guiding principles 
that this subcommittee has stressed. Among them: greater 
competition, five-year planning, improved program management 
while continuing ahead with the refinement and implementation 
of an innovative business model.
    With that, Madame Chairman, I would be pleased to take any 
questions.
    [The prepared statement of Mr. Faulkner follows:]

               Prepared Statement of Douglas L. Faulkner

    Madam Chairman and Members of the Subcommittee, I appreciate the 
opportunity to testify on the President's Fiscal Year 2006 Budget 
Request for the Office of Energy Efficiency and Renewable Energy 
(EERE). My focus today will be on the energy conservation, renewable 
energy, and hydrogen activities within our research and development 
programs.
    The President's FY 2006 Budget includes $1.2 billion for EERE. In 
his February 2nd State of the Union Address, the President underscored 
the need to restrain spending in order to sustain our economic 
prosperity. As part of this restraint, it is important that total 
discretionary and non-security spending be held to levels proposed in 
the FY 2006 Budget. The budget savings and reforms in the Budget are 
important components of achieving the President's goal of cutting the 
budget deficit in half by 2009 and we urge the Congress to support 
these reforms. The FY 2006 Budget includes more than 150 reductions, 
reforms, and terminations in non-defense discretionary programs, of 
which one affects EERE's programs. The Department wants to work with 
the Congress to achieve these savings.
    The programs funded by this appropriation continue support for 
certain Presidential initiatives; build on research, development, and 
deployment successes already achieved; and focus on implementing 
results-oriented business practices to help achieve strategic energy 
goals and fulfill the Department's mission.
    EERE has made good on its strategic goal of ``changing the way it 
does business.'' Last fall, the National Academy of Public 
Administration (NAPA) completed an 18-month review of EERE's 
reorganized structure and noted in its final report, Reorganizing for 
Results, that ``the basic construct of the reorganization--eliminating 
the sector organizations and restructuring around the major programs, 
and consolidating the business administration functions-was sound,'' 
and that ``EERE has made great strides to reinvent how it does 
business.'' Our innovative business and management model is enabling 
EERE to fund the right mix of research and development (R&D) and to get 
more technical work done effectively with the R&D dollars appropriated. 
EERE is also guided by the research and development investment criteria 
(RDIC) called for in the President's Management Agenda, as well as the 
Office of Management and Budget's (OMB) Program Assessment Rating Tool 
(PART) to guide its decisions and focus its R&D on long-term, high-
payoff activities that require federal involvement to be successful.
    A primary long-term goal for our nation must be to significantly 
reduce our dependence on foreign oil, and to develop the technologies 
that enable Americans to make greater use of our abundant, clean, 
domestic renewable energy resources. EERE's FY 2006 request continues 
support for the President's Hydrogen Fuel Initiative to ensure that 
hydrogen production, storage, and infrastructure technologies will be 
available and affordable when hydrogen-powered fuel cell vehicles are 
ready for commercialization. EERE also continues support for its 
FreedomCAR program (where CAR stands for Cooperative Automotive 
Research), working with industry to improve the efficiency and lower 
the cost of advanced combustion engines and hybrid vehicle 
technologies. In addition, EERE will pursue critical technical 
improvements to biorefineries and the processes that use biomass, the 
only renewable resource that can directly produce liquid transportation 
fuels such as ethanol.
    But long-term results are only part of the story for EERE's 
programs. The Fiscal Year 2006 Budget Request is designed to provide 
results to the American people today by advancing technologies that are 
making their way into energy-related products and services that are an 
integral part of America's energy economy. Since 2001, research 
sponsored by EERE has won 37 R&D 100 awards, ten in 2004 alone. One 
technology winner this year is the world's first portable, flexible 
photovoltaic (PV) power module made from thin-film copper indium 
gallium selenide (CIGS). The U.S. Army is already using these 
lightweight PV systems that can be folded as small as a 9 by 12 
envelope, stowed in a small backpack, and easily carried over long 
distances to supply efficient and reliable power.
    Targeting all sectors of energy use, EERE's Fiscal Year 2006 
activities are designed to make a difference in the everyday lives of 
Americans today, and an even greater difference in years to come.

ENERGY CONSERVATION AND RENEWABLE ENERGY PROGRAMS FISCAL YEAR 2006 
                    REQUEST

    EERE programs funded by the Energy and Water Development 
appropriation include Hydrogen and Fuel Cell Technologies, Vehicle 
Technologies, Solar Energy Technologies, Wind and Hydropower 
Technologies, Geothermal Technologies, Biomass and Biorefinery Systems, 
Weatherization and Intergovernmental, Distributed Energy Resources, 
Building Technologies, Industrial Technologies, Federal Energy 
Management, and Program Management and Direction.

HYDROGEN AND FUEL CELL TECHNOLOGIES

    The Fiscal Year 2006 Budget Request for Hydrogen and Fuel Cell 
Technologies totals $182.7 million: $99.1 million for hydrogen 
activities, a $5.1 million increase over the Fiscal Year 2005 
comparable appropriation, and $83.6 million for fuel cell activities, 
an $8.7 million increase. Hydrogen and fuel cell technologies are the 
foundation of the President's Hydrogen Fuel Initiative and help support 
the Department's FreedomCAR program. Under the FreedomCAR and Fuel 
Partnership, government and industry are working together on research 
activities to overcome key technical barriers to commercialization of 
advanced efficient vehicles, and to facilitate a fuel cell hybrid 
vehicle and hydrogen infrastructure commercialization decision by 
industry in the year 2015. Because hydrogen fuel cell vehicles emit no 
criteria pollutants or carbon dioxide, their development and commercial 
success would essentially remove light-duty transportation as an 
environmental issue. The hydrogen will be produced from diverse 
domestic resources, making our nation self-reliant for our personal 
transportation energy needs.
    Much of the proposed increase in Hydrogen Technology is to 
accelerate and expand research and development of advanced technologies 
for producing hydrogen using renewable feedstocks such as biomass and 
renewable energy sources such as wind and solar. The program is also 
developing technologies for distributed hydrogen production from 
reforming of natural gas and from electrolysis. Other priorities 
include development of on-board vehicular hydrogen storage systems to 
achieve a driving range of greater than 300 miles and development of 
hydrogen delivery technologies. The ultimate goal is to reduce the cost 
of producing, storing, and delivering hydrogen to a cost competitive 
with that of gasoline.
    Validation of fuel cell vehicle and hydrogen infrastructure 
technologies under `real-world ' operating conditions is essential to 
track progress and to help guide research priorities. This year's 
request contains $24 million for fuel cell technology validation which 
is a 35 percent increase over the Fiscal Year 2005 comparable 
appropriation. We are also requesting $14.9 million in funding for the 
validation of hydrogen infrastructure technology, a 58 percent increase 
over the Fiscal Year 2005 comparable appropriation. Automotive and 
energy partners are matching public dollars on a ``50-50'' cost-shared 
basis, and the Department is beginning to receive essential statistical 
data on the status of fuel cell vehicle and infrastructure technologies 
relative to targets in the areas of efficiency, durability, storage 
system range, and fuel cost. By measuring progress under real-world 
driving conditions, the Department can accurately monitor success in 
overcoming remaining fuel cell and infrastructure technology barriers 
and assess progress towards the 2015 commercialization decision by 
industry. These activities also provide technical information and 
analysis to support the development of codes and standards for the 
commercial use of hydrogen, and feedback on vehicle and infrastructure 
safety. Fiscal Year 2006 activities include opening eight hydrogen 
fueling stations, assessing performance and cost of hydrogen production 
and delivery technologies, and validating 1,000 hours of fuel cell 
vehicle durability ``on the road.'' By 2009, the program is expected to 
validate fuel cell vehicle durability of 2,000 hours, a 250-mile 
vehicle range, and hydrogen production cost of less than $3.00/gge 
(gasoline gallon equivalent).
    As highlighted by Secretary Bodman in earlier Congressional 
testimony, I am pleased to report that our fuel cell activities 
achieved an important technology cost goal this past year when they 
reduced the high-volume cost of automotive fuel cells from $275 per 
kilowatt in 2002 to $200 per kilowatt in 2004. This accomplishment is a 
major step toward the program's goal of reducing the cost of 
transportation fuel cell power systems to $45 per kilowatt by 2010.\1\ 
Research successes like this will enable a positive commercialization 
decision in 2015 that could lead to the market introduction of hydrogen 
fuel cell vehicles by 2020.
---------------------------------------------------------------------------
    \1\ Cost of 50 kW vehicle fuel cell power systems estimated for 
production rate of 500,000 units per year.
---------------------------------------------------------------------------
    The President's Hydrogen Fuel Initiative was received by Congress 
with enthusiasm, and we appreciate this subcommittee's support. 
However, while the EERE Fiscal Year 2005 comparable appropriation for 
hydrogen technology was $94 million, 40 percent of those funds were 
earmarked for specific projects that are not wholly consistent with our 
research plan or the recommendations of the National Research Council. 
As a consequence, we must delay some very important work in areas such 
as hydrogen production and storage, and our ability to meet our 
established research targets in the specified timeframes may be in 
jeopardy. The Department looks forward to working with Congress to help 
ensure that the projects supported are consistent with our established 
goals in an effort to keep our progress on track.

VEHICLE TECHNOLOGIES

    The FreedomCAR & Vehicle Technologies Program focuses on the 
development of more energy efficient and environmentally friendly 
technologies for cars and trucks that will use significantly less oil, 
and still preserve America's freedom of mobility. Many of these 
technologies also serve as the foundation of tomorrow's hydrogen fuel 
cell vehicles.
    The Fiscal Year 2006 Budget Request for Vehicle Technologies is 
$165.9 million, a $0.5 million increase over the Fiscal Year 2005 
comparable appropriation. Activities in this program contribute to two 
Departmental initiatives: the FreedomCAR initiative and the 21st 
Century Truck initiative.
    FreedomCAR activities in Fiscal Year 2006 focus on innovative, 
high-efficiency vehicle technologies including advanced combustion 
engines, advanced fuel formulations, hybrid vehicle systems, high-
powered batteries, lightweight materials, and power electronics. These 
critical technologies can lead to near-term oil savings when used with 
advanced combustion hybrid electric vehicles and support the future 
development of hydrogen fuel cell hybrid vehicles.
    FreedomCAR goals include increasing passenger and light-duty 
vehicle combustion engine efficiency from 30 percent to 45 percent by 
2010 (while meeting 2010 EPA emissions standards), and reducing the 
cost of high-power batteries for hybrid vehicles from $3000 (1998 
baseline) to $500 for a 25kW battery by 2010. Combustion engine 
efficiency is making good progress, and in Fiscal Year 2006 we expect 
to reach 41 percent efficiency, a major step towards the 2010 goal of 
45 percent. Battery technologies have also made significant progress 
toward these goals: the program reached its $1,000 cost target for 
Fiscal Year 2004, and the Fiscal Year 2006 budget is expected to bring 
that down to $750.
    The 21st Century Truck initiative has similar objectives but is 
focused on commercial vehicles. The 2006 request will fund cooperative 
research efforts between the commercial heavy-duty vehicle (trucks and 
buses) industry and major federal agencies to develop technologies that 
will make our nation's commercial vehicles more efficient, cleaner, and 
safer. The effort centers on R&D to improve engine systems, heavy-duty 
hybrids, truck safety, and to reduce parasitic losses (e.g., 
aerodynamic drag as the vehicle moves down the road at 60 mph, and the 
power drain from belt driven accessories like power steering and air 
conditioning) and engine idling.
    In Fiscal Year 2004, the heavy-duty vehicle activity demonstrated a 
reduction of parasitic losses from 39 percent baseline to 27 percent in 
a laboratory setting, and activities included in the Fiscal Year 2006 
budget are expected to bring those losses down to 24 percent. The 
program also demonstrated an increase in heavy-duty diesel engine 
efficiency from the baseline of 40 percent to 45 percent in Fiscal Year 
2004 (while meeting EPA 2007 emission standards) and we expect the 
Fiscal Year 2006 budget to raise that to 50 percent (while meeting EPA 
2010 emission standards)--important steps toward meeting our long-term 
goal of 55 percent energy efficiency in 2013.

SOLAR ENERGY TECHNOLOGIES

    The Solar Energy Technologies Program focuses research on advanced 
solar devices that can bring reliable and affordable solar energy 
technologies into the marketplace, helping our nation meet electricity 
needs and reducing the stress on our critical electricity 
infrastructure. The Department's efforts are directed in the 
interrelated areas of photovoltaics, concentrating solar power (CSP), 
and solar heating and lighting. The Fiscal Year 2006 Budget Request for 
solar technology is $84.0 million, which is roughly equivalent to the 
Fiscal Year 2005 comparable appropriation of $85.1 million.
    The Department's photovoltaic research and development is focused 
on next-generation technologies such as thin-film photovoltaic cells 
and leap-frog technologies such as polymers and nanostructures. The 
Fiscal Year 2006 request of $75.0 million for photovoltaic energy 
systems includes $31.4 million for critical laboratory research, $28.6 
million for advanced materials and devices, and $15.0 million for 
technology development efforts to improve reliability of the entire 
system. The Department has included $4.5 million in the Fiscal Year 
2006 request to support the new Collaborative Crystalline Silicon 
Photovoltaic Initiative designed to strengthen through research and 
development the technological competitiveness of U.S. products in a 
rapidly growing world market.
    The $6.0 million request for concentrating solar power research 
includes funds to accelerate the development of next-generation 
parabolic trough concentrators and receivers. Development of advanced 
thermal energy storage technologies will continue and field validation 
will be conducted on new collector technology being deployed in trough 
projects in Arizona and Nevada. For distributed applications, research 
in Fiscal Year 2006 will focus on improving the reliability of dish 
systems through the operation and testing of multiple units at Sandia 
National Laboratory. Technical support will also be provided to the 
Western Governors' Association to assist their CSP deployment 
activities.

WIND AND HYDROPOWER TECHNOLOGIES

    Wind Energy research and development promotes greater use of the 
Nation's fastest growing energy resource. Since 2000, installed wind 
turbine capacity in the United States has more than doubled, driven in 
large part by the tremendous reductions in cost that have resulted from 
wind energy research. Our research contributed to reducing the cost of 
electricity generation by a factor of 20 since 1982, to four cents or 
less per kilowatt-hour in areas with excellent wind resources.
    The Fiscal Year 2006 Budget Request for Wind Energy is $44.2 
million, $3.4 million more than the Fiscal Year 2005 comparable 
appropriation. Most of the Fiscal Year 2006 request is to fund R&D on 
multiple large wind system technology pathways in lower wind speed 
areas to achieve the goal of three cents per kilowatt-hour for onshore 
systems and five cents per kilowatt-hour for off-shore systems by 2012. 
Working in collaborative partnerships with industry, the Department 
plans to complete field testing of the first full-scale Low Wind Speed 
Technology prototype turbine in Fiscal Year 2006, and begin fabrication 
of a second prototype turbine (both 2.5 MW scale) which will enable 
electricity to be generated closer to where people live.
    Hydropower is the most widely used form of renewable energy in the 
world today, accounting for over seven percent of total electricity 
generation in the United States and over 75 percent of domestic 
renewable electricity generation. The Department has supported the 
development of new turbine technology that reduces fish mortality 
associated with hydropower plant operation. With the completion of 
testing on new turbine technologies, and consistent with previous 
Congressional direction, the Department plans to close out the 
Hydropower Program and transfer remaining program activities and 
information to the private sector.
    The Fiscal Year 2006 hydropower request of $0.5 million will be 
used to complete the monitoring of plant operation and maintenance, and 
document previous program activities. Outstanding contracts will be 
closed out in Fiscal Year 2006.

GEOTHERMAL TECHNOLOGY

    The Geothermal Technologies Program works in partnership with 
industry to establish geothermal energy as an economically competitive 
contributor to the U.S. energy supply.
    Currently a $1.3 billion a year industry, geothermal energy 
production generates electricity or provides heat for applications such 
as aquaculture, crop drying, and district heating, or for use in heat 
pumps to heat and cool buildings without the emission of greenhouse 
gases. The Fiscal Year 2006 Budget Request for Geothermal Technologies 
is $23.3 million, a $2.0 million decrease from the Fiscal Year 2005 
comparable appropriation. The Fiscal Year 2005 appropriation included 
$3.6 million in funds for congressionally-directed activities now 
completed.
    In Fiscal Year 2006, the program will conduct extensive field tests 
of exploration technologies such as remote sensing techniques to 
increase the U.S. geothermal resource base, and expand and accelerate 
the geothermal resource assessments conducted in collaboration with the 
U.S. Geological Survey. The program will continue its Enhanced 
Geothermal Systems (EGS) technology research to increase the 
productivity and lifetime of engineered reservoirs. The Department 
estimates that EGS technology could quadruple the amount of 
economically and technically viable geothermal resources in the West 
and open up new geothermal possibilities throughout the U.S.

BIOMASS AND BIOREFINERY SYSTEMS R&D

    EERE's Biomass Program focuses on advanced technologies to 
transform the Nation's domestic biomass resources into high value 
fuels, chemicals, materials, and power. Working with the U.S. 
Department of Agriculture (USDA), the program leads a multi-agency 
initiative that coordinates and accelerates all federal bioenergy R&D 
in accordance with the Biomass Research and Development Act of 2000.
    In Fiscal Year 2006, the Department is requesting $72.2 million for 
Biomass Program activities, $15.9 million less than the Fiscal Year 
2005 comparable appropriation. Last year's appropriation, however, 
included $35.3 million in funds for congressionally-directed activities 
for which the Department is not requesting additional funds.
    The Department requests $43.4 million to support platforms R&D. The 
$15 million request for Thermochemical Platform R&D will focus on 
developing technologies for the production, cleanup, and conditioning 
of biomass syngas and pyrolysis oils suitable for conversion to fuels 
and chemicals. This will be done in collaboration with industrial 
partners selected under a joint DOE/USDA solicitation issued in Fiscal 
Year 2004. The $28.4 million requested for Bioconversion Platform R&D 
is to work with industry to improve the performance and reduce the 
costs of enzymes and biomass pretreatment, resulting in a low cost 
sugar stream in support of the nearer-term biorefinery.
    The request also includes $21.8 million for cost-shared R&D with 
U.S. industry to advance technologies that will convert this low cost 
sugar stream into affordable products (chemicals and materials), 
furthering the development of efficient biorefineries. Work with 
industry, universities, and the National Laboratories will focus on 
improving the efficiency of individual process steps such as catalysis 
and separations, with a focus on producing key building-block chemicals 
that have the potential to result in a multitude of high-value, 
renewable chemicals and materials.

WEATHERIZATION AND INTERGOVERNMENTAL PROGRAMS\2\
---------------------------------------------------------------------------

    \2\ These programs are not R&D activities.
---------------------------------------------------------------------------
    In Fiscal Year 2006, we are requesting $310.1 million for 
Weatherization and Intergovernmental Activities, a $15.7 million 
reduction from the Fiscal Year 2005 comparable appropriation. This 
includes $230 million for the Weatherization Assistance Program, which 
will support weatherization of approximately 92,300 low-income homes, 
saving the low-income homeowner an average of $274 annually on their 
energy bills at today's prices, according to estimates by the Oak Ridge 
National Laboratory.
    The Department's Intergovernmental activities promote rapid 
deployment of clean energy technologies and energy efficient products. 
The Fiscal Year 2006 Budget requests $41.0 million for State Energy 
Program grants. These grants, and the funds they leverage, allow State 
governments to target their own high priority energy needs and expand 
clean energy choices for their citizens and businesses.
    In Fiscal Year 2006, we request $4.0 million for the Tribal Energy 
Program which will enable the Department to continue to build 
partnerships with Tribal governments to assess Native American energy 
efficiency needs and renewable energy opportunities for residential, 
commercial, and industrial uses. These activities are helping to 
complete the foundational work that will encourage private sector 
investment in energy projects on Native American lands.
    The Department includes an increase of $1.7 million in its Fiscal 
Year 2006 request to expand and support Home Performance with ENERGY 
STAR, an innovative residential program designed to improve the energy 
efficiency of existing homes by up to 30 percent using certified local 
contractors to perform whole-house retrofits. State and local pilot 
projects will be supported at the national level by the dissemination 
of best practices, contractor training, program design assistance, and 
marketing support.

DISTRIBUTED ENERGY RESOURCES

    By producing electricity where it is used, distributed energy 
technologies can strengthen our nation's aging electricity power 
infrastructure, relieve congestion on transmission and distribution 
systems, and increase supplies during periods of peak demand. The 
Distributed Energy Program seeks to develop and deploy a diverse array 
of integrated distributed generation and thermal energy technologies 
that are competitively priced, reliable, and highly efficient. The 
Fiscal Year 2006 Budget Request for this program is $56.6 million, a 
$3.8 million reduction from the Fiscal Year 2005 comparable 
appropriation. This funding level reflects the reallocation of funds 
given the advances made in previous years and changes within the 
overall energy research and development portfolio. As in previous 
years, this year's request emphasizes integrated designs for end-use 
systems.
    Key performance target goals for Fiscal Year 2006 include the 
development of a combined heat and power (CHP) system which operates at 
over 70 percent efficiency and a prototype microturbine which can 
achieve 35 percent efficiency for small-scale power generation. To help 
potential users take better advantage of distributed energy 
opportunities, the program will complete a state regulatory database 
including information on regulations such as environmental permitting, 
utility tariffs, and interconnection standards, and continue funding 
the eight Regional Combined Heat and Power Application Centers across 
the United States.

BUILDING TECHNOLOGIES

    With an annual price tag of over $250 billion, energy use by 
residential and commercial buildings accounts for nearly 40 percent of 
the Nation's total energy consumption, including two-thirds of the 
electricity sold in the United States. The $58 million included in this 
year's request for the Building Technologies Program is a decrease of 
$7.5 million from the Fiscal Year 2005 comparable appropriation, 
primarily due to reductions in space conditioning and building envelope 
R&D that is nearing commercialization. Fiscal Year 2006 activities 
include solid state lighting, improved energy efficiency of other 
building components and equipment, and their effective integration 
using whole-building-system-design techniques, and the development of 
codes and standards for buildings, appliances, and equipment.
    The $18.3 million request for Residential Buildings Integration 
aims to develop design packages that enable residential buildings to 
use 40 to 50 percent less energy than current practice, and integrate 
renewable energy systems into highly efficient building designs and 
operations in working toward the ultimate goal in 2020 of net Zero 
Energy Buildings: houses that produce as much energy as they use on an 
annual basis.
    As part of the Department's focus on longer-term, high-risk 
activities with great potential for public benefit, in Fiscal Year 2006 
we are requesting $11 million for solid state lighting research. Solid 
state lighting holds the potential to more than double the efficiency 
of general lighting systems, revolutionizing the energy efficiency, 
appearance, visual comfort, and quality of lighting products.
    The Fiscal Year 2006 request also reflects the Department's 
continued commitment to advancing buildings codes and appliance 
standards. Because key analyses and peer reviews for several priority 
appliance rule-makings will be completed in Fiscal Year 2005, funding 
requirements for Fiscal Year 2006 will be reduced in this area.

FEDERAL ENERGY MANAGEMENT PROGRAM

    The Federal Energy Management Program (FEMP) and the Departmental 
Energy Management Program (DEMP) assist federal agencies and the 
Department in increasing their use of energy efficiency and renewable 
energy technologies through alternative financing contract support, 
technical assistance, and funding for retrofit projects. By using 
existing energy efficiency and renewable energy technologies and 
techniques, the Federal Government can set an example and lead the 
Nation toward becoming a cleaner, more efficient energy consumer.
    FEMP's Fiscal Year 2006 request is $19.2 million, a $0.7 million 
reduction from the Fiscal Year 2005 comparable appropriation. We are 
requesting $6.8 million for FEMP technical support that promotes agency 
use of alternative financing tools, which allow federal agencies to 
access private sector financing to fund energy improvements through 
Energy Savings Performance Contracts (ESPC) and Utility Energy Service 
Contracts (UESC) at no net cost to taxpayers. In addition, we are 
requesting $7.7 million for Technical Guidance and Assistance 
activities to help federal energy managers identify, design, and 
implement new construction and facility improvement projects that 
incorporate energy efficiency and renewable energy.

INDUSTRIAL TECHNOLOGIES

    The Industrial Technologies Program seeks to reduce the energy 
intensity of the U.S. industrial sector through a coordinated program 
of R&D, validation, and dissemination of energy-efficiency technologies 
and operating practices. The Department is working to achieve the 
program's goals by partnering with domestic industry, its equipment 
manufacturers, and its many stakeholders.
    The Fiscal Year 2006 Budget Request is $56.5 million, an $18.3 
reduction from the Fiscal Year 2005 comparable appropriation. We 
strongly believe that this level of funding is sufficient because the 
Industrial Technologies Program is becoming more focused and more 
strategic in its investments in next-generation industrial 
technologies. The Program's strategic approach is based on developing a 
focused, multi-year plan that is designed to identify a limited number 
of high-priority, energy-saving research and development opportunities, 
characterize the technical barriers associated with each of those 
opportunities, and implement a multi-year development pathway to 
achieve success in each identified focus area. Many of these R&D 
efforts will be in exploratory phases in Fiscal Year 2006 as the 
program identifies the most promising technology areas and adopts a 
balanced portfolio of high-risk, high-return R&D.

PROGRAM MANAGEMENT AND DIRECTION

    The Program Management (Energy Conservation) and Program Direction 
(Energy Supply) budgets provide resources for executive and technical 
direction and oversight required for the implementation of EERE 
programs. The Budget Request covers federal staff as well as the 
equipment, supplies, materials, information systems, technology 
equipment, and travel required to support management and oversight of 
programs. Also funded by this request are properties; public 
information activities; support service contractors; and crosscutting 
performance evaluation, analysis and planning.
    The Fiscal Year 2006 Budget Requests for Program Management and 
Program Direction total $108.1 million, representing a $4.0 million 
(3.6 percent) decrease from the Fiscal Year 2005 comparable 
appropriations. The decrease primarily reflects completion of the 
National Academy of Science review, the absence of support for prior 
congressionally-directed activities, and the movement of support 
service funding for the Climate Change Technology Program out of this 
request. With these activities excluded, our request actually 
represents an increase of $4.9 million to support our efforts to 
improve project management and to more accurately report our true cost 
of doing business. We also request $2.9 million within Renewable 
Program Support for crosscutting analysis and planning, which was 
formerly funded within individual renewable program budgets.

CONCLUSION

    Madam Chairman, we believe the Administration's Fiscal Year 2006 
Budget for energy efficiency, renewable energy, and hydrogen research, 
development, demonstration and deployment programs will contribute to 
improved energy security by promoting a diverse supply of reliable, 
affordable, and environmentally sound energy, and by promoting the 
efficient use of energy.
    This completes my prepared statement, and I am happy to answer any 
questions the Subcommittee may have.

                   Biography for Douglas L. Faulkner

    Douglas Faulkner was appointed by President George W. Bush on June 
29, 2001, to serve as the political deputy in the Office of Energy 
Efficiency and Renewable Energy (EERE). This $1.2 billion research and 
development organization has over five hundred federal employees in 
Washington, D.C. and six regional offices, supported by thousands of 
contractors at the National Renewable Energy Laboratory and elsewhere.
    Mr. Faulkner oversees all aspects of EERE's operations in a close 
partnership with the Office's two career Deputy Assistant Secretaries. 
He has worked closely with Assistant Secretary David K. Garman to 
reorganize EERE, replacing an outdated and fragmented organization with 
what arguably is the most innovative business model ever used in the 
Federal Government. This has resulted in fewer management layers, fewer 
but more productive staff, streamlined procedures, stronger project 
management in the field and lower operating costs overall. These 
reforms have been recognized as a success by the White House and the 
National Association of Public Administration.
    Mr. Faulkner organized and led an internal management board which 
completely revamped EERE's biomass programs. Many projects were ended 
and those funds pooled for an unprecedented solicitation to refocus R&D 
for new bio-refineries.
    Interviews of Mr. Faulkner about renewable energy and energy 
efficiency have appeared on television and radio and in the print 
media.
    Before assuming his leadership post in EERE, Mr. Faulkner had 
progressed rapidly through the ranks of the civil service at the 
Central Intelligence Agency and the Department of Energy. In his over 
twenty-year career he rose from junior China intelligence analyst to a 
nationally-recognized leader in bio-based products and a senior policy 
advisor to the Secretaries of Energy in both Bush Administrations.
    Born and raised in central Illinois, Principal Deputy Faulkner 
received a Bachelor's degree in Asian Studies from the University of 
Illinois and a Master's degree from the Johns Hopkins University, 
School of Advanced International Studies. He also attended the 
University of Singapore as a Rotary Scholar. At these institutions, he 
studied French and Mandarin Chinese languages. Mr. Faulkner played 
intercollegiate basketball at home and abroad.
    He is involved in his church and community as well as Boy Scouts 
and youth baseball. Mr. Faulkner was appointed in the early 1990s to 
two Arlington County, Virginia, economic commissions.
    Mr. Faulkner lives in Arlington, Virginia, with his wife and son.

    Chairwoman Biggert. Thank you.
    I think we will have time for one more statement.
    Mr. Maddox. Turn on your microphone.

  STATEMENT OF MR. MARK R. MADDOX, PRINCIPAL DEPUTY ASSISTANT 
    SECRETARY FOR FOSSIL ENERGY, THE DEPARTMENT OF ENERGY, 
                         WASHINGTON, DC

    Mr. Maddox. Chairwoman Biggert, Members of the 
Subcommittee, it is a pleasure to join you today.
    You have received my submitted testimony, which presents 
the Office of Fossil Energy's fiscal year 2006 request in 
detail.
    I thought it would be useful this morning to survey briefly 
Fossil Energy's programs in order to provide you with a sense 
of what we have accomplished, what we are working on now, and 
what we expect to accomplish in the future.
    Coal is the Nation's most abundant energy resource, with 
domestic reserves exceeding the energy potential of the world's 
total oil reserves. About 90 percent of all coal produced in 
the United States is used for electricity generation, and over 
half of our nation's electricity is produced by coal-fired 
plants.
    Since 1970, the United States has reduced sulfur dioxide 
emissions from coal by 40 percent, nitrogen oxide emissions by 
more than 20 percent, and particulate emissions by 60 percent 
while tripling coal consumption. Building on this foundation, 
the Clean Coal program's overall goal is to continue to reduce 
polluting emissions, including mercury and greenhouse gas, to 
near zero by the year 2020. We expect to do this by developing 
technologies that increase efficiencies and, therefore, emit 
fewer pollutants, and by developing technologies that capture 
pollutants.
    Let me highlight a few of the programs that will help us 
reach our goals and fulfill President Bush's 10-year, $2-
billion commitment to clean coal research.
    First, the Innovation for Existing Plants Program, which is 
designed to produce dramatic short-term reductions in emissions 
of nitrogen oxide, sulfur dioxide, particulate matter, mercury, 
and byproducts of combustion from existing plants. The 1970's 
federal research projects helped improve the ability of early 
scrubbers to remove sulfur from exhaust gases. The Energy 
Department's Clean Coal Technology program in the 1980s 
demonstrated lower costs and more effective scrubber 
technologies. To meet the more stringent and oxide standards in 
the 1990 Clean Air Act amendments, many power plants turned to 
new, low-nitrogen oxide burners pioneered by the Energy 
Department's Clean Coal Technology program.
    The Innovations for Existing Plants Program is today 
completing tests of technologies that can reduce mercury by 50 
to 70 percent, nitrogen oxide to less than 0.15 pounds per 
million BTUs at three-fourths the cost of selected catalytic 
reduction, particulate matter by 99.99 percent, and acid gases 
by 95 percent. By 2010, the program expects to test 
technologies for advanced cooling, 90 percent mercury reduction 
and a 66 percent increase in byproducts use.

         LThe proven Integrated Gasification Combined 
        Cycle, or IGCC, technology is designed to deliver 
        significant increases in operating efficiency and 
        reductions in emissions when compared to conventional 
        coal-based plants. Our strategy is to make IGCC 
        technology more efficient and flexible, cleaner, and 
        cheaper.

         LThe Clean Coal Power Initiative, or CCPI, is 
        devoted to the rapid demonstration of emerging 
        technologies in coal-based power generation and the 
        acceleration of commercialization. To date, CCPI 
        projects include an array of new, cleaner, and cheaper 
        concepts for reducing sulfur dioxide, nitrogen oxides, 
        and mercury, as well as two next-generation IGCC 
        projects. CCPI also includes the power plant of the 
        future, FutureGen.

         LCarbon sequestration, the capture and 
        permanent storage of carbon dioxide, has emerged as an 
        extremely promising technology. The program includes 
        regional partnerships throughout the United States and 
        parts of Canada to identify best locations and 
        appropriate technologies.

         LThe Fuels program includes production of 
        Hydrogen from Coal. Hydrogen's energy potential has 
        become more apparent, not just for transportation, but 
        as a clean fuel for advanced power technologies, such 
        as fuel cells for stationary power generation.

         LThe Fuel Cell R&D program has been refined to 
        focus on the successful and highly promising work of 
        the Solid State Energy Conversion Alliance, known as 
        SECA. Fuel cell technology for stationary electricity 
        generation offers ultra-low, high operating efficiency 
        and near zero polluting and greenhouse gas emissions.

         LThe mission of the Natural Gas Technology 
        program has been to develop policies and new 
        technologies that stimulate a diverse supply of natural 
        gas, both in North America and around the world. The 
        Oil Technology program's mission has been to implement 
        a policy and research and development program to 
        resolve the environmental supply and reliability 
        constraints of producing oil resources.

    Budget discipline necessitated and close scrutiny of our 
oil and natural gas technology programs using strict guidelines 
to determine their effectiveness and compare them to other 
programs offering more clearly demonstrated and substantial 
benefits. As a result, the budget proposes to conduct the 
orderly termination of the Oil and Gas Technology program in 
Fiscal Year 2006, with prior year funds used to support ongoing 
projects.
    Finally, the Strategic Petroleum Reserve, an energy 
security mainstay of the Nation, continues to operate smoothly 
as we work toward filling the reserve to 700 million barrels 
this year.
    Chairman Biggert and Members of the Subcommittee, I look 
forward to your questions.
    [The prepared statement of Mr. Maddox follows:]

                  Prepared Statement of Mark R. Maddox

    Chairman Biggert, Members of the Committee, it is a pleasure to 
join you today to present the Office of Fossil Energy's FY 2006 budget 
submission. The Department appreciates the support of the Chairman and 
the Members of the Committee over the past years and looks forward to 
working with you on budget issues related to the Fossil Energy Program.
    Before I discuss the Fossil Energy budget in detail, I would like 
to say that in his February 2, 2005 State of the Union Address, the 
President underscored the need to restrain spending in order to sustain 
our economic prosperity. As part of this restraint, it is important 
that total discretionary and non-security spending be held to levels 
proposed in the FY 2006 President's Budget.
    The budget savings and reforms in the Budget are important 
components of achieving the President's goal of cutting the budget 
deficit in half by 2009 and we urge the Congress to support these 
reforms. The FY 2006 President's Budget includes more than 150 
reductions, reforms, and terminations in non-defense discretionary 
programs, of which two program terminations are reflected in the 
Department's Fossil Energy budget. Those program terminations are for 
the Natural Gas and Oil Technology programs. The Department wants to 
work with the Congress to achieve these savings.

The Office of Fossil Energy

    At the core of the Department's mission are two fundamental 
objectives: to ensure America's readiness to respond to short-term 
energy supply disruptions and to provide the Nation with the best 
opportunity to tap the full potential of its abundant fossil fuel 
resources.
    As the Nation strives to reduce its reliance on imported energy 
sources, DOE is leading the way by seeking new energy technologies and 
methodologies that promote the efficient and environmentally sound use 
of fossil fuels.
    The United States relies on fossil fuels for about 85 percent of 
the energy it consumes and forecasts indicate U.S. reliance on these 
fuels could exceed 87 percent by 2025.
    Accordingly, a key goal of DOE's fossil energy activities is to 
ensure that economic benefits from fossil fuels are compatible with the 
public's expectation for exceptional environmental quality and reduced 
energy security risks. This includes promoting the development of 
energy systems and practices that will provide current and future 
generations with energy that is clean, efficient, reasonably priced, 
and reliable.
    The Department's programs focus on supporting the President's top 
initiatives for energy security, clean air, climate change, and coal 
research. FY 2006 DOE programs:

          Support the development of lower cost, more effective 
        pollution control technologies embodied in the President's Coal 
        Research Initiative to meet the goals of the President's Clear 
        Skies Initiative;

          Expand the Nation's technological options for 
        reducing greenhouse gases either by increasing power plant 
        efficiencies or by capturing and isolating these gases from the 
        atmosphere; and

          Measurably add to our energy security by providing a 
        series of solutions to the Nation's energy challenges, 
        beginning with the short-term emergency response provided by 
        such programs as the Strategic Petroleum Reserve. Long-term 
        responses to the energy security challenge include the 
        production of hydrogen from coal to support and hasten 
        development of the ``hydrogen energy economy.''

The President's Coal Research Initiative

    Coal is our nation's most abundant energy resource, with domestic 
reserves almost equal to the energy potential of the world's total oil 
reserves. About 90 percent of all coal produced in the United States is 
used for electricity generation, and over half of our nation's 
electricity is produced by coal-fired power plants.
    Meeting rising demand for clean, reliable and affordable 
electricity will require the use of coal for the foreseeable future, 
which in turn will require the development of new, environmentally 
sound technologies for coal-based electricity generation.
    The FY 2006 budget supports the Department's continuing effort to 
fulfill President Bush's 10-year, $2 billion commitment to clean coal 
research, beginning with funding for the President's Coal Research 
Initiative (CRI) of $286 million, a $13 million increase over the 2005 
enacted level.
    In addition to increasing funding for CRI, the distribution of 
funds to various research and development components of the program has 
been modified to achieve the maximum program benefit in a disciplined 
budget environment through improved alignment with the Research and 
Development Investment Criteria.

Clean Coal Power Initiative and FutureGen

    Within the President's Coal Research Initiative, the Clean Coal 
Power Initiative (CCPI) is a key component of the National Energy 
Policy to address the reliability and affordability of the Nation's 
electricity supply, particularly from its coal-based generation. The FY 
2006 budget request includes $68 million for CCPI, $50 million of which 
is for demonstration projects, and $18 million for FutureGen, the 
world's first near-zero emissions coal-fueled power plant.
    The $50 million allocated for the cooperative, cost-shared CCPI 
program between government and industry will be devoted to continuing 
the rapid demonstration of emerging technologies in coal-based power 
generation, which should accelerate commercialization by the private 
sector. Under CCPI, the Nation's power generators, equipment 
manufacturers, and coal producers help identify the most critical 
barriers to coal's use in the power sector. Technologies are selected 
with the goal of accelerating development and enhancing the potential 
for deployment of coal technologies that will economically meet 
environmental standards, while increasing the efficiency and 
reliability of coal power plants.
    There are currently 10 active CCPI projects, six from the first 
competition, announced in January 2003, and four from the second, 
announced in October 2004. The projects have a total value of $2.7 
billion, $550 million of which is the Department of Energy's cost 
share. The projects include 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.
    In FY 2006, the Department will begin developing a solicitation for 
a third round of projects.
    The FutureGen program for FY 2006, backed up by a request for $257 
million to become available in FY 2007 that corresponds to unexpended 
funds available from prior years' clean coal projects, will establish 
the capability and feasibility of co-producing electricity and hydrogen 
from coal with essentially zero emissions, including carbon 
sequestration and gasification combined cycle, both integral components 
of the coal-fueled power plant of the future. FutureGen is important to 
demonstrating the future of coal use to meet the Nation's energy 
security and environmental challenges.
    The FY 2006 Budget Request also includes $283 million for research 
and development programs in the President's Coal Research Initiative 
and Distributed Generation Systems, with an emphasis on advanced 
technologies that support the FutureGen vision of coal-fueled 
generation of electricity and hydrogen with essentially zero emissions. 
The programs will focus on all the key technologies for FutureGen: 
carbon sequestration, membrane technologies for oxygen and hydrogen 
separation, advanced turbines, fuel cells, coal to hydrogen conversion, 
gasifier related technologies, and other technologies.

Carbon Management

    Several Clean Coal projects help to increase the available options 
for meeting the President's climate change goal of an 18 percent 
reduction in greenhouse gas intensity (carbon equivalent per GDP) by 
2012, primarily by boosting the efficiencies of power plants--the less 
fuel used to generate electricity, the lower the emissions of 
greenhouse gases.
    Carbon management has become an increasingly important element of 
our coal research program. Carbon sequestration--the capture and 
permanent storage of carbon dioxide--has emerged as one of the highest 
priorities in the Fossil Energy research program--a priority reflected 
in the proposed budget of $67.2 million in FY 2006, a nearly 50 percent 
increase over FY 2005's $45 million allocation.
    One of the cornerstones of our carbon sequestration program, a 
national network of regional partnerships, will continue its important 
work in FY 2006. This Secretarial initiative has brought together the 
Federal Government, state agencies, universities, and private industry 
to determine which options for capturing and storing greenhouse gases 
are most practicable for specific areas of the country.
    In addition, the international, Ministerial-level Carbon 
Sequestration Leadership Forum will continue to execute its mission of 
gathering data, exchanging information and participating in joint 
projects to advance carbon sequestration technology.

Hydrogen

    Another aspect of the President's Coal Research Initiative is the 
production of hydrogen from coal. Hydrogen production research is 
important because hydrogen can serve as a clean fuel for tomorrow's 
advanced power technologies such as fuel cells for distributed 
generation, and for future transportation systems. Within the Fossil 
Energy program, we are requesting $22 million in FY 2006 for hydrogen-
from-coal research, a 27 percent increase over the FY 2005 
appropriation of $17 million.

Innovations for Existing Plants

    While DOE continues its aggressive Research, Development and 
Demonstration projects for technologies of the future, it is also 
supporting the President's Clear Skies Initiative with short-term 
advanced for current technology. Innovations for Existing Plants is an 
important program that aims to achieve dramatic reductions in emissions 
of mercury, nitrogen oxide, particulate matter and byproducts of 
combustion from existing coal plants. We are requesting $24 million in 
FY 2006, a 25 percent boost over the FY 2005 appropriated level of $19 
million.

Gasification Technology (Integrated Gasification Combined Cycle)

    Advances to the leading edge integrated gasification combined cycle 
(IGCC) technology, which delivers significant increases in operating 
efficiency and reductions in emissions when compared to conventional 
coal-fired power plants, will intensify in FY 2006 with R&D projects 
aimed at reducing capital costs and technical risk, increasing plant 
efficiency and availability, and achieving essentially zero emissions. 
We are requesting $56 million for Gasification Technology in FY 2006 to 
improve and test gasification designs, materials, instrumentation and 
processes. This represents a 23 percent increase over the FY 2005 
appropriation of $46 million.

Fuel Cells

    Perhaps better known to the public for its potential to power 
automobiles, fuel cell technology also presents enormous potential to 
significantly improve environmental performance and energy security as 
a source of electrical power in stationary plants at or near the end 
user. Fuel cells are highly adaptable; they can be sued as a stand-
alone power source, integrated with other generators, or connected to a 
central power grid.
    Fuel cells can reduce criteria pollutants well below New Source 
Performance Standard levels, as well as thermal and acid rain precursor 
emissions. They offer important carbon management advantages because of 
their inherently low emissions and ultra-high operating efficiency.
    In distributed generation systems, fuel cells can help meet peak 
demand requirements cost-effectively, and IGCC and FutureGen systems 
with fuel cell modules have the potential to significantly increase the 
efficiency of coal-based systems and achieve near-zero emissions.
    Finally, fuel cells will be a vital element in the hydrogen economy 
of the future, using hydrogen from coal to both generate electric power 
and support the hydrogen fuel cell-powered automotive fleet envisioned 
in President Bush's FreedomCAR and Hydrogen Fuel initiatives.
    Faced with these potential benefits the Department has refined its 
ongoing Fuel Cell Research and Development program to focus on the 
successful and highly promising work of the Solid State Energy 
Conversion Alliance (SECA). To better align the program with the R&D 
Investment Criteria, all fuel cell funding for FY 2006 has been 
redirected to SECA from previous, less promising or completed R&D 
projects that ran in parallel with the SECA program.
    This decision provides a two-fold budgeting benefit: the overall 
cost of the fuel cell program would be reduced by $10 million, to $65 
million in FY 2006, while funding for the most promising research 
avenue, SECA, increases by nearly $12 million, or 20 percent, over the 
FY 2005 appropriation of $54 million.
    In a disciplined bud get environment, DOE has fashioned a Clean 
Coal program that answers the short-, mid- and long-term energy and 
environmental challenges of the Nation by effectively allocating 
resources to balance work on today's demonstration projects with 
research and development into tomorrow's technologies and, ultimately 
of FutureGen, the power plant of the future.

Oil and Natural Gas Technology

    The FY 2006 budget request includes $20 million for the cost of 
orderly termination of the Oil and Gas technology programs, with prior-
year funds to be used for the purposes appropriated. The decision to 
terminate these programs reflects a strategic assessment of the 
programs' technical effectiveness compared to other fossil energy 
programs that are more efficient and technically viable. This is in 
line with our commitment to deliver results for the American taxpayer. 
The focus in FY 2006 will be to conduct the orderly termination of 
these programs and I look forward to achieving this efficiency for the 
taxpayers. Funding requested in the FY 2006 budget will be used to 
fulfill legal obligations incurred in the termination process.

Other Fossil Energy Research and Development Activities

    The budget request also includes $120 million for other activities 
in the Fossil Energy Research and Development program, including $99 
million for headquarters and field office program direction and 
management support; $8 million for environmental restoration; $3 
million for federal matching funds for cooperative research and 
development projects; $1.8 million for natural gas import/export 
responsibilities; and $8 million for advanced metallurgical research at 
the Albany Research Center.

Strategic Petroleum Reserve (SPR)

    The President has directed that the Strategic Petroleum Reserve 
(SPR) be filled to 700 million barrels. The mechanism for doing this is 
a cooperative effort with the Minerals Management Service to transfer 
to SPR exchange royalty oil from federal leases in the Gulf of Mexico. 
Current projections are that SPR will reach its 700 million barrel 
target in mid-2005.
    The FY 2006 budget request for SPR facilities development and 
management is $166 million, approximately equal to the FY 2005 budget 
appropriation. The SPR does not require additional funds in the oil 
acquisition account for transporting ``royalty-in-kind'' oil to the 
SPR, since these charges are the responsibility of the oil supplier. 
Also, SPR has the authority to ``borrow'' funds from other Departmental 
accounts to support an emergency SPR drawdown.

Northeast Home Heating Oil Reserve

    FY 2006 activities for the Heating Oil Reserve will be funded with 
carryover from prior years. The two million barrel reserve remains 
ready to respond to a Presidential Order should there be a severe fuel 
oil supply disruption in the Northeast.

Naval Petroleum and Oil Shale Reserves

    The FY 2006 Budget Request of $18.5 million funds environmental 
remediation, cultural resource, and equity determination activities 
required as a result of the Naval Petroleum Reserve No. 1 sales 
agreement. Also included is continued operation of the Rocky Mountain 
Oilfield Testing Center (RMOTC), the Naval Petroleum Reserve No. 3 in 
Wyoming, and lease management activities at Naval Petroleum Reserve No. 
2.

Elk Hills School Lands Fund

    The National Defense Authorization Act for FY 1996 required, 
subject to appropriation, DOE to pay nine percent of the net proceeds 
of the Elk Hills sale to the Teachers Retirement Fund of the State of 
California with respect to its longstanding claims to two parcels of 
land (``school lands'') within NPR-1. The $84 million budget for Elk 
Hills in FY 2006 reflects the advance appropriation of $36 million 
included in the FY 2005 Interior Appropriations Act and additional 
funds for a seventh payment. In light of the delays in equity 
finalization, discussions are ongoing.

Closing

    Fossil Energy's programs are structured to promote the cost-
effective development of energy systems and practices that will provide 
current and future generations with energy that is clean, efficient, 
reasonably priced, and reliable. Our focus is on supporting the 
President's top initiatives for energy security, clean air, climate 
change, and coal research. By reevaluating, refining and refocusing our 
programs and funding the most cost-effective and beneficial projects, 
the FY 2006 budget submission meets the Nation's critical needs for 
energy, environmental and national security.
    Chairman Biggert, and Members of the Committee, this completes my 
prepared statement. I would be happy to answer any questions you may 
have at this time.

                      Biography for Mark R. Maddox

    Mark Maddox currently serves as the Principal Deputy Assistant 
Secretary in the Office of Fossil Energy. In this position, Mr. Maddox 
is involved in several high-priority Presidential initiatives including 
implementation of the Administration's $2-billion, 10-year initiative 
to develop a new generation of environmentally sound clean coal 
technologies, the $1-billion FutureGen project to develop a pollution-
free plant to co-produce electricity and hydrogen, and the Nation's 
Strategic Petroleum Reserve and Northeast Home Heating Oil Reserve, 
both key emergency response tools available to the President to protect 
Americans from energy supply disruptions.
    Prior to taking his position in Fossil Energy in September 2003, 
Mr. Maddox served as a Senior Policy Advisor to the Secretary of Energy 
Spencer Abraham, where he was responsible for advising on fossil energy 
and environmental management program issues, as well as on 
communications strategy. He continues to serve as the government co-
chair for the National Petroleum Council's Gas Study Group's Demand 
Task Force and its Transportation and Distribution Task Force.
    During 1989-1993, Mr. Maddox was Deputy Director of Public Affairs 
at Department of Energy, where he helped design and implement the 
strategic communication plan for the Persian Gulf War, directed the 
Department's crisis communications planning, and supervised the public 
affairs activities of its field sites.
    Prior to returning to public service in 2002, Mr. Maddox was 
Director of Communications and public affairs for the IMS division of 
Lockheed Martin, Inc., now Affiliated Computer Services State and Local 
Solutions, Inc. In these roles, he participated in developing the 
division's political and legislative strategies, served as spokesman, 
and developed the division's communications strategies. Before joining 
Lockheed Martin, Mr. Maddox was Vice President for a mid-size 
Washington, D.C., public relations firm where he represented clients on 
a variety of issues.
    He has served as the Chief of Staff to a Member of the U.S. House 
Commerce Committee, where he was active on telecommunications, 
electricity deregulation and other issues under Committee jurisdiction. 
He has also worked as a Press Secretary in Congress and local 
government.
    Mr. Maddox holds an MBA from George Washington University and a 
Bachelor of Science in Journalism from Bowling Green State University 
in Ohio. An Ohio native, he resides in Alexandria, VA, with his wife 
and two children.

    Chairwoman Biggert. Thank you very much.
    There are six minutes left in this vote. I think that we 
will recess at this time and probably come back about 11:05 or 
after or so. You have time to get a cup of coffee and relax for 
a few minutes, and we will come back then.
    Thank you very much.
    The Committee stands in recess.
    [Recess.]
    Chairwoman Biggert. The Committee will be in order, and we 
will move on to our next witness.
    Mr. Johnson, you are recognized for five minutes.

  STATEMENT OF MR. ROBERT SHANE JOHNSON, DEPUTY DIRECTOR FOR 
    TECHNOLOGY, THE OFFICE OF NUCLEAR ENERGY, SCIENCE, AND 
      TECHNOLOGY, THE DEPARTMENT OF ENERGY, WASHINGTON, DC

    Mr. Johnson. Chairman Biggert, Members of the Subcommittee, 
it is a pleasure to be here to discuss the Fiscal Year 2006 
budget submission for the Department's Office of Nuclear 
Energy, Science, and Technology.
    Our request details proposed programs totaling $511 million 
to continue our efforts to develop and deploy advanced nuclear 
energy technologies in this country.
    I have submitted a written statement for the record, but 
would like to provide a few summary remarks.
    In Fiscal Year 1998, the Nation's Nuclear Energy Research 
program had come to a virtual standstill. In that year, federal 
funding for Nuclear Energy R&D fell essentially to zero. It was 
also a year when the number of students entering the nuclear 
engineering discipline in this country plummeted from around 
1,500 only five years earlier to an all-time low of about 500. 
It was a year when the international community began to turn 
away from the United States as a source of leadership in 
nuclear technology development.
    Since that time, the Chair and Members of this subcommittee 
have invested considerable personal effort to shepherd a 
revival of the Federal Nuclear Energy Research program. 
Similarly, we at the Department have worked hard to refocus and 
re-invent our efforts to create a better, stronger program.
    I am pleased to report that these efforts are proving to be 
successful. Nuclear engineering education is resurgent in the 
United States with nearly 1,600 students now studying in the 
schools across our country. The number of students studying 
nuclear science has such an increase; strong programs at 
universities, such as Ohio State, Purdue, and Texas A&M 
continue to grow; and we see new programs being established in 
schools, such as South Carolina State University and the 
University of Nevada, Las Vegas.
    The Department's programs, aimed at enhancing nuclear 
education in the United States, continue to support this 
progress in our 2006 budget request. We have reasserted U.S. 
leadership in the international community. In February of this 
year, Secretary Bodman joined the ambassadors and senior 
officials from France, the United Kingdom, Japan, and Canada in 
signing the world's first, multi-lateral agreement for the 
development of next-generation nuclear energy technologies. As 
this Generation IV agreement and other actions demonstrate, the 
United States is once again setting the pace for international 
cooperation and partnership.
    The Generation IV technologies emerging from this work will 
not only be safe, economic, and secure, but will also include 
energy conversion systems that produce valuable commodities, 
such as hydrogen, fresh water, and process heat. These features 
make the Generation IV reactors ideal for meeting the 
President's energy and environmental objectives.
    At the same time, our partners in industry have worked hard 
to improve the picture on their side. When it appeared that 
nuclear power's era had ended in the United States, nuclear 
utilities turned their operations around, focusing on 
management excellence and safety, making more nuclear-generated 
electricity than at any time in history. Through improvements 
in operation, U.S. utilities have added the equivalent of 25 
new nuclear plants to the U.S. grid since 1990 without building 
any new plants. U.S. utilities are working with us and others 
to explore the construction of new U.S. nuclear plants for the 
first time in decades.
    Madame Chairman, I have no doubt that our work under the 
Nuclear Power 2010 program has contributed to these positive 
developments. Through this effort, we have helped to organize 
industry to take the next vital steps toward the next U.S. 
nuclear power plant.
    Finally, Madame Chairman, I would like to note that in 
February, we also successfully launched the new Idaho National 
Laboratory. The development of this new laboratory is an 
essential step in furthering our nuclear energy research 
agenda. We now, like the other DOE programs represented here 
today, have a core laboratory that can serve as our command 
center for our program's key research efforts. This new lab, 
working closely with other key National Laboratories, industry, 
academia, and the international community, will help us to 
implement an exciting, world-changing agenda aimed at 
delivering new energy technologies that will foster economic 
growth and a healthier environment for generations to come.
    I conclude my remarks, Madame Chairman, by thanking you for 
your leadership and partnership with us in this endeavor.
    Thank you. I look forward to your questions.
    [The prepared statement of Mr. Johnson follows:]

               Prepared Statement of Robert Shane Johnson

    Chairman Biggert, Representative Honda, and Members of the 
Subcommittee, it is a pleasure to be here to discuss the Fiscal Year 
(FY) 2006 budget submission for DOE's Office of Nuclear Energy, Science 
and Technology.
    In his February 2nd State of the Union Address, the President 
underscored the need to restrain spending in order to sustain our 
economic prosperity. As part of this restraint, it is important that 
total discretionary and non-security spending be held to levels 
proposed in the FY 2006 Budget. The budget savings and reforms in the 
Budget are important components of achieving the President's goal of 
cutting the budget deficit in half by 2009 and we urge the Congress to 
support these reforms. The FY 2006 Budget includes more than 150 
reductions, reforms, and terminations in non-defense discretionary 
programs, of which six affect Department of Energy programs. The 
Department wants to work with the Congress to achieve these savings.
    Of these six programs, two programs are from the Office of Nuclear 
Energy, Science and Technology: the Nuclear Energy Plant Optimization 
(NEPO) and the Nuclear Energy Research Initiative (NERI) programs. 
Research conducted under the NEPO program is designed to assure the 
ability of currently operating nuclear power plants to remain in 
service up to and beyond their licensed operating period. No funding is 
requested for the NEPO program in FY 2006 because industry is committed 
to continuing the research begun under NEPO without DOE support, 
allowing DOE to focus on higher priority activities. No stand-alone 
funding is requested for the NERI program as the Department's principal 
nuclear energy research and development (R&D) programs (Generation IV 
Nuclear Energy Systems Initiative, Advanced Fuel Cycle Initiative, and 
Nuclear Hydrogen Initiative) will be sponsoring NERI research projects 
within the Nation's university research community to enhance the 
research cooperation between academia and our national laboratories and 
to strengthen our mainline R&D programs.
    For most of our nation's history, America's vibrant economy and 
society have benefited from the abundant energy options we have had 
available. Even though we experienced oil price shocks in the 1970s and 
1980s, the vast majority of the energy used in the United States is, 
even today, produced in the United States. Our coal, oil, natural gas, 
nuclear, and renewable resources all contribute to a diversified and 
reliable energy picture.
    However, we are entering a new era in energy supply. As highlighted 
in the President's National Energy Policy, forecasts indicate that our 
need for energy--even with ambitious implementation of energy 
efficiency measures across all sectors of the economy--will continue to 
grow as our economy grows. The Energy Information Administration 
forecasts that by 2025, the United States will import 38 percent of all 
of its energy and 68 percent of its energy for transportation uses. 
Buried in these estimates is an ominous fact that has escaped casual 
notice--the U.S. will, over this period, begin a steadily increasing 
dependence on imports for fuels needed for electricity generation that 
may, over the coming decades, follow the patterns of our accelerating 
dependence on imports required for the transportation sector.
    To meet these challenges while still assuring America's access to 
reliable baseload electricity--while setting a path toward reduced 
emissions--we must apply advanced technologies. New technology can help 
us to exploit renewable energy sources when they are practical, and 
enable coal to continue as a viable, long-term element of our energy 
supply. And as the President conveyed in his State of the Union 
address, we must consider new nuclear energy as part of our long-term 
energy picture.
    The Department of Energy's nuclear energy program has made 
significant progress over the past several years. From the time, not so 
many years ago, when it appeared that the United States might abandon 
advanced nuclear research and development, we have been successful in 
reasserting U.S. leadership in this area around the world. Representing 
the United States, I have been elected by my international colleagues 
to serve as the chair of two important international bodies--the 
Organization of Economic Cooperation and Development Steering Committee 
on Nuclear Energy and the Generation IV International Forum.
    We continue to build on our leadership. Just a few weeks ago, we 
celebrated the launch of the Nation's central laboratory for nuclear 
research and development--the Idaho National Laboratory (INL). This new 
national laboratory combines the resources of the former Idaho National 
Engineering and Environmental Laboratory (INEEL) and the former Argonne 
National Laboratory-West (ANL-W). The INL will lead much of the 
Department's exploration into advanced nuclear reactor and fuel cycle 
technology. We have set an aggressive goal for the new INL to become 
the world's premier center for nuclear energy research and education 
within a decade.
    Developing a central research laboratory is a major step forward 
for the nuclear energy program. We, like other key energy programs at 
the Department, have created a central, dedicated research site at 
which we can consolidate our infrastructure investments and build the 
expertise needed to accomplish our long-term program goals. A central 
lab also helps us minimize the shipment of nuclear materials across the 
country and allows us to bring our nuclear materials together in a 
single, secure location. In addition, we expect that our new central, 
dedicated research laboratory will become a major player in the 
education of the next generation of nuclear energy technologists that 
this nation will need to assure our energy security in the future.
    The Department's FY 2006 request for the nuclear energy program 
proposes a $511 million (an increase of $25 million compared to FY 
2005) investment in nuclear research, development, education and 
infrastructure for the Nation's future that is designed to continue 
this progress. This budget request demonstrates our commitment to 
support the President's priorities of enhancing the Nation's energy 
independence and security while limiting air pollution. Our request 
supports the development of new nuclear generation technologies and 
advanced energy products that will provide significant improvements in 
the economics, sustainability, safety and reliability of nuclear-based 
energy, as well as its resistance to proliferation and terrorism.
    We are committed to efficiently managing the funds we are provided. 
We have abandoned outdated field office and laboratory management 
paradigms and have integrated the Idaho Operations Office with our 
headquarters organization, enabling us to closely manage our 
responsibilities in the field to achieve greater quality and 
efficiency. We are enhancing our expertise in critical areas such as 
project management through training and certification of existing staff 
and the acquisition of experienced, proven managers. We are also 
applying international and public-private partnerships in the 
implementation of our research and development programs as a way of 
leveraging our investments and assuring the utility of our programs. We 
believe these steps must be taken to assure our program's ability to 
make the best use of the taxpayer dollars.
    While we have made great progress in all these areas, much remains 
to be done. Our FY 2006 request moves us in the right direction.

FISCAL YEAR 2006 BUDGET REQUEST

NUCLEAR POWER 2010

    Today, American utilities operate 103 nuclear power plants. These 
facilities operate reliably and efficiently and provide a fifth of the 
Nation's electricity. These plants are emissions-free and can operate 
year-round in all weather conditions.
    Over the last 15 years, nuclear utilities in the United States have 
been increasingly better managed, improving both efficiency and safety. 
In the early 1990s, U.S. plants were available to produce energy only 
70 percent of the time on average. These plants are now producing power 
over 90 percent of the time. More efficient operation has allowed 
nuclear plant operators to produce more energy than ever before, adding 
the equivalent of 25 new nuclear plants to the U.S. grid since 1990 
without building any new nuclear power plants.
    Consolidation of nuclear plant ownership to a fewer number of 
excellent operators has made the operation of U.S. plants safer than 
ever, more cost-effective, and more reliable. Companies acquiring 
nuclear plants are the leaders in the nuclear industry with high marks 
in operating performance. These utilities bring newly acquired plants 
the benefit of economies of scale, experienced staff, well-honed 
management processes. As a result of this success, essentially all U.S. 
nuclear plants are expected to apply for renewed licenses that will 
keep most plants in operation into the middle of the century. There 
will also be some new generation, with The Tennessee Valley Authority 
rebuilding a plant that ceased operating in 1985. TVA expects to invest 
$1.8 billion to bring a 1,065-megawatt plant on-line by 2007.
    With renewed interest from industry, the Department is investing in 
the Nuclear Power 2010 Program. This program's basic missions are to 
cost-share with industry demonstration of new, untested Nuclear 
Regulatory Commission licensing processes, finding sites on which to 
build new plants, and certifying state-of-the-art (or ``Generation 
III+'') designs for new nuclear power plants. The program also conducts 
economic studies and analysis that help point to the barriers facing 
the construction of new plants.
    While it is too early to determine success, this program appears to 
be on the right track. Three utilities are cooperating with the 
Department to obtain ``Early Site Permits'' for three sites across the 
country--the first time this important regulatory tool has ever been 
used. The Nuclear Regulatory Commission is currently reviewing the 
utilities' applications and is expected to issue these permits during 
FY 2006. Once done, these utilities will have sites that are pre-
approved by regulators to host new plants. This process will avoid the 
problems in siting that vastly escalated the cost of some plants in the 
1980s and led to the abandonment of others (most notably the Shoreham 
plant in New York).
    In November 2004, the Nuclear Power 2010 program took its next 
major step by awarding two major projects to utility-led consortia to 
implement plans that could lead to the construction and operation of 
new U.S. nuclear plants. Central to this effort, these projects will 
demonstrate--again, for the first time--the Nuclear Regulatory 
Commission's combined Construction/Operating License (or ``one-step'' 
license) process. These projects could result in a new nuclear power 
plant order by 2009 and a new nuclear power plant constructed by the 
private sector and in operation by 2014.
    In addition to regulatory barriers, it is also important to deal 
with the financial barriers facing new nuclear power plant projects. 
Under the Nuclear Power 2010 program, DOE sponsored an independent 
study by the University of Chicago's Department of Economics. This 
study found that the first few nuclear power plants built in the United 
States would be too costly for utilities to build because of early 
plant costs. These high initial costs arise because the United States 
has not built nuclear plants in a very long time--the resulting new 
design, construction, licensing, and financial uncertainties are 
reflected as higher costs. However, the study found that once these 
early plant costs are absorbed, new nuclear power plants may be less 
expensive to build and operate than either coal-based power plants or 
natural gas-fired plants.
    The need to deal with these early plant costs is expected to become 
a central issue for the industry as the Nuclear Power 2010 program 
addresses the institutional barriers. Without the construction of new 
plants, the contribution of nuclear power as a percentage of the 
Nation's total energy mix will steadily decline. Supporting nuclear 
power helps to maintain a more diversified energy supply and, because 
it is emissions-free, will not contribute to air pollution--nuclear 
power today comprises almost 75 percent of all the non-emitting power 
generation in the country. The President's Budget supports continuation 
of the Nuclear Power 2010 initiative in FY 2006 with a request of $56 
million (an increase of $6.4 million compared to FY 2005).

FISCAL YEAR 2006 BUDGET REQUEST

GENERATION IV NUCLEAR ENERGY SYSTEMS INITIATIVE

    Our Generation IV effort continues to make significant progress. 
Since the Generation IV International Forum (GIF) and the Nuclear 
Energy Research Advisory Committee (NERAC) issued their joint report, A 
Technology Roadmap for Generation IV Nuclear Energy Systems, the 
members of the Forum have expanded to include Switzerland and the 
European Union. The now eleven members (Argentina, Brazil, Canada, the 
European Union, France, Japan, the Republic of Korea, the Republic of 
South Africa, Switzerland, the United Kingdom and the United States) 
have organized into interest groups associated with each of the six 
selected Generation IV.
    A landmark international framework agreement for collaborative 
research and development among the GIF member countries was signed in 
Washington, D.C., by the United States and its GIF partners on February 
28, 2005. The Framework Agreement for International Collaboration on 
Research and Development of Generation IV Nuclear Energy Systems, which 
has been under negotiation for the past year, will allow the United 
States and its partner countries to embark on joint, cost-shared 
research and development of Generation IV nuclear energy systems. These 
next-generation nuclear technologies offer the potential for 
significant improvements in sustainability, proliferation resistance, 
physical protection, safety and economics. The agreement will further 
the development of advanced technologies that are widely acceptable; 
enable the Department to access the best expertise in the world to 
develop complex new technologies; and allow us to leverage our scarce 
nuclear R&D resources.
    With this agreement in place, we are moving forward with these 
countries to develop advanced reactor technologies that could be made 
available in the 2020 to 2030 timeframe. Generation IV concepts offer 
significant improvements in the sustainability, proliferation 
resistance, physical protection, safety and economics of nuclear 
energy. These advanced systems will not only be safe, economic and 
secure, but will also include energy conversion systems that produce 
non-electricity products such as hydrogen, desalinated water and 
process heat. These features make Generation IV reactors ideal for 
meeting the President's energy and environmental objectives.
    We will explore a range of Generation IV concepts, including the 
Supercritical Water-Cooled Reactor, the Gas-Cooled Fast Reactor and the 
Lead-Cooled Fast Reactor. Our efforts will focus on establishing 
technical and economic viability, and developing core and fuel designs, 
and advanced materials for these concepts. We request $45 million (an 
increase of $5.3 million compared to FY 2005) support our investigation 
of technical and economic challenges and risks, including waste 
products, to inform a decision on whether to proceed with a 
demonstration of the Next Generation Nuclear Plant (NGNP), which would 
use very high temperature reactor technologies to economically produce 
both electricity and hydrogen gas. The President's Budget supports 
advanced research into the systems, materials, and fuels that are 
needed to bring Generation IV concepts to fruition. Key to the strategy 
for conducting all Generation IV research and development is the 
multiplication effect derived from international collaboration. By 
coordinating U.S. efforts with those of the GIF partner nations, our 
funding is leveraged by a factor of two to ten, depending on the 
reactor concept involved.
    We are also working in close cooperation with the Department's 
Office of Science through the ``Materials for Advanced Energy Systems 
Initiative'' to coordinate the research advanced materials for use in 
Generation IV nuclear energy systems, fusion energy systems, and 
advanced energy technologies such as hydrogen production systems. 
Through a joint working group, the offices are coordinating on energy 
materials related issues with the purpose of investigating materials 
behavior in high temperature, radiation, and hostile corrosive 
environments, as well as the fabrication and non-destructive evaluation 
or monitoring of such materials. As common projects are identified, the 
offices will work to establish research objectives and cooperative work 
plans to leverage research funding.

FISCAL YEAR 2006 BUDGET REQUEST

NUCLEAR HYDROGEN INITIATIVE

    Hydrogen offers significant promise as a future domestic energy 
source, particularly for the transportation sector. The use of hydrogen 
in transportation will reduce U.S. dependence on foreign sources of 
petroleum, enhancing national security. Hydrogen can be combusted in a 
traditional internal combustion engine, or can produce electricity in a 
fuel cell. Significant progress in hydrogen combustion engines and fuel 
cells is bringing transportation using hydrogen closer to reality. 
Before hydrogen can become a significant part of the Nation's energy 
infrastructure, the cost associated with the production, storage, and 
delivery of hydrogen must be reduced considerably.
    Today, through electrolysis, we can convert water to hydrogen using 
electricity. Without using a non-emitting technology, such as nuclear 
or renewable energy, to produce the electricity, the environmental 
benefits of electrolysis are negated. We believe that for the future, 
Generation IV systems coupled with advanced hydrogen production 
technology offer a more efficient technology for production of large 
quantities of hydrogen without release of greenhouse gases. This 
technology could pave the way for the commercial production of clean-
burning hydrogen for transportation purposes--reducing our reliance on 
imported fossil fuels and supporting the President's vision for a 
future Hydrogen economy.
    The DOE Hydrogen Posture Plan and the Nuclear Hydrogen R&D Plan 
outline our plan for integrating and implementing technology research, 
development and demonstration activities needed to cost-effectively 
produce, store, and distribute hydrogen for use in fuel cell vehicles 
and electricity generation. These documents are revised periodically 
and used to inform our annual budget requests. Technology development 
work to date, which has been conducted in accordance with these plans, 
has proven successful. For example, last year, experiments were 
successfully completed on individual high-temperature electrolysis 
cells for hydrogen production. Since the results show that the hydrogen 
output of the cells closely matched the theoretical calculations, this 
year we are evaluating the performance of stacks of cells to achieve 
higher hydrogen production rates. In FY 2006, the program will proceed 
with the plan to test cell stacks for long-duration and transient 
operation. As a result of these achievements, the FY 2006 budget 
request includes an increase of $11 million to conduct research and 
development on processes that operate across a range of temperatures 
for various advanced reactors being considered under the Generation IV 
Nuclear Energy Systems Initiative.

FISCAL YEAR 2006 BUDGET REQUEST

ADVANCED FUEL CYCLE INITIATIVE

    In addition to leading the development of a new generation of 
nuclear power plants, the Department is developing and demonstrating 
technologies that will enable the United States and other advanced 
countries to implement an improved, long-term nuclear fuel cycle that 
provides substantial environmental, nonproliferation, and economic 
advantages over the current once-through nuclear fuel cycle. The 
Advanced Fuel Cycle Initiative is a research program to develop new 
technologies for reducing the volume, toxicity, and longevity of the 
high-level nuclear wastes that result from the production of energy 
from nuclear power plants. The initiative is designed so that these 
technologies can be made available to support the operation of current 
nuclear power plants, Generation III+ light-water reactors, and 
Generation IV advanced reactors in order to achieve a significant 
reduction in the amount of high-level radioactive waste requiring 
geologic disposal; to significantly reduce the amount of plutonium 
accumulated in civilian spent nuclear fuel; and to extract more useful 
energy from nuclear fuel.
    Under all scenarios, the Nation will need to establish a permanent 
geological repository to deal with the radioactive wastes resulting 
from the operation of nuclear power plants. Substantial growth in the 
use of nuclear energy in the United States will require the 
construction of additional geologic repositories to address the nuclear 
waste generated over time. The advanced research conducted under the 
Advanced Fuel Cycle Initiative, if successful, could provide an 
alternative to building multiple ``Yucca Mountains'' while still 
supporting an expanding role for nuclear power in the United States. In 
the longer-term, the Advance Fuel Cycle Initiative could enable us to 
extend the useful life of the Yucca Mountain repository and reduce the 
radiotoxicity of the wastes it contains such that it would decay to the 
toxicity of natural uranium ore in less than 1,000 years--instead of 
over 100,000 years as is the case with untreated spent fuel. This 
technology could also allow nuclear plants to exploit a far higher 
fraction of the energy contained in uranium ore, potentially expanding 
the lifetime of the world's nuclear fuel resources from around 100 
years up to 1,000 years.
    The Advanced Fuel Cycle Initiative, with an investment of $70 
million for FY 2006 (an increase of $2.5 million compared to FY 2005), 
will continue the progress made in the development of proliferation-
resistant treatment and transmutation technologies that can reduce both 
the volume and toxicity of spent nuclear fuel. These technologies would 
support both national security and energy independence by reducing 
inventories of commercially-generated plutonium while recovering 
residual energy value from spent nuclear fuel. If successful, these 
same technologies offer benefits of enhancing national security by 
reducing inventories of commercially-generated plutonium and enhancing 
energy independence by recovering the energy value contained in spent 
nuclear fuel.
    The program has already enjoyed considerable success. We have 
proven the ability of our URanium EXtraction (UREX) technology to 
separate uranium from spent fuel at a very high level of purity. We 
have demonstrated the ability of a derivative technology, UREX+, to 
separate a combined mixture of plutonium and neptunium that can serve 
as the basis for a proliferation-resistant fuel for light water 
reactors. While the UREX+ process has great potential to address the 
spent fuel challenges associated with today's light water reactors, we 
have also been investigating an alternative separation technology 
called pyroprocessing. This technology is a highly efficient, 
proliferation-resistant nonaqueous approach to separate the actinides 
in spent fuel from fission products. Among other potential 
applications, pyroprocessing could support the reduction of the 
radiotoxicity of nuclear waste through the transmutation of minor 
actinides in future Generation IV fast spectrum reactors providing the 
means for closure of the fuel cycle for Generation IV fast reactors.
    For the Advanced Fuel Cycle Initiative to be successful, advanced 
fuel treatment and transmutation research and development must be 
integrated with the development of Generation IV nuclear energy 
systems, particularly with those reactor technologies that can produce 
the high energy neutrons needed to transmute a wide variety of toxic 
radioactive species. We have organized our national labs, universities, 
and international collaborations in a manner that will enable the 
success of the Advanced Fuel Cycle Initiative.

FISCAL YEAR 2006 BUDGET REQUEST

UNIVERSITY REACTOR INFRASTRUCTURE AND EDUCATION ASSISTANCE

    In addition, the Department has paid close attention to 
developments impacting university research reactors. The research 
conducted using these facilities is critical to many national 
priorities. Currently, there are 27 operating university research 
reactors at 26 campuses in 20 states. These reactors are providing 
support for research in such diverse areas as medical isotopes, human 
health, life sciences, environmental protection, advanced materials, 
lasers, energy conversion and food irradiation.
    The most exciting development in University Reactor Infrastructure 
and Education Assistance is the Innovations in Nuclear Infrastructure 
and Education (INIE) Program established in FY 2002. The consortia have 
demonstrated remarkable collaborative efforts and strong formation of 
strategic partnerships between universities, national laboratories, and 
industry. These partnerships have resulted in increased use of the 
university nuclear reactor research and training facilities, upgrading 
of facilities, increased support for students, and additional research 
opportunities for students, faculty and other interested researchers. 
Today, the Department funds six INIE consortia, providing support to 32 
universities in 23 states across the Nation.
    To complement INIE and the other university assistance programs, 
the University Reactor Infrastructure and Education Assistance program 
provides assistance to universities to improve the operational and 
experimental capabilities of their research reactors and provides for 
the fabrication and shipment of fresh fuel to their research reactors.
    Grants are provided to universities to purchase equipment and 
services necessary to upgrade the reactor facilities, such as reactor 
instrumentation and control equipment, data recording devices, 
radiation, security and air monitoring equipment, and gamma 
spectroscopy hardware and software. Each year, as many as 25 
universities request and receive this assistance. The Reactor Sharing 
program enables universities with reactors to ``share'' access to their 
facilities with students and faculty at their own institutions, with 
universities that lack such a facility, and with visiting students from 
other local institutions including high schools and middle schools. The 
reactors are made available for use in research, experiments, material 
irradiations, neutron activation analysis and training, and for 
facility tours and other educational activities.
    The growth of nuclear energy in the United States is dependent on 
the preservation of the education and training infrastructure at 
universities. The Department has played a substantial role in reversing 
the decline in undergraduate enrollments in this area of study. In 
1998, the United States saw only around 450 students enroll as nuclear 
engineers--down from almost 1,500 in 1992. After several years of 
focused effort, the United States now has nearly 1,600 students 
studying nuclear engineering. That number is set to increase further, 
as strong programs--such as at Purdue and Texas A&M--continue to grow 
and we see new programs start at schools such as South Carolina State 
University, the University of South Carolina, and the University of 
Nevada-Las Vegas. Given the very large number of retirements expected 
in the nuclear field over the next five to ten years, industry, 
government, and academia find that this upswing in student interest 
comes at a critical time.
    The Department provides tuition, stipends, and a practicum to 
outstanding graduate students studying nuclear engineering and health 
physics and scholarships and a practicum to undergraduate students 
pursuing a nuclear engineering course of study. This highly competitive 
program has produced outstanding graduates who have become leaders in 
nuclear research and university education. Also, within the fellowships 
and scholarships program is the University Partnership program, which 
encourages students enrolled at minority-serving institutions to pursue 
a nuclear engineering degree at universities with nuclear engineering 
programs. There are currently six university partnerships consisting of 
13 institutions working cooperatively in this innovative program. South 
Carolina State University (SCSU) and the University of Wisconsin were 
involved in the pilot program and now SCSU administers the program for 
all university partnership members. SCSU has also added two nuclear 
engineering faculty members and has become the only historically black 
college or university in the United States with an accredited nuclear 
engineering program.
    We continue our small but important effort to provide scholarships 
and graduate fellowships to students studying the vital and too-often 
overlooked discipline of health physics. The Department is concerned 
that the Nation may soon not have the trained health physicists who are 
needed to assure the safety of vital nuclear and radiological 
activities. This program will help heighten the visibility of health 
physics as a viable career opportunity and strengthen the health 
physics pipeline to replace retiring professionals.
    The Nuclear Engineering Education Support program prepares students 
for nuclear engineering and science careers and assists universities 
with special needs to improve their educational infrastructure. This 
program is helping to address the knowledge gap of incoming college 
freshmen in the area of nuclear science and engineering. In FY 2005 a 
nuclear science and technology education pilot was established between 
the Department and the Pittsburgh Public School System to provide 
advanced placement high school science students an intensive 
educational experience in the field of nuclear science and technology. 
This effort provides course materials, tours to nuclear facilities, and 
lectures from internationally-recognized experts. In FY 2006, the 
program will expand its efforts to enlist local organizations in 
sponsoring the model used in the Pittsburgh pilot program to other 
school systems across the country, thereby strengthening the 
understanding of nuclear science in our public schools.
    The President's Budget supports continuation of the University 
Reactor Infrastructure and Education Assistance Program in FY 2006 with 
a request of $24 million (an increase $190K compared to FY 2005).

FISCAL YEAR 2006 BUDGET REQUEST

RADIOLOGICAL FACILITIES MANAGEMENT

    In addition to nuclear research and development programs, we have 
the responsibility to maintain and enhance the Nation's nuclear science 
and technology infrastructure. This budget request also includes $64.8 
million (a decrease of $3.7 million compared to FY 2005) to fund the 
management of the Department's vital resources and capabilities at Oak 
Ridge National Laboratory, Los Alamos National Laboratory, Sandia 
National Laboratory, and Brookhaven National Laboratory in a safe, 
secure, and cost effective manner to support national priorities. The 
mission of the Radiological Facilities Management program is to 
maintain these critical user facilities in a safe, environmentally-
compliant and cost-effective manner to support national priorities. 
These funds assure that NE facilities meet essential safety and 
environmental requirements and are maintained at user-ready levels. 
Actual operations, production, research, or other additional activities 
are funded either by other DOE programs, by the private sector, or by 
other federal agency users.
    The Department is responsible for maintaining the necessary nuclear 
material and infrastructure that is required to deliver plutonium-238-
fueled radioisotope power systems (using plutonium-238) to various 
federal users. These systems are an irreplaceable enabling technology 
for deep space exploration missions and national security missions. As 
part of the Department's emphasis on consolidating nuclear material, 
increasing nuclear security, reducing nuclear risks, and addressing 
secure transportation issues, we are currently performing an 
environmental review to assess the consolidation of all of our 
plutonium-238 operations. DOE has identified consolidation at the Idaho 
National Laboratory as the preferred alternative for this proposed 
action.
    In addition, the Radiological Facilities Management program assures 
appropriate oversight of the operations and maintenance of the 
Department's Paducah Gaseous Diffusion Plant uranium enrichment 
facilities to assure that USEC Inc. meets its commitments under the 
2002 DOE-USEC Agreement and that the Government's rights and options 
are being preserved.
    The FY 2006 $64.8 million budget request includes $18.7 million to 
prepare the final design, procure equipment, and begin facility 
modifications for the Uranium-233 Disposition Project at Oak Ridge 
National Laboratory. This project is aimed at stabilizing materials 
left over from the Cold War to address a Defense Nuclear Facilities 
Safety Board recommendation, while extracting isotopes from the uranium 
that are needed for very promising medical research.

FISCAL YEAR 2006 BUDGET REQUEST

IDAHO FACILITIES MANAGEMENT AND IDAHO SITEWIDE SAFEGUARDS AND SECURITY

    The Idaho Facilities Management program maintains the Department's 
facilities at Idaho in a safe, secure and environmentally compliant 
condition for a range of vital federal missions. The Idaho Site-wide 
Safeguards and Security program supports activities that are required 
to protect the Department's Idaho complex assets from theft, diversion, 
sabotage, espionage, unauthorized access, compromise, and other hostile 
acts which may cause unacceptable adverse impacts on national security, 
program continuity, the health and safety of employees, the public, or 
the environment.
    We have now established the Idaho National Laboratory (INL), which 
combines the resources of the former Idaho National Engineering and 
Environmental Laboratory (INEEL) and the former Argonne National 
Laboratory-West (ANL-W). This new lab began operations on February 1, 
2005, and will lead much of the Department's exploration into advanced 
nuclear reactor and fuel cycle technology. We have set an aggressive 
goal for the new INL to become the world's premier center for nuclear 
energy research and education within a decade.
    Developing a central research laboratory is a major step forward 
for the nuclear energy program. We have now joined the other key energy 
programs at the Department by having a central, dedicated research site 
at which we can centralize our infrastructure investments and build the 
expertise needed to accomplish our program goals. A central lab also 
helps us minimize the shipment of nuclear materials across the country 
and allows us to bring our nuclear materials together in a single, 
secure location. In addition, we expect that our new central, dedicated 
research laboratory will become a major player in the education of the 
next generation of nuclear energy technologists that this nation will 
need to assure our energy security in the future.
    Our funding request of $80.1 million from Energy Supply and $17.8 
million from Other Defense Activities for the Idaho Facilities 
Management program maintains and operates the Department's facilities 
at Idaho in a safe, reliable, and environmentally compliant condition 
for a range of vital federal missions. The overall funding for the 
Idaho Facilities Management program decreases from FY 2005 to FY 2006 
because of a $43.4 million one-time cost associated with restructuring 
the INL complex and supporting site infrastructure services. This 
decrease is offset by an increase of $19.7 million for maintenance and 
recapitalization projects to support the goal of achieving and 
maintaining an expenditure rate of two to four percent of Replacement 
Plant Value, a level recommended by the National Academy of Sciences 
and incorporated in Departmental guidance, for the facilities at INL. 
One of the essential facilities for ongoing and planned national 
security and energy research programs at the INL is the Advanced Test 
Reactor (ATR). Replacing the ATR with a new test reactor with similar 
capabilities would exceed two billion dollars and likely take at least 
ten years to build. An independent review group of reactor experts 
studied the ATR and provided their perspectives on the life extension 
of the reactor. This review prompted several projects, most notably an 
exhaustive safety basis reconstitution to assure that all safety 
related systems meet modern standards. This project is in progress and 
results to date are favorable.
    The recommendations of this review and other analyses will be 
incorporated into the INL Ten Year Site Plan (TYSP), which is the 
foundation for INL facilities and infrastructure strategic planning and 
the cornerstone of the Program's initiative to restore the INL and the 
other essential facilities on the site. The TYSP provides 
recommendations for short- and long-term recapitalization of existing 
mission essential facilities and infrastructure. The TYSP identifies 
and prioritizes the project, activities, and mission resource 
requirements for real property assets that cover a ten-year planning 
horizon as well as includes a prioritized list of maintenance, repair, 
and recapitalization projects necessary to correct the maintenance 
backlog.
    Our budget request of $75 million (an increase of $17.3 million 
compared to FY 2005) from the Other Defense Activities appropriations 
account for the Idaho Sitewide Safeguards and Security program supports 
activities that are required to protect the Department's Idaho complex 
assets from theft, diversion, sabotage, espionage, unauthorized access, 
compromise, and other hostile acts which may cause unacceptable adverse 
impacts on national security, program continuity, the health and safety 
of employees, the public, or the environment. As a result of merging 
the former INEEL and ANL-W sites into the INL, the two existing 
safeguards and security programs at the Idaho site will be merged into 
a single program. This integration will continue in FY 2005 with 
additional changes anticipated to increase efficiency and contain costs 
for safeguards and security for the site.
    The Department issued a revised Design Basis Threat in October 
2004. These requirements will be implemented using a risk-informed 
approach to physical upgrades and by seeking efficiencies associated 
with combining the two contracts. The Department believes that early 
investment in improved positions for defending forces, more capable 
detection systems, and technological deterrent devices at target 
locations will result in cost avoidance over the lifetime of enduring 
facilities by reducing the number of additional protective force 
members needed to counter the revised threat. The FY 2006 request 
reflects increased funding of $17.3 million to permit these 
investments.

CONCLUSION

    Our nation cannot rely on any single energy technology to secure 
its future. A broadly diverse energy supply has served us well in the 
past and must be available for the future. Nuclear energy should be a 
part of that diverse portfolio as look to support our growing economy 
while limiting air emissions and enhancing America's energy 
independence.
    The Department of Energy's goal is to work with the private sector, 
our overseas partners, and other agencies to assure that the benefits 
of nuclear technology continue to increase the security and quality of 
life for Americans--and other citizens of the world--now and into the 
future.
    This concludes my prepared statement. Your leadership and guidance 
has been essential to the progress the program has achieved thus far 
and your support is needed as we engage the tasks ahead.
    I would be pleased to answer any questions you may have.

                   Biography for Robert Shane Johnson
    Shane Johnson is the Acting Director of DOE's Office of Nuclear 
Energy, Science and Technology. He was appointed to this position in 
May 2005, upon the resignation of the prior Director.
    In this capacity, Mr. Johnson leads the Department's nuclear energy 
enterprise, including nuclear technology research and development; 
management of the Department's nuclear technology infrastructure; and 
support to nuclear education in the United States. Mr. Johnson also 
serves as the Lead Program Secretarial Officer for the Idaho National 
Laboratory, the Department's lead laboratory for nuclear technology 
research, development and demonstration.
    Since 2000, Mr. Johnson has led the Office's nuclear technology 
initiatives, serving a key leadership role in the initiation and 
management of all of the Office's major research and development 
initiatives, including the Generation IV Nuclear Energy Systems 
Initiative, the Advanced Fuel Cycle Initiative, and the Nuclear 
Hydrogen Initiative. In 2004, Mr. Johnson was promoted to the position 
of Deputy Director for Technology, where his responsibilities also 
include management of the Nuclear Power 2010 program and initiatives 
aimed at strengthening university nuclear science and engineering 
programs in the United States.
    Mr. Johnson serves a central role in the Department's efforts to 
re-assert U.S. leadership in nuclear technology development. He led the 
formation of the Generation IV International Forum (GIF), an 
international collective of ten leading nations and the European 
Union's Euratom, dedicated to developing advanced reactor and fuel 
cycle technologies. He leads the Office's international cooperation 
activities, including establishment of cooperative research agreements 
with other countries and the development by the GIF of the Generation 
IV technology roadmap, which resulted in the selection of six promising 
reactor and fuel cycle technologies by the GIF for future development 
efforts. Mr. Johnson currently serves as the Acting Chairman of the 
GIF, pending election of a permanent chairman and has served as the 
U.S. representative to the policy committee since 2001.
    Mr. Johnson has over twenty years of relevant management and 
engineering experience within Government and industry. Prior to joining 
DOE, Mr. Johnson was employed for five years by Duke Power Company and 
Stoner Associates, Inc. where he was responsible for performing 
engineering studies for nuclear, natural gas, and water utilities.
    Mr. Johnson received his B.S. degree in Nuclear Engineering from 
North Carolina State University and his M.S. degree in Mechanical 
Engineering from Pennsylvania State University. He is a licensed 
professional engineer.

    Chairwoman Biggert. Thank you very much.
    And last but not least, Mr. Kolevar is recognized for five 
minutes.

 STATEMENT OF MR. KEVIN M. KOLEVAR, DIRECTOR OF THE OFFICE OF 
ELECTRICITY DELIVERY AND ENERGY RELIABILITY, THE DEPARTMENT OF 
                     ENERGY, WASHINGTON, DC

    Mr. Kolevar. Thank you Chairman Biggert and Members of the 
Subcommittee for the opportunity to testify today on the 
science and technology priorities for fiscal year 2006 within 
the newly-established Office of Electricity Delivery and Energy 
Reliability.
    The Office of Electricity Delivery and Energy Reliability 
resulted from the consolidation of several programs within the 
Department. Consistent with the Appropriations Act of 2005, 
DOE's Energy Security and Assurance program has been merged 
with those of the former Office of Electric Transmission and 
Distribution. In addition, the Import/Export Authorization 
electricity activity previously administered by the Office of 
Fossil Energy is now housed in this new office.
    Our mission is to lead national efforts to modernize the 
electricity delivery system, enhance the security and 
reliability of America's energy infrastructure, and facilitate 
recovery from disruptions to energy supply. This is vital to 
the Department's strategic goal to protect our national and 
economic security by promoting a diverse supply and ensuring 
delivery of reliable and affordable energy.
    The Research and Development program is intended to 
contribute to the modernization of the electricity system. It 
consists of six main activities that are continuing from 2005: 
high-temperature superconductivity, transmission reliability, 
electric distribution transformation, energy storage, GridWise, 
and GridWorks.
    The High-Temperature Superconductivity program supports 
development of second-generation wire that is useable in 
cables, generators, transformers, and motors: equipment that 
crosscuts the entire electric power value chain. High-
temperature superconductors are a good example of advanced 
materials that have the potential to transform electric power 
delivery in America. The prospect of transmitting large amounts 
of power through compact underground corridors with minimal 
electrical losses over long distances could significantly 
enhance the overall energy efficiency and reliability of the 
energy system.
    The transmission reliability R&D activity supports 
modernization of the Nation's transmission infrastructure 
through technologies that provide enhanced grid reliability and 
efficient electricity markets on our competition. The 
transmission reliability activity focuses on developing real-
time monitoring and control software tools and system operating 
models for grid operators that I would be happy to expound on 
in the question and answer period, if necessary.
    The electric distribution R&D activity supports R&D that 
will enable the development and testing of advanced 
technologies and standards for interconnection of distributed 
energy resources to the electricity grid. The technology will 
foster the full integration of distributed resources into 
distribution operations and lead to increased asset utilization 
and enhanced system reliability for the entire national 
electrical system.
    The energy storage R&D includes research in advanced energy 
storage devices for applications ranging from power quality for 
digital facilities to voltage support for transmission lines. 
The energy storage activity emphasizes buffering technologies 
and the design of storage systems with integrated power 
electronics and controls that are dedicated to improving the 
reliability of the grid.
    GridWise denotes a modernized electric infrastructure 
framework where open but secure communication and information 
technologies are used throughout the grid to enhance 
reliability and robustness and promote economic efficiencies. 
The GridWise activity, which is software-centric, comprises the 
intelligence, or brains, behind a modern electric grid that 
incorporates GridWorks, which is hardware-centric technology.
    The GridWorks activity focuses on advanced equipment 
application and is designed to accelerate the development and 
testing of advanced conductors, which can increase much-needed 
transmission line capacity. GridWorks pursues advanced power 
electronic breakthroughs to develop new transformers, breakers, 
and current limiters to provide faster means of limiting 
transmission problems before they propagate through the 
electric system.
    The electricity-restructuring program within this new 
office provides technical assistance and analytical support to 
states and regions to facilitate competitive and reliable 
wholesale and retail electric markets. This program includes 
modeling and analysis to identify the causes of reliability 
events and recommendations for avoiding such future events.
    The electricity restructuring program also includes 
activities formerly assigned to the Office of Energy Assurance, 
namely working with stakeholders to bolster the security of the 
Nation's critical energy infrastructure, and this program is 
responsible for coordinating and carrying out the Department's 
obligations to support the Department of Homeland Security in 
this important national effort.
    Madame Chairman, I thank you for the opportunity to testify 
today. I look forward to working with you to make progress in 
these critical areas. And I am happy to answer any questions.
    [The prepared statement of Mr. Kolevar follows:]
                 Prepared Statement of Kevin M. Kolevar

         OFFICE OF ELECTRICITY DELIVERY AND ENERGY RELIABILITY

OVERVIEW

    Chairman Biggert and Members of the Subcommittee, thank you for the 
opportunity to testify today on the science and technology priorities 
for Fiscal Year (FY) 2006 within the newly established Office of 
Electricity Delivery and Energy Reliability.
    The Office of Electricity Delivery and Energy Reliability, referred 
to as the Office of Electric Transmission and Distribution (OETD) 
within the FY 2006 budget request, resulted from the consolidation of 
several programs within the Department. Consistent with the Conference 
Report to the Consolidated Appropriations Act of 2005, the Energy 
Security and Assurance Program activities were merged with those of 
OETD. In addition, the Import/Export Authorization (IEA) electricity 
activity was transferred from the Department's Office of Fossil Energy 
under the Interior and Related Agencies Appropriation to OETD under the 
Energy and Water Development Appropriation.
    The mission of the Office of Electricity Delivery and Energy 
Reliability (OE) is to lead national efforts to modernize the 
electricity delivery system, to enhance the security and reliability of 
America's energy infrastructure, and to facilitate recovery from 
disruptions to energy supply. This is vital to the Department's 
strategic goal to protect our national and economic security by 
promoting a diverse supply and delivery of reliable, affordable, and 
environmentally sound energy.
    The Administration has requested $95.6 million for OE in FY 2006. 
This includes $71.8 million for research and development activities, 
$12.4 million for electricity restructuring activities, and $11.4 
million for Program Direction funds to provide for programmatic 
management and to enable the Department to execute its sector-specific 
responsibilities under Homeland Security Presidential Directive (HSPD) 
7--``Critical Infrastructure Identification, Prioritization, and 
Protection'' and its emergency support responsibilities as mandated by 
HSPD 8--``National Preparedness.''

RESEARCH AND DEVELOPMENT

    The Research and Development (R&D) program within OE, which will 
contribute to the modernization of the electricity system, consists of 
six main activities that are continuing from FY 2005: High Temperature 
Superconductivity; Transmission Reliability; Electric Distribution 
Transformation; Energy Storage; GridWise; and GridWorks.
    The High Temperature Superconductivity activity supports 
development of second generation wire that is usable in cables, 
generators, transformers, and motors--equipment that crosscuts the 
entire electric power value chain. High temperature superconductors are 
a good example of advanced materials that have the potential to 
transform electric power delivery in America. The prospect of 
transmitting large amounts of power through compact underground 
corridors, with minimal electrical losses over long distances, could 
significantly enhance the overall energy efficiency and reliability of 
the electric system. In addition, high temperature superconductors have 
the potential for revolutionizing a variety of military propulsion and 
directed energy weapon applications where high power density, as well 
as reduced size and weight at reasonable cost, is absolutely essential.
    The Transmission Reliability R&D activity supports modernization of 
the Nation's transmission infrastructure through technologies that 
provide enhanced grid reliability and efficient electricity markets 
under competition. The Transmission Reliability activity focuses on 
developing real-time monitoring and control software tools and system 
operating models for grid operators, and market design research, 
including demand response integration, to support restructured markets 
development. An example of this ongoing effort is the Eastern 
Interconnection Phasor Project (EIPP). The EIPP is a network of time-
synchronized data recording instruments that monitor the equivalent of 
the grid's heartbeat and blood pressure in near real-time. It provides 
early warning about possible disturbances, while they are still 
manageable.
    The Electric Distribution R&D activity supports R&D that will 
enable the development and testing of advanced technologies and 
standards for interconnection of distributed energy resources into the 
electricity grid. This technology will allow the full integration of 
distributed resources into distribution operations, and lead to 
increased asset utilization and enhanced system reliability for the 
entire national electrical system.
    The Energy Storage R&D activity includes research in advanced 
energy storage devices for applications ranging from power quality for 
digital facilities to voltage support for transmission lines. The 
Energy Storage activity emphasizes the design of storage systems with 
integrated power electronics and controls that are dedicated to 
improving the reliability of the grid, including mitigation of grid 
congestion and increasing grid stability by reducing the incidence of 
power quality disturbances.
    GridWise denotes a modernized electric infrastructure framework 
where open, but secure, communication and information technologies, and 
associated standards and protocols, are used throughout the electric 
grid to enhance reliability and robustness, promote economic 
efficiencies, and provide value and choices to electricity consumers. 
The GridWise activity (software-centric) comprises the intelligence--or 
brains--behind a modern electric grid that incorporates GridWorks 
(hardware-centric) technology.
    The GridWorks activity focuses on advanced equipment applications. 
GridWorks uses the facilities at DOE's national laboratories to 
accelerate the development and testing of advanced conductors, which 
can increase much needed transmission line capacity. It complements 
GridWise's architectural software development by developing and 
demonstrating associated hardware, such as sensors. GridWorks pursues 
advanced power electronic breakthroughs to develop new transformers, 
breakers, and current limiters, to provide faster means of limiting 
transmission problems before they propagate through the electric 
system.

ELECTRICITY RESTRUCTURING

    The Electricity Restructuring program provides technical assistance 
and analytical support to States and regions for policies, market 
mechanisms, and activities that facilitate competitive, reliable, 
environmentally sensitive, and customer-friendly wholesale and retail 
electric markets. This program includes modeling and analysis to 
identify the causes of reliability events, and development and 
implementation of policy-related recommendations for avoiding such 
future events.
    The Electricity Restructuring program also includes activities 
formerly assigned to the Office of Energy Assurance. The President has 
designated the Department of Energy as the Lead Sector-Specific Agency 
responsible for protecting the Nation's critical energy infrastructure, 
and this program is responsible for coordinating and carrying out the 
Department's obligations to support the Department of Homeland Security 
in this important national initiative.

MOVING RESEARCH INTO THE MARKETPLACE

    I would like to turn now to discuss moving the research into the 
marketplace. There are several barriers to the acceptance of new 
electricity transmission and distribution technologies. These include 
the capital intensive nature of grid assets, the long life-span of 
transmission infrastructure which results in a slow turnover process, 
utility reluctance to invest in new technologies until their durability 
is ensured, hesitation to make investments until the future structure 
of the electricity sector is known, difficulties in siting new 
infrastructure, and permitting delays.
    While DOE conducts research, development, field testing, and 
demonstration of technologies that will facilitate modernization of the 
grid, as well as identifies and addresses public policy issues that 
impact grid modernization, the private sector (as well as public power) 
must make the necessary infrastructure investments to actually 
modernize the grid. It is a complicated process that will require 
unprecedented levels of cooperation among the electric power industry's 
diverse stakeholders. The Federal Energy Regulatory Commission has 
recently taken action on a case-by-case basis to authorize transmission 
rate incentives that can provide greater certainty to investors and 
thus encourage quicker, appropriate investments in grid improvement.
    OE has made progress as well--pursuing dialogue with industry, 
shaping a shared vision of the future, and identifying a pathway to get 
us there. The Office is working with State commissions to familiarize 
them with the new grid technologies and the extent to which their 
reliability has been demonstrated. Although DOE has made progress, much 
more progress needs to be made.
    Modernization of our aging energy infrastructure will help reduce 
the risk of large-scale blackouts and minimize transmission 
bottlenecks. The Administration commends the House for again passing 
energy legislation which includes an electricity title that will 
achieve many of the Administration's policy objectives to improve 
reliability, protect consumers, increase supply, and promote efficient 
markets.
    Although I only identified a few key projects, there are many 
beneficial technologies that are ready to be deployed. But what is 
lacking is industry certainty on what a ``restructured'' electricity 
sector will look like in the future. This can be overcome by repealing 
outdated rules that discourage investment in new infrastructure, as the 
recently passed energy bill will do, and by encouraging the development 
of new technologies to make the grid more efficient, reliable, and 
secure.
    I thank you for the opportunity to testify today. I look forward to 
working with you to make progress in these critical areas. Madam 
Chairman, this concludes my testimony and I would be happy to respond 
to any questions from the Committee.

                     Biography for Kevin M. Kolevar
    Kevin Kolevar is Director of the Department of Energy's (DOE) newly 
established Office of Electricity Delivery and Energy Reliability.
    The new office develops and helps implement national policy 
pertaining to electricity transmission and distribution, electric grid 
reliability, and electric grid technology research and development. It 
also leads federal efforts to help ensure and secure the reliable flow 
of energy to homes, industry, public service facilities and the 
transportation system.
    Before taking this position, Kolevar served as Chief of Staff to 
Deputy Secretary of Energy Kyle McSlarrow from January, 2003 to 
January, 2005. In that position, he supported and advised the Secretary 
and Deputy Secretary on policy, regulatory, and legislative matters as 
well as Departmental program management. Prior to serving as Chief of 
Staff to the Deputy Secretary, Kolevar worked as a Senior Policy 
Advisor to the Secretary of Energy on security and technology issues.
    Mr. Kolevar is the former Chair of the Department of Energy 
National Security Working Group and was a senior advisor to the U.S.-
Canada Task Force that investigated the 2003 blackout. Before coming to 
DOE, Kolevar spent over 10 years working in the Senate on the staffs of 
Senators Spencer Abraham (R-Mich.) and Connie Mack (R-Fla.).

                               Discussion

    Chairwoman Biggert. Thank you very much, Mr. Kolevar.
    And now it is our turn to ask the questions, which we limit 
to five minutes, also.
    And so my first question would be for Mr. Johnson, Mr. 
Faulkner, Mr. Kolevar, and Mr. Maddox, unless somebody else 
finds that they really have to answer it, also.
    The Department has often said that the appropriate role of 
federal funding of research is for high-risk activities with a 
potentially high payoff and demonstration projects that are 
both a useful step in developing technologies and a means to 
stimulate commercialization of mature technologies but are 
generally lower risk than other activities that might be 
undertaken. And recently, the Department has characterized some 
major projects as ``learning demonstrations'' and so they are 
necessary to understand the challenges facing new technologies. 
What are the--in your opinion, what are the criteria the 
Department uses to graduate activities from the laboratory to 
the demonstration phase? And what are the characteristics that 
distinguish a learning demonstration from a technical 
demonstration?
    Who would like to start with that?
    Mr. Faulkner, you look ready.
    Mr. Faulkner. I am trying not to look ready.
    Several questions are embedded there. Let me make several 
points. One of them is my office has a range of technologies. I 
think we have a diverse portfolio. We look at a lot of things 
in determining our budget. We look at national priorities. We 
look at where the technologies are in the marketplace. Are 
private sector companies spending more money over time? We look 
at where our partners are spending money in the Federal 
Government. We think that we have a good balance in our 
portfolio between research and development and demonstration 
technologies. We do a lot of analysis, like when we do our 
budget formulation in the spring. We look at a lot of these 
things: priorities, risk. What are the benefits of these 
technologies? Where do they stand? And so it is kind of a 
balance that you have to get to in terms of--it is almost like 
a 3-D chess game in terms of determining where you put your 
money on what technologies.
    Chairwoman Biggert. Is there a difference between what we 
would call learning demonstrations and those that are just 
demonstration projects?
    Mr. Faulkner. Well, in the hydrogen program, which you may 
be referring to, they have learning demonstrations, and they 
consider there is a difference between that and deployment 
demonstrations. They think that these learning demonstrations 
are an extension of the marketplace. We are trying to get data 
to help us do our research better. And a pre-commercialization 
deployment demonstration test the market and large volumes are 
created to try and see how the technologies are adapting, how 
the production costs are--whether you can reduce the production 
costs. And I think in the hydrogen program, we think the 
learning demonstration is just right, right now, because the 
marketplace is pretty immature for more--the other kind of 
demonstration projects.
    Chairwoman Biggert. Okay. Thank you.
    Mr. Maddox.
    Mr. Maddox. Thank you. I will try to remember all of these 
questions. I tried to take notes as we went through here.
    Very quickly, our balance is driven, and our portfolio, is 
driven by a couple different drivers. One of them is our larger 
policy driver, which is essentially to take our most abundant 
resource, coal, and allow it to be burned cleanly.
    A second driver is what we see called regulatory drivers. 
For instance, the mercury regulations have been out there for a 
while, and so we have been putting a large amount of resources 
into trying to create a mercury technology that can remove 
mercury. So that is a real driver as things come forward on the 
regulatory front.
    This Administration had a very strong policy, you can't 
create regulations unless there is underlying technology to 
support meeting those regulations. So for instance, if we want 
to limit mercury to 90 percent, we have got to find a way to 
limit mercury and capture that emissions. So that is the issue 
on that.
    In determining demonstration projects, usually that is 
coming post-pilot phase, which we consider the--more the R&D 
phase where we feel we have reasonable confidence that a 
project may work at a large scale. For us, that is electricity 
production usually in the 275 and up range. And that is also 
limiting. A good example of that is our IGCC plant outside 
Tampa, where it initially started, I think, with 30 percent 
reliability and after eight years of tweaking it, learning how 
it works, we have now got a stable operation that is actually 
available in the 80-plus percentage time. It is now 
commercially dispatching energy and is no longer a 
demonstration project. It graduated to commercial.
    So that is, in a nutshell, how our process works. All of 
our demonstrations are a combination of technical and learning.
    Chairwoman Biggert. All right. Thank you.
    Mr. Johnson.
    Mr. Johnson. Thank you, Madame Chairman.
    I would characterize the Office of Nuclear Energy's 
research and development programs as being planned through, 
essentially, three phases: a laboratory demonstration, a pilot-
scale demonstration, and then eventually bearing merit, an 
engineering-scale demonstration.
    Given the nature of our work, we are, in all of our R&D 
programs in the Office of Nuclear Energy, still on the 
laboratory scale, whether it is in our advanced fuel cycle 
looking at spin fuel separation technologies or in our nuclear 
hydrogen initiative looking at the various chemical processes 
for splitting water into hydrogen and oxygen. We are clearly 
still at the laboratory scale, and we will remain there until 
such time as the technology proves to be sufficiently mature to 
move on to a larger scale operation. And the approach we take 
is to ensure that we have a good understanding of the science 
and engineering on a laboratory scale before making the 
investments to move up into a larger scale facility. For 
example, our nuclear hydrogen program is looking at 
thermochemical reactions. Currently in the laboratory, that is 
characterized as on a watt scale. Our plans to scale that up 
into pilot would be on the kilowatt range, and then an 
engineering scale would take us into a megawatt range for the 
hydrogen production. So what we have is a graduated program 
with clear delineation between the phases of the R&D and, 
hopefully in the not-too-distant future, we will be able to 
move from the laboratory scale into the pilot scale activities.
    Chairwoman Biggert. Thank you.
    And Mr. Kolevar.
    Mr. Kolevar. Madame Chairman, I think, because of the 
nature of our office, we are a little different than--from our 
sister applied R&D programs in that the technologies that we 
are working to develop and get into the system are kind of 
going into the middle of an up and running system. They are not 
an end use connection, if you will. So to the extent that there 
is a difference between, with respect to criteria, learning 
versus technical, I guess we would have to focus more on the 
technical side, and it is because of the nature of the 
challenges that we face in pursuing and working with industry 
and the states to get the technology into the system.
    We understand--typically, going in, and while we do demo 
these things across the lab complex, we understand, fairly well 
going in, the specifications, and we have a pretty good idea of 
the effectiveness of a lot of the technologies that we 
demonstrate. We have a good sense of what we are going to get 
after all of the time that we have spent in the lab 
application. What is particularly difficult is working with 
industry to convince them, and to get the necessary information 
to ensure that we have conforming standards and protocols for 
connectivity in getting new software into the system or 
hardware into the system and to prove beyond a doubt to a 
utility that this technology will work and it will not cause 
some kind of system failure that they pay for, that they are 
targeted for, because the reliability suffers and the consumers 
come back to them. I mean, this is an up and time--real-time up 
and running system that has to maintain 24/7 operations. And so 
it is typically a delicate balancing act, and that is the 
challenge we face is to really convince them that this 
technology will work, that their reliability will improve as a 
result of it, and not suffer during a demonstration on the 
system itself.
    Chairwoman Biggert. Thank you.
    My time has expired.
    And I would recognize the gentlewoman from California, Ms. 
Woolsey, for five minutes.
    Ms. Woolsey. Thank you, Madame Chairman.
    First I would like to ask unanimous consent to enter my 
opening remarks into the record.
    Chairwoman Biggert. Without objection.
    Ms. Woolsey. Thank you very much.
    I am sorry. I missed most of your testimony. I know you 
were wonderful, every--each and every one of you.
    My goal is that this country of ours becomes the globe--
globally, actually, becomes independent of fossil fuels as soon 
as possible, and I believe we can do that by investing in 
clean, renewable energy sources, creating incentives for 
conservation and efficiency and new technologies, and in other 
words, invest in the future. So just know that when I am asking 
you my questions. That is where I come from.
    I represent Marin and Sonoma Counties, the two counties 
just north of San Francisco across the Golden Gate Bridge, 
which could give you a little bit of an idea of my 
constituency. We are very green. We are looking to the future, 
and we think we can be doing things a little differently than 
we are.
    My first question today is for you, Dr. Orbach. I was 
interested in what the Committee has recently been aware of 
planning within the Office of Science, focusing on new 
directions for harnessing solar energies and solar power and 
converting it into solar to chemical with carbon-neutral fuel. 
What are you doing with that? How far are you with it? What 
kind of support are you getting from us and from the 
Administration? And what else do you need to make it go 
forward?
    Dr. Orbach. Thank you, Congresswoman Woolsey.
    We have just finished a major workshop on solar energy 
where, as you have outlined, we have looked at those three 
areas of opportunity. What has changed has been the advent of 
nanotechnology and our ability to, within a given substance, 
understand how light is absorbed, solar light, and also how to 
separate charges, which is what nature does when it does 
photosynthesis. But we now think we know how to do that 
artificially. And so we have put a workshop together to give us 
guidance and future directions for solar energy that, 
hopefully, will open up new avenues and greater efficiencies 
and opportunities for us.
    Ms. Woolsey. Well, tell me what you mean. Who is at that 
workshop, and what kind of incentives do those folks need that 
are at the workshop to carry out this--these future steps?
    Dr. Orbach. Well, we will be providing research support to 
the workshop members. There were over 200 members, I should say 
attendees, at the workshop. We originally planned, by 
invitation only, to have 70, but we just couldn't say no. They 
were, very roughly speaking, about half from universities, 
about a third from national laboratories, and I know it is not 
going to add up, another third, roughly, from industry.
    Ms. Woolsey. An overlap.
    Dr. Orbach. And the--so it was a very broad spectrum. And 
here, actually, we work very closely with energy efficiency and 
renewable energy. The opening speaker was from our NREL 
facility, which is an EERE facility, who laid out what the 
research issues were. And then the focus of the workshop was to 
look at the near-term, what I will call, roadblocks to 
harnessing solar energy that were identified by EERE and then 
to take a look at some of the longer-term. Basically, plants 
are relatively efficient in terms of each photon absorbed, but 
they are inefficient in terms of taking advantage of the energy 
that they receive. And what we want to do is to use artificial 
structures, some of them mimicking biological structures, in 
order to make that whole process more efficient.
    Ms. Woolsey. So I mean, I don't think we have a lot of time 
to dilly-dally on this, so what do you need from us to----
    Dr. Orbach. Well, we are currently exploring----
    Ms. Woolsey.--make people----
    Dr. Orbach. We are currently exploring opportunities here--
by the way, not just in solar.
    Ms. Woolsey. Oh, wind?
    Dr. Orbach. We are also looking at hydrogen. We are looking 
at new materials. We are looking at a panoply of opportunities 
that--biomass is another one, that would assist energy 
independence, as you have outlined it. And we are putting 
together a research program in each of those areas. Hydrogen, 
for example, has already matured. We had 800 preproposals. We 
will be making about 70 grants next month for hydrogen research 
to do as I was describing before. So we are building this into 
our core research program and look forward to your support as 
we develop the specifics.
    Ms. Woolsey. All right. Well, I look forward to working 
with you in getting language in legislation that will actually 
focus on what you are doing.
    Chairwoman Biggert. Thank you.
    The gentleman from Texas, Mr. Hall, is recognized for five 
minutes.
    Mr. Hall. I yield to the gentleman who was here before I 
got here, Madame Chairman, Mr. Schwarz--Dr. Schwarz.
    Chairwoman Biggert. The gentleman from Michigan is 
recognized for five minutes. I believe you were at the--
listening to the testimony, but that is all right if you want 
to yield.
    Dr. Schwarz. My questions are pretty elemental, but they 
are the questions that the folks at home are asking.
    Nuclear power transmission technology, at least in the 
minds of the public, is relatively advanced, if we look 
especially at Western Europe and maybe even more especially at 
France. Can you tell me when you think there will be a new 
nuclear power-generating plant built in the United States and 
what impediments, if I am the CEO of Consumer's Power or DTE or 
ConEd, what impediments are in front of me in doing so, even 
knowing that I have to do it at some point in the future, 
sooner rather than later?
    And whomever wants to address that, please feel free to do 
so.
    Mr. Johnson. Yes, sir.
    With respect to the decision to pursue a new nuclear power 
plant construction project in this country, as you know, that 
is clearly a decision of industry. What the Department is doing 
through its nuclear power 2010 program is partnering with 
industry to prove out the untested regulatory process at the 
Nuclear Regulatory Commission for the identification of reactor 
technologies, the identification of new sites onto which to 
build, and then finally the issuance of what is called the 
combined construction operating license.
    We recently announced the awards of two partnerships with 
two industry-led teams. The preliminary plans that those two 
consortia have is that they are looking to submit the combined 
construction and operating license application to the NRC for 
its review and approval in the 2007 to 2008 time frame. The 
review process then at the NRC will take two to three years. I 
believe the preliminary schedules have--the decisions could be 
made by industry on moving forward with new nuclear generation, 
a plant order, in the 2009 to 2010 time frame.
    Dr. Schwarz. Is there--I am sorry. If somebody else wanted 
to jump in, okay, but I have a couple more minutes, and I 
wanted to ask another question.
    Is there a consensus in the energy research community and 
the commercial power-generating community that we have to go 
back to nuclear? That in the continuation of building and 
refining coal-fired plants, some natural gas-fired plants, 
there is a hard stop there someplace where we can't continue to 
build those plants that put out the fluvia that they put out, 
and we have to go to nuclear? It is a message that I think 
people need to learn and that people have to understand that at 
some point, the alternative, the clean power we are looking for 
is, in fact, nuclear power, back to the future, so to speak? 
Would anyone want to comment on that--on my comment?
    Mr. Johnson. I would only add that the Department is 
supportive of a mixed energy production portfolio, not putting 
all of its eggs in the traditional basket of a single 
technology. So we envision that there is a role for nuclear, 
clean coal, solar, and the other renewables that it is part and 
parcel of a diversified energy production mix.
    Mr. Maddox. I might add too, that, you know, one of the 
things we have studied and looked at is our growing need for 
energy in the future and that there is an expectation that for 
us to maintain our economic growth and the energy to fuel that, 
we are looking at probably about 40 percent more energy over 
the next 20 years. This means that we really don't have the 
option of taking any energy source off the table and that we 
need more of everything, including more conservation.
    We also are very sensitive to the fact that we need to make 
it cleaner. This Administration has virtually doubled the 
amount of money we are putting into clean coal research. We 
lead the world in our FutureGen project. I think everyone 
understands two things: we need more energy, and we need to 
make it cleaner. And our ability to simply discard any energy 
source is not a practical response.
    Dr. Schwarz. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Bartlett. [Presiding.] Thank you very much.
    And the staff tells me that I am next in the cue.
    Thank you all very much for your testimony.
    A couple of weeks ago, I was at a breakfast, and a heritage 
fellow was speaking there. It was Peter Brooks, and he was 
talking in economics, and he made the statement that every 
country in the world that pumped oil had maxed out, except 
Saudi Arabia. Just as I was walking over here, the elevator was 
full, so I walked across the street with Don Young, the 
Chairman of the Transportation Committee, and he was commenting 
on the President's visit yesterday with the gentlemen from 
Saudi Arabia and--who said that they weren't going to increase 
oil production. And I offer the maybe the correct answer would 
have been, ``Gee, Mr. President, we can't increase oil 
production.'' And Chairman Young agrees that that is probably 
true.
    Do you think that these two people are wrong?
    Nobody has volunteered that they are certain they are 
wrong. You all know, of course, of M. King Hubbard, a scientist 
of 60 years ago, who observed during the 1940s and the 1950s 
that an individual oil field was exploited on a bell curve, 
rapidly rising production during the early pumping and then 
reaching a peak at which about half of the field had been 
pumped, and then sliding down the other side. He theorized, as 
you know, that if you added up all of the little bell curves 
from the fields in the United States, you could predict when 
the United States would peak in oil production. He made that 
prediction in 1956, and he was right on target. He said it 
would be about 1970. It was exactly 1970 that we peaked in oil 
production.
    We are now producing about half of the oil that we produced 
in 1970, as you know. We are sliding down Hubbard's peak.
    In 1973, he did this analysis for the world, and he thought 
that the world would peak in oil production about 2000. He 
missed it a little, because he couldn't have known of the Arab 
Oil Embargo, which occurred later. He couldn't have known of 
the oil price spikes and of the worldwide recession, which 
delayed it. There are a number of observers who believe that we 
are now at peak oil.
    What that means is that although world demand for oil is 
going up exponentially, not on a straight line the way your 
energy information agency depicts it, it is going up 
exponentially. And last year, China increased their use of oil 
about maybe as much as 25 percent. The world's economy grew at 
10 percent last year. Our--I am sorry, five percent last year. 
Our economy grew at probably half of that last year. The third 
world is now wanting more oil, and they are using it very 
inefficiently. One of the best things we could do is to help 
them use energy efficiently.
    While we are having greatly increased demands for oil, the 
production of oil will level off for a while, and then it will 
start sliding down Hubbard's peak, no matter what we do. One 
author, when writing about this, and don't throw his document 
down when you read it. I had a--was going to do that, but I 
read on, and it was hard to argue with his conclusion. ``Dear 
readers: civilization, as we know it, is coming to an end soon. 
This is not the wacky proclamation of a doomsday cult, 
apocalypse bible prophecy sector, conspiracy theory society. 
Rather, it is a scientific conclusion of the best paid, most 
widely respected geologists, physicists, and investment bankers 
in the world. These are rational, professional, conservative 
individuals, who are absolutely terrified by phenomenon known 
as global peak oil.'' I, too, am concerned. Tell me that he is 
an idiot and I shouldn't be concerned.
    Mr. Hall. Mr. Chairman, do you want it in that order?
    Mr. Bartlett. No. I have talked to a lot of people. I gave 
a one-hour speech, a special order on the Floor of the House, 
about six weeks ago, and I have had a stream of people through 
my office and calls from all over the world, and I know of 
nobody out there who doesn't believe that we are either at peak 
oil or will shortly be at peak oil. By the way, if you look at 
the curves, at the bell curve, Hubbard's curve for the world, 
and if you look at the use curve, you don't have to be at peak 
oil to have a problem, because you start deviating from that 
bell curve a bit before you get to the peak. So peak oil may be 
a bit in the future. But if the world can't meet its demands--
there are two things that we can not argue with. Hubbard was 
right about the United States, and we have known he was right 
for at least 25 years; and we in the United States and we in 
the world have done nothing, zilch, while this tsunami was 
approaching. And the other thing, which is undeniable, is that 
today oil is over $50 a barrel. I was talking with John 
Dingell, who has a broader, longer vision of this than anybody 
else. He has been in the House 52 years, I think. John says, 
``You will never see $50 a barrel oil again.'' Goldman Sacks 
says it is going to $105 and Americans won't change their 
driving habits until gas is $4 a gallon.
    What are you doing in the Department of Energy that is 
consistent? Then my five minutes is up. We will come back. I 
don't want to take the other people's time. I want to come 
back. I will stay here to talk with you after everybody else 
has--but I want to know what you are doing that is consistent 
with the reality that we are probably at peak oil. See, I don't 
see us doing anything as a culture. I don't see us doing 
anything as a country. I don't see us doing anything as the 
Department of Energy that is consistent with this reality.
    Let me yield now to the next person in the cue.
    Mr. Green.
    Mr. Green. Mr. Chairman, I will pass at this time. Thank 
you.
    Mr. Bartlett. Okay.
    Mr. Hall.
    Mr. Hall. Mr. Chairman, I thank you. And I don't know if I 
have a different outlook that you have. I think we are pretty 
close together, but we just passed an energy bill. Someone is 
doing something about it. This committee has done something 
about it, because this committee had some input into the energy 
bill, H.R. 6. Most of you on this committee--some of you voted 
against the energy bill every time it has come up. But I think 
energy is the number one word in the dictionary, and if had a 
child that was a junior or senior in high school, I would be 
thinking along the way I thought back in 1941 when Frank 
Roosevelt said, ``To some generations, much is given. Of some 
generations, much is expected. But this generation has a 
rendezvous with destiny.'' That rendezvous was World War II, 
and for those who are sophomores or juniors or seniors in high 
school, like I was in 1941, they have the same rendezvous if we 
don't solve the energy problem. And we have just passed a bill 
that has done something about it, if the Senate will get off of 
the you-know-whats and give us two more votes, we will have a 
good bill to take to a President that will sign it. And I think 
everybody at that table has had some input into that energy 
bill, because you have been consulted. Your divisions have been 
consulted. You have worked with us. You have disagreed with us 
and agreed with us. We have a good Chairman that has been fair 
with democrats and republicans alike as we labored through that 
bill. And we have fossil fuels in the bill, and I am glad we 
have fossil fuels in the bill. I am glad we have anything in 
there that might keep my grandchildren from having to fight a 
war. And that is really what the reward is for solving the 
energy problem. It is a shame that we have to buy 60 percent of 
our energy from people who don't like us, who don't trust us, 
and people we don't trust. It is a shame that we can't drill 
ANWR, 19 million acres and tell me we can't drill on a couple 
or three or four or five thousand of it. It is outrageous, I 
think, if we can't if a generation is at risk. And that is 
absolutely what the situation is.
    So we need to clean up fossil fuels, but it is not like the 
Kilgore oil fields 30, 50, 45 years ago. There is a lot of good 
technology. The animal life in Alaska have not faltered 
standing in the shade of some of these oil derricks up there. 
We are solving a problem that is a national problem that we 
have the ability to solve and that we ought to solve, and that 
is passing this energy bill.
    Now I have a part of the energy bill, and I am for every 
bit of that energy bill, everything that might keep our kids 
from having to cross an ocean and take some energy away from 
someone. And let me tell you, nations will fight for energy. I 
don't think there is any question that Japan went south into 
Malaysia because they had been cut off from their energy. I 
don't think there is any question that we--the--even went into 
the oil fields because they spent theirs on mixed benzene, non-
benzene. They were out of fuel. George Bush sent 450,000 
youngsters to a desert, and to me, that was for keeping a bad 
guy, Saddam Hussein, from getting his foot on half of the known 
oil reserves in the world. I think that was an energy battle. 
Of course, they envision it as liberating and giving freedom. 
And I respect that, too.
    So I have this question. I am concerned about the cuts to 
oil and gas R&D in this year's budget request at a time when 
our nation is experiencing record energy prices and threats 
from abroad. We need to do more to discover new technologies to 
use for domestic productions, including fossil fuels and 
including nuclear and including solar. We have touched the base 
on all of them.
    The energy bill that passed the House last week contains my 
provision that calls for mandatory spending for an ultra-deep 
water and unconventional natural gas production program. This 
program is expected to yield natural gas supplies at 3.8 
trillion cubic feet and 850 million barrels of oil. According 
to the Bureau of Economic Geology at the University of Texas, 
this program will yield a net federal budget benefits of $12 
billion over 10 years. It is going to cost $2.1 billion over a 
period of time, but it is going to yield $12.4 billion over 10 
years and lower the cost of household natural gas bills by $2.2 
billion per year by 2015, we are told by a study group. And 
that study has been accepted by republicans and democrats. It 
has been accepted by the House, and it has been accepted by the 
Senate, because it has passed the Conference Committee over 
there twice. And it is over there now for them.
    So the ultra-deep drilling is only one promising program, 
and it is complementary to the base program. At this time, 
domestic oil and gas production is declining and the 7,000 
independent producers are producing about 3/4 of our domestic 
oil and natural gas. So my question, I guess, is why it seems 
to me, and I hope I am wrong because I support the 
Administration, but why are they determined to terminate 
programs that primarily benefit independent producers who are 
producing 3/4 of our energy? And they used to produce 90 
percent of it, and then the majors took it over and bought it. 
But that is--I guess the treatment that the independent 
producers are getting right now is the thing that surprises me 
more than any other. Would any of you care to comment on that? 
Maybe I am wrong. I am not asking you to call anybody an idiot, 
because I have got my own mind made up as to who is an idiot.
    Mr. Maddox. Well, thank you for that.
    To somewhat answer your question, though I am not certain 
it is, I think, as you know, it has been a very tough budget 
year for all of us, and we have had to make some really hard 
decisions. And I think the President probably summed it up best 
in a statement last week that with the current price of oil and 
comparatively well profits that he strongly believes, the 
President strongly believes, that industry should step up to 
the plate and that there is plenty of incentive for them to do 
so.
    Mr. Hall. Probably my time is up.
    Does anybody else have a--any suggestion?
    Well, one, two, three, four, five. I think four of them 
must agree with me, and the other one is not far off, so I 
would yield back my time while I am winning.
    Chairwoman Biggert. Thank you.
    Maybe your question was too tough.
    Mr. Hall. Well, maybe it was.
    And I yield back my time, Madame Chairman.
    Chairwoman Biggert. Thank you.
    Mr. Hall. Thank you.
    Chairwoman Biggert. The gentleman yields back.
    The gentleman from California, the Ranking Member, Mr. 
Honda, is recognized.
    Mr. Honda. Thank you, Madame Chairwoman.
    This is a question for Mr. Faulkner.
    Probably more than any other program at DOE, the success of 
your program depends on getting taxpayer-funded technologies 
developed at the labs into the marketplace. Yet we hear over 
and over about the so-called Valley of Death where federal 
support for commercialization is where technology ends but that 
technology may not be mature enough for the marketplace. The 
marketplace is not always the best judge of technological 
winners and losers.
    So I have a four-point question. If--number one is how has 
it the Department improved this technology transfer efforts. Is 
there a central body responsible for ensuring potentially 
beneficial technologies to make it into the marketplace? If 
not, will the Department and the country benefit from greater 
emphasis of bridging the Valley of Death for potentially 
revolutionary technologies? And then do other agencies' 
efforts, such as DARPA in the Department of Defense, serve as a 
good model for increased technology development and deployment? 
The reason I ask is I have got a bill I am working on.
    Mr. Faulkner. Well, let me try to answer those four 
questions----
    Mr. Honda. I appreciate it.
    Mr. Faulkner.--in a comprehensive way.
    I think it is important to see this as a continuum from the 
first idea that somebody has to the time a consumer or an 
industry purchases or uses this technology. And I think the 
Department, and not just my office, plays an important role in 
several points along that continuum. It is a huge and complex 
process, as big and as complicated as the U.S. economy. I think 
the Department, first of all, does basic and applied R&D and 
many times, at least in my office, we tend to do that on merit-
based, competitive solicitations where the best ideas float to 
the top. You do that in partnerships with the private sector, 
cost-shared partnerships. So they are putting money on the 
table, and when they do that, that means they are starting to 
pay attention to it, and they will try to take that to the 
marketplace.
    I think that these technologies, then, can be encouraged or 
promoted by State or federal legislation, State or federal tax 
incentives or regulations like renewable portfolio standards or 
renewable fuel standards. About 18 states have RPS now.
    DOE also serves a regulatory function. In my office, we 
have an appliance standard setting operation where we set a 
floor for energy efficiency levels for consumer appliances.
    I think, third, we build partnerships with groups like EPA 
on ENERGY STAR, which, in terms of consumer goods, it is kind 
of a voluntary upper limit that pulls the technology up into 
the marketplace.
    Fourth, I think you have to have a very aggressive and 
comprehensive communications and outreach effort to tell 
consumers over and over again about energy-saving tips. For 
example, inflate your tires to the right pounds per square inch 
or the energy saving steps you can take in your own home. The 
easy things to the hard things. And you could buy ENERGY STAR 
appliances. In these ways you can reach millions of consumers.
    And fifth, I think the Department has to work better with 
other federal agencies. For example, we spend a lot of time 
building bridges with the U.S. Department of Agriculture. They 
have a rural development program with millions of dollars in 
terms of grants and loans and loan guarantees where they are 
following for the first time ever an energy title from a farm 
bill. That title instructed USDA and DOE to work together to 
get some energy-saving and renewable energy technologies into 
the rural marketplace.
    So it is a collection of things that the Department, the 
private sector, state and local governments can do together. It 
is a lot of pieces along that technology continuum to move from 
an idea to the marketplace.
    Mr. Honda. To the Chair, if I may, I heard what you are 
saying, and it sounds like you describe what actually exists 
right now. But there are folks still out there in the community 
that still recognizes this gap, the Valley of Death gap. That 
is what we call it. And it seems to me the government has a 
role in--to play to help some of these technologies to go a 
little further along until the private sector feels confident 
that that technology can be commercialized.
    And the question again is what Department--what part of 
your Department or what functions does the Department play in 
terms of helping the technology transfer? Or is there a need 
for another piece there to make that transfer seamless?
    Mr. Faulkner. Well, ultimately, I think it is the private 
sector. It is the companies that will make or produce a product 
and sell something for a profit that gets it into the 
marketplace. I really believe that the key to all of this is 
building partnerships to do research and development and you 
move it along this continuum. And if the private sector is 
putting money on the table with you, sharing the costs from 
basic research to demonstrate they are going to pay attention 
to it, and they are going to have an incentive to pull these 
things into the marketplace. That is not to say the government 
has no role. I was trying to describe briefly that we do have a 
role. Setting standards for appliances, for example can do a 
lot to get, you know, that the--that can start the more of 
these technologies into the marketplace. I am going to be 
buying soon an air conditioner, one step above the new 
standards we set, and a new energy-efficient furnace. And I 
think if consumers do that, as they replace equipment in their 
homes or companies do that----
    Mr. Honda. I guess I will be more specific.
    In the area of nanoscale activities, the length of research 
is going to be much longer and much more complicated, and it is 
going to be--there is going to be more need for government-
private partnerships to move the technology and the research 
for it closer to commercialization where the private investors 
are able to see the light at the end of the tunnel, whether it 
is, maybe, three years or four years out. Beyond that, you 
know, there is some issue around confidence or there is an 
issue around whether they will be able to sustain that kind of 
investment. It seems to me that we have some sort of 
responsibility, not unlike when the Internet was first 
developed.
    Is there a way or is there a need for further--a closer 
look at this kind of activity between government and the 
private industry to help this kind of massive research reach 
closer to commercialization on the market?
    Mr. Faulkner. Well, in terms of the nanotechnology 
revolution, I would leave that to my colleague, Dr. Orbach, 
whose office works on that more than we do. But I----
    Mr. Honda. Okay.
    Mr. Faulkner. I don't see a need for that. I think we just 
need to do more of partnerships building, which is a pretty 
tough thing to do, and focus on working more with the private 
sector.
    Mr. Honda. Dr. Orbach.
    Mr. Kolevar. Congressman, if I can add a point to the 
issue.
    You mentioned your concern about the Valley of Death for 
revolutionary technologies. And it is an important question, 
and it doesn't just pertain to revolutionary technologies. I 
mean, it pertains to the short-term technologies. I have been 
in this position now for 10 weeks and have gone through and 
looked at a number of the R&D efforts underway and have 
identified some where we have worked, whether in cooperation 
with industry or labs, to develop some really intriguing and 
promising short-term technologies that benefited the fringe. I 
mean, they are not revolutionary. But getting them out of the 
lab and into industry, it is very difficult. And there are a 
number of challenges that change with the industry that you are 
looking at. I mean, most of them are just trust issues and how 
much money are they going to have to expend on this and are 
they sure that it will be successful, and do they have to worry 
about it interfering with their current systems.
    My own sense is there is not going to be a standard model 
that will apply across the board. And so it will take a 
constantly--in my opinion, a constantly evolving effort that 
will be different for the types of research that are being done 
by offices, whether represented at this table or elsewhere. But 
it is absolutely crucial, because to the extent that the 
Federal Government is investing money in this R&D and that it 
somehow stalls in that Valley of Death, it is about as close to 
wasted money as it can be. Perhaps the technology could be 
picked up at a later date if somebody finds value and finds a 
way to commercialize it, but just in my look, it strikes--it 
has been very frustrating to identify some promising, near-term 
technologies that were not done, you know, whether by industry 
or the labs or by the government, with a sound enough road map 
in mind. And for that reason, we are not going to see 
commercialization in a time frame where we could have, and 
therefore, we will not realize the benefits of those.
    So the point you raise, in my thinking, is absolutely 
crucial. My response would be it is very hard and it probably 
is not a set model across different applied R&D programs 
because of the constituencies and the interest groups with 
which they work. It is probably going to have to be modeled 
differently each time, and to really follow on what Doug 
Faulkner said, it will have to be a strong, public-private 
partnership, not just the Federal Government and industry, but 
also, you know, states and other interested bodies, academia as 
well.
    Mr. Honda. Yeah. I don't disagree. And I think that the 
partnership needs to be there so that no one person or no one 
group chooses winners and losers. That is the one. And I 
believe that the concept--maybe conceptually you can create an 
approach that morphs itself according to the needs that you are 
looking at.
    Thank you, Madame Chair.
    Chairwoman Biggert. Yeah. The gentleman's time has expired.
    The gentleman from South Carolina, Mr. Inglis, is 
recognized.
    Mr. Inglis. Thank you, Ms. Chairman.
    I am very excited about cracking water and creating 
hydrogen and moving toward energy independence. But it also 
seems we need to crack some solutions relating to storage and 
distribution of hydrogen.
    What kind of research should we be doing to get toward 
cracking those solutions, getting those solutions on storage 
and distribution?
    Dr. Orbach. If I might respond to that. You have identified 
some of the major issues facing the hydrogen economy: 
production, storage, and fuel cells. And here, the Department 
is working as a team with the Office of Science and the Energy 
Efficiency and Renewable Energy to address those issues. We 
have had a major workshop last year where we focused on the 
three areas you identified, and we are using the modern tools 
we have to address them. These would include better catalysts 
to lower the temperature for the cracking process you talked 
about.
    Mr. Inglis. Right.
    Dr. Orbach. We also are looking at open structures that we 
can artificially create for hydrogen storage with just the 
right amount of absorption. And finally, in fuel cells, we are 
looking at new materials that will be cheaper and more 
efficient in terms of the membranes that are essentially the 
biggest hang-up right now for fuel cell operations.
    So all three of them have come together in an integrated 
program between our two offices. We are, as I said before, 
going to award about 70 grants that are in those three areas. 
They are, by the way, in universities, National Laboratories, 
and industries. There is a broad spectrum of interest in just 
those areas. And those grants will be awarded next month as a 
consequence of a competition where we had over 800 
preproposals. We probably could have supported twice as many 
grants and maintained the same level of quality.
    So I think you are going to see some, what I would call, 
revolutionary steps in addressing those three areas as this 
research program develops.
    Mr. Inglis. And by the way, we hope to get you more money 
to fund more of those grants, because it seems to me it is 
essential. We also hope to--that the energy bill is improved 
with Senate language that eliminates some of the earmarks on 
some of those things so that we steer the money to where it is 
actually going to get some results rather than through the 
political process.
    And anyone else want to add something about what kind of 
research we could be doing, what we should be doing to get 
after these things of storage and distribution?
    Mr. Kolevar. Well, I am sorry, Congressman, when you are 
talking storage and distribution, I guess, are you--are we 
talking about fossil resources, gasoline, or are we talking 
hydrogen in particular?
    Well, the--I think I will defer to Doug, who obviously has 
developed that with his office.
    Mr. Inglis. Yeah.
    Mr. Faulkner. I think Dr. Orbach hit most of the main 
points. One other thing I would note is we are also looking at, 
between our two offices and other parts of the government, on 
the bio-refinery, the equivalent of the petrochemical refinery. 
I think the biorefinery will play a role down the road in this 
whole hydrogen revolution that is unfolding. A biomass 
refinery, which could take any number of feed stocks and then 
produce fuels and power and different chemical products, 
possibly including hydrogen. I think that is something else to 
think about as we move down the road, which would also have an 
impact on rural economic development.
    Dr. Orbach. And also, we are looking at biological 
microbial production of hydrogen. There are microbes that do 
produce hydrogen. They are rather inefficient, and we are 
currently in--exploring genetic engineering to try to increase 
their efficiency so that we can do this in a natural 
environment.
    Mr. Inglis. It is very exciting. And of course we are 
excited about it in South Carolina, because in--the Savannah 
River Site now is a National Lab, and for 30 years, we have 
been dealing with hydrogen under pressure. It is just that ours 
is radioactive, so ours glows in addition to dealing with it 
under pressure. We have had real reason to keep it under 
pressure. So because of that expertise, we want to be helpful 
in developing some solutions to the storage and distribution 
part of the equation as we move toward a--energy independence 
with a hydrogen economy.
    And it is, in my opinion, a very bright future. And I hope 
that you will continue to call on us at the Science Committee 
and at this subcommittee and at the Research Subcommittee, 
which I Chair, to help crack those challenges and get on toward 
this.
    So I thank you for the work you are doing.
    Chairwoman Biggert. The gentleman yields back.
    The gentleman from Texas, Mr. Green, is recognized for five 
minutes.
    Mr. Green. Thank you, Madame Chair.
    And thank you to the Ranking Member, as well.
    I would like to thank you for initiating this hearing 
regarding the fiscal year 2006 budget request for the 
Department of Energy's civilian research and development 
programs.
    I would like to address a question, if I may, to Mr. 
Kolevar, and I trust that I have pronounced your name 
correctly, sir.
    Following the northeastern energy grid blackout in 2003, a 
lot of attention was focused on securing our electrical grid 
systems, and I might add, a lot of consternation was created in 
the minds of many people in the country at that time. I am 
understanding that the Office of Energy Delivery and Energy 
Reliability, known as OE, is the lead--is taking the lead in 
modernizing such efforts with a request of $96 million, 
approximately, I believe $95.6 million, to be more specific. 
And I am concerned about two aspects of this: the GridWise and 
the GridWorks initiatives. I would like to get some 
understanding as to what you estimate the budget to be, the 
breakdown. Will there be additional needs that we will have to 
confront as we move forward? And generally speaking, where are 
we with these two initiatives?
    Mr. Kolevar. Thank you, Congressman.
    The fiscal year 2006 request for the two programs combined 
is $10.5 million, $5.5 million of that for GridWise. The 
overall number, $10.5 million, is consistent with the 
Administration's request in fiscal year 2005. The projects I 
think, as you know, are different but symbiotic. GridWise is 
really the brains of the infrastructure. It is mostly software 
systems designed to monitor and relay information faster and 
better. GridWorks is the infrastructure behind it: improved 
cables, conductors, and the like.
    Those two projects--well, I should say, those two headers 
encompass a lot of projects within. And I think we are very 
able--very effectively able to leverage the federal dollars 
with work that is ongoing in the labs and in the universities. 
We have strong partnerships with a number of universities 
across the Nation on both of these elements. And I was in 
Atlanta last week and saw a peer review for the GridWise 
project and was very impressed by a number of technologies that 
have emerged from there that allow operators to see more 
clearly what is going on, not just within their system, but 
within neighboring systems, which is absolutely key to 
preventing a 2003 type blackout.
    And then on the GridWorks type of work, actually, while I 
am here, back in--at the Department, we have a number of 
technology experts from across the lab complex and some 
universities engaged in a review of the projects that we fund 
through that program right now that really give a better sense, 
as we move forward on the 2007 budget development, as to which 
ones are really the most effective and where are we getting the 
best use, the most return, on our federal dollars, where are 
we, candidly, not getting a return on our federal dollars. Are 
there programs that we should see, you know, moving to an off-
ramp so that the resources can be better spent on others that 
seem to be much more promising?
    The--both programs, I have to say, I have been very 
impressed by the quality of the work, whether it is, you know, 
a lab application or a university application. And I do think 
that much of this work we will start to see penetrating in the 
commercial sector in the next several years.
    Mr. Green. Thank you, Madame Chair.
    I yield back the balance of my time.
    Chairwoman Biggert. Thank you.
    The gentleman from Michigan, Mr. Ehlers, is recognized for 
five minutes.
    Mr. Ehlers. Thank you, Madame Chair.
    And I apologize for missing much of the meeting, but I had 
a markup in Transportation, which I was offering a very, very 
good amendment, and I thought my----
    Chairwoman Biggert. I assume that it passed then?
    Mr. Ehlers. Yes.
    I--you gentlemen at that table represent, in my mind, just 
about the most important group of people in this country at 
this point, because I am convinced that we absolutely have to 
reduce our dependence on foreign imports of energy. We have to 
do a much better job of using our energy. And I am not alone in 
that thinking. And many times, I have met people who regard 
this as sort of a fuzzy-headed, knee-jerk, liberal idea that we 
have to improve our energy efficiency, but I am very pleased 
the Energy Future Coalition has developed a plan they called 
``Set America Free: A Blueprint for U.S. Energy Security'' has 
nothing to do with environmental considerations. It has 
everything to do with national security considerations. And 
these are by very knowledgeable people.
    I think it is clear that we can save--we can improve our 
energy supplies far more and far more cheaply through 
conservation and efficiency than by any other short-term means. 
And so I was disappointed that the President's budget--or the 
Administration's budget suggests cutting buildings R&D programs 
by 11.5 percent. Buildings account for almost 40 percent of our 
energy consumption, and we ought to be working very, very hard 
on that and not cutting the funding.
    The American Council for Energy Efficient Economy has 
noticed that very small changes in demand for energy can result 
in much larger drops in energy prices, and I know my natural 
gas heating bill has doubled in less than a decade. I would 
very much appreciate very strong efforts to reduce the use of 
natural gas. I think it would be very beneficial for the 
economy if the price of natural gas dropped.
    Also, we need better efficiency in transportation, which is 
another huge--I believe it is 25 percent of the use. And again, 
if we can do that, the price of oil will drop.
    Can you assure me that you--the Department of Energy is--
and I apologize for your budget cut this year. I think that is 
disastrous, and we will try to reverse that in the Congress or 
change it, but can you assure me that the Department of Energy 
is really putting full effort into achieving these efforts, 
going in the direction of energy independence by energy 
conservation, and above all, energy efficiency?
    Mr. Faulkner.
    Mr. Faulkner. Yes, sir.
    I think I will make a couple of points.
    Our budget is still about 2/3 to 1/3 weighted toward energy 
efficiency over renewables. We have a lot of different 
priorities in our office. I mentioned earlier in my oral 
testimony that we are proud, and take pains to defend, the 
balance and the diversity in our portfolio. I think the 
building sector is an important one. You are absolutely right. 
And it is not just the R&D. It is also looking at setting the 
standards for appliances, which will help boost the energy 
efficiency of the marketplace.
    I would also note that Chairman Greenspan, in a recent 
speech, talked about the incredible success story of how the 
energy use per GDP in the economy, since the 1970s, has shown a 
steady drop, a continuing drop. Part of that is, of course, due 
to R&D, but I think part of it, as he noted, too, is due to the 
cost of energy and what that does to businesses, their 
incentive to reduce energy use and home use. And also I think 
we have to do a better job, and continuing to do a good job, of 
educating the public, getting that word out about how you can 
use better energy-efficient appliances, how you can do things 
in your home that are simple-to-complex, cheap and expensive.
    Mr. Ehlers. May I just interrupt there for a moment?
    I think that maybe the most important thing you can do, and 
I have always admired Agriculture, through their cooperative 
extension service, what they discover in the lab one year is 
used in the fields the following year. However, in energy 
efficiency, just as an example, I--when I was at Berkeley, they 
developed the energy-efficient windows. It took 20 years for 
that energy to be used in a big way in the field. I mean, 
whatever you can do to get that word out through setting up a 
cooperative extension type of arrangement, the public is 
woefully ignorant about energy I think primarily because it is 
intangible. They don't--they can't see it, touch it, feel it, 
smell it. They don't understand it. And so you have real 
educational job to do.
    Dr. Orbach. And I would also like to add that there are 
tremendous opportunities, inefficiencies that you identified. 
One of them is in the white light solid state lighting. About 
20 percent of our electricity is used for lighting. And the 
incandescent bulb is about five percent; fluorescent is about 
25 percent efficient. With solid state lighting, in the white, 
natural light, we can get those efficiencies up by factors of 
two, at least.
    Mr. Ehlers. Right.
    Dr. Orbach. And so we are working very hard on developing 
new light sources that are solid state to try to reduce the 
energy consumption.
    Mr. Ehlers. And did you have any projections of the price?
    Dr. Orbach. Well, right now, I think--I have forgotten the 
fraction, but a significant number of traffic lights are solid 
state. You have seen them by the little round dots. They save 
$1,000 per year per intersection. And our estimate, very 
roughly speaking, is if we could replace incandescent and 
fluorescent lights with solid state lighting, we could make the 
equivalent of creating 50 new nuclear power stations in the 
United States in terms of savings. So there is a huge 
opportunity there. And indeed, industry and our own research 
are working hard on that.
    Mr. Ehlers. I thank you very much.
    And I will yield back, since I have used up my time.
    Chairwoman Biggert. Thank you very much, Mr. Ehlers.
    The gentleman from Illinois, Mr. Costello, is recognized.
    Mr. Costello. I thank the Chair, and I thank the Chair 
for--and Mr. Honda, the Ranking Member, for calling this 
hearing today.
    And I just want to apologize, as my friend from Michigan 
did. I was in the same markup, and I want to attest to the fact 
that he did offer a very important amendment, and hopefully we 
are going to deal with that issue at some time in the not-too-
distant future, because I think you are right on point.
    Mr. Maddox, it is good to see you again. We have met 
before, and we have talked about the FutureGen project that the 
initiative that the Administration is supporting, and I had an 
opportunity to meet with the Secretary of Energy recently where 
he reconfirmed the commitment on the part of the Administration 
and the Department of Energy to move FutureGen along. And I 
first want to commend both President Bush and the Department of 
Energy and the Administration for their strong support for 
FutureGen. I think it is important for the future of this 
country.
    The--as you know, the entire Illinois delegation, including 
this speaker and all 19 Members of the House and both of our 
United States Senators, have sent a letter to both the 
President and the Secretary supporting FutureGen. I know that 
Congressman--my colleague from Illinois, Congressman Shimkus, 
and I recently, not too many months ago, met with you and 
presented petitions by over 10,000 residents in southern 
Illinois supporting the project, and they are hopeful that, not 
only that the project will go forward, but also that the 
project will be built in Illinois.
    I wonder if you might give us an update as to the progress 
that has been made by the Department moving forward with 
FutureGen and then give me a timeline as to your objectives and 
some of the things you want to achieve by specific dates.
    Mr. Maddox. Thank you very much, and it is good to see you 
again.
    I can confirm your statement that the folks in Illinois are 
in full voice on this issue, and we hear from them on a very 
regular basis.
    I would just say, right now, I am probably the most 
optimistic and confident FutureGen will go forward at any time 
since it was first initiated by the President. We have given 
the private sector the confidence that the Federal Government 
will meet its commitments on funding going forward. We--they 
have joined us in negotiations. Those negotiations are going 
forward really on two tracks: one track on the legal 
agreements, but also a separate track on NEPA issues in order 
to try to move quickly on the NEPA issues. Our expectation or 
our hope is if we can get an agreement done by mid-summer, that 
some time in the next three to six months, we can put out an 
initial request for interest for siting locations.
    And additionally, the confidence, from my standpoint, has 
reached a point where a recent trip to China, I did formally 
ask the Chinese government to become a part of this FutureGen. 
I have also approached several other governments, and that is 
becoming one of my priorities now is to go out and start 
soliciting international partners to become--to join FutureGen 
as well.
    So as I said at the beginning, I am very confident, and 
that, I think, gives you a rough timeline of some of the 
critical issues of where we are now.
    Mr. Costello. The--my understanding is the consortium, the 
partners, have come together. There was a meeting in March, as 
I understand. What is the next thing for them to do? Will they 
be meeting again? Is it scheduled? What do they need to do?
    Mr. Maddox. We have actually had three meetings. I am not 
real certain when the fourth is scheduled for. And I am not 
certain how much of it--I am not directly involved in 
negotiations. A lot of those are procurement issues and 
procurement-sensitive, not to be sworn in and various other 
issues. I know they are meeting on a regular basis, and that is 
kind of the status I can give you on that. But I have asked 
repeatedly, ``Are there issues that look like showstoppers?'' 
and have been assured there are none.
    Mr. Costello. I know that you are not in a position to give 
us a definitive date, but you have noted that you are more 
optimistic now than you ever have been that the project is 
going to happen. Do you think that we will be at a point some 
time this calendar year to make a judgment as to narrowing it 
down to site selection?
    Mr. Maddox. I think it will be at a juncture this calendar 
year where we will have asked everyone who is interested in 
hosting the FutureGen project to express interest and begin 
that process of winnowing down by the end of this calendar 
year.
    Mr. Costello. I thank you. And again, I thank the 
Administration and the Department of Energy for your strong 
support. It is an important project. We, of course, hope that 
it is built in Illinois, but even if it is not built in 
Illinois, it is an important project. We have a 250-year supply 
of coal in the United States. We need to figure out a way to 
burn it in an environmentally-safe manner, and this project 
will, in fact, move us forward to doing that.
    So I commend you, and I want you to know that if there is 
anything that we can do as a delegation to assist you, please 
don't hesitate to call on us.
    Mr. Maddox. Thank you very much.
    Chairwoman Biggert. The gentleman yields back, and that 
concludes our first round.
    I think we will have a second round, if we can do it very 
briefly.
    I have two questions. I had three, but, fortunately, Dr. 
Ehlers asked one of them, so maybe I can get these two within 
this time with a short question and short answers.
    First of all, for Mr. Johnson, as was mentioned in my 
opening statement about the President coming forward with the--
proposing for new nuclear facilities. Do you think that the 
U.S. industry will--is willing to participate in the large-
scale research efforts?
    And secondly, I just returned from France and the 
Netherlands looking at reprocessing plants, nuclear plants 
there. And it is something that we have developed here in the 
United States and in Illinois and has--you know, has--was shut 
down quite a while ago, but this is the--to me, is the way to 
go as far as how we are going to deal with nuclear waste and 
also how we are going to conserve the energy which we are now--
so much of the nuclear energy we are just putting into the 
waste rather than reprocessing, will that be part of this 
proposal? Sorry.
    Mr. Johnson. Thank you, Madame Chairwoman.
    With respect to the industry support for our Nuclear Power 
2010 program and moving forward on a path that will hopefully 
lead to a decision by industry to go forward with a new plant 
order and the construction of a new nuclear plant, we have been 
pleasantly surprised with the support of industry and the 
enthusiasm across the industry. We do have, we believe, two 
very strong industry utility-led consortia who are pursuing our 
regulatory demonstration project with us at this time: the 
Dominion-led team and the new ENERGY STAR. They are clearly 
serious about this, more so--for the first time in a long time, 
and we hold out a great hope and promise. If our second phase 
here on our combined construction operating license 
demonstration project is anything like the experience that we 
have gained over the last couple of years with our early-side 
permit projects, this program will continue to be a success.
    With respect to your question on--the question of 
reprocessing overseas, whether in Europe or Japan, as you know, 
the Department is pursuing looking at the separations 
technology for spent nuclear fuel as part of our Advanced Fuel 
Cycle program. Our focus in that program is looking at how can 
we safely, securely, in a proliferation-resistant manner, treat 
the spent fuel that is produced from the current fleet of 
operating reactors. We are looking at that, both from a 
separation of the spent fuel constituents point of view and 
also refabrication of those spent fuel constituents into new 
fuel to be recycled back into either existing reactors or 
possibly in the Generation IV fast reactors that we are 
currently pursuing.
    Chairwoman Biggert. Thank you.
    Well, now I have got three questions here.
    Dr. Orbach, they are both for you, and you probably would 
expect me to ask both of these, but given the limited funds, 
many in the fusion research committee have told us that the 
United States should drop its participation in ITER if it would 
require deep cuts in funding for domestic programs. Do you 
agree with this?
    Dr. Orbach. Yes, I would, because the strong domestic 
program is critical to the success of ITER and to the success 
of the United States in participation. In the 2006 budget, we 
have had to reduce, somewhat, the domestic program, but I would 
like you to look at that in terms of a reorientation of the 
domestic program rather than a reduction. ITER itself is an 
experimental device. It will be the largest experiment ever 
conducted, and we believe that the intellectual opportunities 
there are enormous. And----
    Chairwoman Biggert. But we have put so much into that--into 
this budget for this year, and there isn't even a site yet, be 
it France or Japan.
    Dr. Orbach. Well, we hope that by July there will be a site 
decision. Both parties, the European Union and the Japanese, 
have stated publicly that they hope to reach a decision between 
themselves by July.
    Chairwoman Biggert. Okay.
    Then this question you probably know that I would ask. And 
I save the best for the last.
    There--you know, the Rare Isotope Accelerator is an 
important project for nuclear physics and for the Nation. And 
is it still a priority for the DOE and the Office of Science?
    Dr. Orbach. The answer is yes. It tied for third in our 20-
year facility outlook. Secretary Bodman has written that it is 
a very important scientific program, both for nuclear physics 
and also national security. And our problem, of course, is that 
currently we do not have a funding structure for it, and so we 
have withheld the--request for proposals.
    Chairwoman Biggert. Well, what is the status of the NCAC 
review?
    Dr. Orbach. We believe that the NSAC review----
    Chairwoman Biggert. I mean NSAC.
    Dr. Orbach. Yes. It is the Nuclear Science Advisory 
Committee review. They--we are hoping to get a response from 
them by June.
    Chairwoman Biggert. Okay. So there is no funding, but the--
but perhaps a placeholder?
    Dr. Orbach. Well, we have R&D funding in the 2006 budget. 
There is $4 million, which is a continuation----
    Chairwoman Biggert. Which is the placeholder.
    Dr. Orbach.--of the R&D, and that is because it is an 
important project for us. And we don't want to let go of it. 
That money will be well used for the development of the project 
itself.
    Chairwoman Biggert. Okay. Thank you.
    Mr. Honda, do you----
    Mr. Honda. Thank you, Madame Chair.
    To Mr. Kolevar, I have been meeting with some folks and 
their municipal utilities, and there were some concerns about 
how costs are driven up because of, I guess, routing of 
electrons and the distribution of it and how they are managed 
or manipulated. And I was just wondering what role that you 
could describe for us, the role of the electric utilities and 
the development with DOE of real-time monitoring and the 
control software tools and system operating models that are at 
the core of your transmission reliability and distribution R&D 
programs. I am trying to understand a--what appears to be a 
very complicated management of electrons as it relates to cost 
and passing costs onto consumers, whether the utilities or the 
municipalities. I am having a--I would like some help in 
understanding that.
    Mr. Kolevar. Sometimes I like help in understanding it.
    It--I think, clearly, 50 years ago, if people had been 
asked, you know, ``We are going to start fresh, and what is the 
grid going to look like?'' we probably would have had a 
different design than we had today. I don't think that would 
surprise anybody. But the nature of the market, the nature of 
the fractured jurisdictions, competing companies are often very 
reluctant to share market data and proprietary data, because it 
can affect their bottom line, dramatically impacts the costs 
that end-use consumers can face, even when they are within a 
relatively small area. And it is a challenge. It--my office 
addresses it and comes at it in two ways. One, of which you 
mentioned, is technology development along the lines of 
monitoring systems, aggregating data to really find, you know--
to get where the energy is flowing efficiently and probably 
with some capability in the future to identify costs, where 
costs are being allocated along various lines. The second side 
of our office's work on that is on the analytical side, and it 
is working with municipalities, with regional organizations, 
with states to identify future goals with respect to 
development to identify constraints within the system. You 
know, a lot of times you have, in a lot of regions, the ability 
to produce more energy but not really push it along to end-use 
consumers, because you have, you know, constraints. Path 15 in 
California is one notable one, probably notable because we 
fixed it. It took a long time to do.
    And so it is a difficult challenge. My sense is that it 
will be driven--that reforms in this area will be driven by the 
passage of effective, comprehensive energy legislation. And in 
my opinion, the House's actions with the bill that passed out 
recently will go a long way towards helping, and it will be 
because we have systems in place to encourage the development 
of regional entities, who don't necessarily have a profit 
margin or a profit motive at the end of the day. They have the 
interest of the consumer at their heart. And empowering 
regional entities to work within states or within several 
states will go a long way toward helping level the sometimes 
very differing cost scales within regions for price.
    But I will tell you, on the technology side, we have some 
very promising R&D projects that we are pursuing that are--that 
I--that are starting to see commercial penetration that are--
that have the potential to have a cost impact and that you can 
start to trace, you know, who is paying for what along various 
lines, but also have a huge--can have a huge impact on 
reliability in that you--in that operators and operators' 
neighbors would be able to see fluctuations in the grid that 
might precede a low-voltage event, a brief blackout, or what 
could actually cascade into a big blackout and respond very 
quickly to correcting that frequency change and thereby 
increase reliability for consumers. And at the end of the day, 
the country loses a lot of money from blackouts, probably 2/3 
of it from your very momentary blackouts. You know, you get 
home and your alarm clock is blinking. That kind of blackout is 
a minor inconvenience to you and me. We go home and we reset 
our alarm clock. It is a major inconvenience to somebody like 
Intel who can lose an entire chip-line from, you know, a 10-
second occurrence.
    Being able to address those brief occurrences, those brief 
outages, and increase the reliability of the system will save 
the Nation a great deal of money in the future.
    Chairwoman Biggert. The gentleman yields back.
    Before we bring this hearing to a close, I want to thank 
our panelists for testifying before the Energy Subcommittee 
today. And I would agree with Dr. Ehlers that you and your 
agencies and your testimony and your expertise are so important 
to the field of science, especially research and development, 
and to this Nation and to the global economy that we live in.
    So I thank you so much for being here today.
    If there is no objection, the record will remain open for 
additional statements from Members and for answers to follow-up 
questions the Subcommittee may wish to ask of the panelists. 
Without objection, so ordered.
    This hearing is now adjourned.
    [Whereupon, at 12:45 p.m., the Subcommittee was adjourned.]

                               Appendix:

                              ----------                              


                   Answers to Post-Hearing Questions

Responses by Raymond L. Orbach, Director of the Office of Science, 
        Department of Energy, Washington, DC

Questions submitted by Chairman Judy Biggert

Q1.  Last year, you testified that the U.S. contribution for ITER would 
be about $700 million. We understand that you now consider that figure 
to have been in error and are not sure where it originated. What is the 
current estimate of the U.S. contribution to ITER? Will the U.S. 
contribution be capped at that level? Are there any circumstances under 
which you can envision that cap being breached? What additional costs 
beyond the contribution to the ITER project itself do you expect the 
U.S. will incur as a result of its contribution to ITER?

A1. The current estimate originated with the $502 million value 
estimate, corresponding to our 10 percent of the ITER Engineering 
Design Activities Final Design Report estimate, and has been revised to 
reflect guidance of the DOE 413.3 Order on Program and Project 
Management for the Acquisition of Capital Assets, industrial estimates 
by U.S. suppliers, revised rates of escalation, and best practices of 
DOE project and procurement management.
    The current Total Project Cost (TPC) estimate for the U.S. 
Contributions to ITER Major Item of Equipment (MIE) project is $1.122 
billion for the eight-year project period. (Note: Total Project Cost is 
the sum of Total Estimated Cost--the U.S. contributions of equipment, 
personnel, and a limited amount of cash supporting the personnel and 
the installation and assembly tasks, and Other Project Costs--the 
specific R&D and design activities that support ITER.) The TPC cap is 
based on the June 2003 authorization from an interagency process led by 
the State Department and the Office of Science and Technology Policy to 
negotiate the multilateral ITER Agreement. The only known circumstances 
under which the cap could be increased would arise from factors that 
are deemed to be outside the control of the DOE. For example, both 
economic changes causing increases in projected escalation rates by the 
time of the Critical Decision-2 (CD-2) review and changes in currency 
exchange rates affecting the cash parts of the U.S. Contributions to 
ITER project would constitute bases for increasing the cap.
    The only additional costs that we expect the U.S. to incur as a 
result of our participation in the construction, operation, de-
activation, and decommissioning of ITER will be the research costs 
associated with providing scientists, engineers, diagnostics and other 
associated equipment during the research phase of the experiment.

Q2.  Given the reduced funding outlook for Office of Science, do you 
plan to revise your 20-Year Facilities Plan? How will you make the 
choices between building new and running existing facilities, and 
between facilities and funding for research grants?

A2. The Twenty-year Facility Outlook was designed to be a planning 
document, not a budget document. The Office of Science recognizes that 
the breadth and scope of the vision encompassed by these facilities 
reflect a most aggressive and optimistic view of the future of the 
Office. Nevertheless, we believe that it is necessary to have and 
discuss such a vision. Despite the many uncertainties, it is important 
for organizations to have a clear understanding of their goals and a 
path toward reaching those goals. We have held to the priorities 
listed, as appropriations and scientific considerations provide. Under 
the funding request for FY 2006, we plan to proceed with the priorities 
contained in the Outlook.
    This is not just a listing of all possible future facilities which 
will enable the best science. The Twenty-year Facility Outlook only 
lists 28 facilities, and the facilities are prioritized according to 
the best science they will produce. The order is like a golf score: 
there is a first, and there is a second. But four facilities are tied 
for third for the simple reason that their relative order is difficult 
if not impossible to obtain on purely scientific grounds. These choices 
were made with the assistance of the U.S. scientific community. Our 
Advisory Panels assessed the scientific opportunities in their own 
fields, and set time lines when these opportunities could mature. My 
office then chose among fields, assigning priority according to our 
best sense of relative scientific importance using, of course, the 
assessments of our Advisory Panels.
    While it is DOE's intent to give priority to these facilities, many 
steps need to occur before deciding whether and when to propose 
construction of each, including long-term budget estimates, the status 
of project R&D, conceptual design work, engineering design work and 
scientific reviews, inclusion in the President's budget requests, and 
approval by Congress.

Nuclear Physics

Q3.  When and how will the Department make a decision about the future 
of its nuclear physics facilities: the Relativistic Heavy Ion Collider, 
the Continuous Electron Beam Accelerator Facility and the Rare Isotope 
Accelerator?

A3. Initial decisions regarding the future of the nuclear physics 
facilities are expected to be made during the FY 2007 budget 
formulation process. As you are aware, federal funding will be 
constrained in the out-years. The Department will examine its 
activities and opportunities across its portfolio and make decisions 
that will optimize the utilization of the resources available to 
address national priorities and meet national needs. Input from the 
research community has been solicited through the Nuclear Science 
Advisory Committee (NSAC) regarding the opportunities for scientific 
progress and discoveries from the programs at RHIC, CEBAF, and RIA, and 
will be part of the decision process.

Question submitted by Representative Dave G. Reichert

Q1.  How do you plan to address shortfalls in user facility funding 
such as those faced by Environmental Molecular Science Laboratory 
(EMSL) at Pacific Northwest National Laboratory? Can you commit that 
you will support efforts in Congress to provide additional funds for 
Office of Science user facilities, including EMSL?

A1. The Office of Science (SC) places great value and the highest 
priority on its National Scientific User Facilities. We continue to 
provide full support for EMSL operations, and have not reduced its 
budget since it opened in 1997. Through the use of science and 
management reviews by Advisory Committees (e.g., Biological and 
Environmental Research Advisory Committee) as well as by internal SC 
entities, we seek to balance the needs of National Scientific User 
Facilities and support for fundamental research programs that use such 
facilities. We factor the recommendations of such reviews into our 
decision-making process for budget development.

Questions submitted by Representative Michael M. Honda

Q1a.  The existing national laboratory infrastructure represents a 
sizable investment by DOE, especially aging facilities for nuclear-
related research.

      Has the department examined how facilities that it supports may 
be consolidated to reduce the maintenance needs for older facilities?

A1a. The Deputy Secretary has recently approved an Asset Management 
Plan to establish the goals and strategies to guide and evaluate 
management of Real Property Assets in a holistic, performance-based 
approach. The Asset Management Plan and the Department's Facilities 
Information Management System, the dynamic repository of facility data, 
are key facility assessment tools.
    The Department's Real Property Asset Management Order established 
the requirement for the preparation of comprehensive Ten Year Site 
Plans (TYSP) to formally integrate long-range real property asset 
planning with the Department's strategic plan and appropriate planning 
guidance. The TYSP addresses space and land use across the site to 
consolidate operations where practical and eliminate excess facilities. 
It addresses facility assets throughout their life cycle (acquisition 
through renewal and/or disposal) to control overall facility cost while 
enhancing the facilities' contribution to mission effectiveness.

Q1b.  Has the department estimated the costs for decommissioning 
consolidated facilities?

A1b. At the Headquarters level, Decontamination and Decommissioning 
(D&D) costs of contaminated facilities have been estimated and are 
reported as liabilities within the Department's Balance Sheet.
    At the site level, as noted above, the Department has established 
the Ten Year Site Plans (TYSP) to formally integrate real property 
asset planning with the Department's strategic plan and appropriate 
planning guidance. The TYSP addresses facility assets throughout their 
life cycle (acquisition through renewal and/or disposal) and considers 
the business case decisions for facility consolidation, renovation and 
decontamination/decommissioning.

Biological and Environmental Research

Q2a.  What are the department's plan to ensure the long-term 
availability of isotopes for research, clinical trails, and treatment?

A2a. The Department of Energy (DOE) maintains nuclear technology 
infrastructure that supports a wide range of important research, 
isotope production, and other vital purposes. The planning, 
maintenance, and safe operation of this infrastructure is important to 
DOE. DOE has undertaken measures to address facility capabilities and 
upgrades in support of nuclear, scientific, and medical research. An 
example is DOE's investment in the Isotope Production Facility (IPF), a 
new production capability at the Los Alamos Neutron Science Center 
(LANSCE) that will enable almost year-round production of long-lived 
accelerator isotopes including many that are not typically available 
elsewhere. The upcoming National Academy of Sciences (NAS) study on 
isotope production, which will include DOE participation, will help 
determine future needs in this area.

Q2b.  With over 17 million procedures performed in the U.S. last year, 
research in nuclear medicine is critical to maintaining our standard of 
living and extending lives.

      The future of research in radioisotopes is highly dependent on 
the availability of skilled radio-chemists and nuclear chemists. How is 
the department addressing the need to retain and develop such skilled 
professionals?

A2b. We have started a dialogue with our colleagues at the NIH on the 
future of the nuclear medicine program, including the training of the 
next generation of radio-chemists.

Basic Energy Sciences

Q2c.  What is the justification for cutting funding for the 
Radiological (sic) Engineering Development Center at Oak Ridge National 
Laboratory?

A2c. The BES portion of support for the Radiochemical Engineering and 
Development Center (REDC), which provides capabilities for the 
processing, separation, and purification of transplutonium elements, 
was terminated in FY 2006 because only a handful of BES researchers 
make use of the REDC annually. The funding was terminated in order to 
support higher-priority facilities that together host thousands of 
users annually.

Q2d.  Has the Office of Science evaluated the cost associated with 
shutting down this facility, and has the department budgeted for such 
an activity?

A2d. It is not anticipated that REDC will close. SC funding for REDC 
had been ramping down gradually over the past two years with the 
expectation that ORNL would consolidate work in its many hot cells at 
the ORNL site into the REDC facility. Support for REDC would then come 
from actual users and customers of hot-cell facilities.

Fusion Energy Sciences

Q3.  By increasing funds for Fusion Energy Sciences in these extremely 
tight budget times, the Administration has signaled its strong support 
for the ITER project, a critical step in the development of fusion 
energy. But the budget request reduces vital domestic research by $ 
34.1 million, which would seriously damage U.S. capabilities to benefit 
from ITER. And this is at a time when U.S. fusion energy research 
funding is already only one-third that of Europe.

          Should we take the Fiscal Year 2006 (FY06) budget 
        request for fusion as an indication of how the domestic 
        programs may have to make sacrifices for our role in ITER in 
        the future?

          If not, how can we continue the world-class research 
        at our facilities at home while still participating in the 
        international effort?

A3. As you have noted, the ITER Project is a critical step in the 
development of fusion energy, with strong support from the 
Administration. The ITER facility will provide a unique opportunity to 
investigate the complex science of burning plasma physics and 
technology, which underpins the feasibility of fusion as an energy 
source. The construction and operation of ITER leverages international 
collaboration to share the existing knowledge and to minimize the cost 
of achieving this objective. ITER is an integral part of the U.S. 
Fusion Program, benefiting from the ongoing research at the major U.S. 
facilities in theory and computation, technology development, and U.S. 
collaborations with the international scientific community. The 
experience we will gain from the construction and operation of ITER 
will benefit the totality of the U.S. Fusion program. In FY 2006 we 
have re-oriented the program to accommodate the needs of the ITER 
Project in addition to established priorities. We will adjust our 
priorities as appropriate within the annual budget allocations and 
maintain a viable U.S. Fusion program to benefit from ITER.

Questions submitted by Representative Lincoln Davis

Leadership Class Computing

Q1.  Does DOE intend in FY07 to resume hardware acquisition to actually 
establish a true leadership class computing facility?

A1. The Department is currently in the process of developing its FY 
2007 budget proposal.

Q2.  What are the Department's long-term plans for the leadership 
facility awarded last year to the team led by Oak Ridge National Lab?

A2. The Department is planning to continue its investment in the 
Leadership Computing Facility, which will provide a limited number of 
competitively selected teams the capability to achieve scientific 
leadership. The focus on providing a small number of teams access to 
exceptional capability is key to the mission of the facility.

Q3.  How does this contribute to establishment of a leadership class 
computer?

A3. The computers being currently installed at the Leadership Computing 
Facility (a 20 teraflop Cray X1e and a 25 teraflop Cray Xt3 or Red 
Storm) are two of the largest systems available for open science in the 
U.S. The decision to allocate these resources to a limited number of 
competitively selected teams will enhance the facility's ability to 
enable leadership class science.

Q4.  How does the Department justify the newly proposed ``Research and 
Evaluation Prototypes,'' funded at $13.2 million, a ``new start'' in 
FY06 when the budget also includes a significant cut to the Center for 
Computational Sciences, an established program?

A4. The research and evaluation prototype activity, previously referred 
to as Advanced Computing Research Testbeds, has been a part of the 
Advanced Scientific Computing Research budget for a number of years. In 
FY 2005 Oak Ridge National Laboratory will complete the evaluations 
that were funded in prior years. Therefore, we will solicit proposals 
for new research and evaluation prototypes in FY 2006. This type of 
activity was strongly endorsed in the Federal Plan for High End 
Computing, which was published by the National Science and Technology 
Council last May. These systems complement our investments in the 
Leadership Computing Facility at Oak Ridge National Laboratory because 
they enable us to evaluate future systems. In a technology area like 
computing, where new computers are introduced every two years, it is 
critical to evaluate future systems in order to understand what systems 
should be installed at facilities like the Leadership Computing 
Facility and the National Energy Research Scientific Computing Center.

Genomes to Life

Q5.  The constrained budgets DOE will face in the coming fiscal years 
are already affecting operations of existing user facilities.

     Will DOE reconsider the scale and scope of the four Genomes to 
Life start-up facilities, so that the cost of each is reduced?

A5. Yes. We have recently engaged the National Academies in a 
scientific assessment of our current plans for the Genomics: GTL 
program. Among several topics, they have been asked to address the 
scientifically appropriate scope and scale for facility component of 
the Genomics: GTL effort.

Question submitted by Representative Al Green

Q1.  I notice in your testimony that there is a strong focus, in terms 
of funding, on the President's initiatives.

     How much of a role does that play in your requests for the funding 
of activities and have you found any major divergent visions between 
your particular sectors and the Administration's initiatives?

A1. The Office of Science (SC) budget funds presidential initiatives in 
hydrogen and fusion (ITER). The Office fully funds all of the 
President's initiatives, subject to Congressional appropriation, and 
has found these Presidential initiatives in line with the science-
driven priorities outlined in SC's 20-year Facilities for the Future 
document.

                   Answers to Post-Hearing Questions

Responses by Douglas L. Faulkner, Principal Deputy Assistant Secretary 
        for Energy Efficiency and Renewable Energy, Department of 
        Energy, Washington, DC

Questions submitted by Chairman Judy Biggert

Q1.  In both your written and oral testimony, you emphasized standards-
setting for buildings, appliances, and equipment as a priority for the 
Building Technologies Program in the Office of Energy Efficiency and 
Renewable Energy. The program has not submitted several final rules for 
new and amended appliance standards that were required by the Energy 
Policy Act. While it is good news that several rules are going to be 
issued in 2005, the backlog would make it seem unwise to be cutting the 
budgets for this important program. Are these efforts resource-
constrained? What would it take for the Department of Energy (DOE) to 
issue final rules in all areas which it was overdue? How is the peer 
review requirement recently imposed by the Office of Management and 
Budget affecting the standards process at DOE?

A1. We recognize the Department has missed statutory deadlines for a 
number of rule-makings. Secretary Bodman has testified regarding the 
importance of resolving this issue. We continue to undertake an annual 
priority-setting process to determine which of these rule-makings 
should be allocated resources during the coming year; we are working 
diligently to complete the priority rule-makings and expect to issue 
rules for these products as soon as possible. Our efforts are not 
resource-constrained; the reduced level of funding for these activities 
requested for FY 2006 will have no impact on these priority rule-
makings. However, the process for issuing rules is lengthy and 
burdensome, including substantial periods for public comment that can 
slow the process.
    To issue all final rules that are overdue, the Department would 
have to significantly accelerate its processes. Yet, some overdue rules 
are no longer of significance to industry or the public, while others 
are of great importance. We will continue to focus on the highest-
priority rules.
    We expect that the peer review requirements imposed by the Office 
of Management and Budget will have little impact on rule-making 
schedules; we will conduct the peer review of the appliance standards 
concurrent with the preparation and review of Notices of Proposed Rule-
making.

Q2.  The American Council for an Energy Efficient Economy (ACEEE) has 
noted that small changes in demand for energy can result in much larger 
drops in energy prices. They have estimated that a five percent 
reduction in demand for natural gas could cause a 20 percent drop in 
price. Your testimony refers to ``the Department's focus on longer-
term, high-risk activities.'' However, the White House guidance to 
agencies for research and development (Memorandum 04-23) also calls for 
investments that ``support technological innovation to enhance economic 
competitiveness and new job creation.'' Given the large public benefits 
of the price drop modeled by ACEEE (around $25 billion per year), and 
the high energy prices today, is there a need to focus more of DOE's 
research and development effort on nearer-term energy efficiency goals? 
What contribution to our predicted energy demand could be made by an 
investment in efficiency and renewable energy of one-fifth of this 
benefit over the next three years?

A2. The Office of Energy Efficiency and Renewable Energy's (EERE)  
portfolio of research  and  development  (R&D)  efforts  focuses  on  
achieving  a  diverse  mix  of near-, mid-, and long-term benefits. 
Although near-term benefits may seem particularly attractive during a 
time of high energy prices, it is critical to maintain an array of 
technologies that will reap benefits into the future.
    We have not conducted an analysis to determine the level of public 
benefits, including reductions in energy demand, that would likely 
result from increasing the budget of EERE to $5 billion over three 
years ($1.66 billion per year). With R&D, benefit estimation provides 
decision-makers with a useful indication of relative benefits rather 
than absolute benefits. To have a larger near-term impact, the 
investment should be targeted at implementing energy efficiency 
projects, not R&D. It is generally the role of industry to make such 
investments, and, absent a market failure, industry will usually do 
just that if price signals indicate that the projects will be 
sufficiently profitable.
    In his 2005 State of the Union Address, the President underscored 
the need to restrain spending in order to sustain our economic 
prosperity. As part of this restraint, it is important that total 
discretionary and non-security spending be held to levels proposed in 
the FY 2006 Budget. The budget savings and reforms in the Budget are 
important components of achieving the President's goal of cutting the 
budget deficit in half by 2009 and we urge the Congress to support 
these reforms. Regardless of EERE's funding level, our primary long-
term goal remains to significantly reduce our dependence on foreign oil 
and to develop the technologies that enable Americans to make greater 
and more efficient use of our abundant, clean, domestic renewable 
energy resources.

Question submitted by Representative Ralph M. Hall

Q1.  Over the years, DOE's Industrial Technologies (IT) Program has 
helped make manufacturers in my state and rest of the country more 
competitive in global markets which creating good-paying jobs. The IT 
program is meeting its goals of reduced dependence on foreign energy, 
reduced environmental impact, job growth and retention. I am concerned 
to find that the program faces deep budget cuts at DOE, from $91 
million in 2004 to a requested level of $57 million for Fiscal Year 
2006. Why is the Administration cutting back on its requests for this 
successful public-private partnership program?

A1. Because industry is less likely to invest in R&D toward long-term 
energy-savings technologies, our Industrial Technologies Program 
focuses on a fewer number of higher-risk, higher-reward technologies, 
and our budget reflects that. Fortunately, the industrial sector of the 
economy is already quite energy efficient, since it has an economic 
incentive and the financial means to reduce energy use as a component 
of its overall cost of production.

Questions submitted by Representative Al Green

Q1.  The proposed budget seems to de-emphasize the necessity for energy 
efficiency and renewable energy by continuing to reduce funding for 
energy efficiency and renewable energy research and development (R&D), 
with the exception of activities supporting the Administration's 
hydrogen initiatives. Renewable Energy R&D funding, excluding the 
Hydrogen fuel initiative, has seen a 13 percent reduction and Energy 
Efficiency R&D (excluding fuel cells) is projected to have a 15 percent 
reduction. I noticed in your written testimony that the attempt is to 
focus ``R&D on long-term, high-payoff activities that require federal 
involvement to be successful.''

     What other criteria does DOE use to prioritize its energy 
efficiency and renewable energy initiatives?

A1. The Department of Energy (DOE) prioritizes its activities in 
alignment with the National Energy Policy and the Department of 
Energy's Strategic Plan. In addition, DOE utilizes models that estimate 
the potential benefits of portfolio choices. DOE also uses principles 
contained within the President's Management Agenda (PMA), the Office of 
Management and Budget's Program Assessment and Rating Tool (PART), and 
the Research and Development Investment Criteria (RDIC) to inform 
budget decisions and guide management improvements.

Q2.  The proposed budget seems to de-emphasize the necessity for energy 
efficiency and renewable energy by continuing to reduce funding for 
energy efficiency and renewable energy research and development (R&D), 
with the exception of activities supporting the Administration's 
hydrogen initiatives. Renewable Energy R&D funding, excluding the 
Hydrogen fuel initiative, has seen a 13 percent reduction and Energy 
Efficiency R&D (excluding fuel cells) is projected to have a 15 percent 
reduction. I noticed in your written testimony that the attempt is to 
focus ``R&D on long-term, high-payoff activities that require federal 
involvement to be successful.''

     Why do you believe that there is such a focus on the 
Administration's hydrogen initiatives rather than other near-term 
technologies such as solar, wind, and hydropower energy?

A2. Reducing, or even eliminating, our nation's dependence on foreign 
oil is the top priority of the Office of Energy Efficiency and 
Renewable Energy (EERE). Our requested funding levels for programs that 
can directly reduce transportation oil consumption, such as the 
Hydrogen, Fuel Cells & Infrastructure Technologies Program, reflect 
that high priority. In addition, the FY 2006 funding requests for solar 
energy and wind energy are only slightly below (one percent and two 
percent, respectively) their 2005 appropriation levels. The lower 
request for hydropower reflects the Department's decision to close out 
its hydropower R&D work in the absence of any significant remaining 
market barriers that would justify continued federal investment.

Q3.  The proposed budget seems to de-emphasize the necessity for energy 
efficiency and renewable energy by continuing to reduce funding for 
energy efficiency and renewable energy research and development (R&D), 
with the exception of activities supporting the Administration's 
hydrogen initiatives. Renewable Energy R&D funding, excluding the 
Hydrogen fuel initiative, has seen a 13 percent reduction and Energy 
Efficiency R&D (excluding fuel cells) is projected to have a 15 percent 
reduction. I noticed in your written testimony that the attempt is to 
focus ``R&D on long-term, high-payoff activities that require federal 
involvement to be successful.''

     I noticed in your testimony that there has been a strong focus, in 
terms of funding, on the President's initiatives. How much of a role 
does that play in your request for the funding of activities, and have 
you found any major divergent visions between your particular sector 
and the Administration's initiatives?

A3. As an integral component of the Administration, the Department 
shares the President's vision and carries out activities to support 
that vision, including Presidential initiatives.

                   Answers to Post-Hearing Questions

Responses by Mark R. Maddox, Principal Deputy Assistant Secretary for 
        Fossil Energy, Department of Energy, Washington, DC

Questions submitted by Chairman Judy Biggert

Q1.  The President's fiscal year 2006 (FY06) budget request proposes to 
rescind $257 million from the Clean Coal account, and advance-
appropriate the same amount in Fiscal FY07, dedicated to the FutureGen 
project. Such a change would move the project into an account with 
fewer statutory protections against cost overruns. Why is the 
Department of Energy (DOE) proposing to move this funding between 
accounts? Is there a concern about potential overruns?

A1. The President's fiscal year 2006 budget proposes to rescind $257 
million from the Clean Coal account and advance-appropriate the same 
amount to FutureGen in the FY 2007 budget. This proposal would move 
remaining prior-year funds from terminated clean coal demonstration 
projects to an account specific to FutureGen, a large-scale research 
project. Forward-funding the FutureGen project for several years is an 
indication of the government's serious commitment to the FutureGen 
project. With regard to potential cost overruns, it is our intent to 
exercise tight controls over cost and schedules using strong management 
principles and practices in keeping with the general project management 
guidelines of the Department.

Q2.  The Office of Fossil Energy has chosen a unique management 
structure for the FutureGen project. As I understand it, the structure 
would create a private-sector consortium to manage both oversight and 
operations. Is the proposed management approach to large demonstration 
projects such as FutureGen the right mechanism to ensure efficient 
operation and oversight of federally-funded projects? Please explain 
the role of the project integrator and how that approach is better for 
public purposes. What is the liability of the Federal Government in the 
event that the private-sector partners walk away from the project 
before the demonstration is complete?

A2. The Department of Energy has chosen a project structure for 
FutureGen that is not unique, but one which has been employed with 
similar projects that have been cost-shared between government and 
industry. The implementation of the FutureGen project through a 
cooperative agreement with an industry consortium was one of many 
methods studied to determine how best to proceed with meeting the need 
for a zero emission coal-based power plant. After all methods were 
thoroughly studied, DOE concluded that a cooperative agreement with an 
industry consortium was the preferred and most efficient mechanism 
available to ensure that the goals of the FutureGen research project 
would be met. One of the chief goals of the FutureGen project is 
replication of zero emission clean coal technology once the technical 
feasibility and economic viability of the project has been proven. For 
this reason, significant participation from the coal utilities and 
technology providers who we expect to carry out those replications is 
essential, and partnering closely with these private-sector entities is 
appropriate. The project will be managed with distinct budget periods 
that limit the liability of all parties for each period and will adhere 
to the Department's comprehensive project management guidelines for 
major projects regarding Critical Decision approvals by the 
Department's energy systems acquisition review board. While any partner 
can discontinue participation at the end of a budget period, currently 
the liability of the Federal Government would be limited to the monies 
invested up to that point and offset by the government's ownership of 
any residual assets to which it was entitled.

Q3.  The FY06 budget request indicates that over 65 percent of the cost 
of the FutureGen project would come from the Federal Government ($620 
million of the $950 million). The Energy Policy Act of 1992 requires 
that demonstration programs receive no more than 50 percent of their 
funding from federal sources. Does the proposed budget for FutureGen 
follow the requirements in law that demonstration projects be costs 
shared, with industry contributing a minimum of fifty percent of the 
cost of the project?

A3. The FutureGen Project is an advanced demonstration project that 
will attempt to integrate cutting-edge technologies and components, 
some of which are not currently ready for full-scale demonstration. The 
approximate overall cost-share percentages are 26 percent from 
industry, 65 percent from the government, and nine percent from 
International contributions. However, not all portions of the project 
will be cost shared at the same level. Consistent with the Fiscal Year 
2004 and 2005 Appropriations language, the Federal Government will 
maintain a 50 percent cost-share from non-federal sources on any 
component of the project that would be considered as demonstration. 
Less will be sought for portions with technology not ready for full-
scale demonstration, such as carbon sequestration.

Q4.  Natural gas prices are at all-time highs, and the chemical 
industry has been cutting production in the U.S. in response to those 
prices. Gasification of coal creates a synthetic mix of gases, often 
called syngas, which can be used in many of the same processes as 
natural gas. If large-scale gasification were in place in the U.S. 
today, coal could serve as a stabilizing force on natural gas prices. 
What is DOE doing to promote the use of coal gasification as a 
substitute for natural gas?

A4. The Department of Energy's clean coal research program, in 
partnership with U.S. industry, is conducting research, development, 
and demonstration activities to improve the performance and reduce the 
costs of advanced gasification systems. Research on these advanced 
gasification technologies is aimed at low-cost, reliable methods of 
gasifying a variety of coals into a synthesis gas (syngas) that can be 
used in an integrated gasification system to co-produce electricity, 
high value chemicals and fuels (hydrogen), or converting the syngas 
into methane as an alternative fuel to natural gas. For example, 
relatively inexpensive domestic feedstocks such as lignite coal can be 
gasified to produce a synthetic gas. This synthetic methane as an 
alternative to natural gas is currently being produced by the Dakota 
Gasification plant in Beulah, North Dakota.
    The coal gasification program includes research on low-cost, fuel-
flexible, longer life refractory materials; advanced oxygen membrane 
technology with lower costs and improved efficiency; low-cost, ultra-
clean gas stream cleanup systems; designs for gasifiers that operate 
more efficiently on low rank coals; and advanced catalysts for 
producing hydrogen and synthesis gas in shift reactors. These 
activities will enable us to use coal to produce power, from efficient 
hydrogen turbines, and high value fuel and chemical products. For the 
longer-term, the coal gasification program is a key element in the 
effort to develop advanced technologies for efficient, near-zero 
atmospheric emissions coal plants that are fuel flexible, and 
affordable.

Question submitted by Representative Ralph M. Hall

Q1.  I am concerned about the future of manufacturing in the U.S. As 
you well know, our natural gas prices are the highest in the world and 
are beginning to price U.S. companies out of global markets. I would 
like to know what DOE is doing to stimulate new energy technologies. I 
am told by business people in my district that coal gasification 
technology holds great promise. They tell me lignite, mined in my 
district, can be converted in to a form of gas that can be used to make 
chemicals, electricity, and even ultra-clean form of diesel fuel. It 
strikes me that gasification may have the potential to save natural gas 
and U.S. jobs. What is DOE doing to help make this technological 
promise a reality?

A1. The Department of Energy, in partnership with U.S. industry, is 
conducting research, development, and demonstration activities to 
improve the performance and reduce the costs of advanced systems that 
produce power, fuels (hydrogen), and chemicals from coal and 
alternative fuels (biomass). The Coal Gasification Program is a key 
element of efforts to develop advanced technologies for efficient, 
near-zero atmospheric emissions coal plants that are fuel flexible, and 
affordable.
    There are a number of gasifiers that have been designed to 
accommodate a variety of specific coals (and other feedstock) including 
low-rank coals such as lignite. Lignite is a good example of a 
relatively inexpensive domestic feedstock that can be gasified to 
produce a synthetic gas. This synthetic methane as an alternative to 
natural gas is currently being produced by the Dakota Gasification 
plant in Buelah, North Dakota.
    The Gasification Program includes research on low-cost, fuel-
flexible, longer life refractory materials; advanced oxygen membrane 
technology with lower costs and improved efficiency; low-cost, ultra-
clean gas stream cleanup systems; designs for gasifiers that operate 
more efficiently on low rank coals; and advanced catalysts for 
producing hydrogen and synthesis gas in shift reactors. These 
activities will enable us to use coal to produce power, from efficient 
hydrogen turbines, and high value fuel and chemical products from coal.
    Overall, the research that we are pursuing is focused on making 
gasification more competitive by developing advanced technologies that 
will lower its capital cost and reduce risk, and position coal 
gasification to be compatible with the capture of carbon dioxide for 
the future. It is anticipated that this effort could improve the 
competitiveness of gasification systems being marketed by major vendors 
today.

Question submitted by Representative Bob Inglis

Q1.  The Administration's budget request for Distributed Generation--
Fuel Cells provides that funding in the Solid State Energy Conversion 
Alliance (SECA) program will be used to ``continue MW-scale SECA fuel 
cell and fuel cell hybrids work.'' What activities in this area do you 
envision in FY06, and what is the Department's plan for this program 
beyond FY06?

A1. The current strategy is to develop clean high efficiency fossil 
fueled power plants: Immediate near-term (2006-2007)--validate 
successful Solid State Energy Conversion Alliance (SECA) Phase I 
achievements and initiate Phase II SECA low-cost, 3-10 kilowatt solid-
state fuel cell modules for distributed and auxiliary power unit 
applications. Validation of target achievements will be done via 
testing of the first prototype fuel cells to confirm the first plateau 
of performance (current density, hours of operation) and analyzing the 
design and cost reduction potential using the system components. If the 
fuel cell prototype passes the first ``gate'' it will qualify for a 
second phase development aimed at further performance improvements and 
cost reduction designs that will be tested and analyzed at the end of 
the second phase. Mid-term (2007-2010)--develop and test SECA fuel cell 
prototype modules capable of manufacture of $400 per kilowatt (a ten-
fold reduction from fuel cells available in 2000); and Long-term (2010-
2015)--scale-up and demonstrate the critical high risk technology 
advancements which will permit U.S. industry to establish commercial 
availability of advanced, low-cost, ultra-high efficiency, fuel 
flexible, integrated fuel cell and fuel cell/turbine hybrids systems 
for synfuel and hydrogen-based plants. Fuel cell systems have 
specifically identified goals which coincide with coal-based and other 
fuel-flexible zero emissions power modules and concepts in the 2010 to 
2015 time frame.

Questions submitted by Representative Michael M. Honda

Q1.  DOE recently released a series of reports indicating the potential 
to recover 43 billion barrels of additional domestic oil through the 
use of carbon dioxide-enhanced oil recovery. This is a technology that 
has received considerable federal research attention in the past and 
the release suggested the importance of additional research to apply 
the technology in these other areas.

          So, faced with the opportunity to produce an 
        additional 43 billion barrels of oil in the United States, as I 
        understand the Administration's budget request, why does the 
        Administration recommend that this research be terminated?

A1. The decision to terminate the oil and gas research programs 
reflects a strategic assessment of the programs compared to other DOE 
programs. This is in line with our commitment to deliver results for 
the American taxpayer.
    Much of the Department's oil and natural gas research is jointly 
funded by industry and the government. It was determined that the 
industry has the capacity to pursue this research, especially in light 
of the current strong economic performance of the industry.

Q2.  In 2003, the Secretary's advisory group--the National Petroleum 
Council--looked at natural gas supply and demand challenges over the 
next 25 years. The Supply Task Group recommended that from 2003 to 
2010, public money from government agencies such as the DOE or Joint 
Industry Partners made up of both government and industry partners 
should continue doing the research and technology development in gas 
hydrates. Under the Administration's budget request, there would be no 
federal money available to conduct further research or joint projects 
envisioned by these experts--a group chaired by a major oil company.

          How does the Administration's budget request square 
        with the advice of its own Petroleum Council?

A2. The Administration believes that the Energy Bill requested by the 
President will stimulate research and technology development by 
industry. In addition, recent high oil and gas prices provide an added 
incentive to substantially increase private R&D investments in gas 
hydrates.

Q3.  It is my understanding that the DOE oil and natural gas research 
and development (R&D) are largely cost shared in about equal amounts. 
Many of the contributors are universities where the projects are used 
to fund graduate student in petroleum engineering or petroleum geology 
programs. Separately, the Department of Labor has initiated an effort 
to address the labor challenges in the oil and natural gas exploration 
and production industry--including both rig workers and engineers and 
geologists.

          Did the Administration solicit comments from these 
        universities funding partners on the consequences of 
        terminating these R&D functions and on their ability to 
        maintain their engineering and geology programs without 
        continued DEO funding?

          What do you believe the consequences will be if these 
        programs are terminated?

A3. Budget discipline necessitated close scrutiny of all Fossil Energy 
programs, using strict guidelines to determine their effectiveness and 
compare them to other programs offering more clearly demonstrated and 
substantial benefits. University funding partners were not consulted on 
this strategic decision.
    Much of the Department's oil and natural gas research is jointly 
funded by industry and the government. It was determined that the 
industry has the capacity to pursue this research, especially in light 
of the current strong economic performance of the industry.

Research Capabilities of Integrated Oil Companies

Q4.  I'm told that only companies with significant research 
capabilities are the major integrated oil companies.

          Can you tell us how much of current U.S. enhance oil 
        production--outside of Alaska--comes from the companies that 
        have large research capabilities?

          How likely is it that these companies would direct 
        research to these areas?

          If they were to conduct the research, how likely is 
        it that these companies would share the technology with other 
        enhanced oil producers?

A4. An analysis of industry R&D spending (1997-2000), reported by the 
Interstate Oil and Gas Compact Commission, showed that the oil and gas 
service industry spent $631 million per year on R&D, about 17 percent 
higher than the spending of energy producers ($540 million per year, 
1997-2000). The Department expects the service industry to continue to 
provide technological innovations for use by major and independent 
producers, including companies engaging in enhanced oil production.

Questions submitted by Representative Jerry F. Costello

$2 Billion Commitment to Coal

Q1.  The DOE is currently conducting a ten-year, $2.0 billion program, 
the President's ``Clean Coal Power Initiative'' (CCPI) which is 
intended to cost share with the industry the demonstration of clean 
coal technologies that are ``ready to go'' today. DOE requested $50 
million for the CCPI program in FY06. Is the DOE fully committed to 
funding the CCPI program at $2 billion over 10 years?

A1. The Fiscal Year 2006 budget supports the Department's continuing 
effort to fulfill President Bush's 10-year $2 billion commitment to 
clean coal research with funding for the President's Coal Research 
Initiative (CRI) of $286 million, a $13 million increase over the 2005 
enacted level. The 2006 Budget brings the total requested funding for 
clean coal research to $1.6 billion over five years, on pace to exceed 
the President's ten-year pledge by more than 50 percent.
    The President's Coal Research Initiative is made up of the Clean 
Coal Power Initiative (CCPI) as well as FutureGen, and Coal Technology 
Research and Development (which includes Sequestration, Fuels, 
Emissions Control, Coal Gasification, Turbines and Advanced Research 
and Development).

Q2.  The DOE is currently conducting a ten-year, $2.0 billion program, 
the President's ``clean coal power initiative'' (CCPI) which is 
intended to cost share with industry the demonstration of clean coal 
technologies that are ``ready to go'' today. DOE requested $50 million 
for the CCPI program in FY06.

     If there is to be a third CCPI solicitation in FY07, will the 
Department be requesting an additional $250 million for FY07 to get the 
total dollars in the third solicitation to the $300 million level, 
which has been the amount in each of the first two solicitations?

A2. The Administration's FY 2007 budget has not been finalized yet. The 
Department is in the initial planning stages for CCPI Round 3, which 
will demonstrate advanced technologies currently being developed, such 
as integrated advanced clean-up technologies that include mercury 
controls, and advanced next generation power technologies that are 
carbon sequestration compatible. Specific goals and a timeframe for 
Round 3 have not been determined at this time and will depend on 
technology developments and future budgetary considerations.

Q3.  The DOE is currently conducting a ten year, $2.0 billion program, 
the President's ``clean coal power initiative'' (CCPI) which is 
intended to cost share with industry the demonstration of clean coal 
technologies that are ``ready to go'' today. DOE requested $50 million 
for the CCPI program in FY06.

     Will the funds appropriated for this demonstration program be used 
strictly for the CCPI program or will it be split with the FutureGen 
Initiative?

A3. The funds appropriated for the Clean Coal Power Initiative 
demonstration program will be used strictly for CCPI demonstration 
projects. The FutureGen Initiative is funded directly from its own 
budget line item. In the Administration's FY 2006 Request, the Clean 
Coal Power Initiative demonstrations are budgeted at $50 million, and 
the FutureGen project is budgeted at $18 million, with a request for 
advanced appropriation of $257 million to be used for FutureGen in FY 
2007 and beyond.

Question submitted by Representative Al Green

Q1.  I notice in your testimony that there has been a strong focus, in 
terms of funding, on the President's Initiatives. How much of a role 
does that play in your request for the funding of activities, and have 
you found any major divergent visions between your particular sectors 
and the Administration's initiatives?

A1. The Department of Energy is an executive branch agency. We are 
responsible for carrying out the President's Initiatives. In 
formulating the budget, the Administration has to balance many 
priorities. The funding requested for these programs is consistent with 
the President's overall management goals. There are no major divergent 
visions between the Department and the Administration.
                   Answers to Post-Hearing Questions
Responses by Robert Shane Johnson, Deputy Director for Technology, 
        Office of Nuclear Energy, Science, and Technology, Department 
        of Energy, Washington, DC

Questions submitted by Chairman Judy Biggert

Impact of Idaho National Laboratory Reorganization on R&D Programs

Q1.  How will the reorganization of the Idaho laboratory complex affect 
the Department of Energy's (DOE'S) overall nuclear energy research and 
development (R&D) program? What role will other national laboratories 
with significant nuclear expertise, such as Argonne National 
Laboratory, play in nuclear energy R&D after Idaho National Laboratory 
begins operations? Does the Department plan to phase out nuclear 
research at other laboratories?

A1. The reorganization of the Idaho complex is intended to facilitate 
and strengthen the Department's long-term vision for the Idaho National 
Laboratory (INL) to become the Nation's leading center of excellence 
for nuclear energy research and development (R&D). INL's focus on the 
development of advanced nuclear technologies will provide significant 
improvements in sustainability, economic, safety and reliability, and 
non-proliferation and resistance to attack. However, the Department 
recognizes that many other national laboratories have well-established 
areas of expertise in multiple nuclear technology disciplines, and some 
laboratories have unique test facilities. DOE intends to continue to 
use these valuable assets in moving ahead with our nuclear energy R&D 
programs.

Background:

          There are three advanced nuclear energy research 
        programs within the Office of Nuclear Energy, Science and 
        Technology that fund R&D at the national laboratories: 
        Generation IV Nuclear Energy Systems Initiative (Generation 
        IV), Nuclear Hydrogen Initiative (NHI), and Advanced Fuel Cycle 
        Initiative (AFCI).

          The national laboratories engaged in nuclear energy 
        R&D and the programs they support are listed below:

                  Argonne National Laboratory--East: Generation IV, 
                NHI, AFCI

                  Argonne National Laboratory--West: Generation IV, 
                NHI, AFCI

                  Brookhaven National Laboratory--AFCI

                  Idaho National Engineering and Environmental 
                Laboratory--Generation IV, NHI, AFCI

                  Los Alamos National Laboratory--AFCI

                  Lawrence Livermore National Laboratory--Generation 
                IV, AFCI

                  Oak Ridge National Laboratory--Generation IV, NHI, 
                AFCI

                  Pacific Northwest National Laboratory--AFCI

                  Sandia National Laboratories--Generation IV, NHI, 
                AFCI

                  Savannah River National Laboratory--NHI, AFCI

Questions submitted by Representative Michael M. Honda

Q1.  In the 1970s and early 1980s, the domestic nuclear industry 
provided virtually 100 percent of the design, construction, 
fabrication, fuel and other needs of our nuclear infrastructure.

          What percent of uranium fueling our reactors comes 
        from the U.S. mines at present?

          How many of the original domestic reactor design 
        companies are left?

          Is it indeed the case that other countries such as 
        France, Britain, Russia and Japan either own and/or heavily 
        subsidize their own nuclear industry?

          Under these circumstances how difficult is it for 
        domestic companies to compete internationally or even within 
        our own borders for nuclear business?

          Does DOE have any policy taking action to support the 
        domestic nuclear supply and technology industry?

A1. According to the Energy Information Administration, U.S. uranium 
production from mines in 2004 was 2.5 million pounds, or about five 
percent of the 51 million pounds uranium equivalent contained in fuel 
assemblies loaded into U.S. reactors during 2004. Of the five original 
reactor vendors in the United States (Westinghouse, General Electric, 
Babcock & Wilcox, Combustion Engineering and General Atomics), only 
Combustion Engineering no longer remains. General Electric and 
Westinghouse are focused on light water reactor technology, while 
General Atomics is working on gas-cooled reactors and Babcock & Wilcox 
offers nuclear power equipment. Westinghouse's nuclear business is 
located in the U.S. but is wholly owned by British Nuclear Fuels, 
Limited, a company based in the United Kingdom.
    Governments own all or a majority of the nuclear industries in 
France, Britain and Russia, although attempts to privatize companies 
are in early stages in France and Britain. Private Japanese companies 
control most of the reactor design and nuclear fuel industries in 
Japan. The governments of France, Japan, and Russia heavily subsidize 
the commercial nuclear technology and fuel research and development 
activities, and support their domestic company's nuclear technology 
marketing and sales to other countries. This type of support puts U.S.-
based reactor vendors at a competitive disadvantage when competing 
globally for the sale of new nuclear power plants. Uranium mining, 
conversion, and enrichment are more of a commodity business than 
designing and engineering reactors.
    Given the importance of this industry, however, the U.S. has 
provided strong support for the domestic nuclear supply and technology 
industry. The Department initiated the Nuclear Power 2010 program, in 
part, to demonstrate the untested federal licensing processes for 
siting, building, and operating new nuclear power plants. Additionally, 
the Nuclear Power 2010 program supports reactor vendor activities to 
successfully accomplish the Nuclear Regulatory Commission certification 
and completion of ``first-of-a-kind'' engineering of their proposed 
advanced light water reactor designs. The Department is supporting the 
development and certification of the General Electric Economic 
Simplified Boiling Water Reactor (ESBWR) and the Westinghouse Advanced 
Pressurized Water Reactor (AP-1000) reactor designs in a 50-50 cost-
shared partnership with the nuclear industry.
    In addition, the recently passed Energy Bill included a proposal by 
the President to offer risk insurance for new nuclear power plant 
construction. Providing this risk insurance as well as significant 
support for nuclear energy research and development programs has helped 
to eliminate barriers facing the nuclear energy industry and will help 
make U.S. companies even more competitive with foreign suppliers.

Question submitted by Representative Al Green

Q1.  I notice in your testimony that there has been a strong focus, in 
terms of funding, on the President's initiatives.

     How much of a role does that play in your requests for the funding 
of activities, and have you found any major divergent visions between 
your particular sector and the Administration's initiatives?

A1. The Administration's initiatives play a major role in the 
development of the Department's budget request. Following publication 
of the ``National Energy Policy,'' the Department developed a Strategic 
Plan that defines its mission and goals for accomplishing that mission. 
The Office of Nuclear Energy, Science and Technology programs and 
budget requests support the Department's goal to protect our national 
and economic security by promoting a diverse supply of reliable, 
affordable, and emissions-free energy.
    The ``National Energy Policy'' and the Administration's initiatives 
for nuclear energy are aligned with the Department's programs to 
support the development of new nuclear generation technologies that 
provide significant improvements in sustainability, economics, safety 
and reliability, and nonproliferation. Specifically, the Generation IV 
Nuclear Energy Systems Initiative establishes a basis for expansive 
cooperation with our international partners to develop advanced reactor 
and fuel cycle systems that represent a significant leap in economic 
performance, safety, and proliferation-resistance. Through the Advanced 
Fuel Cycle Initiative, the Department seeks to develop advanced, 
proliferation resistant nuclear fuel technologies that maximize the 
energy produced from nuclear fuel while minimizing wastes. The Nuclear 
Power 2010 program supports intermediate-term research, technology 
development and demonstration activities that advance the ``National 
Energy Policy'' goals for enhancing long-term U.S. energy independence 
and reliability and expanding the contribution of nuclear power to the 
Nation's energy portfolio. In addition, the Nuclear Hydrogen Initiative 
will develop advanced technologies that can be used in tandem with 
advanced nuclear energy plants to generate economic, commercial 
quantities of hydrogen to support a sustainable, clean energy future 
for the United States.
    The Department worked closely with Congress on the development of 
the ``National Energy Policy.'' The nuclear titles of the policy were 
crafted in conjunction with experts from the Department and thus are 
supportive and complementary to NE's vision. Additionally, as noted 
earlier, the Department's vision for nuclear energy, science, and 
technology is fully aligned with that of the Administration.

                   Answers to Post-Hearing Questions

Responses by Kevin M. Kolevar, Director of the Office of Electricity 
        Delivery and Energy Reliability, Department of Energy, 
        Washington, DC

Question submitted by Chairman Judy Biggert

Q1.  What is the rationale for the proposed reduction in the Fiscal 
Year 2006 budget for energy storage, given the likely contribution to 
improving grid stability and enabling the connecting of intermittent 
sources (such as wind) to the grid?

A1. The Fiscal Year (FY) 2006 budget request for the Office of 
Electricity Delivery and Energy Reliability (OE), in line with 
Presidential priorities and budget reductions, has been reduced by 
$5.876 million from the FY05 request. Storage was one of several R&D 
programs that, in light of budget constraints, were reduced in order to 
fund higher priority activities. The FY06 budget request will provide 
funding support for those activities which the Administration believes 
are critical to DOE's mission.

Questions submitted by Representative Michael M. Honda

Q1.  In your testimony you cite military propulsion and directed energy 
weapons applications as examples of the application of high temperature 
superconductivity wire developed through Department of Energy (DOE) 
research.

     How quickly can we expect to see this technology in electric 
transmission and distribution systems? What barriers need to be 
overcome in order for this research to be ready for commercializing 
other non-military applications?

A1. We are beginning to see the impacts of high temperature 
superconductivity technology on the electricity grid today. The FY 2006 
Budget request supports demonstrations, in partnership with electric 
utilities and equipment manufacturers, of first-of-a-kind equipment 
prototypes in operation on the grid. For example, three complete, 
integrated systems that demonstrate different aspects of 
superconducting cables are now being developed in partnership with 
American Electric Power, Long Island Power Authority and National Grid 
(Niagara Mohawk) for planned operation and testing on electric grids in 
Ohio and New York. The time to market will be accelerated by this 
approach which provides utilities direct experience with installation 
and operation of superconducting equipment as well as gaining the 
advantages of their collaboration in designing equipment which will 
meet their needs and requirements. We are continuing research that 
improves the performance and potential cost of future high temperature 
superconductivity grid equipment. This includes technology research 
into advanced wire materials and processes to enable production of long 
lengths of cost-competitive, superconducting wire.

Q2a.  Describe for us the role of the electric utilities in the 
development with DOE of the real-time monitoring and control software 
tools and system operating models that are the core of your 
Transmission Reliability and distribution research and development 
(R&D) programs.

      What problems, if any, has DOE encountered in the development of 
the technologies and procedures for the Transmission Reliability 
program?

A2a. With respect to electric transmission, reliability is enhanced 
when additional lines are added to the grid, proper maintenance occurs 
in a timely manner, and when grid operators are able to make 
adjustments, in real-time, to address fluctuations in system 
conditions, particularly during periods of peak demand. Real time grid 
reliability management is a key focus for the Transmission Reliability 
Program, and several recent accomplishments designed to help operators 
recognize, analyze and respond to system anomalies and predict 
performance under various circumstances demonstrate this commitment. In 
fact, several analysts believe that the tools being developed and 
deployed, including VAR-Voltage Management Tool, Area Control Error 
(ACE)-Frequency Real-Time Monitoring System, and Synchronized Phasor 
Measurement Tools, could have limited the spread and may have prevented 
the August 14, 2003, blackout altogether had they been in place in this 
region. Working with the Consortium for Electric Reliability Technology 
Solutions (CERTS) and industry partners, including Independent System 
Operators, DOE plans to continue the research, development and 
deployment of these monitoring and visualization tools, enabling the 
region-wide sharing of real time information from measurement 
technologies.

Q2b.  What technology barriers to the integration of distributed energy 
resources into electric distribution systems have you encountered?

A2b. The mission of the Electric Distribution Program (which refers 
collectively to the Electric Distribution Program and the GridWise 
Initiative) is to transform today's electric distribution 
infrastructure for increased affordability, reliability, security, and 
resilience, through integration of advanced communications, 
information, sensors, controls, and distributed energy resources (DER) 
with electric power systems. The central strategy employed by the 
Program to achieve its mission is a comprehensive set of R&D 
partnerships involving other federal programs, State programs, and the 
private sector.
    One of the challenges that distributed energy resources encountered 
as they integrated with the electric system was the need for 
consistent, objective, yet technically sound, connection requirements 
that addressed both the operational needs of the distributed energy 
resource, but also the safety concerns of the connecting utility. Thus, 
the Electric Distribution Program is partnering with the Institute of 
Electrical and Electronics Engineers (IEEE) for the development of 
uniform interconnection standards, IEEE 1547. Organizational and 
technical support is also being provided to develop international 
standards via the International Electrotechnical Commission Technical 
Committee 8 (IEC TC 8), System Aspects of Electrical Energy Supply.

Q2c.  What science or technical breakthroughs does DOE expect to make 
with the storage program that will enable significant quantities of 
power to be available to increase grid reliability and mitigate 
congestion problems?

A2c. Breakthroughs that reduce the costs of electricity storage systems 
could potentially drive changes in the design and operation of the 
electric power system. Peak load problems could be reduced, electrical 
stability could be improved, and power quality disturbances could be 
eliminated. Storage can be applied at the power plant, in support of 
the transmission system, at various points in the distribution system, 
and on particular appliances and equipment on the customer's side of 
the meter. The Energy Storage Program performs research and development 
for storage technologies and systems that incorporate a broad 
technology base consisting of batteries (both conventional and 
advanced), flywheels, high-energy density capacitors, superconducting 
magnetic energy storage (SMES), power electronics, and control systems.

Q3.  What are the three most important issues that DOE and electric 
power industry face in modernizing the existing bulk power transmission 
system?

A3. The overarching challenges are to strengthen the flow of investment 
capital into grid-related improvements, and to focus that flow on the 
changes that are most urgently needed. To accomplish this, three 
critical actions are needed:

          The U.S. Congress needs to enact legislation with 
        mandatory and enforceable reliability standards;

          Collaborative efforts are needed at the regional 
        level to determine what the design characteristics of the 
        region's next-generation grid should be; and

          While FERC has primary regulatory responsibility for 
        the transmission grid at the federal level, DOE can work with 
        regional organizations and groups of states to facilitate 
        regional transmission planning to identify the issues (both 
        technical and policy) that need to be addressed and resolved in 
        order for transmission grid investment to occur. Many 
        institutional questions need to be addressed at the regional 
        level, such as how the costs of new facilities will be 
        allocated across a multi-state region, how to streamline the 
        processes for determining whether a specific facility is 
        needed, and how regional siting protocols are to work.

Questions submitted by Representative Al Green

Q1.  Following the Northeastern energy grid blackout in 2003, national 
attention was focused on enhancing and securing our electrical grid 
systems. It is my understanding that the Office of Electricity Delivery 
and Energy Reliability (OE) is the lead in modernizing such efforts 
with a request of $95.6 million for various activities.

     Can you elaborate more specifically on two of the initiatives, the 
GridWise and GridWorks initiatives as well as give me an estimate of 
the budget for the two?

A1. These two new activities were developed to better integrate 
advancing power technologies into the electric delivery system in order 
to achieve increased reliability and security. GridWise develops real 
time controls, advanced communications and information software 
technologies for electric distribution and end use. GridWorks develops 
advanced hardware technologies, including cables and conductors, 
substation and protective systems, power electronics, and sensors.
    If we compare the President's FY 2005 request to the FY 2006 
request, the total amount requested for GridWorks and GridWise is the 
same (i.e., $10.5 million). This reflects the Administration's 
continued commitment to these programs, and their potential 
contribution to the reliability of the electric grid.

Q2.  In the hearing you spoke of transferring technologies from the 
research and development phase to actual implementation in the grid 
system. Could you perhaps discuss what you feel a time line for tech 
transfer should be, how the OE budget should change when it is time for 
such implementation, and what sort of delays we might see from the end 
of the development phase to the beginning of the implementation phase?

A2. The time line for implementation strongly depends on the 
technology. Research in high temperature superconductivity, for 
example, has been occurring for over a decade. However, it is important 
that the user, in our case the utility, is involved in the project 
during all phases--research and development, as well as demonstration. 
This approach provides utilities with direct experience with 
installation and operation of equipment as well as gaining the 
advantages of their collaboration in designing equipment which will 
meet their needs and requirements. Often, the more that the utility has 
been engaged in the project during the early stages, the easier it is 
to transition from the development phase to the demonstration stage and 
finally to commercial deployment. This is because the utility's 
technological needs have been taken into account, there is an existing 
familiarity with the technology by the user, and thus the potential 
risks of integrating the new technologies into their system are better 
understood.

Q3.  I notice in your testimony that there has been a strong focus, in 
terms of funding, on the President's initiatives. How much of a role 
does that play in your request for the funding of activities, and have 
you found any major divergent visions between your particular sectors 
and the Administration's initiatives?

A3. The FY 2006 budget request for the Office of Electricity Delivery 
and Energy Reliability will provide funding support for activities 
which the Administration and DOE believe will ensure electricity 
reliability and energy critical infrastructure protection.
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