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



 
                          DEPARTMENT OF ENERGY'S 
                             FISCAL YEAR 2007 
                              BUDGET PROPOSAL


                                   HEARING

                                  BEFORE THE


                           COMMITTEE ON ENERGY AND 
                                   COMMERCE
                          HOUSE OF REPRESENTATIVES


                         ONE HUNDRED NINTH CONGRESS

                                SECOND SESSION


                                MARCH 9, 2006

                              Serial No. 109-82

          Printed for the use of the Committee on Energy and Commerce




Available via the World Wide Web:  http://www.access.gpo.gov/congress/house


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                    COMMITTEE ON ENERGY AND COMMERCE
JOE BARTON, Texas, Chairman                 JOHN D. DINGELL, Michigan
RALPH M. HALL, Texas                          Ranking Member
MICHAEL BILIRAKIS, Florida                  HENRY A. WAXMAN, California
  Vice Chairman                             EDWARD J. MARKEY, Massachusetts
FRED UPTON, Michigan                        RICK BOUCHER, Virginia
CLIFF STEARNS, Florida                      EDOLPHUS TOWNS, New York
PAUL E. GILLMOR, Ohio                       FRANK PALLONE, JR., New Jersey
NATHAN DEAL, Georgia                        SHERROD BROWN, Ohio
ED WHITFIELD, Kentucky                      BART GORDON, Tennessee
CHARLIE NORWOOD, Georgia                    BOBBY L. RUSH, Illinois
BARBARA CUBIN, Wyoming                      ANNA G. ESHOO, California
JOHN SHIMKUS, Illinois                      BART STUPAK, Michigan
HEATHER WILSON, New Mexico                  ELIOT L. ENGEL, New York
JOHN B. SHADEGG, Arizona                    ALBERT R. WYNN, Maryland
CHARLES W. "CHIP" PICKERING,  Mississippi   GENE GREEN, Texas
  Vice Chairman                             TED STRICKLAND, Ohio
VITO FOSSELLA, New York                     DIANA DEGETTE, Colorado
ROY BLUNT, Missouri                         LOIS CAPPS, California
STEVE BUYER, Indiana                        MIKE DOYLE, Pennsylvania
GEORGE RADANOVICH, California               TOM ALLEN, Maine
CHARLES F. BASS, New Hampshire              JIM DAVIS, Florida
JOSEPH R. PITTS, Pennsylvania               JAN SCHAKOWSKY, Illinois
MARY BONO, California                       HILDA L. SOLIS, California
GREG WALDEN, Oregon                         CHARLES A. GONZALEZ, Texas
LEE TERRY, Nebraska                         JAY INSLEE, Washington
MIKE FERGUSON, New Jersey                   TAMMY BALDWIN, Wisconsin
MIKE ROGERS, Michigan                       MIKE ROSS, Arkansas
C.L. "BUTCH" OTTER, Idaho                   
SUE MYRICK, North Carolina                  
JOHN SULLIVAN, Oklahoma                     
TIM MURPHY, Pennsylvania                    
MICHAEL C. BURGESS, Texas                   
MARSHA BLACKBURN, Tennessee                 
                       BUD ALBRIGHT, Staff Director
                      DAVID CAVICKE, General Counsel
        REID P. F. STUNTZ, Minority Staff Director and Chief Counsel


                                 CONTENTS


                                                                      Page
Testimony of:

Bodman, Hon. Samuel W., Secretary, U.S. Department of Energy 	       34
Additional material submitted for the record:

Bodman, Hon. Samuel W., Secretary, U.S. Department of Energy, response 
for the record	                                                      106

                        DEPARTMENT OF ENERGY'S FISCAL 
                          YEAR 2007 BUDGET PROPOSAL


                           THURSDAY, MARCH 9, 2006

                          HOUSE OF REPRESENTATIVES,
                     COMMITTEE ON ENERGY AND COMMERCE,
                                                            Washington, DC.

     The committee met, pursuant to notice, at 10:00 a.m., in Room 2123 
of the Rayburn House Office Building, Hon. Joe Barton (chairman) 
presiding.
     Members present: Representatives Hall, Upton, Stearns, Whitfield, 
Shimkus, Radanovich, Bass, Pitts, Terry, Ferguson, Otter, Sullivan, 
Murphy, Burgess, Blackburn, Dingell, Markey, Rush, Stupak, Engel, 
Wynn, Green, Strickland, Capps, Doyle, Allen, Schakowsky, Solis, 
Inslee, and Barton.
     Staff present: Mark Menezes, Chief Counsel for Energy and 
Environment; Annie Caputo, Professional Staff Member; Maryam 
Sabbaghian, Counsel; Kurt Bilas; Counsel, Margaret Caravelli, Counsel; 
Elizabeth Stack, Policy Coordinator; Sue Sheridan, Minority Senior 
Counsel; Bruce Harris, Minorty Professional Staff Member; and Peter 
Kielty, Legislative Clerk.

     CHAIRMAN BARTON.  The hearing will come to order.  We are 
waiting for Ranking Member Dingell and as soon as Mr. Dingell gets 
here, we will proceed, and he is on his way.  But welcome, Mr. 
Secretary, we are glad to have you.
     SECRETARY BODMAN.  Delighted to be here, sir.
     CHAIRMAN BARTON.  In fact, I think I am going to go ahead and do 
my opening statement to help expedite time.  I want to welcome you, 
Secretary Bodman, for the hearing on the Department of Energy's 
budget.  We look forward to hearing from you.  We also look forward to 
continuing to work with you on the energy issues that face the United 
States.  The past year has seen some very notable achievements in the 
energy area, especially the passage of the Energy Policy Act of 2005.  
We are here to review the Department's Fiscal Year 2007 budget.  The 
Department performs work that is critical to the jobs, health, safety, and 
security for all Americans and you, Mr. Secretary, lead that work.
     I believe your Department's performance has improved over the last 
several years and particularly, the last year under your leadership.  We 
would like to see this trend continue.  As we have seen all too clearly in 
the past, working American families and the U.S. economy rely on 
secure, ample supplies of energy at prices they can afford to pay.  
Hurricanes at home and even political storms in distant places can have a 
real impact on the daily lives of our people.  Providing reliable energy 
means more jobs, more economic security, and more national security for 
us and our children.
     Last year the Congress passed, and the President signed, the Energy 
Policy Act of 2005.  Most of that legislation originated in this committee.  
I would like to thank you for your hard work on that same bill.  It has 
placed new obligations on your Department.  You have new work to do 
to accomplish energy efficiency, electric transmission and security, 
nuclear power, clean coal development, renewable energy, hydrogen and 
oil and gas, and multiple deadlines in the bill.  Speaking of the deadlines 
in the bill, I think we need to commend the new chairman of the Federal 
Energy Regulatory Commission, Chairman Joe Kelliher, for his work in 
meeting those deadlines.  FERC has met every deadline they are 
supposed to have met in the new bill.  I wish I could say the same about 
the Department of Energy, but unfortunately I cannot.
     The President has announced some new programs this year, such as 
the global nuclear energy partnership.  He also has announced initiatives 
for renewable fuels, transportation, solar power, and American 
competitiveness in basic science.  Managing and successfully meeting all 
the requirements of the recently passed Energy Policy Act and the 
President's new initiatives is an important challenge for your 
Department.
     The President and I both strongly believe that nuclear power is 
necessary to meet our Nation's energy needs.  The nuclear industry must 
begin to build new plants as soon as possible to meet the growing 
demand for electricity.  I believe that your Department's ability to meet 
its obligation to build the Yucca Mountain Repository is linked directly 
to the industry's ability to build some of these new plants.  I am very 
frustrated that the Department still has not filed a license application, 
which is almost four years overdue.
     I want to commend you, Mr. Secretary, for demonstrating initiative 
by proposing the Global Nuclear Energy Partnership as a long-term 
concept to address nuclear waste disposal and international proliferation 
issues.  I am concerned, though, that the scope of this program may be 
too broad and it may be premature.  I would urge you not to allow the 
Global Nuclear Energy Partnership to divert focus and resources away 
from the near-term challenges that must be overcome to ensure the long-
term viability of the industry, especially progress at Yucca Mountain.
     Today, the President is going to host a meeting on energy with a 
bipartisan group of House members, some of whom are on this 
committee.  Because of that, it is my understanding that you need to 
leave at approximately 1:00 p.m., or very shortly thereafter, to prepare 
for that meeting.  Mr. Dingell, myself, and several others are planning on 
going to that same meeting, so we are going to try to expedite this so that 
we can all attend the meeting with the President this afternoon.  By prior 
agreement and prior discussions, today's opening statements, except for 
myself and Mr. Dingell, will be one minute each and then we will ask the 
Secretary questions for five minutes at a time.
     Finally, I want to take this opportunity to commend our Chief 
Counsel for Energy and Environment, Mark Menezes, for the fine job 
that he has done the last several years for the committee.  Next week is 
going to be his last week on the committee.  He has decided to seek 
greener pastures and we are going to miss you.  So good luck to you and 
we hope that we get to see you again.  Mark is going to become a partner 
at Hunton and Williams, which is a law firm here in Washington, D.C.
     With that, I want to recognize my Ranking Member, Mr. Dingell, for 
his opening statement.
     [The prepared statement of Hon. Joe Barton follows:]

PREPARED STATEMENT OF THE HON. JOE BARTON, CHAIRMAN, COMMITTEE ON ENERGY 
                               AND COMMERCE

     The hearing will come to order.  I would like to welcome Secretary 
Bodman back to this Committee.  We look forward to continuing to work with 
you, Mr. Secretary, on the many important energy issues facing the United 
States.   The past year has seen some notable achievements, including the 
passage of the Energy Policy Act of 2005.

     We are here this morning to review the FY 2007 budget request of the 
Department of Energy.  The Department performs work that is critical to the 
jobs, health, safety, and security of all Americans, and the Secretary leads 
that work.  The Department's performance has improved greatly over the last 
several years, and particularly over the last year under your leadership, Mr. 
Secretary.   Keep up the good work -- we want to see that trend continue.  

     As we have seen all too clearly in the past year, working American 
families and the U.S. economy rely on secure, ample supplies of energy at 
prices they can afford to pay.   Hurricanes at home and even political storms 
in distant places can have a real impact on the daily lives of our people. 
Providing reliable energy means more jobs, economic security, and national 
security for us and our children.  That's a tall order, Mr. Secretary, 
and I look forward to hearing how you plan to fill it.  

     Last year, Congress passed and the President signed the Energy Policy 
Act of 2005.  Thank you for your hard work on that bill.  This legislation 
placed new obligations and responsibilities on the DOE.  DOE has new work to 
accomplish on energy efficiency, electricity transmission and security, 
nuclear power, clean coal development, renewable energy, hydrogen, and oil 
and gas.  There are multiple deadlines in this bill, and I want to commend 
Chairman Kelliher of the FERC for meeting those deadlines.  I hope that DOE 
will strive to achieve the goals and deadlines in EPACT.
     In addition, the President has announced new programs as part of the 
Global Nuclear Energy Partnership, and initiatives for renewable fuels for 
transportation, solar power, and American competitiveness and basic science. 
Managing and successfully meeting all of the requirements of the Energy Policy 
Act and the President's initiatives will be an enormous challenge for the 
Department.  
     The President and I both strongly believe that nuclear energy is 
necessary to meet our nation's energy needs.  The industry must begin to build 
new plants as soon as possible to meet the growing demand for electricity.  I 
believe that DOE's ability to meet its obligation to build the Yucca Mountain 
repository is linked to the industry's ability to build new plants.  I am 
frustrated that DOE still has not yet filed a license application, which is 
almost 4 years overdue.  
     I commend you, Mr. Secretary, for demonstrating initiative by proposing 
the Global Nuclear Energy Partnership as a long-term concept to address 
nuclear waste disposal and international proliferation issues.  However, I am 
concerned that the scope of this program may be overly broad and premature.  
I urge you not to allow GNEP to divert focus and resources away from the 
near-term challenges that must be overcome to ensure the long-term viability 
of the industry.
     Today, the President will host a meeting on energy with a bipartisan 
group of House Members, some of whom are on this Committee.  I note that 
Secretary Bodman will have to leave at 1pm, or very shortly thereafter, to 
prepare for that meeting.  I assure you that neither the Secretary nor I 
selected the time of this meeting, and it is regrettable that our hearing 
will have to end at a fixed time.
     Opening statements today will be 1 minute, except for Ranking Member 
Dingell and myself.  When asking questions of the Secretary, I encourage 
all Members to stick to the five minutes they are allowed under the rules, 
or even to turn back some time so that as many Members may ask questions 
as possible. 
     I remind all Members of the opportunity to ask questions for the 
record following the hearing.  I have asked the committee staff to help 
pull together those questions that come in quickly.  Mr. Secretary, I ask 
you to please respond to questions as soon as you can, particularly 
from Members that don't get to ask questions today.
     Finally, I want to give a word of thanks to a departing member of 
the committee staff.  Mark Menezes, the majority's chief counsel for 
energy and the environment, will be leaving us next week.  Mark is one of 
the staffers most responsible for the bipartisan success of last year's 
energy bill, and has been instrumental in everything energy-related this 
committee has done since his arrival in 2003.  Mark will become a partner 
at Hunton and Williams, where he will doubtless serve his clients well.  
Mark, congratulations and we will miss you.  I ask the Members of the 
Committee to join me in a round of applause for Mark.
	Mr. Secretary, again, welcome.  I look forward to working with you, 
and listening to your testimony today.

	MR. DINGELL.  Mr. Chairman, I thank you for your courtesy.  Good 
morning and Mr. Secretary, welcome to the committee.  Mr. Chairman, I 
thank you for this hearing.  I thank Secretary Bodman for appearing 
before the committee today to discuss the DOE budget for fiscal year 
2007.  Mr. Secretary, this time you appear before this committee to 
discuss DOE's budget and much has transpired since your last visit.  
First, after several consecutive years of failure, the Congress finally 
agreed to a comprehensive energy bill that was signed by the President 
last August.  That bill was born out of difficult and hard-fought 
negotiations touched by a number of important and complex questions 
and issues.  Given that, I am sure that members will be anxious to hear 
the progress the DOE is making in implementing the various components 
of that legislation.  And by the way here, parenthetically, I would 
commend the Chairman here for his leadership in the way that was 
achieved.
	Several months after the energy bill was signed, the Nation suffered 
one of the worst natural disasters in its history due to Hurricanes Katrina 
and Rita.  The Nation's energy infrastructure in the Gulf Coast was 
significantly damaged and the country saw even more volatile energy 
prices as a result.  The Energy Information Administration reports that 
gasoline prices hit an average high of $3.11 per gallon and natural gas 
prices reached $16.11 per MCF.  While prices have abated since then, 
they still remain high.  Hurricane season will soon again be upon us and I 
would appreciate your comments today as to lessons learned that could 
be applied again should we be unfortunate enough to undergo similar 
experiences to the disasters that occurred in the last hurricane season.
	Your budget request raises a number of interesting questions that 
merit attention.  First, in the President's State of the Union address, he 
announced an advanced energy initiative that would help achieve an 
Administration goal of replacing more than 75 percent of our oil imports 
from the Middle East by 2005.  Questions rise around that.  Is this a 
realistic goal?  If so, how precisely will we get there?  Does this initiative 
consist of new programs or just funding for the Energy Policy Act of 
2005 and other statutes or would it entail new initiatives?  If so, what 
will those initiatives be and when will they be submitted to the Congress 
so that we can commence working on them to meet this difficult, 
challenging and complex opportunity and engagement?
	Second, as I asked in my February 8, 2006 letter to you, which I 
note, Mr. Secretary, remains unanswered, we are interested in the degree 
to which the Administration's budget request matches the funding levels 
we authorized in the energy bill for important programs such as low-
income home energy assistance program, LIHEAP regulation and the 
Energy Star program.  I hope that in your visit today you will shed light 
on these questions, as they are indeed important.
	Third, the budget request is also noteworthy for its emphasis on 
nuclear programs, specifically, the sweeping Global Nuclear Energy 
Partnership.  While certain of its stated purposes, such as non-
proliferation, are laudable, others appear to require closer scrutiny.  
However, I am concerned that this sprawling new venture may divert 
many of DOE's attentions from other immediate concerns, such as 
fulfilling its current responsibilities under the Nuclear Waste Policy Act 
with respect to Yucca Mountain, which is not, as I am sure you will 
agree, going very well.  It is years behind and billions of dollars over-
budget.
	In this connection, I would ask that a November 10, 2005 letter that 
Representative Boucher and I sent to DOE regarding various nuclear 
matters and the Secretary's response of yesterday be included in the 
hearing record, Mr. Chairman, without objection.
	CHAIRMAN BARTON.  Without objection.
	[The document follows:]

 

     MR. DINGELL.  Mr. Secretary, all of us appreciate the magnitude of 
DOE's tasks and the difficulties that you confront in addressing them.  I 
can hardly disagree with the goals that purport to wean us from our 
dependence on foreign oil and I applaud you for attempting the difficult 
task of envisioning a long-term nuclear energy policy.  These are things 
on which we have struggled for a long time.  I hope you have better 
success than have your predecessors on these two questions.
	I hope, however, that we can focus on the policies that the Congress 
has already put in place that address some of the important problems of 
the day and that affect our citizens right now, such as conservation, 
efficiency, and nuclear waste.  Again, Mr. Secretary, I thank you for your 
appearance before us today.  I thank you, Mr. Chairman, for recognizing 
me and I yield back the balance of my time.
	[The prepared statement of Hon. John D. Dingell follows:]

PREPARED STATEMENT OF THE HON. JOHN D. DINGELL, A REPRESENTATIVE  IN CONGRESS 
FROM THE STATE OF MICHIGAN

     Mr. Chairman, thank you for holding this hearing.  I want to thank 
Secretary Bodman as well for appearing before the Committee today to discuss 
the Department of Energy's (DOE) budget request for fiscal year 2007.
     Mr. Secretary, this is the second time you have appeared before the 
Committee to discuss DOE's budget and much has transpired since your last 
visit.  First, after several consecutive years of failure, the Congress 
finally agreed on a comprehensive energy bill that was signed by the President 
last August.  That bill was born out of difficult and hard-fought 
negotiations and touched on a number of important and complex topics.  Given 
that, I am sure Members will be anxious to hear what progress DOE is making in 
implementing the various components of that bill.
     Second, less than a month after the energy bill was signed, the Nation 
suffered one of the worst natural disasters in its history due to Hurricanes 
Katrina and Rita.  The Nation's energy infrastructure in the Gulf Coast was 
significantly damaged and the country saw even more volatile energy prices 
as a result.  The Energy Information Administration reports that gasoline 
prices hit an average high of $3.11 per gallon and natural gas prices reached 
$16.11 per mcf.  While prices have abated since then, they remain high.  
Hurricane season will soon be upon us again and I would appreciate your 
comments as to lessons learned that could be applied should we be unfortunate 
enough to experience similar disasters this year.
     Your budget request raises several interesting questions that also merit 
attention.  First, in the President's State of the Union address, he announced 
an "Advanced Energy Initiative" that would help achieve an Administration goal 
of replacing "more than 75 percent of our oil imports from the Middle East by 
2025."  Is that a realistic goal?  And, if so, how precisely do we get there? 
Does this initiative consist of new programs or just funding for the Energy 
Policy Act of 2005 and other statutes?
     Second, and as I asked in my February 8, 2006, letter to you (which I 
note remains unanswered), we are interested in the degree to which the 
Administration's budget request matches the levels of funding we authorized 
in the energy bill for important programs such as the Low-Income Home Energy 
Assistance Program (LIHEAP), weatherization, and the EnergyStar program.  I 
hope that your visit with us today will shed light on these questions.  
     Third, the budget request is also noteworthy for its emphasis on 
nuclear programs, specifically the sweeping "Global Nuclear Energy 
Partnership."   While certain of its stated purposes, such as 
nonproliferation, are laudable, others require closer scrutiny.  
Moreover, I am concerned that this sprawling new venture may divert DOE's 
attention from other immediate concerns, such as fulfilling its current 
responsibilities under the Nuclear Waste Policy Act with respect to Yucca 
Mountain.  In this connection, I would ask that a November 10, 2005, letter 
that Representative Boucher and I sent DOE regarding various nuclear matters, 
and the Secretary's response of yesterday, be included in the hearing record.	
     Mr. Secretary, all of us here appreciate the magnitude of DOE's tasks.  
I can hardly disagree with goals that purport to wean us from dependence on 
foreign oil, and I applaud you for attempting the difficult task of 
envisioning a long-range nuclear energy policy.  I hope, however, that we 
can focus on the policies that the Congress has already put in place that 
address some of the important problems of the day and that affect our 
citizens right now, such as conservation, efficiency, and nuclear waste.
     Again, I appreciate your appearance before us today and look forward to your testimony.

     MR. HALL.  [Presiding]  Thank you, Mr. Dingell.  Mr. Secretary, I 
won't take my further one minute that we are allotted, but you and I have 
had several discussions and I appreciate it.  You have been very 
generous, and your staff has been generous, with your time and I 
understand where you are, what you have to do, and what you are going 
to do; and we will do that honorably and work together.  Maybe we will 
work something out before it is over, because I think we all want the 
same thing, and that is to be free of captivity of some Nations that we are 
dependent on for 60 percent of our energy.  We know we can't live with 
that and four times as a Democrat, I passed the Ultra-deep Amendment 
with the energy bill.
     It got by the Senate and actually, the Conference Committee even 
had approved it and then one time, as a Republican, I passed it and it has 
been signed into law.  Now I understand one of the best friends I have 
got in this town was talking about zeroing it out, and I am going to be 
with him at two o'clock this afternoon and talk to him about it and I 
thank you for your time.  But you know where I am and where we are on 
that.  We are going to try to keep you from doing it, if we can up here, 
but we will be above board and we will let you know.  Somewhere I 
heard a story said the young lover of Siam to his young maiden to named 
Kiam, if you kiss me of course you will have to use force, but God 
knows you are stronger than I am, so we don't know if we are going--
that is going to apply or not, but you have got to get somebody up and 
down here to introduce that bill and then you got to push it through and 
we are going to sure try to keep you from doing it.  Is that fair enough?
     SECRETARY BODMAN.  Yes, sir.
     MR. HALL.  Thank you, sir.  All right, I recognize Mr. Markey, the 
gentleman from Massachusetts.
     MR. MARKEY.  Thank you, Mr. Chairman.  Mr. Secretary, the Bush 
Administration's Global Nuclear Energy Partnership program will cost 
the Department of Energy $4.5 billion over just the next five years and 
well over $100 billion if the program goes into commercial operation.  
This proposal is a reckless and dangerous boondoggle that will bust the 
budget, wreak havoc with the U.S. Nuclear Nonproliferation Policy, and 
only further facilitate the spread of nuclear materials around the world.  
It does not represent a realistic solution to the Nation's nuclear waste 
problems.
     We have already seen some of the results of this program.  Last week 
President Bush ill-advisedly signed an agreement with the leader of India 
which is going to blow a hole in the International Nuclear 
Nonproliferation Treaty and the Nonproliferation Act, which guides 
American policy.  The Pakistanis have already asked for an exception to 
the law using the Indians as a precedent.  We have Iran before the United 
Nations Security Council asking them to abide by the rules.  I do not 
think, Mr. Secretary, it is advisable for the United States to be telling 
India that they don't have to play by the rules when we are asking Iran 
and North Korea and Pakistan and other to play by the rules.  You cannot 
have two separate sets of rules.
     I believe that President Bush has made an historic mistake in carving 
out this exception for the Indian government.  I think we are going to 
reap long-term negative dividends from this decision, and my hope is 
that as this program continues to be better understood, that the long-term 
policy of the Bush Administration engaging in selective proliferation 
rather than uniform nuclear nonproliferation will be understood and that 
we will put a stop to it.  It is just too dangerous for the world to have 
such a policy.
     We can expect Pakistan to be cutting deals with China; we can 
expect Russia to be cutting separate deals with countries that they favor.  
This is a precedent based upon this underlying program, which, in my 
opinion, is going to make the world a much more dangerous place to live 
in.  Thank you, Mr. Chairman.
     [The prepared statement of Hon. Edward J. Markey follows:]

PREPARED STATEMENT OF THE HON. EDWARD J. MARKEY, A REPRESENTATIVE IN 
CONGRESS FROM THE STATE OF MASSACHUSETTS

     Mr. Chairman, one of the centerpieces of the Bush Administration's 
fiscal year 2007 Department of Energy Budget Request is the call for a $250 
million down payment on a Global Nuclear Energy Partnership program -- a 
program that DOE estimates will cost $4.5 billion over just the next 5 years, 
and well over $100 billion if the program goes into commercial operation.
     This proposal is a reckless and dangerous boondoggle that will bust 
the budget, wreck havoc with U.S. nuclear nonproliferation policy, and only 
further facilitate the spread of nuclear materials around the world.  It does 
not represent a realistic solution to the nation's nuclear waste problems, 
and it does not represent a viable energy policy in today's competitive 
electricity markets.
     Already, we are seeking the adverse implications of GNEP affecting our 
international relations.  Just last week President Bush and Prime Minister 
Singh signed an agreement that will effectively exempt India from 
international and U.S. nuclear nonproliferation laws and controls -- 
exemptions that will allow them to be a part of the Administration's Global Nuclear Energy Partnership.  What is the result of this proposal?  
We are establishing a precedent that states will inevitably point to as they 
seek similar exceptions to nonproliferation barriers for their preferred 
partners. Pakistan has already asked for a similar nuclear bargain from 
President Bush.  If the U.S. says "no", China may now say "yes."
     The new Bush India nuclear loophole requires changes to U.S. law and 
the practices of the 45-nation Nuclear Suppliers Group (NSG), which currently 
prohibit trade with states (such as India) that have tested nuclear weapons 
or do not allow international safeguards to verify nuclear technology is 
not being used to make bombs.
     This proposal would effectively grant India highly sought-after access 
to nuclear technology and materials only accorded to the 183 non-nuclear 
weapon states that comply with the global nonproliferation standards. 
Countries that have played by the rules may no longer do so if India is 
allowed to have its radioactive cake and eat it too. 
     The United States and India should work together to increase India's 
electricity production and minimize climate changing carbon emissions through 
cleaner coal-burning, renewables and energy efficiency technology. They 
should not, however, tip the delicate scales of world-wide nuclear balance 
and destroy the rules that have prevented nuclear peril for decades.  Representative Upton and I have introduced a bipartisan 
resolution expressing disapproval of the Bush India deal, and I look forward 
to working with Members on both sides to oppose this dangerous loophole.  
     I would note that shortly after the India deal was announced, I offered 
an amendment in the Energy Conference to disapprove it.  That amendment was 
approved by the House conferences with your support, Mr. Chairman. 
Unfortunately, it was rejected by the Senate conferees after the 
Administration asked them to withhold judgment on the initial July 18th 
India deal until all of the details were worked out.  
Those details were hammered out last week in New Delhi in an all-night 
negotiating session in which the Bush Administration appears to have 
capitulated to virtually all of the demands put forward by the Indian 
government..  
     I look forward to hearing more this morning about the Administration's plan to transform itself into the Johnny Appleseeds of nuclear power with 
this new Global Nuclear Energy Partnership, and the implications of 
partnering with countries like India -- who refuse to sign the Nuclear 
Nonproliferation Treaty or accept full-scope international 
proliferation safeguards.  I believe that policy is fraught with danger 
for the world.  I also believe that reprocessing continues to be uneconomic 
in the U.S.  I look forward to hearing the Secretary's testimony on these 
matters.

     MR. HALL.  The gentleman's time is expired.  The chair recognizes 
the gentleman from Florida, Mr. Stearns, for one minute.
     MR. STEARNS.  Thank you, Mr. Chairman, and I appreciate the 
Secretary coming here.  You are going to get a lot of tough questions 
here.  You can just see it from the top, from the gentleman from 
Massachusetts and frankly, some of the things he is talking about some 
of the conservatives have the same concern.  So I mean, he is echoing, 
obviously, what he feels, but there are some pundits on the conservative 
side that ask some of the same questions about what happened in India 
and the inconsistent policy with Pakistan and why that is, so you are 
going to be called this morning to explain this policy.  In Florida, 
obviously, we are all concerned with the high cost of energy.  We have a 
thousand people coming into Florida every day, it is probably a 30 
percent increase in electricity consumption over the next 10 years, so we 
are anxious to hear your solution to the problem, so I appreciate your 
coming here and answering these questions and thank you, Mr. 
Chairman.
     [The prepared statement of Hon. Cliff Stearns follows:]

PREPARED STATEMENT OF THE HON. CLIFF STEARNS, A REPRESENTATIVE IN CONGRESS 
FROM THE STATE OF FLORIDA

     Thank you, Mr. Chairman, for calling this hearing.
     Mr. Secretary, welcome and thank you for taking the time to appear 
before us today.  I appreciated your efforts to work with Congress in passing 
last year's energy bill, and look forward to our continued cooperation to 
tackle a specific segment of the energy production industry: nuclear power.
     My home state of Florida is one of the fastest growing states in the 
nation, with more than 17 million citizens -- and nearly 1,000 new residents 
arriving every day.  According to the Florida State Department of 
Environmental Protection, my state's expanding economy will lead to a 30 
percent increase in electricity consumption over the next ten years.
     Of course, Floridians, like most Americans, want their energy as clean 
as possible. Because nuclear power is abundant, safe, reliable, and free 
of harmful emissions, Florida already looks to nuclear power for about 15% 
of its electricity needs.
     In his Fiscal Year 2007 budget, the President requested $544.5 million 
for nuclear waste disposal at Yucca Mountain, a $50 million increase from 
FY06 appropriations.
     Some $20 billion has been collected in the Nuclear Waste Trust Fund 
for the implementation of the Yucca Mountain storage site -- over $1 billion 
from Florida alone.  While I appreciate the Department's proposed Global 
Nuclear Energy Program (GNEP), which will over time reduce the amount of 
spent nuclear fuel destined for storage, this does not obviate the need 
to finally open Yucca for business.  Since 1998, the law has required the 
Federal government to collect spent fuel, and it is time for collection to 
get underway.
     Mr. Secretary, I eagerly await a legislative proposal to set sensible 
scientific standards for waste disposal, and to comprehensively address 
Yucca Mountain.
     While no new nuclear plants have entered service in Florida since 1983, 
Progress Energy will be announcing plans later this month to construct a new 
nuclear plant in my state. I commend them for considering this important 
investment in our energy future.  So, Mr. Chairman, Mr. Secretary, let's not 
leave energy providers hanging in regulatory limbo. Let's get Yucca done.

     MR. HALL.  The chair recognizes Mr. Allen from Maine for a 
minute.
     MR. ALLEN.  Thank you, Mr. Chairman, for holding this hearing and 
Secretary Bodman, thank you for being here today.  Mr. Secretary, I am 
puzzled by certain aspects of the President's proposed budget for the 
Department of Energy.  Last year gasoline prices shot up to over $3 a 
gallon for the first time and wholesale natural gas prices, which had 
doubled between 2002 and the beginning of 2005, doubled again by the 
end of last August.  In response, you are proposing an 18 percent cut to 
the energy efficiency programs at the Energy Efficiency and Renewable 
Energy Office.  Prices spike, supplies get tight and you respond by 
proposing to cut the portion of the budget that focuses on reducing 
demand.  That doesn't make sense.
     This committee recognized that energy efficiency is a case where the 
government should lead by example and yet the Federal Energy 
Management Program, which leads the government-wide effort to save 
energy, has been cut by 13 percent.  I would simply suggest the 
Administration's priorities are often incomprehensible.  We ought to be 
investing in programs that reduce our energy consumption.  I am 
disappointed by the consummate hope that Congress will increase 
funding in these areas.
     MR. STEARNS.  [Presiding]  I thank the gentleman.  Mr. Ferguson.
     MR. FERGUSON.  Thank you, Mr. Chairman.  Thank you for holding 
this hearing.  I thank the Secretary for being here to testify and talk about 
the budget and other energy issues.  I appreciate the Administration's 
commitment to investing in renewable energy.  I happen to be a fan of 
solar energy as well as other renewable energy.  I have a bill on solar 
energy and I look forward to discussing that further.  But Mr. Secretary, I 
want to note that PJM, which is the RTO serving 13 States in the Mid-
Atlantic and the Midwest, including my home State of New Jersey, has 
applied to the Department seeking your support for the construction of 
new transmission lines to ensure the future reliability of electric supplies 
and lower electricity prices in New Jersey.
     The new transmission facilities from the Midwest through 
Pennsylvania to New Jersey would help to ensure the availability of low-
cost power to the region and will provide a means to spur the 
development of new advanced generation technologies, including 
renewable energy resources like solar and wind power.  This is a first 
formal application before the Department seeking to utilize the authority 
that this committee provided to the Department of Energy in the Energy 
Policy Act from last year to designate "national interest electric 
transmission corridors."
     I hope that the Department will move thoughtfully, but also in a 
timely manner in reviewing this request because it has really important 
implications for my district, for our State of New Jersey and for our 
region for helping to make the provisions of last year's Energy Policy 
Act really successful and I appreciate your time today.  Thank you for 
being here.  I yield back.
     MR. STEARNS.  Thank the gentleman.  Ms. Capps recognized for one 
minute.
     MS. CAPPS.  I prefer to save my time for the questions.
     MR. STEARNS.  The gentlelady prefers to save her time.
     MS. CAPPS.  I welcome the Secretary.
     MR. STEARNS.  Mr. Terry for one minute.  The gentleman saves his 
time.  Mr. Burgess.  Mr. Burgess.
     MR. BURGESS.  Mr. Chairman, I have a statement also for the record, 
but Mr. Secretary, thank you for being here this morning.  I do hope we 
will hear from you this morning on a bill that we passed last fall, the 
second energy bill that we passed in the 109th Congress.  This was a bill 
that dealt with increasing refining capacity in this country and also put a 
time line on development of a pipeline to bring natural gas from Alaska 
and Canada back into the lower 48 States.  It has already been alluded to 
as to how the gas prices, natural gas prices are in this country.  Whatever 
relief we can bring to our constituents, I think we need to be on about 
doing and I would just be interested in your thoughts on the second bill 
and what we may do to facilitate that in the Senate, and I will yield back.
     [The prepared statement of Hon. Michael Burgess follows:]

PREPARED STATEMENT OF THE HON. MICHAEL BURGESS, A REPRESENTATIVE IN CONGRESS 
FROM THE STATE OF TEXAS

     Mr. Chairman,
     Thank you for convening this hearing today.  
     One of my most important responsibilities as a Member of Congress is 
to ensure that my constituents' tax dollars are being spent wisely.  It is 
for that reason that I look forward to the ongoing debate about our national 
funding priorities.  
     Secretary Bodmin, thank you for appearing before us this morning.  As 
we begin the Fiscal Year 2007 appropriations cycle, it will be helpful to 
hear from you about the President's Budget request for the Department of 
Energy, particularly as this is the first budget year after enactment of 
the Energy Policy Act of 2005.  
     I am especially interested to hear your testimony on the DOE's oil 
and natural gas research programs.  One of the best ways to decrease our 
dependence on foreign sources of oil is to make the most out of our domestic 
oil resources we do have.  Research funded through this account, such as 
enhanced oil recovery using carbon dioxide, can help to increase domestic 
supply.  
     We've seen that in North Texas with the Barnett Shale -- thirty years 
ago, the Barnett shale was nothing but rock.  Since that time, with the 
help of a DOE grant, George Mitchell was able to develop the technology 
to recover the natural gas in the Barnett shale.  In 2004, it produced 
370 Billion Cubic Feet and total reserves for the Barnett Shale are 
estimated to be over 500 Trillion Cubic Feet.  
     Now, companies using the technology developed by Mitchell and in North 
Texas are looking at tapping into several other shale natural gas plays 
around the country.  What began as a small expenditure by the Department 
of Energy has already brought trillions of cubic feet of natural gas into 
our domestic supply and has the potential to allow us to tap trillions more. 
This has helped to hold down the cost of natural gas despite dramatically 
increased demand.  As we face increasing prices for oil, gas, and other 
petroleum products, this will be extremely important moving forward.  
     Secretary Bodmin, thank you again for appearing before us this morning. 
I yield back.  

     MR. STEARNS.  The gentleman yields back.  Mr. Stupak is 
recognized for one minute.
     MR. STUPAK.  Thank you.  Mr. Secretary, welcome.  I think we can 
all agree our Nation faces an energy crisis.  Americans are paying record 
prices to fill up their cars and heat their homes.  We remain dangerously 
dependent upon foreign energy sources and I have seen little from the 
President's 2007 budget that would change this.  Families are paying 23 
percent more on natural gas, 24 percent more on home heating, and 9 
percent more for electricity than they did last year.  Take a look at this 
heating bill my staffer's handing you from a senior complex in Oscoda, 
Michigan.  Last November their bill was $5,377.57; a month later, their 
bill was $12,492.65.  This is what northern Michigan residents are facing 
this winter.  The total LIHEAP for the senior citizen complex is 
approximately $7,000.  It was used up in one month.
     At the same time my constituents are faced with the choice of 
gassing up their cars or paying for groceries, oil companies are reaping 
record profits and refineries have increased their prices by 255 percent.  I 
have been asking for a hearing in this committee for the last six months 
on the dramatic increases of natural gas and oil prices, but so far my 
requests have fallen on deaf ears.  Just as this committee has failed to 
investigate skyrocketing energy prices, the President has offered little 
more than rhetoric and photo ops.  His 2007 budget fails to provide the 
necessary funding to accomplish the energy goals set forth in his State of 
the Union address.
     So Mr. Secretary, I believe the American people deserve better and I 
look forward to your testimony today.
     MR. STEARNS.  I thank the gentleman.  Mr. Murphy from 
Pennsylvania.
     MR. MURPHY.  Thank you.
     MR. STEARNS.  You are recognized for one minute.
     MR. MURPHY.  Thank you, Mr. Chairman, and thank you for being 
here, Mr. Secretary.  In an era where Iran turns off the OPEC oil valve 
because we protest their attempts to get nuclear weapons, when 
Venezuela shows its strong ties to Castro, when Russia ups the ante for 
Ukraine trying to get natural gas, we see the vital importance of energy 
independence in America.  My wish is that America would set the same 
sort of focus that Kennedy said years ago for getting to the moon and we 
should aim towards energy independence within 10 years.  Otherwise we 
remain hostage to other countries for this.  One of the concerns that I will 
have that I want to be asking more about has to do with the cuts for the 
clean coal initiatives, and the cuts in some of the other oil and gas 
research areas I think are absolutely vital if we are going to have this 
energy independence.  We have an abundant supply of coal lasting us a 
couple hundred years, and I want to make sure that is one of the areas 
that we address in this budget because I believe we cannot afford to have 
those cuts.  Thank you, Mr. Chairman.
     [The prepared statement of Hon. Tim Murphy follows:]

PREPARED STATEMENT OF THE HON. TIM MURPHY, A REPRESENTATIVE IN CONGRESS FROM 
THE STATE OF PENNSYLVANIA

     Mr. Chairman, 
     Our nation's energy supply is falling short of our needs.  Demand for 
oil and natural gas has greatly increased in recent years, our national 
production supply is down.
     As I see it, the problem lies in the fact that we depend far too much 
on foreign countries for our oil.  If we are to secure our homeland and 
make our country more energy independent, then we must rely less on imports 
in the future.  We must continue to make investments in our energy 
infrastructure by expanding natural gas storage facilities, building 
more refineries, and opening up our shorelines to exploration.  
     Moreover, we can never overlook the importance of coal as a vital 
domestic energy source.  From the early 19th century, it was coal that 
made Western Pennsylvania the center of energy production for a growing 
nation.  Coal must be a cornerstone of our strategy to achieving energy 
independence.  At current rates of consumption, we have nearly a 300-year 
supply of coal in this country, enough to provide more than fifty percent 
of the fuel used to generate our domestic electricity needs.  Out of our four 
major fuel sources -- oil, gas, uranium, and coal -- coal has the largest 
domestic reserve base, and the largest share of U.S. energy production in 
BTUs.
     I'm concerned with the Bush Administration's funding proposal for coal 
technologies in the budget.  In the FY 2007 budget request, the 
Administration's FutureGen initiative is funded at $54 million, while 
the Clean Coal Power Initiative (CCPI) is only allocated $5 million, 
compared to $54 million dollar difference in FY2006.  If the Administration 
believes we ought to reduce our countries dependency on foreign oil, and 
considers coal a major component of its national energy strategy because 
of its low-cost abundance, then I don't see how critical funding for the 
Clean Coal Power Initiative can be over looked.  It is the CCPI program 
that takes these clean coal technology concepts developed in research & 
development and demonstrates them on a commercial scale.  This is important 
because without such demonstrations industry generally will not take the 
risk to build them.  In addition the CCPI program is implemented by the 
National Energy Technology Laboratory, NETL.  If funding is cut 
from onsite research at NETL then there will be jobs lost through reduced 
hiring of contractors from the area.
     FutureGen is a needed venture to help build the world's first 
coal-fueled zero emissions power plant generating "clean power" from coal, 
(and I am very supportive of that public-private partnership) I just believe 
that the DOE coal program has been successful because it has included a 
portfolio balanced between basic research and demonstration projects, and 
the proposed FY07 budget has abandoned that philosophy.  
     America's energy consumption is at an all-time high and rising.  Energy 
conservation is important, but first and foremost, this nation must generate 
energy right here at home because we have the resources we need.  It must be 
a national priority to achieve energy independence for the long-term security 
of America. Thank you Mr. Chairman. 

     MR. STEARNS.  Mr. Rush is recognized for one minute.
     MR. RUSH.  Thank you, Mr. Chairman.  Welcome, Mr. Secretary, it 
is always good to have you before our committee.  Mr. Chairman, 
Congress passed and the President signed into law the Energy Policy Act 
of 2005 just last yea,r and while I had a lot of reservations, I ultimately 
supported the bill when we marked it up in this committee and I 
supported its final passage.  Much of my support was due to my LIHEAP 
and weatherization amendments that this committee passed and were 
preserved in the final passage.  EPACT authorized LIHEAP funding at 
$5.1 billion and the weatherization program at $600 million.  The 
President's budget falls woefully short on both of these programs and I 
look forward to hearing from Secretary Bodman on why the President is 
proposing such a shortfall in LIHEAP and weatherization funding, and I 
thank you, and I yield back the balance of my time.
     MR. STEARNS.  Mr. Pitts is recognized for one minute.  The 
gentleman passes.  Mr. Shimkus.
     MR. SHIMKUS.  I will pass.
     MR. STEARNS.  All right, the gentleman passes.  Mrs. Blackburn.
     MRS. BLACKBURN.  Thank you, Mr. Chairman.  Thanks for the 
hearing and thanks to Secretary Bodman for being here with us today.  I 
really look forward to working with you on some of the progress that we 
have already made from the Energy Policy Act of 2005.  I did find it 
surprising that in the State of the Union the President did not address 
ANWR and opening the outer continental shelf.  I support several of the 
initiatives that have been mentioned on hydrogen and renewable fuels 
and I sincerely hope the President will continue a strong commitment to 
opening up our currently inaccessible domestic energy sources and I 
hope we will hear from you a bit on that today.
     I think that forcing American families to pay higher energy prices in 
order to please environmental special interest groups is not good energy 
policy, and I appreciate the President's emphasis on the use of 
technology to address our economy's dependence on oil, but I hope we 
will also continue to focus on expanding domestic oil sources.  I also 
hope that we are going to hear from you and see some greater emphasis 
on energy efficiencies.  I look forward to hearing from you, Mr. 
Secretary, today and continuing to work with the committee and I yield 
back.
     MR. STEARNS.  Ms. Solis, the gentlelady from California.  Ms. 
Schakowsky.  Yes, Ms. Schakowsky.
     MS. SCHAKOWSKY.  Thank you, Mr. Secretary.  Despite unusually 
warm temperatures, the average Midwestern consumer paid 28 percent 
more to heat their homes this winter and yesterday the Midwest 
Attorneys General Natural Gas Working Group released a report 
demonstrating that this rise in price was not caused by simple supply and 
demand factors; instead, a lack of oversight, wild speculation on the 
futures market, and price gouging were responsible, they say, for the 
wellhead price of natural gas to increase over $400 billion from 2000 to 
2005, and the Administration has done nothing to bring those prices 
down and I don't see anything in the budget that would do that.
     The budget funds LIHEAP at a level that is $2.3 billion under what 
this committee authorized in the Energy Policy Act, cuts millions of 
dollars from critical energy efficiency programs and increases funding 
for renewable energy programs by only .2 percent, making the 
President's State of the Union commitment to end America's addiction to 
oil nothing, in my view, but an empty promise.  Most inexplicitly, this 
budget invests hundred of millions of dollars in new nuclear 
infrastructure and dangerous, expensive programs like reprocessing, 
which could divert resources from nuclear waste cleanup.
     It will be hard to justify this nuclear expansion to the residents of 
Illinois who were informed in February that two Illinois plants spilled 
radioactive cancer causing tritium between 1996 and 2003, expanding 
the nuclear industry is a recipe for a public health disaster.  Families 
across the Midwest whose wallets were stressed by the most expensive 
winter on record should expect more from their Administration.  Thank 
you.
     MR. STEARNS.  Mr. Otter is recognized.
     MR. OTTER.  Thank you, Mr. Chairman.  Good to have you here, Mr. 
Secretary.  I had hoped my colleagues from the Pacific Northwest would 
be here to help gang up on you about the DPA diversion of funds.  I am 
going to use my time when I have the opportunity for questions and 
responses to speak mostly about nuclear energy and in particular, the 
Idaho National Laboratory and its future.  I was a little disappointed in 
some of the figures and some of the things that I have heard relative to 
whether or not this Administration is going to fulfill those commitments 
and responsibilities made by previous Administrations and so I hope we 
will have a chance to talk about that.  But once again, Mr. Secretary, 
thank you for being here.
     CHAIRMAN BARTON.  Ms. Solis.
     MS. SOLIS.  Thank you, Mr. Chairman.  I would also like to thank 
you for having this hearing today and I also want to state that I believe 
the Department of Energy's budget does not reflect our American 
priorities.  Funding for weatherization and consumer protection programs 
should be significant, yet we see that Bush's budget cuts will cut 
LIHEAP by $2.3 billion less than we authorized in the EPACT program.  
We should be making real investments in Federal research to develop 
creative energy solutions rather than focusing just on oil and gas and we 
should rebuild the Gulf Coast quickly as a model of an integrated, 
diverse, and sustainable society.
     What are we doing about monitoring the repairs of the pipelines that 
were damaged in the Gulf?  I hear there were 100 pipelines that were 
damaged.  I encourage this committee to also bring the EPA here to 
discuss their budget because EPA is ignoring very important priorities 
that we should be looking at in concert.  For example, through 2011 there 
were nearly $1 billion in gas taxes that could have been used to clean up 
leaking underground storage tanks and prevent future leaks, but President 
Bush's budget refuses to expend these funds.  I yield back the balance of 
my time.
     CHAIRMAN BARTON.  The gentlelady yields back and I would like to 
compliment her on how nice she looks on TV in that green suit.  It looks 
really, really good on television.  It does, it really does.  Mr. Sullivan.  
Has Mr. Murphy been given a chance?  Mr. Green of Texas, speaking of 
green.
     MR. GREEN.  Thank you, Mr. Chairman, but I have a maroon tie on.  
How does it look today?
     CHAIRMAN BARTON.  Wait until we see you on the close-up monitor.
     MR. GREEN.  Okay.  Mr. Chairman, thank you and welcome, Mr. 
Secretary, and those of us who strongly supported the Energy Act and I 
guess we are concerned about where the budget priorities are.  
Obviously, I share the same concern on LIHEAP and weatherization, but 
I count 76 programs authorized by the Energy Policy Act which the 
President strongly supported but received zero dollars.  Our committee 
established a number of loan guarantee programs for the next generation 
of energy technology like coal and petroleum, coke and the next 
generation nuclear plants, but again, there is nothing in there for that.
     I am concerned that the $50 million authorized for the Ultra-deep 
Water Research program, the President has requested zero dollars and 
last year Congress appropriated $64 million, a pretty modest sum for oil 
and gas research and development; here again, we have zero dollars this 
year.  And no matter how many speeches we give, petroleum and 
petroleum products are not going to go away anytime soon.  Putting our 
heads in the sand, even if it is oil sands, still doesn't help us break our 
addiction to foreign oil and so that is why I think our research we need to 
do and again, we worked with the Department on research to get more 
out of the ground, so we don't have to knock as many holes in the 
ground, so hopefully the Budget Committee and Congress will change 
some of that.  But again, welcome.
     CHAIRMAN BARTON.  The tie doesn't look worth a toot, but your hair 
looks pretty good on TV.  Mr. Inslee of Washington.
     MR. INSLEE.  Thank you.  Mr. Secretary, I think you are one of the 
most important people in the world today because you have a capability 
of doing something about global warming.  As we speak this morning 36 
cubic miles of the Antarctic has melted in the last year.  The glaciers in 
Greenland have accelerated their march to the sea by a factor of two in 
the last 10 years.  We have massive kills by the pine beetle in our forests 
in the Northwest and Southwest of Canada.  We have the disappearance 
of the glaciers in Glacier National Park, all of which is occurring on your 
watch and I am very interested in hearing what you intend to do for all of 
our grandkids and great grandkids who would like to see glaciers in 
Glacier National Park when they have an opportunity to go there and 
frankly, to date, your Administration has been AWOL on this issue.  It 
has adopted the posture of the ostrich rather than the American eagle.  
We hope that it will take its head out of the sand at some point and 
actually show leadership, internationally and nationally on this, and you 
are in a position to do so.  And I would hope that at some point you 
would take on that role because we need to and I will look forward to 
any of your discussion about that today.  Thank you.
     CHAIRMAN BARTON.  We thank the gentleman.  The gentleman from 
Pennsylvania, Mr. Doyle.
     MR. DOYLE.  Thank you, Mr. Chairman.  Mr. Secretary, welcome to 
our committee.  I look forward to hearing your testimony at the 
conclusion of opening remarks.  As we all know, the President, during 
his State of the Union address declared that Americans are addicted to oil 
and then made several proposals that he claims would lead our Nation to 
energy independence.  While I applaud the Administration for the 
statement and welcome you all to the table, I have strong concerns that 
rhetoric is being substituted for a real commitment to achieving this goal.  
In 1960 President Kennedy challenged America to put a man on the 
moon by the end of the decade.  NASA saw its total budget increase six-
fold over the next eight years by which time that national goal was 
achieved.
     However, in this case, a case that I believe is easier technologically, 
the President has chosen not to increase your budget by any measurable 
manner.  Instead of bringing new resources to the table, this budget 
simply robs Peter to pay Paul by shuffling around funds to over fund the 
President's newly named initiatives while under funding proven 
programs that can bring near-term solutions to fruition.  Simply put, Mr. 
Secretary, the time for rhetoric has passed.  I stand ready to work with 
you and my colleagues on both sides of the aisle to take the steps we 
need to turn the dream of energy independence into reality.  I yield back, 
Mr. Chairman.
     CHAIRMAN BARTON.  The gentleman from Pennsylvania yields back.  
Is any other Member present who hasn't been given an opportunity to 
make an opening statement?  Seeing none, the Chair asks unanimous 
consent that all Members not present be given the requisite number of 
days to put their opening statements in writing in the record.
     [The statements follow:]

PREPARED STATEMENT OF THE HON. TAMMY BALDWIN, A REPRESENTATIVE IN CONGRESS 
FROM THE STATE OF WISCONSIN

     Thank you, Mr. Chairman for holding this hearing today.  Welcome 
Secretary Bodman.
     Like many of my colleagues, I was delighted that President Bush, in his 
State of the Union address, spoke so candidly about America's energy policy. 
He echoed those now famous words--America is "addicted to oil."  He went 
on to call for a "break to this addiction."  The President then vowed to 
reduce America's oil dependence by cutting Middle Eastern petroleum imports 
by 75 percent by 2025.  Such an ambitious goal provided a ray of hope to 
those of us who have advocated for wind power, solar energy, and ethanol use.  
     Unfortunately, two things have happened since the President's address. 
First, Secretary Bodman backed away from the President's statement, telling 
the world - specifically the Middle East - that the President didn't really 
mean what he said.  In fact, he stated that the President's words were meant 
"purely as an example," and not a real policy directive.
     Then, the President released his FY2007 budget proposal.  And despite 
all the promises to improve energy dependence, the budget virtually flat 
funds the Department of Energy's programs, and cuts others.  
     For instance, programs that would lower costs for Wisconsin working 
families see declines in funding.  I am concerned about funding for the 
weatherization program, which assists low-income Wisconsin households 
increase the efficiency of their homes, yet is cut by $78 million.  And, 
despite a movement towards new technologies aimed at reducing the U.S. 
demand for oil -- such as hydrogen powered automobiles -- the money 
to fund new research initiatives that eventually result in these 
technologies just doesn't appear to be a priority for this Administration.
     Mr. Chairman, Secretary Bodman, if we are truly committed to overcoming 
our addiction to foreign oil and to reducing record energy prices for 
Wisconsin's working families and all Americans, we must commit to taking 
the necessary steps toward reaching our goal -- and, we must provide the 
financial support that will allow us to reach our goals.
     Thank you, Mr. Chairman.  I look forward to hearing from the Secretary.

PREPARED STATEMENT OF THE HON. SHERROD BROWN, A REPRESENTATIVE IN CONGRESS 
FROM THE STATE OF OHIO

     Thank you, Mr. Chairman, and thank you Mr. Secretary for your testimony 
today.
     Secretary Bodman, I wanted to commend you for a responsible request for 
FutureGen -- the proposed public-private partnership to build a 
production-scale, coal-fueled, zero-emissions fuel cell power plant.  Ohio 
is uniquely situated to host the FutureGen plant, and I fully support 
the Administration's efforts to move this project forward.  To that end, I 
encourage you to seek a statutory authorization for FutureGen, which would 
solidify its appropriations footing. 
     There were, however, a few areas of the Administration's budget proposal 
that I believe fell short.
     The Industrial Technologies program has a track record of proven success 
in Ohio, and its Industries of the Future component serves industries that 
play a critical role in Ohio's economy -- including metal casting, steel, 
chemicals and others.  But the President's budget attacks Industrial 
Technologies again -- with a request that would cut funding by 40%, relative 
to 2005 appropriations.
     And hydrogen and hydrogen vehicle development is another shortcoming. 
The Ohio Fuel Cell Coalition -- with member organizations in academia and 
industry on the cutting edge of fuel cell, hydrogen and battery research -- 
could benefit from a robust investment in the development of these 
technologies.
     And when the President announced the Hydrogen Fuel Initiative in 2003, 
he committed to deliver $720 million in new funding over 5 years.  That 
equates to $144 million a year, but on average, the President has enacted 
well less than that.  And his 2007 budget requests less than $65 million 
in new funding, according to an analysis by the Congressional Research 
Service.  I believe we can and should provide much more to support this 
research effort.
     The NASA Glenn Research Center in Cleveland is also engaged in 
promising research with important energy and economic security potential. 
NASA Glenn's Ultra-Efficient Engine Technology for Aircraft (UEET) program 
seeks to develop systems offering significant reductions in jet fuel 
consumption.
     When fully implemented, these efficiency improvements may eventually 
save airlines 130 million gallons of jet fuel a year.  And leadership in 
this technology would enhance the competitiveness of American engine and 
aircraft manufacturers in a global marketplace.
     I offered an amendment during this committee's consideration of the 
energy bill, authorizing Energy Department funding to help NASA advance 
this initiative.  My amendment was adopted and enacted as part of the bill.  But the President's 2007 budget requests no funding for this important 
program.
     Let me just mention one other thing.  I wrote you earlier this year, 
asking that you accelerate implementation of several energy bill provisions 
that would support fuel cell and advanced vehicle development.  And I asked 
that you support the establishment of an Advanced Batteries Center of 
Excellence in Ohio.  I have not received your reply yet and would ask that 
you respond as soon as possible.
     To protect Ohio's traditional industries and develop Ohio's emerging 
industries, my state needs a much more significant commitment from the 
federal government.  I hope I can count on the Administration to join me 
in supporting increased appropriations for Industrial Technologies, the 
UEET and other programs of importance to Ohio.
     I would also appreciate your prompt reply to my request for accelerated 
implementation of energy bill provisions important for the development of 
advanced vehicle industries in Ohio.
     Thank you again for taking the time to join us today.

     CHAIRMAN BARTON.  The Chair would now like to recognize and 
welcome the Secretary of Energy, the Honorable Sam Bodman, to the 
Energy and Commerce Committee.  Welcome, Mr. Secretary, and you 
are recognized for such time as you may consume.

STATEMENT OF HON. SAMUEL W. BODMAN, SECRETARY, 
U.S. DEPARTMENT OF ENERGY

     SECRETARY BODMAN.  Thank you, Mr. Chairman.  I am very 
pleased to be here in front of the committee.  As you know, our 
Department has several critical energy, economic and national security 
missions and these are spelled out in detail in my written testimony, 
which I will submit for the record.  Let me, if I may, take a brief 
opportunity here at the outset to mention a few of the highlights of the 
$23.5 billion request from the President.  First, the 2007 budget includes 
a $505 million increase in the Department of Energy's Science Office.  
The goal here is to support an ambitious new American Competitiveness 
Initiative which the President outlined in his State of the Union address.
     The goal of this is to ensure that America remains at the forefront of 
science in an increasingly competitive world and to do that, our 
Department is pursuing transformational new technologies at the cutting 
edge of scientific fields that we believe will be important in this next 
decade; areas like nanotechnology, material science, biotechnology and 
high speed computing.  The President also announced the new Advanced 
Energy Initiative to increase spending on clean energy sources that will 
reduce our dependence on imported fossil fuels.
     While our Department maintains several programs to help consumers 
conserve energy and lower their utility bills, we also know that the 
Nation's energy needs will continue to expand as our economy grows.  
So we are working to accelerate research and development in the most 
promising renewable energy technologies.  Specifically, the 2007 budget 
request proposes $150 million for biomass, the biomass and biofuels 
programs; and $148 million to support the Solar America program.  In 
addition, the budget requests a total of $288 million to support 
implementation of the President's Hydrogen Fuel Initiative.
     As a part of the President's Advanced Energy Initiative, the 
Department's 2007 budget also features a $250 million request to begin 
investments in the Global Nuclear Energy Partnership.  This partnership, 
GNEP, as we have come to call it, is a new, what we hope will be an 
international effort to help meet the world's rapidly growing electricity 
needs with safe, emissions-free nuclear power while enhancing our 
ability to keep nuclear technology and materials out of the hands of those 
who would seek to use it for non-peaceful purposes.  As a complement to 
the GNEP strategy, the Department will continue to pursue a permanent 
geologic storage site for nuclear waste at Yucca Mountain and the 2007 
budget includes a $544 million request to support this goal.
     For the National Nuclear Security Administration or NNSA, the 
budget proposes a total of $9.3 billion in 2007, a $211 million increase 
from the 2006 appropriation.  Most of this increase, $111 million, is in 
the Defense Nuclear Nonproliferation area.  Programs that will accelerate 
efforts to secure nuclear materials in the former Soviet Union and 
advance an aggressive global nuclear nonproliferation agenda.
     Finally, the Department of Energy's budget request also focuses on 
other key priorities.  To meet our environmental commitments, the 
budget submission requests $5.8 billion to clean up legacy nuclear waste 
sites.  We recently announced the completion of cleanup at Rocky Flats, 
a former nuclear weapons plant located outside of Denver.  In 2006, 
DOE will complete the environmental cleanup of the Fernald and 
Columbus sites in Ohio, the Sandia National Laboratory in New Mexico, 
and several other smaller sites.
     Mr. Chairman, that concludes my prepared statement and I look 
forward to responding to questions from the committee members.
     [The prepared statement of Hon. Samuel W. Bodman follows:]

PREPARED STATEMENT OF THE HON. SAMUEL W. BODMAN, SECRETARY, U.S. 
DEPARTMENT OF ENERGY

     Good morning, Mr. Chairman and Members of the Committee. I am pleased to 
appear before you today to discuss the President's Fiscal Year (FY) 2007 
budget request for the Department of Energy (DOE). Most notably, this 
budget request contains:

 A Landmark Investment in Scientific Research 
The FY 2007 budget includes a $505 million increase in DOE's Science 
programs, which is part of a commitment to double funding for certain high-
leverage science agencies over the next ten years.  The American 
Competitiveness Initiative recognizes that scientific discovery and 
understanding help drive economic strength and security.  Developing 
revolutionary, science-driven technology is at the heart of the Department of 
Energy's mission.  The increase proposed for the Department's Science 
programs reflects the significant contribution DOE and its world-class research facilities make to the Nation.

 Strategic Investments to Reduce America's Dependence on Foreign Oil 
and Develop Clean Energy Technologies
The President's Advanced Energy Initiative provides a 22 percent increase for 
research that can help reduce America's dependence on foreign oil and advance 
clean energy technologies.  The FY 2007 Budget proposes $149.7 million for 
Biomass and Biorefinery Systems Research and Development (R&D) program 
to support the new Biofuels Initiative to develop cost competitive ethanol from cellulosic materials (agricultural wastes, forest residues, and bioenergy 
crops) by 2012.  In addition, the budget request continues to pursue the 
vision of reducing America's dependence on foreign oil, reducing air 
pollution, and reducing greenhouse gas emissions through the development of 
a hydrogen economy.  The FY 2007 Budget requests a total of $289.5 million 
(including $1.4 million requested by the Department of Transportation) to 
support implementation of the President's Hydrogen Fuel Initiative.  The FY 
2007 Budget also provides a 27 percent increase for advanced battery 
technologies that can improve the efficiency of conventional hybrid 
electric vehicles (HEV) and help make "plug-in" HEVs commercially viable.

To help develop clean electricity, the FY 2007 Budget funds diverse technology 
R&D programs. The FY 2007 Budget includes $148.4 million for a new Solar 
America Initiative to develop cost competitive solar photovoltaic technology 
by 2015.  The FY 2007 Budget also provides $60.0 million for U.S. 
participation in ITER, an international experimental reactor program that has 
the potential for putting us on a pathway to tap nuclear fusion as an enormous 
source of plentiful, environmentally safe energy.  The FY 2007 advances the 
Administration's commitment to the FutureGen project, which will establish 
the capability and feasibility of co-producing electricity and hydrogen from coal with near-zero atmospheric emissions of pollutants and greenhouse gasses.   

 Strategic Investments to Enable Nuclear Energy Expansion in a 
Cleaner, Safer Manner The Department's FY 2007 budget features $250 million 
to begin investments in the Global Nuclear Energy Partnership (GNEP). GNEP 
is a comprehensive strategy to enable an expansion of nuclear power in the 
U.S. and around the world, to promote non-proliferation goals; and to help 
resolve nuclear waste disposal issues.

The Energy Information Administration (EIA) projects that over the next 25 
years, demand for electricity in the United States alone will grow by over 40 
percent.  Nuclear power is an abundant, safe, reliable and emissions-free way 
to help meet this growing demand for energy throughout the world.  As part of 
the GNEP strategy, the United States will work with key international partners 
to develop and demonstrate new proliferation resistant technologies to recycle 
spent nuclear fuel to reduce waste. To help bring safe, clean nuclear power to 
countries around the world, the international GNEP partners will also develop 
a fuel services program to supply developing nations with reliable access to 
nuclear fuel in exchange for their commitment to forgo developing enrichment 
and recycling technologies.

As a complement to the GNEP strategy, the Department will continue to pursue 
a permanent geologic storage site for nuclear waste at Yucca Mountain, and 
the FY 2007 budget includes $544.5 million to support this goal. Based on 
technological advancements that would be made through GNEP, the volume 
and radiotoxicity of waste requiring permanent disposal at Yucca Mountain will 
be greatly reduced, delaying the need for an additional repository indefinitely.

GNEP builds upon the successes of programs initiated under President Bush's 
leadership to encourage the construction of new nuclear power plants here in 
the U.S.  The FY 2007 budget includes $632.7 million for nuclear energy 
programs, a $97.0 million increase above the FY 2006 appropriation. In 
addition to the $250 million for GNEP within the Advanced Fuel Cycle 
Initiative, Generation IV (Gen IV) research and development ($31.4 million) 
will improve the efficiency, sustainability, and proliferation resistance of 
advanced nuclear systems and Nuclear Power 2010 ($54.0 million), will lead 
the way, in a cost-sharing manner, for industry to order new, advanced light-
water reactors by the end of this decade. In addition, ongoing implementation of the Energy Policy Act of 2005 (EPACT) will establish federal insurance to 
protect sponsors of the first new nuclear power plants against the financial 
impact of certain delays during construction or in gaining approval for 
operation that are beyond the sponsors' control.

 Strengthening America's National Security Commitments  
In the area of national security, the budget proposes a total of $9.3 billion 
in FY 2007, a $211.3 million increase from the FY 2006 appropriation. At $6.4 
billion, Weapons Activities remain essentially level with the FY 2006 
appropriations to continue the transformation of the Nation's nuclear 
deterrent and supporting infrastructure to be more responsive to the threats 
of the 21st Century. The majority of the increase, $111.4 million, is in 
Defense Nuclear Nonproliferation programs to accelerate efforts to secure 
nuclear material in the former Soviet Union and advance an aggressive global 
nuclear nonproliferation agenda.  

     The Department of Energy's budget request also focuses on other key 
priorities. To meet our environmental cleanup commitments arising from 
nuclear activities during the Manhattan Project and the Cold War, the 
budget requests $5.8 billion to clean up legacy nuclear waste sites.  DOE 
has accelerated cleanup at the legacy nuclear waste sites and recently 
announced completion of cleanup at Rocky Flats, a former nuclear weapons 
plant located outside of Denver, Colorado.  In 2006, DOE will also complete 
environmental cleanup of the Fernald and Columbus sites in Ohio, the Sandia 
National Laboratory in New Mexico, and several other sites.
     Reflected throughout the FY 2007 budget are the integration of 
performance measures and the incorporation of sound business practices in 
the Department's operation consistent with the President's Management Agenda. 
We also have established straight-forward operating principles which set the 
tone for further improving the management of the Department.  These principles 
are:
      Accept no compromises in safety and security
      Act with a sense of purposeful urgency
      Work together, treating people with dignity and respect
      Make the tough choices
      Keep our commitments
      Manage Risk through informed decisions

PROMOTING SCIENCE AND TECHNOLOGICAL INNOVATION
     As the millennium unfolds, we stand on the threshold of scientific 
revolutions in biotechnology and nanotechnology, in materials science, in 
fusion energy and high-intensity light sources, and in high-speed computing, 
to touch on only a few important fields.  The nations that lead these 
scientific revolutions will likely dominate the global hi-tech economy for 
the foreseeable future.  We are on the verge of major new discoveries about 
the nature of our universe, solutions to some of the deepest mysteries of 
the cosmos and the fundamental understanding of matterï¿½insights that will 
transform the way we think about ourselves and our world.  
     The President's American Competitiveness Initiative will encourage 
American innovation and bolster our ability to compete in the global economy 
through increased federal investment in critical areas of research, especially 
in the physical sciences and engineering.  This initiative will generate 
scientific and technological advances for decades to come and will help 
ensure that future generations have an even brighter future.
     Twenty-first century science requires sophisticated scientific 
facilities.  In many fields, private industry has neither the resources 
nor the near-term incentive to make significant investments on the scale 
required for basic scientific research to yield important discoveries. 
Indeed, in recent years, corporate research has declined.  That is 
why the Department's Office of Science, which is responsible for ten world-class U.S. national laboratories and is the primary builder and operator of 
scientific facilities in the United States, plays such a critical role. 
Investment in these facilities is much more than bricks and mortar; it is 
an investment in discovery and in the future of our Nation.  The 
Office of Science is also educating and training our next generation of 
scientists and engineers.  Roughly half of the researchers at Office of 
Science-run facilities are university faculty or graduate or postdoctoral 
students (who work side by side with scientists and researchers employed 
directly by the labs), and about a third of Office of Science research 
funds go to institutions of higher learning. In addition, the NNSA 
operates three world-class national laboratories which greatly advances 
the frontiers of science in connection with their national security 
mission and which have many interactions with universities.
     I am pleased to inform the Committee that the Department is already 
achieving meaningful scientific results with our latest high-end 
supercomputing systems, including Blue Gene L and Purple at Lawrence 
Livermore National Laboratory and our Red Storm supercomputer at Sandia 
National Laboratory. Within a month of coming online, weapons designers 
at Lawrence Livermore and Los Alamos, working jointly, have discovered 
key physics that is important to weapons design that could not have been 
identified using less capable computers. This discovery is critically 
important to predicting the behavior of weapons, and, as a result, our 
ability to be responsive to national needs.  Because of the 
interrelationships among the Department's science-based programs, these 
new, remarkably powerful computers are already having a major, positive 
effect on science in several of our laboratories. 
     The President's FY 2007 budget request of $4.1 billion for the Office 
of Science will move us forward on several scientific fronts designed to 
produce discoveries that will strengthen our national competitiveness.  
Final international negotiations are close to being completed with our 
international partners in ITER, the fusion experimental reactor 
designed to demonstrate the scientific and technological feasibility of 
fusion energy.  Capable of producing a sustained, burning fusion fuel, ITER 
will be the penultimate experiment before commercialization of fusion as a 
plentiful, environmentally friendly source of energy.  A request of $60.0 
million in FY 2007 provides funding for the second year of the ITER project. 
The return on investment will expand across international borders and has 
the promise of tremendous economic opportunity and development.  
     The FY 2007 budget also includes $105.9 million to enable us to 
continue construction of the Linac Coherent Light Source (LCLS), the world's 
first x-ray free electron laser.  The LCLS will allow us to watch matter 
in action, one molecule at a time, and witness chemical reactions at the 
microscopic level in real time.  The structural knowledge obtained with 
x-rays holds the key to understanding the properties of matter such as 
mechanical strength, magnetism, transport of electrical currents and light, 
energy storage, and catalysis.  Likewise, in biology much of what we 
know about structure and function on a molecular level comes from x-ray 
studies.  Such knowledge forms the basis for the development of new materials 
and molecules and the enhancement of their properties, which in turn will 
advance technology, fuel our economy, and improve our quality of life.  In 
addition, the FY 2007 Budget seeks $19.2 million in FY 2007 for the 
first full year of operations of each of four facilities for nanoscience 
research and $19.4 million to continue with construction of a fifth.
     The FY 2007 budget provides $171.4 million for the Spallation Neutron 
Source (SNS), which enters its first full year of operation as the world's 
foremost facility for neutron scattering.
     The FY 2007 budget request also includes $135.3 million for the Genomes: 
GTL research, which will help us understand how nature's own microbial 
communities can be harnessed to remove carbon from the atmosphere, generate 
hydrogen for fuel, and turn cellulose into ethanol.  
     Within the $4.1 billion FY 2007 budget request for Science, $143.3 
million is provided to support near full operation of the Relativistic 
Heavy Ion Collider (RHIC), which gives us a lens into the early universe, 
and $80.0 million is allocated to allow near full operation of the 
Continuous Electron Beam Accelerator Facility (CEBAF), which will give new 
insight on the quark-structure of matter. Early studies of nuclear and 
particle physics provided the foundation for technologies that have changed 
our daily lives, giving us televisions, transistors, medical imaging devices, 
and computers, and has enormous potential to lead to unexpected discoveries. 
The Large Hadron Collider (LHC) at CERN, scheduled to be completed in 2007, 
will open a new chapter in illuminating the structure of matter, space and 
time.  At this new energy frontier, qualitatively new phenomena of nature 
should emerge.  There are many possibilities - supersymmetry, extra space 
dimensions, or unexpected new symmetries of nature - but finding out which, 
if any, are true can only be settled by experiment.  In FY 2007, $56.8 
million is requested to support U.S. participation in the LHC research 
program.  The new results anticipated at the LHC can be significantly 
advanced by discoveries at a potential next generation International 
Linear Collider (ILC) which would break new ground in our understanding 
of nature.  In FY 2007, the ILC funds for research and development are 
doubled with a funding request of $60.0 million.    
     The budget also includes $318.7 million to solidify America's 
leadership in the economically vital field of high-speed computing, a 
tool increasingly integral not only to advanced scientific research, but 
also to industry.  The budget will provide the pathway toward a point 
when computers will be so powerful that researchers will be able to attack 
a wide range of previously impossible scientific problems through modeling 
and simulation, enabling the U.S. to maintain leadership in this strategic 
area.  Additionally, from development of the suite of scientific software 
and applications for the petascale computers, U.S. industry will be able to 
accelerate innovation, saving billions in development costs and giving our 
economy untold competitive advantages.  We are, in short, on the verge of a 
revolution across multiple sciences as profound as any humanity has witnessed 
- one that will transform our vision of nature and, ultimately, our industry 
and economy.  

ADVANCING AMERICA'S ECONOMIC AND ENERGY SECURITY
     The Energy Policy Act of 2005, signed by President Bush on August 8, 
2005, serves as a roadmap to help lead the United States to a secure energy 
future.  The FY 2007 budget request of $2.6 billion to support energy programs 
fulfills President Bush's pledge to promote a strong, secure economy and 
expand our Nation's energy supply by developing a diverse, dependable energy 
portfolio for the future.  
     The President has proposed the Advanced Energy Initiative to help reduce 
America's dependence on foreign sources of oil and accelerate development of 
clean energy technologies through targeted increases in federal investment. 
     The FY 2007 budget request of $1.2 billion for energy efficiency and 
renewable energy activities reallocates resources to emphasize technologies 
with the potential for reducing our growing reliance on oil imports and for 
producing clean electricity with reduced emissions.  It includes two new 
Presidential initiatives; Biofuels and Solar America. The FY 2007 budget 
proposes $149.7 million for the Biofuels Initiative to develop by 2012 
affordable, domestically produced bio-based transportation fuels, such 
as ethanol, from cellulosic feedstocks (such as agricultural wastes, forest 
residues, and bioenergy crops), and encourage the development of 
biorefineries.  Biomass has the promise to deliver a plentiful domestic 
energy resource with economic benefits to the agricultural sector, and to 
directly displace oil use.  The Solar America Initiative accelerates the 
development of solar photovoltaics, a technology that converts energy 
from the sun into electricity.  Further development can help this 
emissions-free technology achieve efficiencies to make it cost-competitive 
with other electricity generation sources by 2015.  The FY 2007 Budget 
provides $148.4 million for the Solar Energy Program that comprises the 
initiative.
     In addition to funding increases for biomass and solar energy, the 
Energy Efficiency and Renewable Energy budget request includes $195.8 
million to support continued research and development in hydrogen and 
fuel cell technology which holds the promise of an ultra-clean and 
secure energy option for America's energy future.  The increase of $40.2 
million above the FY 2006 appropriation accelerates activities geared to 
further improve the development of hydrogen production and storage 
technologies, and evaluate the use of hydrogen as an emissions-free 
transportation fuel source.  The President's Hydrogen Fuel Initiative is 
funded at $289.5 million and includes $195.8 million for DOE's Energy 
Efficiency and Renewable Energy program, $23.6 million for DOE's Fossil 
Energy program, $18.7 million for DOE's Nuclear Energy program, $50.0 
million for DOE's Science program, and $1.4 million for the Department of 
Transportation.   
     While the budget proposes increases for Biomass, Solar 
and Hydrogen research, the Geothermal Program will be closed out in FY 2007 
using prior year funds.   The 2005 Energy Policy Act amended the Geothermal 
Steam Act of 1970 in ways that should spur development of geothermal 
resources without the need for subsidized Federal research to further 
reduce costs.  
     Nuclear power, which generates 20 percent of the electricity 
in the United States, contributes to a cleaner, more diverse energy portfolio. 
In FY 2007 a total of $632.7 million is requested for nuclear energy 
activities.  Within the total, $250 million will support the Global Nuclear 
Energy Partnership (GNEP).  GNEP is a comprehensive strategy to enable an 
expansion of nuclear power in the U.S. and around the world, to promote 
nuclear nonproliferation goals; and to help resolve nuclear waste disposal 
issues.
     GNEP will build upon the Administration's commitment to develop nuclear 
energy technology and systems, and enhance the work of the United States and 
our international partners to strengthen nonproliferation efforts. GNEP will 
accelerate efforts to:
      Enable the expansion of emissions-free nuclear power 
domestically and abroad;
      Reduce the risk of proliferation; and 
      Utilize new technologies to recover more energy from nuclear 
fuel and dramatically reduce the volume of nuclear waste.
     Through GNEP, the United States will work with key international 
partners to develop new recycling technologies that do not result in 
separated plutonium, a traditional proliferation risk.  Recycled fuel 
would then be processed through advanced burner reactors to extract 
more energy, reduce waste and actually consume plutonium, dramatically 
reducing proliferation risks.  As part of GNEP, the U.S. and other nations 
with advanced nuclear technologies would ensure developing nations a 
reliable supply of nuclear fuel in exchange for their commitment to 
forgo enrichment and reprocessing facilities of their own, also alleviating 
a traditional proliferation concern.   
     GNEP will also help resolve America's nuclear waste disposal challenges. 
By recycling spent nuclear fuel, the heat load and volume of waste requiring 
permanent geologic disposal would be significantly reduced, delaying the need 
for an additional repository indefinitely. 
     The Administration continues its commitment to open and license Yucca 
Mountain as the nation's permanent geologic repository for spent nuclear 
fuel, a key complement to the GNEP strategy.  Managing and disposing of 
commercial spent nuclear fuel in a safe and environmentally sound manner 
is the mission of DOE's Office of Civilian Radioactive Waste Management (RW).  
     To support the near-term domestic expansion of nuclear energy, the FY 
2007 budget seeks $54.0 million for the Nuclear Power 2010 program to 
support continued industry cost-shared efforts to reduce the barriers to 
the deployment of new nuclear power plants.  The technology focus of the 
Nuclear Power 2010 program is on Generation III+ advanced light water 
reactor designs, which offer advancements in safety and economics 
over the Generation III designs.  If successful, this seven-year, $1.1 
billion project (50% to be cost-shared by industry) 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.    
     Funding of $1.8 million is provided in FY 2007 to implement a new 
program authorized in the recently enacted Energy Policy Act of 2005.  
The program will allow DOE to offer risk insurance to protect sponsors of 
the first new nuclear power plants against the financial impact of certain 
delays during construction or in gaining approval for operation that are 
beyond the sponsors' control.  This program would cover 100 percent of the 
covered cost of delay, up to $500 million for the first two new reactors 
and 50 percent of the covered cost of delay, up to $250 million each, for 
up to four additional reactors.  This risk insurance offers project sponsors 
additional certainty and incentive to provide for the construction of a 
new nuclear power plant by 2014.      
     The FY 2007 budget request includes $31.4 million to continue to 
develop Next-generation nuclear energy systems known as Generation IV 
(GenIV).  These technologies will offer the promise of a safe, economical, 
and proliferation resistant source of clean, reliable, sustainable nuclear 
power with the potential to generate hydrogen for use as a fuel.  Resources 
in FY 2007 for GenIV will be primarily focused on long-term research and 
development of the Very-High Temperature Reactor.
     The University Reactor Infrastructure and Educational Assistance 
program was designed to address declining enrollment levels among U.S. 
nuclear engineering programs. Since the late 1990s, enrollment levels in 
nuclear education programs have tripled. In fact, enrollment levels for 
2005 have reached upwards of 1,500 students, the program's target level 
for the year 2015. In addition, the number of universities offering 
nuclear-related programs also has increased. These trends reflect renewed 
interest in nuclear power. Students will continue to be drawn into this 
course of study, and universities, along with nuclear industry societies 
and utilities, will continue to invest in university research reactors, 
students, and faculty members. Consequently, Federal assistance is no 
longer necessary, and the 2007 Budget proposes termination of this 
program. The termination is also supported by the fact that the program 
was unable to demonstrate results from its activities when reviewed using 
the Program Assessment Rating Tool (PART), supporting the decision to spend 
taxpayer dollars on other priorities. Funding for providing fresh reactor 
fuel to universities is included in the Research Reactor Infrastructure 
program, housed within Radiological Facilities Management. 
     Recognizing the abundance of coal as a domestic energy resource, the 
Department remains committed to research and development to promote its 
clean and efficient use.  U.S. coal accounts for twenty five percent of 
the world's coal reserves.  For the last three years, the Department has 
been working to launch a public-private partnership, FutureGen, to develop 
a coal-based facility that will produce electricity and hydrogen with 
essentially zero atmospheric emissions.  This budget includes $54 million 
in FY 2007 and proposes an advance appropriation of $203 million for the 
program in FY 2008.  Funding for FutureGen will be derived from rescinding 
$203 million in balances no longer needed to complete active projects in the 
Clean Coal Technology program.  Better utilization of these fund balances to 
support FutureGen will generate real benefits for America's energy security 
and environmental quality.  
     The budget request for FY 2007 includes $4.6 million to support 
Alaska Natural Gas Pipeline activities authorized by Congress in late 2004. 
Within the total amount of $4.6 million, $2.3 million will be used to 
support an Office of the Federal Coordinator and the remaining $2.3 million 
will support the Loan Guarantee portion of the program.  Once constructed, 
this pipeline will be capable of delivering enough gas to meet about 
ten percent of the U.S. daily natural gas needs.
     The budget request proposes to terminate the oil and gas research 
and development programs, which have sufficient market incentives for 
private industry support, to other energy priorities.    
     The Energy Policy Act of 2005 established a new mandatory oil and gas 
research and development (R&D) program, called the Ultra-Deep and 
Unconventional Natural Gas and Other Petroleum Research program, that is to 
be funded from Federal revenues from oil and gas leases beginning in FY 2007. 
These R&D activities are more appropriate for the private-sector oil and gas 
industry to perform.  Therefore, this budget proposes to repeal the program 
through a future legislative proposal, although we will faithfully execute 
current law until such time that Congress acts affirmatively on that 
legislative proposal.  
     The FY 2007 budget includes $124.9 million for a refocused portfolio 
of energy reliability and assurance activities in the Office of Electricity 
Delivery and Energy Reliability.  This will support research and development 
in areas such as high temperature superconductivity, and simulation work 
needed to enhance the reliability and effectiveness of the Nation's power 
supply.  This office also operates the Department's energy emergency response 
capability and led DOE's support effort during and after the Gulf Coast 
hurricanes.
     The Department of Energy's Power Marketing Administrations (PMAs), 
consisting of the Southeastern (SEPA), Southwestern (SWPA), Western Area 
(WAPA) and Bonneville Power Administrations (BPA), play an important role 
in meeting energy demands and fueling our economy.  The electricity 
generated at Federal hydroelectric facilities and sold by the PMAs 
represents four percent of the Nation's electricity supply.  In FY 2007, 
$229 million is requested for SEPA, SWPA, and WAPA to continue their 
activities.
     The budget includes a proposal that sets the interest rate for certain 
new obligations incurred by SEPA, SWPA and WAPA paid to the Treasury for 
power related investments at the rate Government corporations borrow in the 
market.  This rate is similar to the interest rate current law sets for BPA 
borrowing from the U.S. Treasury.  However, this change applies only to 
investments whose interest rates are not set by law.  These three PMA 
obligations due to Treasury currently outstanding will continue to retain 
existing interest rates.  This is expected to result in a rate increase of 
less than 1 percent paid by some PMA customers.  This change is expected to 
increase total receipts to the U.S. Treasury, beginning in FY 2007, by 
approximately $2-3 million annually.
     BPA, unlike the other three PMAs, is "self-financed" by the 
ratepayers of the Pacific Northwest and receives no annual appropriation 
from Congress.  BPA funds the expense portion of its budget and repays 
amounts it has borrowed from the Treasury as well as certain Federal 
investments with revenues from electric power and transmission rates. 
     The President's FY 2007 Budget provides, consistent with sound business 
practices required under the Federal Columbia River Transmission Act of 1974, 
that BPA will use any net secondary revenues it earns above $500 million 
annually to make early payments on its federal bond debt to the U.S. Treasury. 
Due to high energy prices, these net secondary revenues could be significantly 
higher than historical levels, especially in the next three years.  The budget 
reflects $924 million from FY 2007-2016 from these higher-than-historical 
net secondary revenues.  Absent implementation of the Budget proposal, 
BPA could run out of borrowing authority from the U.S. Treasury, and 
therefore limiting BPA's ability to invest in energy infrastructure, as 
early as 2011.
     In addition, the FY 2007 budget provides that Energy Northwest will 
refinance a portion of its debt in calendar years 2006 and 2007.  During FY 
2006 and FY 2007, these deficit reduction proposals should allow $1.3 billion 
in additional U.S. Treasury borrowing authority to become available to BPA.
In the month since the FY 2007 budget was released, I have heard from Members 
of Congress and from various stakeholders concerning the Administration's 
budget proposal relating to BPA.  I also have met with Members of Congress 
from the Pacific Northwest, from both parties, concerning that proposal; I 
have found those discussions to be helpful.  I continue to believe that the 
Administration's proposal makes good sense for the Bonneville Power 
Administration and its customers.  I have decided that a formal BPA 
rate case to address the proposal will not be initiated until July, and have 
committed to a further dialogue with members of the Pacific Northwest 
Congressional delegation and others in Congress concerning the proposal.

ADVANCING AMERICA'S NATIONAL SECURITY
     The National Nuclear Security Administration (NNSA) continues 
significant efforts to meet Administration and Secretarial priorities by 
conducting fundamental and applied scientific research and development, and 
applying that science to promote national security.  The FY 2007 budget 
proposes $9.3 billion to meet defense-related objectives.  The budget 
request maintains commitments to the nuclear deterrence requirements of the 
Administration's Nuclear Posture Review (NPR) and continues to fund an 
aggressive strategy to mitigate the threat of weapons of mass destruction. 
Key investments include:
      Transforming the nuclear weapons stockpile and infrastructure 
while meeting Department of Defense requirements;
      Conducting innovative programs in the former Soviet Union and 
other countries to address nonproliferation priorities;
      Supporting naval nuclear propulsion requirements for the nuclear 
Navy;
      Providing nuclear emergency response assets in support of 
homeland security.
     Weapons Activities:  The United States continues a fundamental shift in 
national security strategy to address the realities of the 21st century.  The 
Administration's NPR addresses a national security environment in which 
threats may evolve more quickly and be less predictable and more variable 
than in the past.  The NPR recognizes the need to transition from a 
threat-based nuclear deterrent with large numbers of deployed and 
reserve weapons, to a deterrent consisting of a smaller nuclear weapons 
stockpile with greater reliance on the capability and responsiveness of 
the Department of Defense (DOD) and NNSA infrastructure to respond to 
threats.  The NNSA infrastructure must be able to meet new requirements in 
a timely and agile manner while also becoming more sustainable and 
affordable. As part of the goal of a responsive infrastructure, efforts are 
underway to both modernize and consolidate the facilities and infrastructure 
needed for ongoing stockpile stewardship from the current Cold War 
configuration. The Department is reviewing recommendations from the recent 
Secretary of Energy Advisory Board (SEAB) study of the nuclear weapons 
complex and is formulating a strategic plan for achieving a responsive 
infrastructure that includes consideration of those recommendations.  We 
intend to communicate the elements of that plan to Congress this spring.
     The FY 2007 budget request of $6.4 billion for Weapons Activities 
strongly supports implementation of the responsive infrastructure and the 
ongoing program of work that forms the backbone of the nuclear weapons 
deterrent as well as a robust safeguards and security program.  This 
includes all programs to meet the immediate needs of the stockpile, 
stockpile surveillance, annual assessment, and life extension programs.  
NNSA uses world-class science resources along with industry and academia 
in the areas of computation, simulation, experiments, materials science 
and analysis of highly complex weapons physics information. NNSA will 
continue to move ahead with the Reliable Replacement Warhead (RRW) program 
to establish the path forward for stockpile transformation.  Success of 
the RRW program will, in turn, enable transformation to a more responsive 
infrastructure. The campaigns are focused on long-term vitality in science 
and engineering and on R&D supporting future DOD requirements, and include 
support of the first ignition experiment at the National Ignition Facility 
in 2010. These campaigns also represent a core investment in science and 
technology within DOE whose reach is felt beyond the national security 
arena.  In addition, NNSA is implementing a responsive infrastructure of 
people, science and technology base, and facilities and equipment needed 
to support a right-sized nuclear weapons infrastructure.  
     Defense Nuclear Nonproliferation:  Preventing weapons of mass 
destruction from falling into the hands of terrorists is one of this 
Administration's top national security priorities.  The FY 2007 request 
of $1.7 billion strongly supports the international programs that are 
denying terrorists the nuclear materials, technology and expertise needed 
to develop or otherwise acquire nuclear weapons.  The FY 2007 budget request 
for Defense Nuclear Nonproliferation increases by 6.9 percent the amount 
appropriated in FY 2006.  NNSA continues unprecedented efforts to protect 
the U.S. and our allies from threat, including $261 million for cutting-edge 
nonproliferation research and development for improved technologies to 
detect and monitor nuclear proliferation and nuclear explosions worldwide. 
There are also major efforts focused on potential threats abroad.  The 
budget request includes $207 million to help complete the shut down of 
three Russian nuclear reactors still producing 1.2 metric tons of 
plutonium per year and replace them with conventional fossil fuel 
power plants.  Also, this budget requests $290 million for construction of 
the U.S. Mixed Oxide Fuel Fabrication Plant at DOE's Savannah River Site 
in South Carolina.  This facility will dispose of 34 metric tons of 
U.S. surplus plutonium.   
     A key breakthrough in nonproliferation efforts was recently achieved 
with the agreement at the Bratislava meeting in 2005 to allow the United 
States to help Russia improve security at a number of military warhead sites. 
Coupled with the continuing material protection and recovery programs, 
Megaports and Second Line of Defense, and the successful completion of 
negotiations on a liability protection protocol allowing the U.S. and 
Russia to move ahead on disposition of surplus plutonium, NNSA is making 
significant strides to reduce the threat from proliferation of warheads 
and weapons-usable nuclear materials.  
     Naval Reactors:  NNSA continues to support the United States Navy's 
nuclear propulsion systems.  The FY 2007 request is an increase of 1.7 
percent over the FY 2006 appropriation level.  This increase allows the 
Naval Reactors program to develop new technologies, methods, and materials 
to support reactor plant design for the next generation reactors for 
submarines and aircraft carriers, and continue stewardship and remediation 
for their facilities and sites to maintain outstanding environmental 
performance. 
     Safeguards and Security:  The Defense Nuclear Security program is 
responding to a revision in threat guidance affecting physical security at 
all NNSA sites.  Meeting the new Design Basis Threat will require further 
upgrades to equipment, personnel and facilities.  NNSA is committed to 
completing these upgrades.  The FY 2007 budget request for Cyber Security 
program activities, protecting information and IT infrastructure, is 
essentially level with the FY 2006 funding level.  The FY 2007 Request 
includes funding for the DOE Diskless Conversion initiative.  Meeting the 
post-9/11 security requirements has required a significant long-term 
investment, reflecting DOE's continuing commitment to meet these 
requirements.

ENSURING A CLEAN ENVIRONMENT
     Just as important as advances in national security, energy 
independence, and scientific discovery are the Department's programs 
that protect human health and the environment by cleaning up Cold War 
legacy waste and improving management of spent nuclear fuel through the 
establishment of the national permanent nuclear waste repository at 
Yucca Mountain, Nevada.  Like many of the Department's major programs, 
the environmental cleanup program and the nuclear waste repository 
activities have undergone management and programmatic reforms to further 
improve operations and implement effective and efficient practices.
     To deliver on the Department's environmental cleanup commitments 
following 50 years of nuclear research and production from the Cold War, 
in 2002 the Environmental Management program underwent a major 
transformation that would enable the Department to perform its cleanup 
activities faster than previously estimated.  Working in partnership with 
the public, states and regulators, the Environmental Management (EM) 
program has made significant progress in the last four years to shift 
away from risk management toward risk reduction.  By the end of FY 2006, 
the cleanup of a total of eighty-six DOE nuclear legacy sites will be 
complete. This includes the recently announced completion of Rocky Flats 
and the anticipated FY 2006 completion of Fernald and Columbus sites in 
Ohio.  While encouraged by the results demonstrated thus far, the 
program continues to stay focused on the mission and is working 
aggressively to enhance and refine project management approaches while 
addressing the regulatory and legal challenges associated with this 
complex environmental cleanup program.
     In FY 2007, the budget includes $5.8 billion to continue environmental 
cleanup with a focus on site completion, with eight sites or areas to be 
completed in the 2007 to 2009 timeframe.  This budget request is reduced 
from the FY 2006 budget request of $6.5 billion primarily reflecting 
cleanup completion at some sites in FY 2006 and the subsequent transfer 
of post-closure work activities.  As cleanup work is completed over 
the next five years at sites without a continuing mission, EM will 
transfer long-term surveillance and monitoring activities and management 
of pension and benefit programs to the Office of Legacy Management.  For 
those with continuing missions, these activities will be transferred to 
the cognizant program office.  
     The $5.8 billion budget request remains focused on EM's mission of 
reducing risk by cleaning up sites--consequently also reducing environmental 
liability--and will support the following key activities:
      Stabilizing radioactive tank waste in preparation for 
disposition (about 30 percent of the FY 2007 request for EM);
      Dispositioning transuranic and low-level wastes (about 15 
percent of the request for EM);
      Storing and safeguarding nuclear materials (about 15 percent of 
the request for EM);
      Decontaminating and decommissioning excess facilities (about 20 
percent of the request for EM); and
      Remediating major areas of our large sites (Hanford, Savannah 
River Site, Idaho National Laboratory, and Oak Ridge Reservation) (about 10 
percent of the request for EM)
     One of the significant cleanup challenges is the management and 
treatment of high-level radioactive liquid waste at the Hanford Waste 
Treatment and Immobilization Plant (WTP).  In FY 2007, $690 million is 
proposed for the WTP project.  The plant is a critical component of the 
program's plans to clean up 53 million gallons of radioactive waste 
currently stored in 177 aging underground storage tanks.  
     By June 2006, the U.S. Army Corps of Engineers is expected to complete 
an independent cost validation, deploying more than 25 professionals 
experienced in cost estimating, design, construction, and commissioning.  
The Department plans to utilize the results from several reviews to 
validate cost and schedule for this project.
     The Department, while responsible for the cleanup and disposal of 
high-level radioactive waste generated from the Cold War, is also 
responsible for managing and disposing of commercial spent nuclear fuel 
in a safe and environmentally sound manner.  The latter responsibility is 
the mission of DOE's Office of Civilian Radioactive Waste Management (RW).  
     The Nation's commercial and defense high-level radioactive waste and 
spent nuclear fuel will be safely isolated in a geologic repository to 
minimize risk to human health and the environment.  The FY 2007 budget 
requests $544.5 million to establish a geologic repository at Yucca Mountain, 
Nevada.  This Administration is strongly committed to establishing Yucca 
Mountain as the Nation's first permanent repository for high-level waste 
and spent nuclear fuel.  Licensing and developing a repository for the 
disposal of these materials will help set the stage for an expansion of 
nuclear power through the President's GNEP initiative, which could help to 
diversify our energy supply and support our economic future.  Permanent 
geological disposal at Yucca Mountain offers the safest, most environmentally 
sound solution for dealing with this challenge.   
     To further advance the Administration's commitment to the establishment 
of Yucca Mountain, the Department intends to submit to Congress legislation 
to address land withdrawal, funding and other issues that are important to 
the program's success.  
     As the Environmental Management program completes
cleanup of sites throughout the DOE complex, management of post closure 
activities at these sites will transfer to the Office of Legacy Management 
(LM).  In FY 2007, $201.0 million is proposed to provide long-term 
surveillance and maintenance, long-term response actions, oversight and 
payment of pensions and benefits for former contractor retirees, and records 
management activities at closure sites transferred to LM.  The majority of 
funding ($122.4 million) is associated with the transfer of post closure 
responsibilities and funding of three major sites from EM to LM in FY 2007. 
These sites are: Rocky Flats, $90.8 million; Fernald, $26.5 million; and a 
group of sites known as the Nevada off sites, $5.1 million.  The cumulative 
effect of these three transfers results in a 150 percent increase in the 
Legacy Management budget matched by a corresponding decrease in the 
Environmental Management budget.  

PROMOTING CONSERVATION
     I would also like to briefly mention to you the work that the Department 
has been doing to promote energy conservation.  As part of our "Easy Ways to 
Save Energy" campaign, senior leaders in the Energy Department, including 
myself, traveled the country to help American families and businesses better 
deal with limited supplies and high energy prices.  We went to places like 
Home Depot and Lowe's to showcase simple, readily-available energy savers that 
Americans can put into use right now. The campaign also includes Public 
Service Announcements--in English and Spanish--which were sent to 4,500 
stations.  In addition, we have distributed more than 20,000 EnergySavers 
booklets, with tips for saving energy and money in the home.  We've also 
dispatched teams of energy efficiency experts to help identify energy-saving 
options at large federal facilities and private industrial plants.

IMPROVING MANAGEMENT FOR RESULTS IN OUR LIFETIME
     Underpinning and supporting all of the programs above, the Department 
of Energy has continued to make strides in meeting President Bush's challenge 
to become more efficient, more effective, more results-oriented, and more 
accountable for performance.  
Over the past four years, the President's Management Agenda (PMA) has been the 
framework for organizing the Department's management reform efforts.  
     To better manage human capital, the Department implemented a performance 
management system to link employee achievement at all levels with mission 
accomplishment.  In FY 2006, DOE will publish, communicate and implement a 
revised five-year Human Capital Management Strategic Plan as well as a formal 
leadership succession plan.  The Department completed six competitive sourcing 
studies and has three others underway.  The completed studies encompass over 
1,300 Federal and 1,000 contractor positions with $532.6 million in expected 
savings.  During FY 2007, DOE anticipates studying approximately 100 to 300 
positions.  
     In FY 2006 and FY 2007, DOE will expand the availability of financial 
data in support of decision-making by continuing to implement the Integrated 
Management Navigation (I-MANAGE) system, specifically in the areas of budget 
and procurement through the Integrated Data Warehouse (IDW).  The Department 
continues to apply Earned Value Management principles to each of its major 
information technology investments.  In addition, DOE is partnering with 
other government agencies to develop a standardized and integrated human 
resources information system, and to develop a consolidated grants management 
system.
     The Department continued its effort to institutionalize multi-year 
planning and strengthen the link between program performance and resource 
allocation decisions.  The Program Assessment Rating Tool (PART) continues 
to be used to promote improved program performance.  For programs that have 
not formally been reviewed by OMB, the PART process has been used for internal 
self-assessment.
     A number of important milestones were reached in Real Property Management 
including the approval of the Asset Management Plan (AMP) by the Deputy 
Secretary. The AMP outlines an overall framework for the strategic management 
of the Department's $77 billion portfolio of Real Property Assets. 
Additionally, the 20,000 real property records in the Facilities Information 
Management System, the Department's repository of real property information, 
were populated and updated as required by the Federal Real Property Council 
for support of the Federal Real Property Profile.  This 
information will be used to support real property management decisions department-wide.
     As these examples indicate, the Department of Energy is using the PMA 
to address its many management challenges.  The Department is working to 
become more streamlined, more efficient, and more results-oriented in FY 2007. 

Conclusion
     The Administration recognizes that energy is central to our economic 
and national security.  Indeed, energy helps drive the global economy and 
has a significant impact on our quality of life and the health of our people 
and our environment.  The FY 2007 budget request balances the need to address 
short-term challenges while planning for long-term actions.  The request 
evidences the fact that our basic science research must remain strong if we 
are to remain competitive with our global partners.  The request contains 
bold new initiatives in nuclear, biomass, and solar energy.  It continues the 
President's strong commitment to clean coal, hydrogen, and fusion.  The 
request honors our commitment to deal with civilian nuclear waste, as well 
as legacy waste from the Cold War, and to further our already successful 
nonproliferation programs in order to help ensure a safer world for 
generations to come.

     CHAIRMAN BARTON.  Thank you, Mr. Secretary.  The Chair would 
recognize himself for the first five minutes of questions.  Mr. Secretary, 
in the Energy Policy Act, we created a new Federal partnership with 
private industry to go out and retrofit and rebuild our existing coal plants, 
co-powered electricity generation plants called the Clean Air Coal 
Program.  The budget that the President and you submitted doesn't fund 
that at all.  These are the oldest plants in the country.  Their 
environmental emissions have been grandfathered on at least two 
occasions.  Why would we not want to fund a program that would retrofit 
or rebuild these plants and bring them up to new environmental 
standards, keeping jobs and power generation in the existing locations?
     SECRETARY BODMAN.  Mr. Chairman, this is a response that you are 
going to hear, I think, several times during the course of the morning.  
We have had a lot of tough choices to make.  I talked about, in my 
opening statement, the increases in funding for the various science 
efforts, for the Advanced Energy Initiative, for the Competitiveness 
Initiative, which are the centerpiece of what we are trying to get done.  
This Department proposes a flat budget year to year, approximately, and 
therefore to the extent we have increased funding in one area, it has to 
come from somewhere, so it had decreased it in other areas.
     Now, the fact that the energy bill authorized programs, there were 
certain programs that we felt did not have the same priority as those that 
are in the budget and it was strictly that.
     CHAIRMAN BARTON.  Well, why should we look at this GNEP 
program that is going to cost billions and billions of dollars and may or 
may not be successful.  Why should we even look at authorizing that if 
the Department is not going to do something that we absolutely know 
will be cost effective, will keep jobs in America, and will make the air 
cleaner in America right now?  I just don't understand it.
     SECRETARY BODMAN.  Well, Mr. Barton, we have a different view, 
that is all.  I think that the GNEP program and presumably, I am going to 
get asked about that later on, but the GNEP program is intended over a 
three-year period to arrive at a position of a go or no go decision that 
would enable us to decide whether this approach makes sense.  This is a 
research investment of about a billion and a half dollars that we think is 
crucial to creating a new source of emissions-free electricity in our 
country.  It is the only way that I see we are going to get there, from an 
electricity standpoint, and so I would consider that a higher priority for 
those reasons.
     CHAIRMAN BARTON.  Well, I don't.  I am just going to tell you, we 
just have a fundamental difference of opinion.
     SECRETARY BODMAN.  I am not shocked at the fact that you and I 
don't agree on that and it probably won't be the only one we don't agree 
on.
     CHAIRMAN BARTON.  That, to me, is such a win/win, to retrofit or 
rebuild these existing coal fire power plants.  We get a double win.  I 
really, you know, I will prepare a letter and get as many members of this 
committee to sign it to send to the appropriators asking that they fund the 
new coal program, and will find some money in your budget that this 
committee doesn't think is as high priority, and we will find a way to 
fund it and we will see what the appropriators do.  We just have to 
honorably agree to disagree.
     SECRETARY BODMAN.  Oh, I understand.
     CHAIRMAN BARTON.  Well, let me go back to the nuclear issue.  
Looking at this new GNEP program, what is your plan to fund Yucca 
Mountain?  Are you and the Administration willing to propose and 
support legislation to address the funding challenge at Yucca Mountain 
and find us a permanent fix?
     SECRETARY BODMAN.  Yes, sir.  There are several things going on 
with respect to Yucca Mountain.  As you are aware, I have been in this 
job a year.  We have had an opportunity to evaluate it.  One of the first 
decisions that we have made collectively is to change the approach to the 
development of Yucca Mountain to a, if you will, a clean operation.  
Heretofore the decision has been made to transport nuclear fuel to Yucca 
Mountain and then to move it at Yucca Mountain to new storage devices.  
We believe that it is simpler and more economically effective to put it in 
a single canister or a device on the site at the nuclear plant, transport it to Yucca Mountain and then not remove it from the site as one goes 
through the various stages arriving at an ultimate disposal.  So that was 
the first decision.
     Secondly, we have not managed this program very well.  I think that 
is an understatement.  Everyone, I think, would agree with that and we 
are attempting to do a better job of managing the program.  Thirdly, we 
have had help.  The Department of the Interior's folks in the geological 
service were found to have written some e-mails during the course of the 
year that were reflective of a bad attitude and a poor culture, if you will, 
with respect to the quality assurance efforts of this initiative.  That has 
really damaged the core, if you will, of the Yucca Mountain program.  
We have new leadership in the program that I think has taken on the task 
of moving this program forward.  We are very committed to it.
     Whether or not GNEP goes forward, we have to fix these issues, so 
we have, I think I mentioned, $544 million in there and that, I believe, 
will be adequate to deal with what we need.  In addition, there will be 
legislation to get to the point that you raised and the legislation will be 
forthcoming soon, I would guess within a month, that will deal with land 
withholding; it will deal with financial reform.  It may deal with interim 
storage; that still, I think, remains up in the air, but there are a number of 
issues that will be taken care of, we hope, through the legislative 
proposal that we will make with respect to Yucca Mountain.
     CHAIRMAN BARTON.  Thank you, Mr. Secretary.  The gentlelady 
from California, Ms. Capps, for six minutes.
     MS. CAPPS.  Thank you, Mr. Chairman, and good morning, Secretary 
Bodman.
     SECRETARY BODMAN.  Good morning.
     MS. CAPPS.  Last month the President announced his 2007 budget.  
Unfortunately, in my opinion, it again demonstrates the misplaced 
priorities of this Administration for me, whether it is health care or 
education or energy, the President's policies continue to show how out of 
touch his Administration is.  The President did rightly point out, in his 
State of the Union address and I quote, that "America is addicted to oil."  
He also said the best way to break this addiction is through technology, 
yet in the budget the President is not going to fund breakthrough 
technologies, he is simply going back to the funding levels of the Clinton 
Administration.
     For example, the President has requested $1.176 billion for the 
Energy Efficiency and Renewable Energy Program.  That is the same 
amount that was appropriated in fiscal year 2001.  While the programs 
highlighted in the State of the Union received some increases, they are 
not significant enough to break our oil habit.  Prices for natural gas, 
crude and gasoline increased dramatically in the wake of infrastructure 
damage caused by Katrina and Rita.  I am still concerned, a lot of us are, 
that production capacity has not been restored, as well as the readiness of 
the Gulf Coast region for the 2006 hurricane season and I say that as part 
of a bipartisan delegation led by our Speaker, down to the Gulf Coast 
area this past weekend.
     According to the EIA, the number of rigs in the Gulf is 20 percent 
lower than before the hurricane hit, and MMS says that a hundred 
pipelines were damaged by the hurricanes.  As a result, 255,000 barrels 
per day of crude oil and 400 million cubic feet of natural gas will not be 
restored prior to the start of the 2006 hurricane season.  I would like you 
to talk for a bit about your Department's efforts on monitoring repairs 
and what are the plans for assistance in preparation for the coming 
hurricane season?  Thank you.
     SECRETARY BODMAN.  First of all, I think the numbers you gave are 
correct, best I know.
     MS. CAPPS.  Thank you.
     SECRETARY BODMAN.  Those hurricanes did very severe damage to 
the infrastructure.  Interestingly enough, the closer you got to shore, the 
more the damage, because the wave action, I guess, they got higher the 
closer one was to shore.  And those are the areas where we have not seen 
recovery, Congresswoman, to the same degree further offshore where we 
had newer and more effective devices.  I am not trying to draw a line 
between here and my Department and the Interior Department, that is 
their focus, the MMS offshore.
     MS. CAPPS.  Right.
     SECRETARY BODMAN.  That is what they do.  And having said that, I 
am somewhat familiar with what has gone on and I think the industry has 
responded quite well.  These are private sector owned rigs, they are 
private sector owned production platforms, they are private sector owned 
refineries, private sector owned transmission lines, and private sector 
owned pipelines to get the refined product up to the marketplace.  You 
are looking at me as though you don't agree.
     MS. CAPPS.  Well, I agree they are privately owned, but they get a lot 
of incentives from the Federal government and we are much less--
     SECRETARY BODMAN.  Well, they have enormous incentive.  
Looking at the price of oil and gas in today's world, I can assure you, 
ma'am, that they have enormous incentive to get the rigs fixed, to get the 
pipelines fixed, and to get the transmission lines fixed.  All of this energy 
is extremely expensive and the profit motive that these private companies 
have is unbounded at this point in time, so I can assure you, they are 
working very hard on it.  Now, I can further assure you that our folks, I 
am very proud of the group that we had that worked hard during both 
episodes, both Katrina and Rita.  We had a whole group of us in the 
office over the Labor Day weekend, because that was when Katrina hit.
     MS. CAPPS.  Right.
     SECRETARY BODMAN.  And they were involved and, I think, we got 
very good marks on terms of their accomplishments.
     MS. CAPPS.  Right.  You are talking about Labor Day weekend, but, 
and I only have a minute left.  I don't mean to interrupt you, but I am 
interested in demonstrable results of monitoring repairs and assistance in 
preparing for the coming hurricane season.
     SECRETARY BODMAN.  Offshore rigs, ma'am?
     MS. CAPPS.  Whatever you feel responsible for.  The end result.
     SECRETARY BODMAN.  Well, the issues in terms of production, 
largely has do with production, which is an offshore question and I 
thought I explained it, so I wasn't clear.
     MS. CAPPS.  Right.
     SECRETARY BODMAN.  A number of those rigs, of those production 
platforms, will not be restored.  The ones that are out now, by and large, 
it is my guess, I don't know this because I don't work with them every 
day; this is something the Interior Department does, but by and large, 
those rigs, the production platforms that are out are not going to be put 
back because it is not economically desirable to reinvest to put those 
facilities back in place.
     MS. CAPPS.  Your Department does concern itself with energy.
     SECRETARY BODMAN.  Yes, it does.
     MS. CAPPS.  And there is a deficiency in energy now coming there 
that is apparently available energy.  Are there any plans for what is going 
to happen now?
     SECRETARY BODMAN.  On what is going to happen now on the Gulf 
Coast?
     MS. CAPPS.  Yes.
     SECRETARY BODMAN.  Well, the transmission lines have been 
restored, the pipelines have been restored, the refineries have been 
restored so all of that -- we monitor it, we are in frequent touch with the 
people who do that and all of that is back in good shape.  I think the last, 
we have had three refineries have remained offline and I believe within 
the next couple of weeks they are due to become online, say by the end 
of March.  And so all of that is up and functioning.
     MS. CAPPS.  I am over time, but I just want to get from you the high 
cost of energy related to what is available there.
     SECRETARY BODMAN.  Well, the high cost of energy, 
Congresswoman, is a reflection of the high cost of oil throughout the 
world.  It is a fact that for the first time in my lifetime that the suppliers 
of oil in the world are having difficulty keeping up with the increasing 
demand.  We have seen enormous demands in China and in India, in 
particular.  As our economy has recovered, we have seen increases in 
demand here, as well.  But the real big percentage growers are in China 
and India, as we see them coming on board and so that is what is driving 
the price of oil and that is what is reflected in the prices that your 
constituents are paying, in my opinion.
     MS. CAPPS.  I realize I have gone over my time, but it seems like the 
total in natural gas rigs drilling in the Gulf of Mexico for the week are 
about 20 percent lower than they were in early August.
     SECRETARY BODMAN.  I don't doubt that.  A lot of rigs were 
destroyed during the course of the hurricanes.
     MS. CAPPS.  And I guess that begs the question--but I am over my 
time.  We do have another hurricane season coming, so a foreboding.
     SECRETARY BODMAN.  I am very concerned about it.  I can't tell 
you, I can't give you a magic wand.  I wish I had one.  There is no--
     MR. HALL.  [Presiding]  Okay, we have now passed the time.
     MS. CAPPS.  Thank you.
     MR. HALL.  The lady is so brave and such a wonderful member.  I 
hate to tap the gavel at her, but we have a long way to go and I thank 
you.  I recognize Mr. Bass from New Hampshire for six minutes.
     MR. BASS.  Thank you, Mr. Chairman.  Mr. Secretary, I want to 
thank you for coming to New Hampshire a couple weeks ago.  I think 
you saw, when you were there, some of the impressive energy work that 
is being done in our State and I expect in the near future there would be a 
lot more to show you and hopefully you will be able to make a return 
visit soon.
     I have two questions for you, sir.  First, Section 932 of the Energy 
Policy Act authorized the biomass and bio-refinery system R & D 
program at $213 million for 2007.  The section specifies funding of 
integrated bio-refinery demonstrations and incorporate "a wide variety of 
lignocellulosic feedstocks including any portion of a plant or co-product 
from conversion including trees and forest residues."  Now, I am 
paraphrasing here.  There is an additional mandate that the Secretary 
"ensure the geographical distribution of bio-refinery demonstrations."
     Other sections of the Energy Act and existing law provide industrial 
biomass and bio-refinery R & D commercialization and demonstration 
support.  All of these sections should apply to cellulosic biomass on an 
even level with the traditional grains or other sources.  You have heard 
me ask you this question before, obviously, a couple weeks ago.  My 
question is would you describe to us briefly the Department's 
commitment to diversity in feedstock and geography of any new bio-
refinery?
     SECRETARY BODMAN.  Congressman, first we are definitely 
committed to a variety of feedstock; I think you are aware of that.  You 
and I chatted about it.  That is part of the President's proposal in terms of 
the biomass effort, research effort, which is to develop technology that 
would enable us to use a wide variety of feedstock and cellulosic 
materials of the sort that you just described and that to the extent that we 
are able to move forward with funding support for the bio-refineries, 
clearly we will follow the law and we will pay attention to geographic 
dispersion.  I am unaware of this particular Section 932 and I would like 
answer that for the record, if I may.
     MR. BASS.  That is fine.  If I could just follow up.  There is a 
particular reason why we need to have a bio-refinery, some ethanol 
capability in the Northeast.  As you well know, about 12 percent of all of 
the content of gasoline is, currently in some counties in the Northeast, 
MTBE, and MTBE is going to be out of the market fairly soon and we 
are not going to have any alternative to oxygenate in the area and it is 
hard to transport ethanol from elsewhere in the country, so we need that 
not only because of diversity of source, but also because we are going to 
have a critical shortage of oxygenate stock in a relatively short period of 
time.
     Mr. Secretary, on another issue; in the energy bill, Section 206 
authorizes the only Department of Energy managed consumer focused 
incentive program for renewable energy.  Increased use of smaller scale 
biomass solar and geothermal energy could significantly displace heating 
oil, natural gas, and electricity, and New Hampshire is 86 percent 
dependent on heating oil and propane.  We are second in the country 
behind Maine.  The appliance and systems that convert these fuels for 
use have had dramatic improvements in the past few years, but they are 
expensive and there are no central heating type systems available in the 
United States at all, not a single manufacturer.
     There is a rebate program that your Department could authorize, 
fund, and run that would provide rebates for solar, wind, and biomass, 
but I notice in the Department's budget request that there is no funding at 
all for Section 206.  I am wondering if you have had a chance to look at 
this section, if you have any comments on it?
     SECRETARY BODMAN.  I have looked at it, you and I talked about it 
when I visited and I have a team working on it and I do not have a 
specific answer at this point in time, but I would be happy to respond to 
you promptly, to say within the month.
     MR. BASS.  Fair enough, Mr. Secretary, and I just want to say that 
energy, as you know, is not about philosophy or political party, it is 
about region and I think we have an opportunity with the energy bill to 
diversify not only our energy consumption, but our energy production 
around the country, and consumption of biomass in the Northeast is 
critically important and production of biomass, as well, perhaps more 
than in any other part of America, so I really appreciate your interest and 
attention to this matter and I will look forward to hearing from you and I 
yield back.
     MR. HALL.  Thank you, sir.  The gentleman yields back.  Ms. Solis, 
the gentlelady from California recognized for five minutes.
     MS. SOLIS.  Thank you, Mr. Chairman.  Yes, my question for you, 
Mr. Secretary, you have already heard our concerns about Hurricane 
Katrina and the devastation that it had and the power outages that we are 
still seeing there at the Gulf Coast.  We just returned from a CODEL 
with Mr. Hastert and our Leader, and we realized that many of our 
communities down there still have no level of electricity, but more 
importantly, many of the rigs, the oil rigs are down.  And the last time I 
think you came here, we spoke with you regarding a discussion we had, 
whether oil rigs facilities currently could withstand hurricane level three, 
four, or five, and I would like to know what steps DOE is undertaking 
now to ensure that the facilities that are going to be rebuilt, whether they 
are privately owned, will meet some set standards that the Federal 
government will set by your agency?
     And in addition, I would like to know, as you can imagine, the lack 
of power is hampering the construction there and what are we doing to 
assist these communities so that they can get moving quickly to have 
their energy restored?  We went through different parishes there that 
have no electricity, no sewage, debris is still remaining there.  And we 
are finding that that whole effort is very slow in its process, and I am 
wondering what DOE is doing to help coordinate with FEMA, with all 
the other agencies?
     SECRETARY BODMAN.  First of all, to answer your first question, to 
my knowledge, we do not have responsibility for the specifications of oil 
rigs that are used offshore or onshore, for that matter.  That is not 
something that we do, to my knowledge.  I will be happy to respond to 
you on that and do some more work on that, but that is my preliminary 
response.
     MS. SOLIS.  That is somewhat incredible given the fact that we have 
lost so much production and it is impacting us nationally.
     SECRETARY BODMAN.  Well, we have lost a lot of production but 
most of the production that we have lost at this point in time, we now 
have, I think it is 85 percent of the gas that was shut in is now back on 
line and functioning.  I think it is 75 percent of the oil.  Frankly, it is 
that or vice versa.  I have forgotten which.  One is 75 and the other is 85. 
By and large, the shut in material, as of today, is a function not of rigs, 
but of production platforms, and the production platforms were destroyed.  
The production platforms are the devices that are there that obviously 
produce the material and send it ashore and that is what was destroyed.
     These are old fields, the fields that tend to be closer to shore tend to 
be older.  They tend to be depleted and it was not economically viable to 
reinvest and to rebuild those and so the companies haven't done it.  They 
are drilling wells elsewhere.  They are drilling further offshore and they 
are developing more reserves.  They are doing that and it is, I believe, 
something that we will see as the year unfolds, provided that we do not 
have another hurricane that destroys more rigs.
     MS. SOLIS.  We will know in less than three months.
     SECRETARY BODMAN.  Well, but I can't help that.  I mean, that is not 
my job.  I have enough to do and that is not one of them, but in terms of 
the electricity, the utilities--
     MS. SOLIS.  What about the electricity, yes.
     SECRETARY BODMAN.  --and we work very closely with those 
utilities.  The utilities did not install the electricity, particularly in New 
Orleans, to some of the parishes, to some of the districts, I guess.  I am 
not sure of the terminology.
     MS. SOLIS.  Parishes.
     SECRETARY BODMAN.  Because it was not clear that these homes 
were going to be rebuilt and so it would have been a matter of rerunning 
the wires or the lines in there and then having them destroyed and so 
until a master plan is developed, the electric utilities have not responded 
in order to wire up some of these--
     MS. SOLIS.  But there are some parishes where there is electrical 
lighting on the streets and yet, no household has any form of electricity.  
We actually walked into a parish and saw that, so I don't know what the 
DOE is doing to help incentivize our public utilities groups to ask them 
to move forward.
     SECRETARY BODMAN.  It is not a matter of incentivizing them 
because we don't incentivize them.  We do work with them and they 
have been very responsive, to my knowledge.  I can't answer that 
specifically, but we will do some more homework and we will give you 
an answer.
     MS. SOLIS.  I would like to hear back from you.
     SECRETARY BODMAN.  Sure, I would be happy to.
     MS. SOLIS.  Thank you, Mr. Secretary.
     MR. HALL.  All right, the gentlelady yields back her time.  The Chair 
recognizes Mr. Shimkus, and recognizes him as the Chairman and to ask 
whatever questions he wants.  And I saved you for one more question 
about the ultra-deep, Mr. Secretary.
     SECRETARY BODMAN.  I am sure that will be forthcoming, Mr. Hall.
     MR. SHIMKUS.  [Presiding]  Thank you, Mr. Chairman.  I was just 
told on the floor that they think there is only one vote, so I have cast my 
vote and so we are going to continue to move on until people come back.  
Well, it depends on if you get back here in time.  I know how slow you 
are.  But I am going to get my wind and recognize myself for six 
minutes.  Thank you for being here and I am happy to be here.  I have 
rushed over here to keep the process moving.
     SECRETARY BODMAN.  Thank you, sir.
     MR. SHIMKUS.  And keep the hearing in order.  Some initial 
questions have already been raised about Yucca Mountain.  I would like 
to follow up on that by asking, three years since we have passed the 
Nuclear Waste Policy Act, by the time our Nation's first repository 
opens, and I have been a big proponent of that, been pushing for it 
through all the budgetary stresses and strains; by the time it opens, we 
will have more nuclear waste than Yucca Mountain can hold under the 
provisions of the Act.  Under the Nuclear Waste Policy Act, the 
Secretary is obligated to report to Congress beginning in 2007 on the 
need for a second repository.  Has the Department begun this evaluation?
     SECRETARY BODMAN.  Yes, we have.  We have begun, as required 
by the Nuclear Waste Policy Act.  We recognize that we are required to 
deliver a report to Congress between January of 2007 and January of 
2010, so we do have a window in which we are supposed to respond.  
We are currently in the planning phase, if you will, for the development 
of that report and we will be examining a number of States as potential 
sites for repository sites.
     MR. SHIMKUS.  Let me ask you a follow-up question.  We had a 
chance to meet two days ago and I really appreciate the access you gave 
many of the Members.  How does this whole debate affect the expansion 
of nuclear power in the country?
     SECRETARY BODMAN.  Oh, Yucca Mountain, in my judgment, is 
necessary.
     MR. SHIMKUS.  Almost critical.
     SECRETARY BODMAN.  Is necessary; it is potentially, I guess you 
could say the most critical matter.  I mean, I think there are other issues 
that are at work, as well, but it is right at the top of the list when you talk 
to the utility industry.  It's the fact that they have to have a way of 
managing their spent fuel.  So I don't know how you--I suppose for one 
utility, it might be the very top priority and for another it might be 
somewhat less, so but for everybody there is no doubt that it is a very 
important matter.
     MR. SHIMKUS.  Well, we will fall back to that debate on on-site 
storage, who takes over responsibility, the taxpayers' dollars for that or 
an interim storage site?
     SECRETARY BODMAN.  In terms of interim storage, our general 
counsel tells me, and he is quite definite about it, that we are not 
permitted, we, the Department of Energy, are not permitted to take fuel 
into an interim storage situation until we get a license for Yucca 
Mountain.  Once we have a license for Yucca Mountain, then the Act 
permits us to take that and deal with interim storage.  In terms of interim 
storage, we have an open mind on that.  I mean, that is not something 
that we ruled out, but legally we can't do it at this point in time and we 
are focusing our efforts on trying to get Yucca Mountain done.
     MR. SHIMKUS.  Well, if I may jump in, because you are talking about 
the license issue.
     SECRETARY BODMAN.  Yes.
     MR. SHIMKUS.  When are you going to file a license application with 
the Nuclear Regulatory Commission?
     SECRETARY BODMAN.  We are going to develop a schedule for you, 
we will have that the early part of this summer, that will deal with this 
matter.  As I mentioned before, I don't think you were here, sir.
     MR. SHIMKUS.  Oh, point that out to everyone.
     SECRETARY BODMAN.  Sorry, I was just trying to be responsive.  
The issue that we have been dealing with--now I have lost my train of 
thought.  You got me completely--
     MR. SHIMKUS.  I have been successful.
     SECRETARY BODMAN.  No, no.
     MR. SHIMKUS.  The license application.
     SECRETARY BODMAN.  Yes, the issue that we have been working on 
has to do with the efforts of the USGS employees and the e-mails they 
sent and it really undermined the whole attitude and approach, if you 
will, the culture of that operation and we have been rebuilding that 
carefully and thoughtfully.  We have a new leader; he is doing a very 
good job and I am comfortable with it and he is the one that has initiated 
the leadership to shift the emphasis to a so-called clean canister approach 
to managing Yucca Mountain, and they are now completing the design of 
that.  The design will be competed and we will have a program that we 
think will stand your scrutiny available this summer.
     MR. SHIMKUS.  A great thing about being on this committee, for me, 
is Illinois is really an energy important State, whether it is renewable 
fuels, whether it is oil wells, coal reserves.  We are a big nuclear power 
State, so I have been very fortunate to be well-positioned.  I want to shift 
a little bit on the coal issues, as you could have guessed, and ask about in 
the five-year budget proposal we talked again about the FutureGen and 
really, the great support in this cycle.  The question is for the outlying 
four years do you think the remaining $203 million is enough to keep 
FutureGen on schedule?
     SECRETARY BODMAN.  As best I can tell that it is, sir.  No, you are 
talking about what the five year plan?
     MR. SHIMKUS.  Correct.  You have got $54 million for the first year 
and then $203 million would be for the final four years of the five-year 
plan and the question is, is that $203 million, do you think will meet the 
needs to keep the project moving forward at the pace that we would like 
to see it?
     SECRETARY BODMAN.  No.
     MR. SHIMKUS.  Then what should it be?
     SECRETARY BODMAN.  Well, we really need the total of $750 
million; that is what is committed.  There is an organization that has been 
pulled together called the Industrial Alliance or the FutureGen Alliance, 
it is a group of seven companies; four U.S. companies, three non-U.S. 
companies; two Australian, one Chinese; and they have committed to put 
up some $250 million.  The Department is supposed to put up $700 
million and I don't recall, Mr. Shimkus, what amount has been 
appropriated in the past, but that is what we are going to need over a 
period of time.
     MR. SHIMKUS.  And I will end with this statement and then yield to 
one of my colleagues.  It is our observation that there is not enough in the 
CCPI for a third round of solicitations.  Can you have your staff just 
address that to me and see if that is a proper analysis?
     SECRETARY BODMAN.  No, I can tell you that now.  I mean, the 
CCPI is only, I think it has a $5 million amount in there and the reason 
for that is that the CCPI has been a long-term demonstration program and 
we have sizeable balances that have not been spent from years gone by in 
commitments that have been made to various, as we have gone out to 
competitions and therefore the folks at OMB and I think, frankly, they 
were right in this instance, that they said look, until we start getting some 
of this money spent and committed, why put more money in and so that 
has really been, it has been that goal, so we need to look harder at 
making sure the projects that we did, I think the new one will be the third 
round.
     MR. SHIMKUS.  Right.
     SECRETARY BODMAN.  So we have two rounds and we need to make 
sure that those are moving forward in a way that makes sense and that is 
what we are undertaking at this time.
     MR. SHIMKUS.  Great.  Thank you.  And I didn't mean to cut you off, 
but I want to get to my colleague, Mr. Upton, for six minutes.
     MR. UPTON.  Thank you, Mr. Chairman.
     SECRETARY BODMAN.  Mr. Upton, nice to see you, sir.
     MR. UPTON.  Mr. Secretary, welcome back.  I have enjoyed your 
leadership for the last year and I look forward to a good number of years 
remaining.  I just want to say, and I am sorry my friend from New 
Hampshire left to go vote, as I just did, but before you go back to New 
Hampshire we want you to come west to Michigan, so we look forward 
to that.
     SECRETARY BODMAN.  I will bear that in mind, Mr. Upton.  Thank 
you, sir.
     MR. UPTON.  I have two nuclear facilities there in my district and I 
know that we are looking forward to walking you through those facilities 
as they continue to operate.
     SECRETARY BODMAN.  Thank you, sir.
     MR. UPTON.  I didn't hear the beginning of your answer to Mr. 
Shimkus as I was running back to vote, as it related to Yucca Mountain.  
Mr. Towns and myself helped carry the water, I guess, in the early 1990s 
for that legislation.  I am very supportive of your efforts to open Yucca 
Mountain and I don't know if you actually gave an optimistic date or a 
date at all in terms of when you think that facility might be opened to 
receiving fuel.
     SECRETARY BODMAN.  I didn't give any date, Mr. Upton, and the 
reason is, what I did was to explain.  We have had a very long and tough 
year in dealing with Yucca Mountain; you are fully aware of that, with 
the USGC situation.  Our contractor, I think it is fair to say, did a less-
than-wonderful job.
     MR. UPTON.  I heard you say that in response to Chairman Barton.
     SECRETARY BODMAN.  And frankly, we in the Energy Department 
didn't do as good a job as we should have done and overall, we are trying 
to do a better job of managing our responsibilities in the Energy 
Department.  I think we are getting better.  I can't tell you we are great, 
but you know, we are getting better.  And this one is an embarrassment.  
This has been around for a long time and every time I use the word 
Yucca Mountain, people cringe and so there is a real issue there.  We 
have a new leader, he is doing a very good job of looking hard at what 
the history has been and what the future should be and first of all, he is 
the one that articulated this new approach to developing the clean 
canister approach to managing this, which means you would only use 
one device rather than multiple devices and it would be simpler, and 
therefore he is redesigning it and he is going to have a schedule.  He will 
have it this summer and we are going to lay that out for you; as soon as I 
have it, you will have it.
     MR. UPTON.  Great, and I look forward to that.  I saw a report in the 
last 24 hours and I tried to put my hands on it in the last hour and I 
couldn't find it again.  It related to the oil supply and I guess an 
upcoming meeting by OPEC in the next number of days.
     SECRETARY BODMAN.  Well, they just had it.  They just finished 
yesterday, I believe.
     MR. UPTON.  Did they?  There was a concern as I read it.  Maybe it 
was because I was looking at today's papers instead of yesterday's, but 
there was a concern, I guess, expressed by the Saudis or some nations 
within OPEC that there might, because the oil supply stocks are higher 
than what they were anticipated to be, there was some worry that the 
price per barrel might drop dramatically to perhaps as low as $40 a barrel 
from, in essence, the $60.  Now, what are your projections as to where 
things are at, particularly, at least in my district, and I expressed this to 
you earlier in the week, we have seen gas prices spike by about $.50 a 
gallon just in the last three weeks.  We were about $2.55 in Kalamazoo, 
Michigan earlier this week.
     SECRETARY BODMAN.  First of all, Mr. Upton, one of the privileges I 
have in this job is not making forecasts.  I don't make forecasts.
     MR. UPTON.  Well, your people do.
     SECRETARY BODMAN.  Well, we do have a part of the Energy 
Department, the Energy Information Agency, EIA, has been organized to 
be a nonpartisan evenhanded approach--
     MR. UPTON.  I used to ask Mr. Greenspan when he appeared before 
our committee if it was the right time to refinance.
     SECRETARY BODMAN.  And what did he tell you?
     MR. UPTON.  He laughed.  Same response you are giving now.
     SECRETARY BODMAN.  Yes.  Anyway, their forecast for oil prices is 
that it is going to be a little higher this year than it was last year.
     MR. UPTON.  Again exceed $3?
     SECRETARY BODMAN.  But that over time there will be a gradual 
diminution of oil prices, that is to say over a 10-year period.  I think that 
is what their forecast is and the theory of that is, I believe, is that it is 
taking the world oil industry a long time to recover and to invest at the 
rate that is needed in order to supply the oil that is required throughout 
the world.  This is the first time in my lifetime that the suppliers are 
having enormous difficulty keeping up with demand.  They just simply 
can't do it today.  I mean, there are various discussions about which 
country can do what to whom, but when you look at the total amount, the 
totality of oil available, it is very close to the supply demand.
     MR. UPTON.  I understand.
     SECRETARY BODMAN.  And that is why every time there is a 
problem in Nigeria or potential problem elsewhere, Russia or wherever it 
may be, that is why you see these spikes in prices.
     MR. UPTON.  I want to get my last question in before my time has 
expired.  Recently, Mr. Doyle and I have introduced bipartisan 
legislation that is cosponsored by dozens of our colleagues, to expand 
ethanol, to require by 2012 a 10 percent ethanol mandate as part of the, at 
the pump.  And I have talked to the big three automotive sector, current 
automobiles, whether you drive a 1996 or a 2006 vehicle can use that 
type of blend and we are hoping to continue to get more cosponsors to 
this legislation.  Our estimate is that it will save 320 million barrels of 
oil that we won't otherwise have to import by moving to ethanol.  I know in 
our State, which is another reason I would like you to come visit, we 
have four ethanol plants just about ready to operate, up and running; 
another one down in Indiana in South Bend.  Another plant that has been 
permitted, as well.
     SECRETARY BODMAN.  Pardon me, these use corn as feedstock, 
right?
     MR. UPTON.  Corn.  But as I understand, sugar is another source.  
We have sugar beet, but I don't know if that is permissible with ethanol.
     SECRETARY BODMAN.  Sugar beets are not a very good, as I 
understand, they are not a very good raw material.
     MR. UPTON.  That is on the other side of the State, that is why I want 
you to come to the west side.  But I just want to know, I appreciated the 
President's comments in the State of the Union.  I don't know if you 
have taken a view on our bill, H.R. 4774, but I would appreciate your 
comments on ethanol.
     SECRETARY BODMAN.  Well, ethanol is a very important matter.  
The President has proposed a 50 percent increase in the budget for 
cellulosic ethanol.  The one specter that is out there, I believe, is that as 
we use more and more corn to produce ethanol, and we are now up to, I 
think, 14 percent or so of the corn that is grown is now being grown for 
ethanol.  It is some significant factor and so as that number increases, we 
are going to see increase in price.  We are already seeing increase in the 
price of corn and so it will follow through in terms of food prices and so 
forth, we are going to start to reach a limit; I don't know where it is.  It 
may be at this 10 percent number, whatever it is, but 10 percent is still 20 
billion gallons, 22 billion.  Pardon me, it is 14 billion gallons.  We use 
about 140 billion gallons a year, so it would be about 14 billion gallons.  
That is somewhat higher than I have heard, the 10 to 12 billion gallons a 
year is what I have understood to be the limit before we start getting into 
real issues with respect to land available.
     MR. UPTON.  Well, I have Kellogg's, too, so I appreciate your 
comment.
     SECRETARY BODMAN.  Yes, sir.
     MR. UPTON.  If I could have set this up, I would have taken claim, 
but I have my corn growers who are just over here in the corner and they 
agreed with your percentage, Mr. Secretary, as far as the amount of corn 
that is going into ethanol production, so you are right on.
     SECRETARY BODMAN.  Thank you, sir.
     MR. SHIMKUS.  And now the Chair would like to recognize my 
colleague and friend from Massachusetts, Mr. Markey.
     MR. MARKEY.  Thank you.
     MR. SHIMKUS.  Five minutes.
     MR. MARKEY.  Thank you very much.  Mr. Secretary, are you 
troubled by the fact that your Department is toting the fast breeder 
reactors as a panacea for proliferation at the very moment that India 
negotiators are cleaning the President's clock expressly to reserve the 
plutonium breeder capacity of their present and future fast breeder 
reactors for weapons-grade plutonium production?
     SECRETARY BODMAN.  No.
     MR. MARKEY.  Why aren't you concerned?  This is an exception to 
the Nuclear Nonproliferation Treaty and the Nuclear Nonproliferation 
Act which is now going to be advertised by the Indians as a way in 
which they have been able to reserve their capacity to produce nuclear 
bomb-grade material in their fast breeder reactors and obviously that will 
send a signal to other countries in the world that they, too, should be 
attempting to gain access to nuclear breeder reactors so that they can 
have nuclear bomb-grade material produced?  Why isn't that something 
that is at the top of your concerns, Mr. Secretary?
     SECRETARY BODMAN.  Mr. Markey, you and I have discussed this in 
the past and we don't agree.  I don't agree with you; it will not come as a 
surprise to you.  First of all, I view the agreement that has been struck 
with India as a very positive event.  The United States has agreed to seek 
from Congress an exception for India, an exception related to the Atomic 
Energy Act, I think it was of 1954 or so.  It has agreed to work this issue 
with the Nuclear Suppliers Group, which is a group of, I think, some 40 
nations that are signatories to the Nonproliferation Treaty.  The Indians 
have agreed to take two-thirds of their reactors and, for the first time, 
have nuclear reactors in India that will be submitted to scrutiny of the 
International Atomic Energy Agency.
     MR. MARKEY.  Are their fast breeder reactors going to be part of the 
safeguards program?
     SECRETARY BODMAN.  No.  They are not.  I think they have two 
small fast breeder reactors that are used for experimentation, to my 
knowledge.
     MR. MARKEY.  Mr. Secretary, they can make bomb-grade nuclear 
material in those breeder reactors which President Bush is not requiring 
them to put under full scope safeguards.
     SECRETARY BODMAN.  That is correct.
     MR. MARKEY.  Will the Indians qualify for help under your global 
nuclear program despite the fact that they are not putting their breeder 
reactors under full scope?
     SECRETARY BODMAN.  I would think that they would not.
     MR. MARKEY.  You think they would not?
     SECRETARY BODMAN.  I would think that they would not.
     MR. MARKEY.  Okay, so the sharing of GNEP technology with India 
is not going to happen?
     SECRETARY BODMAN.  I can't tell you that.  I answered your 
question, Congressman.  You said do you think and I said I would think 
not.
     MR. MARKEY.  You would think not.
     SECRETARY BODMAN.  I am one person.  The Administration has got 
a lot of different people that think different things, but I would think that 
they would be where they are in a position that they are not involved 
with, they have not subjected their breeder reactors or so-called fast 
reactors to international scrutiny that they would not be involved in 
GNEP.
     MR. MARKEY.  Mr. Secretary, under Section 57(b) of the Atomic 
Energy Act you have the authority to approve nuclear technology 
transfers.  These are so-called Part 810 transfers.  Since the July 18 
agreements, have you approved any such transfers to India?
     UNIDENTIFIED SPEAKER.  Excuse me for a minute.
     SECRETARY BODMAN.  I have no idea who this lady is.
     UNIDENTIFIED SPEAKER.  Hello.  Excuse me, sir.  My name is--
     CHAIRMAN BARTON.  Ma'am, you haven't been approved to be a 
witness.  Our only witness is the Secretary.
     UNIDENTIFIED SPEAKER.  Well, my problem is that I was told by the 
office that I was supposed to be here today to testify at 11:21, and my 
children, who have been raped and tortured in the street--
     CHAIRMAN BARTON.  That hearing is in the Senate.  You are in the 
wrong room.  This is the House, not the Senate.  You are in the wrong 
room, ma'am.
     UNIDENTIFIED SPEAKER.  Do you know where I would go, sir?
     CHAIRMAN BARTON.  If you will go with that gentleman, we will 
find out.
     UNIDENTIFIED SPEAKER.  Thank you, sir.
     CHAIRMAN BARTON.  Thank you, ma'am.
     SECRETARY BODMAN.  I have forgotten where we were, Mr. 
Markey.
     CHAIRMAN BARTON.  Thank you.  You may proceed, Mr. Secretary.
     MR. MARKEY.  Could I ask, Mr. Chairman, if the time would be 
placed back onto the clock for me so that I can continue my questioning?
     CHAIRMAN BARTON.  Sure.  Sure.  There you go.
     MR. MARKEY.  I thank you.  I thank you, Mr. Chairman, very much.  
Have you approved any such transfers to India?
     SECRETARY BODMAN.  No.
     MR. MARKEY.  No.  Are there any requests for nuclear technologies 
to India currently pending before the Department of Energy?
     SECRETARY BODMAN.  Not that I am aware of.
     MR. MARKEY.  Could you check for the record?
     SECRETARY BODMAN.  Of course.
     MR. MARKEY.  Let me again, I make the point again that our 
credibility with Iran and North Korea and Pakistan is going to be 
destroyed if we make an exception for India.  It will not end.
     SECRETARY BODMAN.  If I may say, Mr. Markey, to compare India 
with North Korea and Iran, I believe, is a gross distortion of the facts.  
Indian has had nuclear materials for a number of decades.  They have 
been very responsive, they have never been involved in proliferation 
efforts or issues that I am aware of and I think that you are aware of and 
where it is clear that both Iran and North Korea have got serious 
questions with respect to that issue and I just think it is a very bad 
comparison, if I may say.
     MR. MARKEY.  It is not a bad comparison and I will tell you why.  
India never signed a nuclear nonproliferation--
     SECRETARY BODMAN.  I understand that.
     MR. MARKEY.  Iran and North Korea and other countries have.  We 
now have Iran before the Security Council at the UN asking them to 
comply with the agreement so that we have their uranium enrichment 
program under full scope safeguards.  It is preposterous for the President 
to think that he can go to India and give an exception for a plutonium 
breeder reactor program that actually manufactures nuclear bomb 
material and not to think that Iran is going to point to that exception to 
Russia, to China, to others at the Security Council and say how can you 
have two standards?  How can you have one for a country that doesn't 
sign the treaty and then one for our country that does sign the treaty?  
Why should we sign the treaty?  Why should we abide by it?  And 
Pakistan will be making that case.  North Korea will be making that case.
     I think that Chavez in Venezuela will be arguing that they could cut a 
deal with China for nuclear programs with that same type of agreement.  
I just think that the precedent is so dangerous for India, which we can cut 
a deal in the clean coal technology sector which is 70 percent of their 
electrical generating capacity.  We could have cut a multi-billion dollar 
agreement rather than in this 2 percent sector in nuclear electrical 
generating capacity which has incredible precedential value when it 
comes to Iran and North Korea and Pakistan, Venezuela, other countries 
that actually talk in terms of nuclear weapons programs, so the exception 
makes the rule unenforceable because these other countries are going to 
look at it and they are going to say we are not going to abide by it, either.
     The President can't determine where the exceptions are.  It has to be 
the nonproliferation rule which we are maintaining.  Selective 
proliferation on a bilateral basis will destroy a multilateral uniform 
enforcement of the nonproliferation treaty, especially at a point where we 
have the world with us at the UN with Iran.  Russia will have less of a 
reason to be tough on Iran if we have less interest in being tough with 
India, which has never signed a nuclear nonproliferation treaty and is 
touting the fact that they are going to use their breeder reactor program 
now to construct more nuclear weapons after the U.S. has just signed this 
agreement last week.
     That is why the onus is on Congress now because if we don't 
maintain it, we are going to see the spread of nuclear weapons across the 
planet without the enforcement of the globe and this debate is something 
which goes right to this GNEP program which you are bringing before 
us, Mr. Secretary.  If we don't ensure that safeguards are put in place 
where we are spreading this technology, then we should expect the rest 
of the world to use it as an exception that will basically eviscerate the 
entire nuclear nonproliferation regime in the world and that is the only 
place where Bush and Kerry agreed that nuclear nonproliferation is the 
number one issue.  You can't say it is the number one issue and then 
carve out exceptions that Iranian and North Korean diplomats can look 
to.  I thank the Chairman.
     SECRETARY BODMAN.  Is there any question there or is it just a 
speech, sir?
     MR. MARKEY.  It is obviously something I want you to take back to 
the President because I don't think he understands the implications for 
the planet.
     SECRETARY BODMAN.  I believe he does, sir, and you and I, as I 
said, have already talked about this.
     CHAIRMAN BARTON.  The gentleman from Nebraska for six minutes, 
Mr. Terry.
     MR. TERRY.  Thank you, Mr. Chairman.  I just have a few questions 
here.  E85, automobile industry is touting the E85, the number of flex 
fuel vehicles that are out on the road today, even in the State of Nebraska 
there is a total of three E85 pumps.  I have contacted people I know who 
own chains of BP Amocos and Shells who have told me that they have 
contacted their franchisor and have said not only no, we will not give you 
permission, it is a violation of your contract; and hell no, we won't waive 
that provision of the contract to allow you to put E85 under the canopy, 
and this has all been within the last 60 days.  So is the Department of 
Energy doing anything to work with our major retailers to allow E85 
under the canopy or at least on the premises?
     SECRETARY BODMAN.  Yes, this issue is one that arose for the first 
time, in my thinking, last week.  This is a new issue in terms of my 
concern, my consciousness.  So I have instructed my colleagues and 
myself each time we see executives of the large oil companies to talk 
with them about what they are doing to encourage the development of 
additional ethanol.  The problem that they have, and I have had one 
conversation so far, the problem that they have is that they are not in the 
business of manufacturing the ethanol as yet and therefore they cannot 
certify the quality of the material that is there.  They cannot certify the 
fact that the ethanol is used in vehicles that are supposed to accept the 
ethanol; that vehicles' owners may put the fuel, put the E85 in a vehicle 
that shouldn't have, that is not equipped to deal with E85, so that is their 
concern and so there are a number of issues that have to be worked 
through.  It is not a simple matter to merely wave a wand and cause 
something to occur.
     MR. TERRY.  Are you working, then, or is your Department working 
with those issues to see that we can get more E85 pumps out there 
without having to be a completely independent, you know, come and go-
type gas station?
     SECRETARY BODMAN.  Are we?
     MR. TERRY.  Are you working--
     SECRETARY BODMAN.  We are working the issue.  I am trying to 
understand what the facts are and that is the first time, as I said, this 
occurred a week ago.  I was asked a question.  I frankly hadn't focused 
on it prior to that and this is the second time I have been asked.
     MR. TERRY.  All right, I would appreciate your continued efforts.
     SECRETARY BODMAN.  We would be happy to do it.
     MR. TERRY.  It is important.
     SECRETARY BODMAN.  I understand.
     MR. TERRY.  Then on the hydrogen fuel cell, which I really think is 
long-term.  E85 is a short-term solution, and I want to talk a little bit 
about the Hydrogen Fuel Cell Initiative.  One of the more important 
areas is energy efficiency, the renewable energy, which is just shy of 
$200 million.  On the surface, that appears extremely low.  In order to 
convince the American public that we are really serious about new 
alternative technologies, do you feel that the $195 million in that specific 
category, and $288 million in total Department of Energy for the 
Hydrogen Fuel Cell Research Development Initiative is right on, too 
small, too big?
     SECRETARY BODMAN.  Well, it seems to me to be dealing with the 
right issues.  The issues with respect to hydrogen are in two areas, 
technical issues.  One, is the development of the fuel cell and shrinking 
the size of the fuel cell, that is to say, upping the current density and that 
involves a lot of sophisticated work related to the design of the 
membrane and so forth, so I think it is about the right amount.
     MR. TERRY.  Okay.
     SECRETARY BODMAN.  The second issue--
     MR. TERRY.  I would agree with your first conclusion and 
respectfully disagree, then, that with those highly technical problems that 
$288 million is enough.
     SECRETARY BODMAN.  Well, the President committed, I think the 
number was a billion one or billion two--
     MR. TERRY.  Over five years.
     SECRETARY BODMAN.  Over five.  I was about to say over five years.  
You completed my sentence for me.
     MR. TERRY.  I like to do that.
     SECRETARY BODMAN.  I thought you were very good at that.  And so 
we are on target to do that and we believe that we are having an impact.  
I should also add that private industry is also investing heavily in this 
area and they seem to be making very good progress.
     MR. TERRY.  Yes, they do and I appreciate their efforts, as well.  I 
certainly would support probably a doubling of the renewable energy and 
the science portions of that.  Another area that I hear a great deal of and I 
would appreciate your comment, earmarks have taken away about 25 
percent of that and according to some of your employees, without them 
going too far out on a limb, have stated that that has slowed down the 
progress.
     SECRETARY BODMAN.  That is accurate, that is accurate.
     MR. TERRY.  So you agree with that?
     SECRETARY BODMAN.  Yes, sir.
     MR. TERRY.  Should we fight to eliminate those earmarks?
     SECRETARY BODMAN.  Well, I think earmarks are a Congressional 
prerogative.  I think what we can do from our standpoint, and it is up to 
us to make the case as to why we want to have the money spent the way 
we wish to spend it and then why spending it in other ways is not as 
desirable and you know, clearly the power of the purse sits in Congress.
     CHAIRMAN BARTON.  The gentleman's time has expired.
     MR. TERRY.  And I would certainly fight to eliminate those 
earmarks.
     SECRETARY BODMAN.  Thank you, sir.
     CHAIRMAN BARTON.  The gentleman from Maine, Mr. Allen, for 
five minutes.
     MR. ALLEN.  Thank you, Mr. Chairman.  Mr. Secretary, in my 
opening I mentioned that the Energy Efficiency and Renewable Energy 
Office programs are being cut by 18 percent and the Federal Energy 
Management Program, which leads the government-wide effort to save 
energy, is being reduced by 13 percent.  I think the problem we have here 
is the one that Paul O'Neil described to the President when he left the 
Administration over the 2003 tax cuts.  He told the President if you do 
the 2003 tax cuts as proposed, you will never have enough money to do 
anything else that you want and it seems to me that is true.
     But I want to ask you a couple questions on energy efficiency.  One, 
do you believe the funding for energy efficiency programs in the budget 
match the Nation's need for saving energy and if I can just follow up on 
that, the programs to deploy energy efficient technology have the most 
immediate impact on demand, yet the budget would eliminate a number 
of those programs and cut the rest.  And so the general point is if there is 
a national interest in saving energy, if the President has said we are 
addicted to oil, why is DOE reducing the amount of money it spends on 
energy efficiency programs?
     SECRETARY BODMAN.  Well, first of all, there is accounting and then 
there is accounting and so it depends on which accounts you wish to look 
at.  We have increased funding for vehicle technologies which are 
dealing with energy efficiency.  We have increased funding for building 
technologies which deal with energy efficiency.  We have reduced the 
weatherization program by about a third, which I know causes great 
angst, but that, frankly, is something that I did.  When I had looked at 
where we had to make reductions in past programs in order to try to get a 
balanced budget, which is what we were instructed to do, we have a 
modest increase in the Energy Star program in order to promote the use 
of more effective appliances in our economy and so there are a lot of 
areas where we--
     MR. ALLEN.  But overall, Mr. Secretary, overall, if saving energy, 
being more energy efficient is a major national problem, something that 
requires the full attention of this Administration, we are not doing what 
we should be doing, wouldn't you agree?
     SECRETARY BODMAN.  We are doing a lot of things in this 
Administration and no, I don't agree with that and I think that there are 
always initiatives in areas where one could do more and so we had to 
make a lot of very tough choices, which I had said before and I say 
again.  We had a half a billion dollar increase in the science budget, 
which I think is crucial to the future of our country.
     MR. ALLEN.  I hear what you are saying.  I would just add that it 
seems to me all the tough choices, so-called, are being made on the 
expenditure side, not on the revenue side, but I know that is not your area 
of jurisdiction.  Let me just ask you one other thing.  The President said 
the President set a goal of reducing our Middle East oil imports by 75 
percent by 2020.  I don't have a clue how this program would ever get 
there or what kind of analysis he went through, the Administration went 
through, to get to that number.  I do not understand, if 70 percent of our 
oil goes into vehicles, I don't understand how we could possibly reach 
that goal without significantly improving vehicular efficiency instead of 
just focusing on new fuels and that is more than just investments in 
technology.  There has to be some way to substantially increase the 
efficiency of our cars and trucks.  Would you comment on that?
     SECRETARY BODMAN.  Yes, the simple question, sir, is ethanol, and 
ethanol is the approach that is the background of the President's goal of 
reducing the consumption of imported oil 20 years out, by five million 
barrels a day.
     MR. ALLEN.  Cellulosic ethanol?
     SECRETARY BODMAN.  Cellulosic ethanol because for reasons that I, 
again, I am not sure who was here when I said what I said, but we are 
running short of corn, I believe we will start to import corn.  There will 
be limits as to how much corn we can use and we are now, I think, at 14 
percent of the corn that is grown in this country is being used to produce 
ethanol and we are going to see that reflected, it will be reflected 
economically in food prices and other issues.  So we need to get 
cellulosic ethanol which has the potential, if we are successful, by the 
year 2012 of getting the cost of cellulosic ethanol below a dollar, that we 
would be in a position to accomplish this five million barrels a day goal 
that the President has set.
     MR. ALLEN.  Thank you.  Mr. Chairman, could I just ask one 
question for the record?
     CHAIRMAN BARTON.  Yes, sir.
     MR. ALLEN.  Mr. Secretary, would you be willing to provide me 
with the backup, whatever analysis went into this 75 percent reduction in 
Middle East oil imports by 2020, the calculations, the backup?
     SECRETARY BODMAN.  Fine.
     MR. ALLEN.  I would very much appreciate it.
     SECRETARY BODMAN.  Sure.
     MR. ALLEN.  Thank you.
     CHAIRMAN BARTON.  The distinguished subcommittee chairman of 
Commerce, Trade, and Consumer Protection Subcommittee, Mr. Stearns.
     MR. STEARNS.  Thank you, Mr. Chairman.  Mr. Secretary, I am 
going to ask sort of an easy question to start off.
     SECRETARY BODMAN.  An easy question?
     MR. STEARNS.  Easy question, yes.
     SECRETARY BODMAN.  I see.
     MR. STEARNS.  Okay.  Could you explain the safeguards in the 
Global Nuclear Energy program to prevent weapons usable fuel from 
getting into the hands of terrorists?  If you could sort of explain that to us 
just to give us some confidence on that would be helpful.
     SECRETARY BODMAN.  The GNEP program consists of three parts.  
One is the so-called urex-plus recovery of transuranic elements.  That 
means plutonium, it means americium, curium, neptunium.  Those are 
the four elements that are in large quantity inside, that are in spent fuel 
today.  So the first thing is to recover it as an alloy or as a mixture.  That 
mixture is not usable for making bombs by terrorists or by people who 
would do harm to us.  The process that is used, for the most part, in the 
world today is the purex process, with a P.  Purex recovers pure 
plutonium.  That is what goes on in France, it goes on in Russia, at least 
those two countries and perhaps elsewhere.  And so we have significant 
quantities of plutonium that have been recovered and is now being stored 
in secure environments by countries that are employing that technology 
and so that is the primary difference, is to be able to recover it.
     And then the second piece of the GNEP initiative is a reactor that 
will burn it effectively and the third piece is an effort to recycle the fuel 
that comes out of the fast reactor or this burning process that will enable 
us to reduce the number of transuranic elements.
     MR. STEARNS.  Now, you have given me the three things.  Do you 
think the safeguards are in place to protect so that this fuel doesn't get 
into the hands of terrorists?
     SECRETARY BODMAN.  Well, they will have to be.  I mean, when 
you say safeguards, that means that you have a standard of controlling 
this that the--
     MR. STEARNS.  And you feel a high level of confidence that the 
safeguards are there?
     SECRETARY BODMAN.  Well, what I have is the confidence that the 
transuranic materials, as a component, is not directly useful for making 
weapons.  That is the principal difference.  Now, could you take the 
transuranic elements and then extract plutonium from it?  Sure.  You 
have to protect it and you have to deal with it seriously and you have to 
have it subjected to the kind of safeguard--
     MR. STEARNS.  But it is pretty high technology to do that?
     SECRETARY BODMAN.  Oh, it is very, this is extremely high 
technology.
     MR. STEARNS.  Okay.  Did you go with President Bush to India?
     SECRETARY BODMAN.  No, I did not.
     MR. STEARNS.  Okay.  Were you briefed on his agreement before he 
went?
     SECRETARY BODMAN.  Yes.
     MR. STEARNS.  So you well aware what he was trying to do?
     SECRETARY BODMAN.  I was aware of it, yes.
     MR. STEARNS.  Yes.
     SECRETARY BODMAN.  I can't tell that I was aware of all the details, 
but I was generally aware of what he was trying to accomplish.
     MR. STEARNS.  Now, India has agreed to let the International Atomic 
Energy Agency inspect 14 of the 22 nuclear facilities.
     SECRETARY BODMAN.  That is correct.
     MR. STEARNS.  So that leaves eight that are not going to be 
inspected.  Is that a concern?  Should we be concerned at all with this 
new agreement that eight of these facilities are not going to be inspected?
     SECRETARY BODMAN.  I think it is a fair issue to ask questions about 
and so in that sense, is it fair to be concerned?  Yes.  I consider this 
agreement to be a significant step forward.  India has been a very 
responsible member of the world community when it comes to 
nonproliferation.
     MR. STEARNS.  They didn't sign the Nuclear Nonproliferation 
Treaty, right?
     SECRETARY BODMAN.  That is correct.
     MR. STEARNS.  Okay.
     SECRETARY BODMAN.  I am talking about there are countries which 
have signed the nonproliferation treaty which have, in fact, proliferated.
     MR. STEARNS.  You mean like Iran?
     SECRETARY BODMAN.  Like Iran, like North Korea.  And so that the 
signing of an agreement is not, it is not a sufficient condition to put on 
judging what I said and what I said was that India, despite the fact that 
they have not signed the agreement, have been a very responsible 
member of the world community.  There is no record of any sign in any 
way that they have proliferated technology or materials out of that 
country.
     MR. STEARNS.  But you would agree that--
     CHAIRMAN BARTON.  This will have to be the last question.
     MR. STEARNS.  Yes.  You would agree that the last eight, I mean it is 
eight sites that they are not going to inspect and they will allow 14 and 
you voiced some reservation that perhaps we should have access to those 
eight sites, is that the way I hear you saying it?
     SECRETARY BODMAN.  No, that is not what I said.  Whatever the 
President agreed to, he agreed to and he agreed to it without the eight 
sites.  Would I rather have the eight sites in rather than out?  Sure.
     MR. STEARNS.  Okay, yes.
     SECRETARY BODMAN.  But we don't.
     MR. STEARNS.  Yes, all right.
     SECRETARY BODMAN.  And do I consider the agreement that is there 
a good agreement?  I do.  And the reason I think it is a good agreement is 
India has been very responsible in the past.  I expect them to be very 
responsible in the future.  And I think this is a very good step to kind of 
bring them into the international nuclear community in an effective way.  
It recognizes the facts of life of what the situation is there and I think it is 
a reasonable and a responsible thing to do.
     MR. STEARNS.  All right.  Thank you, Mr. Chairman.
     SECRETARY BODMAN.  Thank you.
     CHAIRMAN BARTON.  We thank the gentleman.  Before I introduce 
Mr. Dingell to ask his questions, we have one of the distinguished 
railroad commissioners of the great State of Texas in the audience, the 
Honorable Victor Carrillo.  We welcome you to our committee.  You 
have testified before.  Glad to have you here.  Mr. Dingell for five 
minutes.
     MR. DINGELL.  Mr. Chairman, thank you.  Welcome, Mr. Secretary.
     SECRETARY BODMAN.  Thank you, sir.
     MR. DINGELL.  Mr. Secretary, in your statement you said, at page 
two, as a complement to GNEP strategy, the Department will continue to 
authorize a permanent geological storage site for nuclear waste at Yucca 
Mountain.  I find this troublesome because you are saying as a 
complement.  The Congress gave you clear authority and clear 
instructions that this was to be completed back in 1982.  Since that time, 
ratepayers have contributed better than $20 billion to the waste fund and 
the government is now paying utilities millions of dollars annually in 
compensation for delays.  Now, the question, and I think this is yes or no.  
Mr. Secretary, does DOE have the resources, fiscal, human, and financial 
to undertake a program of the magnitude of GNEP without sacrificing 
the focus required for it to fulfill its statutory duties with respect to the 
Yucca Mountain repository?  Yes or no.
     SECRETARY BODMAN.  Do we have it today?
     MR. DINGELL.  Do you have it today.
     SECRETARY BODMAN.  We have the management resources.  We 
certainly don't have the technical resources.
     MR. DINGELL.  So you don't have the resources to do this and I find 
this troublesome, Mr. Chairman, or rather, Mr. Secretary, because we 
have been waiting a long time on this.  It is a massive problem to the 
country--
     SECRETARY BODMAN.  Mr. Dingell, may I, then, I want to make sure 
I understand what I understood you to ask.  Do we have the resources to 
undertake--
     MR. DINGELL.  Fiscal, financial, personnel.
     SECRETARY BODMAN.  To undertake GNEP at the current time as 
well as to pursue Yucca Mountain?  I believe we do have the resources to 
pursue Yucca Mountain and we are pursuing it.  I do not believe that at 
the current time we have the resources to pursue GNEP.
     MR. DINGELL.  All right.
     SECRETARY BODMAN.  The technical resources.
     MR. DINGELL.  You have got, Mr. Secretary, a program on Yucca 
Mountain that indicates that probably the potential benefits of that are 
not going to be realized sometime in the future.  In like fashion, it 
appears that even if things do go well, GNEP's program will not be 
realized for decades.  Is that correct or not?
     SECRETARY BODMAN.  Which one, sir?
     MR. DINGELL.  Well, first of all, I think you are way behind on 
Yucca Mountain.
     SECRETARY BODMAN.  That is correct.
     MR. DINGELL.  But GNEP's potential benefits I don't think are going 
to be realized for decades.
     SECRETARY BODMAN.  That is correct.
     MR. DINGELL.  As a matter of fact, that is a program that has not 
even begun to be worked on at the agency.
     SECRETARY BODMAN.  That is correct.
     MR. DINGELL.  Now, Mr. Secretary, are you effectively advocating 
in the Department extended interim storage of spent fuel bound for the 
repository at Yucca Mountain above ground in order to let GNEP catch 
up before the waste is disposed of in the underground repository?
     SECRETARY BODMAN.  We are pursuing Yucca Mountain with as 
much vigor as we can independent of progress or lack thereof with 
respect to GNEP.
     MR. DINGELL.  Now, Mr. Secretary, you are aware of the rate 
payers' contribution to the Nuclear Waste Fund?
     SECRETARY BODMAN.  Yes, I am.
     MR. DINGELL.  I have long been concerned about them being 
diverted to unrelated purposes, something which has regularly happened 
and I am concerned that $18 billion or so now sitting in the Nuclear 
Waste Fund could be a particularly tempting target for parties looking to 
fund GNEP.  My question to you is are you going to use the Nuclear 
Waste Fund to fund GNEP?
     SECRETARY BODMAN.  No.
     MR. DINGELL.  Is that a commitment here?
     SECRETARY BODMAN.  Yes.
     MR. DINGELL.  Now, Mr. Secretary, does the Department have any 
authority under the Nuclear Waste Policy Act to tap money so the 
Nuclear Waste Fund in order to pursue activities under the GNEP 
program?  In other words, do you have authority to do that?
     SECRETARY BODMAN.  I do not believe so.  I do not know the 
answer.  I would be happy to get you that before the record--
     MR. DINGELL.  That would be very much appreciated.  Mr. 
Secretary, last question.  Would the Department please provide the 
committee with the legal memorandum addressing this question?
     SECRETARY BODMAN.  Of course.
     MR. DINGELL.  I would appreciate it.  Last of all, Mr. Secretary, you 
are always welcome here, but I think you owe me one letter and I know 
you want to--
     SECRETARY BODMAN.  You are correct.  Your bookkeeping is better 
than mine and I do owe you one letter.
     MR. DINGELL.  It would be much appreciated.  The folks in the 
Administration are always a little bit hard put to respond to letters from 
Members of Congress, so we try to remind them when they come up here 
so that they will know that we are saddened by the fact that they do not 
respond to our mail.
     SECRETARY BODMAN.  I would like to say, sir, if I may, that I have 
personally worked very hard on trying to maintain a sense of 
responsiveness on the part of my colleagues in the Department to the 
Members of Congress to the point where each week, each Monday 
morning we have a meeting and the man who is responsible for all of the 
executive communication, correspondence, makes a report and we are, I 
think, increasingly diligent and so what the reasons are for this, this 
arrived on February 8, your letter, or at least it was dated February 8, I 
presume was faxed to us.  I don't know the details of it, but you can be 
sure that it will have our attention.
     MR. DINGELL.  Mr. Secretary, I don't want you to think my 
comments to you this morning indicated any hostility or lack of affection 
or respect.  It just indicated a certain concern about the fact that not just 
your agency, but every agency down there doesn't seem to respond to the 
concerns of Members of Congress and I would just like to remind 
everybody who comes up here about the need to make us feel better by 
responding.
     SECRETARY BODMAN.  Well, sir, we recognize the fact that this 
Congress has the power of the purse and as far as I am concerned, you all 
are the customers and we are doing our very best to be responsive to you.
     MR. OTTER.  [Presiding]  The gentleman's time has expired.  The 
Chair recognizes the gentleman from Texas, Dr. Burgess.
     MR. BURGESS.  Thank you, Mr. Chairman.  Mr. Secretary, increasing 
domestic production is something we are all concerned about.  There is a 
program of enhanced oil recovery through carbon dioxide injection into 
older wells and this recoverable oil resource could be increased.  It is 
almost 400 percent.  The estimate is 430 billion new barrels to 
technically recoverable reserves.  That figure, in fact, would put us ahead 
of Saudi Arabia's reserve count.  The budget proposal that we have 
received, you are terminating the petroleum oil and natural gas 
technology programs that we have to thank for this knowledge and why 
is it that that--is this probably the same answer that has been generated 
before on other programs, but this is a terribly important program and in 
my neck of the woods down in Texas, we have the Gittings Field down 
in central Texas, the Barnett Shale up in north Texas.  The Gittings Field 
has a lot of recoverable oil left in it if we would just develop the 
technology to bring it to the surface.
     SECRETARY BODMAN.  You know, I would, I guess, say two things.  
One, a lot of the use of carbon dioxide to stimulate the recovery of oil 
has been around for decades, as you well know, and part of the issue that 
goes into a decision of this kind is how much research, what is the role of 
public funding for research in some of these initiatives and I think the 
decision that was made was that with $60 oil, that there is plenty of 
incentive for the owners of these reserves to develop all kinds of 
approaches to recovering that oil.  It is just a very good investment.  And 
so I guess the question I would have would be to try to understand to a 
better degree than I do what the specifics are of that program and why it 
is something that makes sense for, with $60 oil, why does it make sense 
for us to put public money into it?
     MR. BURGESS.  With the coal-based methane and the natural gas 
reserves of the Barnett Shale down in Texas, those are promising 
additions to our domestic supply of natural gas.
     SECRETARY BODMAN.  Right.
     MR. BURGESS.  But these fields are developed, not by the big guys, 
but by the smaller, independent producers who don't have the budgets, 
who don't have the capital, who don't have the wherewithal for 
developing this type of technology.  Therein lies the problem.  These are 
smaller pockets of energy that are developed by smaller players in the 
market and not by the big boys.
     SECRETARY BODMAN.  This has a resonance to it that resonates with 
my several conversations with Mr. Hall related to the ultra-deep drilling.
     MR. BURGESS.  Well, I would appreciate it if perhaps your staff 
could get back to my office with a little bit more detail on this.
     SECRETARY BODMAN.  Of course.  I would be happy to do it, sir.
     MR. BURGESS.  I mean it is the health of the nation, as well.
     SECRETARY BODMAN.  I understand, sir.
     MR. BURGESS.  Just the other matter that I alluded to in the opening 
statement about the energy bill that we passed in October that has not yet 
been voted on in the Senate, one of the provisions in that bill, Texas has 
a pretty good program for the Attorney General being in charge of price 
gouging, as my understanding through the work we did on that bill, if 
there is not a national program and this bill, for the first time, did develop 
a national program for someone to look at the concept of price gouging.  
Is this something that you feel would be a good thing for the country to 
have?  Is it something the Department of Energy does not want?
     SECRETARY BODMAN.  It is not a matter of not wanting, I think it is a 
matter of when one starts to supersede State law.  The price gouging law, 
largely State laws, as I understand it, we were, particularly in the days 
when gasoline ran up in the aftermath of Katrina and Rita, we were the 
recipient of, we had a toll-free number as well as a website that collected 
information, complaints from consumers.  We put all that together, took 
it to the Federal Trade Commission and they, in turn, worked with the 
Attorneys General around the country.  That seemed to be a reasonable 
way to go about doing it and would not require the bureaucracy and the 
more, the larger apparatus to try to impose on the States a Federal 
mandate, so I guess the first thing I would want to do is to find out is 
how did we do?  As best I knew, we did pretty well in terms of getting 
information and there were some litigation and some people that were 
charged as a result of activities following Katrina and Rita.
     MR. BURGESS.  Is that information available in any sort of report for 
us?
     SECRETARY BODMAN.  The answer is I don't know.  I would be 
happy to look at it.
     MR. BURGESS.  Okay.
     MR. OTTER.  The gentleman's time has expired.  The gentlelady 
from Illinois.
     MS. SCHAKOWSKY.  Thank you, Mr. Chairman.  Thank you, Mr. 
Secretary.  First, Mr. Chairman, I would like to put into the record a 
report from the Midwest Attorneys General's Natural Gas Working 
Group.
     MR. OTTER.  Without objection.
     [The report follows:]

 

     MS. SCHAKOWSKY.  Thank you.  According to that report which was 
released by my attorney general, Lisa Madigan, as well as three other 
Midwestern Attorneys General, they say that simple supply and demand 
factors can't explain the increase in prices and in fact, they talk about 
demand has not been surging as frequently reported in the press.  Over 
the past 10 years it has been relatively flat.  We are talking about natural 
gas, with a slight moderation in the winter peak.  Over the past three 
years it has declined slightly and they have all kinds of charts to 
document that and what they are saying is that the Administration and 
the Congress can bring down natural gas prices by better regulating the 
futures market and ensuring companies do not gouge consumers.
     And really, this is a follow-up in some ways to Dr. Burgess's 
question about the role of the Federal government.  These Attorneys 
General actually are asking for help from the Federal government to deal 
with price gouging and I wondered if you are aware of any instances in 
which oil and gas companies engaged in price gouging last year?
     SECRETARY BODMAN.  I am aware that there were people accused of 
it.  There is an issue with respect to gas, so when I say there were charges 
with respect to gasoline; there were situations following Katrina and Rita 
where people were accused of price gouging.
     MS. SCHAKOWSKY.  Would you support giving the Federal Trade 
Commission legal authority to prosecute oil and gas companies that 
engage in price gouging?  Right now it is only collusion that they are 
allowed to deal with.
     SECRETARY BODMAN.  Congresswoman, I would be happy to look at 
that, rather than sort of on real-time here make a commitment to that.  I 
would rather not do that, but I would be happy to look at it.
     MS. SCHAKOWSKY.  I would appreciate it, as would our Attorneys 
General.  I wanted to ask you about the LIHEAP program.  I am very 
concerned about the--in Chicago where we haven't had a particularly 
cold winter.  We were afraid of that, but we see that the Administration--
     SECRETARY BODMAN.  So was I, if I may say.
     MS. SCHAKOWSKY.  Right.  But nonetheless, the Administration's 
request for LIHEAP funding was at $2.8 billion, which is $2.3 billion 
less than the amount authorized in the Energy Policy Act of 2005.  We 
are very concerned in these cold weather States about this decrease.  
How can that be justified in this time of rising prices?
     SECRETARY BODMAN.  Let me, at the risk of sounding like a 
bureaucrat, but let me say that is not my program.  It is not part of the 
Department of Energy, it is the Department of Health and Human 
Services.  Having said that, I think, again, I know Secretary Leavitt and 
his colleagues over there who administer that and who manage that--
     MS. SCHAKOWSKY.  It is administered jointly, right?
     SECRETARY BODMAN.  No, it says jointly.  I have seen that comment 
that we administer jointly.  We do not administer jointly.
     MS. SCHAKOWSKY.  Okay.
     SECRETARY BODMAN.  They administer it and they run, they do a 
responsible job on it.  I can just tell you that as with a lot of these things, 
for example, the decision that I made on weatherization, which is 
probably what--
     MS. SCHAKOWSKY.  I do want, exactly, I do want to talk about that, 
as well.
     SECRETARY BODMAN.  Weatherization is our doing and we have 
reduced that from about $240 million a year, which has dealt with some 
90-some odd thousand homes or helped 90-some odd thousand homes, I 
think, to $160 million or something like that, which is roughly 60,000 
homes.
     MS. SCHAKOWSKY.  This is one I think that really makes me scratch 
my head and wonder how, at a time when we want to both conserve 
energy and reduce prices for low-income households, how we could 
reduce that.  We are talking about, my data tells me, about 30,000 fewer 
homes are receiving weatherization assistance.
     SECRETARY BODMAN.  Your numbers are right.  That was a decision 
I made.
     MS. SCHAKOWSKY.  Why?
     SECRETARY BODMAN.  Well, the reason that I made it was that I had 
choices to make in order to bring the overall budget in at a level and that 
is a choice that I made so that to the extent you are unhappy with 
anybody, don't be unhappy with the President, OMB, or anybody else.  I 
did that.
     MS. SCHAKOWSKY.  Well, I just, you know, want to go on record as 
strongly disagreeing with that decision.
     SECRETARY BODMAN.  I understand.
     MS. SCHAKOWSKY.  Let me ask you, finally, our Democratic Leader 
in the Democratic caucus has come up with an innovation agenda that 
calls for energy independence in 10 years.  Do you see that as a 
possibility?
     SECRETARY BODMAN.  It depends on what you mean by energy 
independence.  Does that mean that we are not going to import oil or any 
materials, energy materials from abroad?
     MS. SCHAKOWSKY.  Right.
     SECRETARY BODMAN.  I do not believe that would be likely, no, 
ma'am.
     MS. SCHAKOWSKY.  Thank you.
     MR. OTTER.  The gentlelady's time has expired.  The Chair would 
recognize Mrs. Blackburn from Tennessee.
     MRS. BLACKBURN.  Thank you, Mr. Chairman, and I thank you, Mr. 
Secretary, for hanging with us this morning.  I have got three questions 
and excuse the voice.  It kind of comes and goes on me a little bit today.  
The TVA, which is there for Tennessee and sir, I know you may not have 
these answers at hand.  If you want to get back with me on these, that is 
going to be fine.
     SECRETARY BODMAN.  I can tell you that I don't know anything 
about the TVA budget, but I would be happy--
     MRS. BLACKBURN.  Let me tell you what my question--yes.  Let us 
talk about what these questions are.  They were recently awarded $35 
million in a lawsuit against DOE because they still have not started 
accepting and storing the nuclear waste at Yucca Mountain and what I 
would like to know is how many other lawsuits of this kind have been 
filed?
     SECRETARY BODMAN.  Lots.  And I can get you the number.
     MRS. BLACKBURN.  And I would like the number.
     SECRETARY BODMAN.  I would be happy to get you the number.
     MRS. BLACKBURN.  Thank you.  I would like to know how many are 
pending and other than that litigation, I would like to know what the 
Department, what their strategy is for addressing the dozens of 
outstanding lawsuits where utilities are really piling up millions of 
dollars of delayed damages each year because of inaction or whatever 
you all may see as the reason for that, so if you would, let us look at this.  
This is something that should've started in 1998 with accepting that 
waste at Yucca Mountain and TVA, as you are aware, sued because of 
the cost of building the dry cast storage to hold that waste on-site at their 
plants.  They won that suit and I know that you all have only settled three 
of those.
     SECRETARY BODMAN.  Three cases?
     MRS. BLACKBURN.  Yes, sir.
     SECRETARY BODMAN.  Yes.  My colleague just told me there are 
about 60 cases pending.
     MRS. BLACKBURN.  Okay.  If we can have some specifics on that.  
That is of great concern to me that this would go unanswered.
     SECRETARY BODMAN.  You are right, sure.  I would be happy to 
provide you with that.  What we are doing is to try to move forward with 
the repository, that is why it is so important to get that and to manage it 
well, but I fear we find ourselves way behind schedule.  We find 
ourselves with a situation that reflects poorly on the management of the 
Energy Department and it reflects poorly on other managements, as well, 
but there is plenty of blame to go around and we are doing our best to 
bring it back into focus and to manage it well.
     MRS. BLACKBURN.  And I appreciate that and if we could know a 
little bit about the timeline, that would be great.  Continuing on the 
nuclear energy, one of the President's initiatives is the expansion of that 
and I would like to know what specific actions that you all are taking to 
improve the certainty of the regulatory process for new nuclear plant 
designs, to ensure that they can and will be built competitively and if you 
do not have that now, if I could have--
     SECRETARY BODMAN.  Oh, I can tell you that.
     MRS. BLACKBURN.  You can tell me that, okay, great.
     SECRETARY BODMAN.  If you would like to know that.
     MRS. BLACKBURN.  Yes, sir.  Please.
     SECRETARY BODMAN.  We do have a program called Nuclear Power 
2010, or NP 2010, which is an effort, a joint effort or jointly funded 
effort by the government and consortia of utilities to get to generate a 
combined operating and inciting a license for new nuclear utilities.  We 
have not had a new nuclear plant in over 30 years in our country.  In our 
judgment, we need that in order to meet the electrical demands that will 
be in our country over the next 20 years and so starting, I think it was 
four years ago, we started this program.  We have had a very good 
response to it and the goal is to generate the combined, both operating 
and the operating license and the citing authority to build and start 
construction by the year 2010.
     MRS. BLACKBURN.  And does that include the lawsuit?
     SECRETARY BODMAN.  Yes.  We are working with the Nuclear 
Regulatory Commission.
     MRS. BLACKBURN.  Okay.
     SECRETARY BODMAN.  We meet with them frequently and so they 
are aware of what we are doing and we are aware of what they are doing.
     MRS. BLACKBURN.  Okay, all right.  Thank you.  I have one other 
question and I will just post it.  I am not going to ask for an answer, but I 
think going back to our domestic supplies with ANWR in the outer 
continental shelf and what the President's intentions and priorities there 
and I want to be respectful of others' time, so I will just wait to hear back 
from you on that and I thank you, sir, for your time.
     SECRETARY BODMAN.  Thank you very much.
     MR. OTTER.  The Chair recognizes the gentleman from 
Pennsylvania, Mr. Doyle.
     MR. DOYLE.  Thank you, Mr. Chairman.  Mr. Secretary, welcome.
     SECRETARY BODMAN.  Thank you, Mr. Doyle.
     MR. DOYLE.  Mr. Secretary, as one of the few Democrats up here 
that actually voted for this Energy Policy Act, I have to tell you, and as 
someone who thinks the goal of energy independence is probably the 
most important mission that our country has and the most important 
thing we can do for our kids and grandkids, to see this budget is 
extremely disheartening and disappointing and I think Chairman Barton, 
on his first question to you, just hit the nail right on the head.
     We are in a situation where to tell the American people that we are 
going to strive towards energy independence is just not something that is 
not only not possible in 10 or 15 years, it is not going to be possible in 
100 years if we don't have the financial resources to put into it and quite 
frankly, we find ourselves in the situation that we are in because the 
American people are going to have to realize that they can't have their 
tax cuts and these investments, also.
     We are staring at deficits as far as the eye can see and if this 
Administration and Members of Congress are wedded to the idea of 
making these tax cuts permanent, we are going to be looking at huge 
deficits for the next 10 to 15 years which are going to make it virtually 
impossible for us to make the kinds of investments we need to make to 
continue the research and to move forward these technologies to lessen 
our dependence on foreign oils.  And it doesn't matter who the Secretary 
of Energy is and it doesn't matter who the President is, whether the next 
President of the United States and the next Secretary of Energy are going 
to be sitting up here playing the same shell game that you are being 
forced to play until we provide some real resources to these programs.
     I just want to ask you one question and it gets back to what 
Chairman Barton talked about, too, when we talk about the shell game 
that is going on.  Your Department has repeatedly discussed the 
importance of the Department's Fossil Energy Research Program and the 
National Energy Technology Laboratory in helping change the outlook 
for America's energy future by placing more reliance on the massive 
coal reserves and leading the drive to eliminate pollution and greenhouse 
gas emissions over the coming decades.  And I agree with these 
assessments of the fossil energy program and the NETL's key role.
     Once again, we are just concerned that we are saying things but we 
are not following up with the funding when it comes to fossil energy and 
the NETL to achieve the goals.  Let me give you some reasons for my 
concerns and I would like to ask you to respond to these, please.  The 
proposed budget for the Fossil Energy Clean Coal Power Initiative is 
only $5 million, which is down from the $50-$100 million that has been 
appropriated over the past several years.  The fossil energy, oil and gas 
budget is going from $60 million in FY 2006 to a proposed zero budget 
in fiscal year 2007.  The general plant project budget at the NETL is 
being zeroed out.  If we don't address these significant infrastructure 
needs of the laboratory, we are going to compromise key operational 
capabilities, as well as safety, at NETL's two major sites in Pittsburgh 
and Morgantown.
     And the $22 million cut in the NETL program direction budget 
would require layoffs of up to 200 laboratory Federal and contract 
personnel in the early fall of this calendar year.  Can you help me 
understand how these unusually large budget cuts that are being 
proposed by the Administration mesh up with the increased mission 
responsibilities and expectations for the Department's fossil energy 
program and the NETL to support a better energy future for our country?
     SECRETARY BODMAN.  Oil and gas, as I have said before, with $60 
oil, for owners of reserves to develop new methods of producing those 
reserve, CCPI $5 million, the background of that is, at least the way I 
view that, the hiatus, we have an unusually large amount of unspent 
balances in that account that have been there.  The OMB people looked 
at it, I think they were right.  They have observed that those balances, we 
ought to get those projects that have been started in the past up and going 
before we start putting more money in it.
     We have two rounds of CCPI that have been funded and the monies 
simply haven't been spent and so that is what this is, if you will, a hiatus, 
waiting a year, putting a pause in the system and waiting until next year 
before we add other monies, before we can start a solicitation which 
would occur, presumably, in 2008.  With respect to NETL, I think that is 
an accounting change.  To my knowledge, there is not a change in the 
budget for NETL and I will be happy to look into that and I would be 
happy to get back to you, but I am unaware of any perspective layoffs 
that occur at NETL.
     MR. DOYLE.  Thank you.
     SECRETARY BODMAN.  There has been a change in the accounting 
that we were required to do by moving the accounting for some of the 
personnel and leadership group or administrative people from one 
account to another, I think.
     MR. DOYLE.  Could you get back to me in writing on that?
     SECRETARY BODMAN.  I would be happy to do that.
     MR. DOYLE.  Thank you.
     MR. OTTER.  The other gentleman from Pennsylvania, Mr. Murphy.
     MR. MURPHY.  Thank you.  Thank you again, Mr. Secretary.  I want 
to follow up on some of these questions being asked about the Clean 
Coal Initiative issue because they are extremely important.  The NETL, 
the National Energy Technology Laboratory is in my district.  It splits its 
funding with the Morgantown plant, too.  And I have similar concerns 
about the clean coal.  I understand the issue you are saying that they are 
backlogged in terms of some of those contracts.
     SECRETARY BODMAN.  Right.
     MR. MURPHY.  But I look at it this way; as water is flowing through 
a hose, if you turn it off at some point, yes, the water has a chance to go 
forward, then you have a big gap there and what I see as part of this, that 
these, the backlog in contracts, if we stop it this year, then that means 
there will be no funding for other contracts.  Part of this problem is going 
through these contracts, approving them, the laborious bureaucratic 
process is not something that can be done in a year and so if we cut off 
this funding down to $5 million, which is basically below a maintenance 
level, it seems to me, then we will have more years before we can go 
forward on this.
     What I see is that, with the Clean Coal Initiative, is that there is 
so much that can be done, we are so close, the research is very promising on 
all this and I understand the need to push for the FutureGen.  I mean, I 
would like to see both actually funded and I go back to my opening 
comments that it sickens me when I see us funding both sides of the war 
on terror that, and when we see other countries like Iran rattling their 
saber by saying we are just going to turn off the oil on you Americans 
and watch us sweat as oil prices go up and watch what happens with the 
vulnerability we will have with other nations as we deal with natural gas 
prices, as well.  For me, and I heard the comment to the Chairman earlier 
and so many of us here in the committee, this issue on clean coal, I just 
think is critically important to continue to fund and I want to go on 
record again.  To me, it is a major issue in approving any part of this 
budget.
     The other issue has to do with--I would like some more information 
on this one and that has to do with the Oil and Gas Research Program, 
because this is also critically important here on what we can be doing on 
this.  I think it is a real crippling blow to zero it out and I would like 
some sense from you where you think that places us.  Is that putting us at 
some risk for future research?  How are we going to make up for that?
     SECRETARY BODMAN.  This is in terms of oil and gas research?
     MR. MURPHY.  Yes.  In the past, I know NETL received $65 million 
for the natural gas and oil programs; $33 million for natural gas, $32 
million for oil and I see it being zeroed out now.
     SECRETARY BODMAN.  We will be happy to respond, you know, I 
think the approach that the President has used and I have heard him say 
it, that there is a lot of incentive for producing more oil and more gas.  
We have had extremely high prices, as you are well aware and your 
constituents are well aware and therefore when we start looking at how 
we should allocate public funds, that is a tough sell in terms of 
supporting oil and gas research.  I don't think it puts us at any risk, but I 
can understand that you hold a different view.
     MR. MURPHY.  Indeed, I do.  Let me shift to one other question here 
in the time I have remaining.  This has to do with the designating 
national interest transmission corridors and the regional transmission 
organizations, the RTOs, like PJM is one that handles Pennsylvania, 
New Jersey, Maryland, Ohio, and other areas.
     SECRETARY BODMAN.  They are well-run organizations, by the way.  
They are very effective.
     MR. MURPHY.  I think they are too, yes.
     SECRETARY BODMAN.  Yes.
     MR. MURPHY.  Well, I just want to have some sense of what the 
Department of Energy is going to be doing to help work on incorporating 
the work that the RTOs are doing in the corridor designations.  I mean, 
my assumption is we need more transmission lines to help with our grid 
performance.  I want to have a sense of what the Department of Energy 
is going to be doing to help with that work.
     SECRETARY BODMAN.  Well, we are required under the EPAct to 
prepare a report for Congress, I think by August 6 or sometime that first 
week of August, and we expect to be able to accomplish that.  We will be 
meeting with RTOs; they were in my office, matter of fact, last week.  
The PJM folks that you referred to are folks who would also be meeting 
with their counterparts in Canada, which we run a unified electric grid 
that crosses the border in a seamless fashion between Canada and the 
United States, and so we will be working with our Canadian 
counterparts.  So we will be following through and analyzing the 
congestion that exists or doesn't exist in various quarters.  The initial 
signs that I saw were in the eastern States and in Pennsylvania, in 
particular, we need more north and south transmission and not as much 
east and west, and that that was going to be a real help.  At least, that was 
the preliminary thinking that I heard.  But suffice it to say, we are 
working at it and we will provide a report and we will report to you and 
the other members of this committee.
     MR. MURPHY.  I would appreciate it if you could stay in touch with 
me, as well.
     SECRETARY BODMAN.  There is also, if I could just add, there is the 
provision in the bill that if we find there is an emergency of some kind, if 
we find we have something that requires more immediacy in terms of its 
actions, there is a provision in there to do that and we are mindful of that, 
as well.
     MR. MURPHY.  Thank you.
     MR. OTTER.  The gentleman's time is up.  Mr. Stupak.
	MR. STUPAK.  I thank you, Mr. Chairman.  Mr. Secretary, earlier this 
morning when I gave my opening, I talked about gas prices and I had 
indicated that the refineries have increased their prices 255 percent from 
September 2004 to September 2005.  As Secretary of Energy, would you 
know what factors go into a 255 percent increase at the refinery level for 
a gallon of gas?
     SECRETARY BODMAN.  Do I know what the costs are that go into it?
     MR. STUPAK.  What factors went into it which would cause a 255--
     SECRETARY BODMAN.  Largely, oil prices.
     MR. STUPAK.  So just the price of oil?
     SECRETARY BODMAN.  The price of oil is roughly two-thirds of the 
price of gasoline, I think, you know, when you start looking at running a 
refinery.  I don't remember exactly, but we can certainly get you that if 
you would like to have those figures.
     MR. STUPAK.  Well, I would and that is why we have been asking for 
hearings because, you know, even a cubic foot of gas, which has gone up 
23 percent in the last year; home heating, 24 percent over--if inflation is 
about 3 percent, why would these items go up 23, 24, 25 percent?
     SECRETARY BODMAN.  I think you will find, unfortunately, that 
corresponding with my arrival as your Energy Secretary, sir, and that 
seemed to correspond to a rise in worldwide oil prices.
     MR. STUPAK.  Well, I don't think we can blame you just for the rise 
in oil prices.
     SECRETARY BODMAN.  Well, there are those who do, but anyway, 
that is a different matter.  I am just saying that we have had a huge 
escalation in oil prices and I think you will find it is largely the reason 
for the changes in gasoline prices.
     MR. STUPAK.  Sure, and when you mentioned to Mr. Murphy, you 
were talking about how our constituents are painfully aware and then 
when you say, you go home and they say why is it so high, what factors 
go into it, and I say well, I know 8 to 9 percent was the exploration.
     SECRETARY BODMAN.  Right.
     MR. STUPAK.  Five to 8 percent was the distribution, but 255 percent 
was the refinery.  Well, why is that?  And that's what our constituents 
want to know.
     SECRETARY BODMAN.  We would be happy to provide that for you.
     MR. STUPAK.  Thank you.  The weatherization program, I know I 
spend a lot of time on it, but I gave you the copy of the heating bill there 
for my Oscoda high rise.
     SECRETARY BODMAN.  Yes.
     MR. STUPAK.  Underneath the weatherization program, a lot of that 
is replacing windows and things like that, so this high rise here where we 
had this dramatic increase in price for heating, if the weatherization 
program is cut 30 percent, how do they go about trying to make their 
building more efficient or trying to do something so they don't have 
$12,000 heating bills next year, when the weatherization program, which 
was already under-funded, was cut by another 30 percent, you can see 
the point we are driving at?
     SECRETARY BODMAN.  No, no.  I understand what you are driving at.  
There are things that all of us can do, including these individuals for 
whom you sent me the bill or with the bill here, you can do to save 
energy.  There are a lot of things that we can do without spending a lot of 
money and for example, light bulbs.  You can buy light bulbs that use 
about a third of the energy that normal light bulbs and there are other 
things that you can do without spending a lot of cash that we have 
advocated and continue to advocate that people pay attention to.
     MR. STUPAK.  Well, I will be interested in seeing what their bill is 
for last month because last month we had air temperatures of 45 below 
up there.  December was a pretty mild one, so I am really waiting to see 
what those bills are.
     SECRETARY BODMAN.  I am sure that is right.
     MR. STUPAK.  Let me go to the GNEP program, if I may.
     SECRETARY BODMAN.  Sure.
     MR. STUPAK.  It is my understanding that this initiative that us and 
other nuclear producing companies or countries, excuse me, are putting, 
are entering into a partnership to sell advanced nuclear power plants and 
technology and the countries would lease the fuel for use in these plants 
and when the fuel is spent, it would be sent back to the country of origin.  
Is that correct?
     SECRETARY BODMAN.  That is correct.
     MR. STUPAK.  So like in the agreement with India, this is part of this 
GNEP?
     SECRETARY BODMAN.  No, sir.
     MR. STUPAK.  Okay.  If the United States entered into these 
agreements, the spent fuel rods would come back here.  What would we 
do with them, then, if Yucca Mountain is not up and running?  We 
already have a problem with storage.
     SECRETARY BODMAN.  Well, first of all, the GNEP program is a 
multi-decade program.  This is going to be just developing the chemistry, 
we can recover the transuranics, developing the fast reactor, developing 
the fuel manufacturing, developing the fuel recycling.  It is going to be 
20 years, 15, 20 years.
     MR. STUPAK.  We don't recycle in this country.  We only reprocess 
rods.
     SECRETARY BODMAN.  I understand.  But it is our view that we need 
to because 90 percent of the energy that is in a spent fuel rod is still there 
and the problem is it is in a different chemical form and so we need to 
recover it.
     MR. STUPAK.  You can reprocess 97 percent of a rod?
     SECRETARY BODMAN.  That is the goal.
     MR. STUPAK.  So would you be advocating overturning the Carter 
Administration initiative against reprocessing spent fuel rods in this 
Nation?
     SECRETARY BODMAN.  No, what we are advocating and as proposed 
to Congress in this budget is the GNEP program, which is specifically 
reprocessing and so to answer your question, when fuel is spent, that has 
been sent to another nation, it is sent back to the nation from which it 
came, it would be reprocessed and it would be from that reprocessing 
you would produce a mixture of transuranic elements which would be 
used as a fuel in a fast reactor which would exist in the country of origin, 
the first country that created it and therefore we could burn it, gradually 
burn the so-called actinides of the transuranics and produce energy from 
that, that is the goal.
     MR. OTTER.  Mr. Green of Texas.
     MR. GREEN.  Thank you, Mr. Chairman, and I regret I am so late 
because I wanted to follow my colleagues in your questioning earlier 
lamenting the damage to our Nation because the rigs in the Gulf of 
Mexico were down and the pipeline is down and a lot of us are not--I am 
from Houston and so that is how we make a living there.
     SECRETARY BODMAN.  I am aware of that, sir.
     MR. GREEN.  And it is interesting because so many of the folks, 
particularly from California, are concerned about it since they don't want 
to produce or drill off their coast and the question for my colleague from 
New Hampshire about MTBE, we fought in this committee for six years 
and finally in the energy bill it was prevailed upon to eliminate MTBE, 
basically.  And so now it is no secret that we found out that MTBE, we 
will have to replace that with gasoline or ethanol.
     SECRETARY BODMAN.  Ethanol, yes.
     MR. GREEN.  And we don't have the infrastructure yet for ethanol 
although, again, we have talked about it for six years in this committee 
and ethanol is not as easily transported as MTBE.  You can't pipeline, so 
I have asked, in fact, yesterday morning I met with my chemical 
manufacturers in my district and I said I hope we have some vacant land 
so we can put ethanol plants up next to these chemical plants, the 
refineries that we have in the Houston area.
     SECRETARY BODMAN.  And what did they say, if I may ask?
     MR. GREEN.  Pardon?
     SECRETARY BODMAN.  What did they say, if I may ask?
     MR. GREEN.  Well, you know, I am going to encourage them to 
invest in it and maybe we might have to have a second energy bill to see 
if we can build more ethanol plants.  Congressman Shimkus and I have 
battled this for many years and I realize now there are more farmers than 
there are oil producers, so now we are going to have to bring your corn 
down or whatever else so we can make it into ethanol.
     But let me talk about some of the questions in the Energy Policy Act 
that I thought was real important.  There was a number of loan guarantee 
programs for clean coal and new nuclear generation, new renewable 
technology is also included.  Petroleum co-gasification is technically 
feasible technology, but no one has been commercially successful yet, 
and I support the technology because it turns a waste product into electric 
generation which displaces the use of our valuable natural gas.
     As a former chemical company executive you probably know better 
than any of us the importance of affordable natural gas to our Nation's 
chemical industries and its workers.  When will the Department's loan 
guarantee program become operational and can you tell us about how 
they work?  And I am particularly interested to know if these loan 
programs are going to be self-financing, where the companies put up the 
risk insurance premium, because I am not clear on what the benefit of a 
loan guarantee program is without risk insurance also.
     SECRETARY BODMAN.  First of all, we are working hard on the loan 
guarantee program and getting it set up and functioning.  It is a very 
important part of the policy act.  The expectations of Congress are very 
significant in this, of the output of this program.  I have a concern that 
we do it well.  This is not an area where the employees of the Energy 
Department are necessarily skilled, that is to say to make judgments on 
which chemical process do you use, which particular plant.
     It is more like running a bank than anything else or a commercial 
bond operation where you are trying to make evaluations of different 
approaches.  So we are trying to be careful in setting it up.  We are 
probably going to narrow the scope of it to fund just some types of 
processes in the beginning so that we can get the systems in place that 
will enable us to manage this in a responsible manner.  This is taxpayer 
money, eventually, that is going to pay for all this and we need to be 
careful about it.  So that is the first comment.
     Secondly, we have been approached by a number of people already, 
and I presume you have and others in the Congress who are 
knowledgeable about this and, we are going to be, hopefully, be able to 
run this by guidelines.  I guess that is the other point I wanted to make.  
There are two general ways we can do this.  One is to set a series of 
guidelines which is a more informal approach and could be accomplished 
by this summer.  Within the next two or three months we should be up 
and functioning.
     If we are required to issue rules or regulations, that is over a year and 
it is going to be the summer of 2007, not the summer of 2006 before we 
are functioning.  So we are doing our best.  We have told OMB that we 
want to function with guidelines, not rules.  They are reviewing that.  We 
will see how that all comes out, but I am hopeful that would be the case.  
We should be functioning, I would think, this summer and assuming that 
that goes well and that we would be in a position to start this program.  
But it is going to take a while and we are going to have to get it staffed.  
We don't have the people in place to function.
     MR. OTTER.  Mr. Inslee from Washington.
     MR. INSLEE.  Thank you.  Mr. Secretary, this budget is disappointing 
to me, but I really believe it will be an outrage to subsequent generations 
and the reason is it really dooms us to failure to achieve either energy 
independence or any meaningful reduction of greenhouse gases.  I have 
listened carefully to the testimony and I think a fair description of the 
investment in clean fuels would be charitably described as chump 
change.  You have proposed $149 million for biofuels, which is less than 
2 percent, to put this in perspective, of the $7 billion of royalty relief that the Administration currently wants to give to the fossil fuels industry 
and oil and gas from public lands.  You have not done anything to require 
flex fuel vehicles, which Brazil has indicated would be successful or 
actually making sure that ethanol is available once we have flex fuel 
vehicles.
     You have done nothing to limit CO2 to have a cap, a meaningful cap.  
We really are doomed to continued failure under this budget and it is 
extremely disappointing in that regard.  I want to ask you about 
something that affects the Northwest and that is your efforts, your 
Administration efforts to increase our energy rates in the Northwest.  
You are proposing an energy rate increase for the Northwest ratepayers 
of about $924 million.  It would result in about a 6 to 10 percent 
increase.  Over 10 years it will cost us, it has been estimated at a 
minimum of 1120 jobs in the Northwest.
     These are your suggestions, even though the BPA has voluntarily 
retired $1.6 billion of debt and the reason you are telling us that you want 
to foist this rate increase on the Northwest is that you have argued that it 
is good for the Northwest that if we make early payments on the debt, a 
payment of which we have never missed, this will somehow free up our 
efforts for other equity.  And while we respect your efforts to give us 
advice, no one in the Northwest agrees with that, and I just want you to 
know one of the reasons we don't agree with that.  We have seen this 
movie before, how this Administration has treated the Northwest.  When 
we went through the Enron debacle and pleaded with the Vice President 
for help, he just told us, effectively, to go fish.  And Enron ran rampant 
and took a billion dollars of the West Coast economy.
     And now we see today those people on trial and I noticed one of 
them yesterday said yes, I admit we were stealing money from people, 
yes, right.  They were stealing money from the Northwest and my rate 
payers and your Administration, prior to you, I may note, prior to your 
coming on board, allowed that theft to go unchallenged, unchecked.  So 
we look at this Administration's efforts to increase our energy rates now 
as sort of an adding insult to injury, a second blow of a continued 
consistent pattern of leaving us out to dry in the Northwest on energy 
rates.
     And my question will sound more rhetorical than anything, but I 
think it is appropriate in these circumstances and where we have always 
met our commitment on the debt to the Northwest to the BPA; where we 
have been good, solid partners with the Federal government; where we 
have experienced this pillaging already of our rate payers through the 
depredations of Enron and the likes; where the Administration did not 
help us on that; doesn't it appear just a little bit arrogant for the 
Administration to tell us in the Northwest what is good for us when it 
comes to the BPA debt repayment?
     SECRETARY BODMAN.  Congressman, I can't speak to the vast array 
of subjects that you have just raised.  I can speak to BPA and to the 
impact of the proposal on BPA, which as a businessman, I would 
consider to be a prudent thing.  What has been proposed is, that I am sure 
you are aware, that if BPA is successful in selling energy to adjacent 
utilities and generates more than a half a billion dollars of income, 
untaxed income, which would end up going to rate relief, the first half a 
billion dollars goes to reduce the rates of BPA customers, which, as you 
are well aware, are already quite low relative to the rest of the country.  
     And the proposal is that if anything above that half a billion dollars is 
accomplished, that that should be used to pay down debt, such that if 
one, the day after you paid it down, if the executives of BPA wanted to 
avail themselves of more credit, they could borrow it back and put the 
money to work if they have capital projects to put to work.  So I think it 
is a reasonable and a responsible action that has been proposed, simple as 
that.  And so I can't speak to the moral indignation that is a part of your 
comment, but I can speak to the business practices that I think for which 
this makes sense.
     MR. INSLEE.  Just briefly, I can just tell you that businessmen that I 
talked to in the Northwest, some that have had somewhat successful 
businesses in the Northwest--
     SECRETARY BODMAN.  I am sure there are.
     MR. INSLEE.  --think it is an absolute travesty that you are trying to 
do this.  I will submit some questions for the record to Mr. Chair and I 
hope that you will graciously answer them.  Thank you, Mr. Bodman.
     SECRETARY BODMAN.  I will be happy to do it, sir.  Thank you.
     MR. OTTER.  Mr. Secretary, would you respond to a question from 
the Chair?  My understanding is that you have to leave at one o'clock.
     SECRETARY BODMAN.  That is the case.
     MR. OTTER.  Thank you, Mr. Secretary.  The chair would now 
recognize himself.  There are a lot of questions that I have that Mr. Inslee 
already touched on and I would like to submit those to you in a letter, 
and Mr. Engel, I hope not to wait too long for your response.
     SECRETARY BODMAN.  No, we will try to do it as promptly as 
possible.
     MR. OTTER.  Mr. Secretary, being from Idaho, you can expect that I 
have a great hope for nuclear energy and the role that the Idaho National 
Laboratory can play in that.  But I am also aware that the future of 
nuclear energy is really dependent upon how well we overcome our sins 
of the past and especially with regards to the nuclear waste problem.  
And so I got a two-part question here.
     Number one, in your budget we appear to be taking away from sites 
such as the Idaho site on cleanup where we have had great success, good 
progress, and then that money is going to sites that have not have had as 
good progress.  I would think a victory on cleaning up nuclear waste like 
we could have in Idaho should we sustain the present commitment that 
we have to that, money wise, it would be something that we could shine 
our badge a little bit and say see, here is how well we can take care of the 
problem.  That, plus the fact, the second part of my question deals with 
in another committee, I think it was either yesterday or the day before, 
you mentioned that your Administration, the Department of Energy, does 
not necessarily agree with commitments that were made by past 
administrators, or Secretaries of the Department of Energy and maybe, 
perhaps, you don't feel compelled to keep those commitments.
     Some of those commitments, Mr. Secretary, I would remind you, are 
not gentlemen's agreement.  It wasn't a nice deal that two people made 
because rational minds were meeting.  Those were actual contracts and 
contracts that are now being challenged and so on two fronts, before I 
think we can advance the possibilities, the potential of nuclear energy, 
we have got to clean up the sins of the past.  And the second part is 
before we can really advance any of this, I think we need to clean up the 
image of the Department of Energy and the image of the Department of 
Defense, which you don't have that much to do with, I understand, 
before we can finalize the cleanup and move forward to the future that 
we have with nuclear energy.  So my question is, number one, what 
about the switching of the money to where we have had progress, from 
places where we have had progress, to places where we haven't had as 
good progress, and number two, what are we going to do to clean up this 
image that at every whim or every new Secretary or every new Under 
Secretary we suddenly shift in our focus and we shift in our 
commitments of the past?
     SECRETARY BODMAN.  Any written agreement, any contract that this 
Department has, we do our absolute level best to honor, sir, and there are 
differences of opinion between residents of Idaho, yourself in particular, 
as I have read in your news release, and our Department over what the 
nature of that contract was and we are now in litigation, as you are 
aware, which hopefully one of these days will be resolved one way or 
another and we will be able to proceed.  But we do try to honor and I 
assure you that, it is like honoring the commitments that Congress has 
made and we try to honor those and try to do our best to do them.
     With respect to the budget and shifting money around, what we 
attempted to do in the Environmental Management budget, first, we have 
been successful in cleaning up some sites.  I mentioned them in my 
introductory remarks.  Rocky Flats is now cleaned and is now--that had 
been a major, pit manufacturing facility and it is no longer.  It has now 
been returned to the Department of the Interior or soon will be; Fernald; 
Columbus; Sandia.  We have had some successes and I think, rightly, we 
have attempted to take credit for it.
     In terms of construction of this particular budget, these are very 
difficult tradeoffs that we have made and I appreciate your way is one of 
characterizing it.  The way I would characterize it is we have attempted 
to put the money in those areas where we are at highest risk and where 
there is the greatest risk to the environment and that, in particular, has 
been the pit plant at Hanford, which has been a major management 
problem for this Department, for the State of Washington and that is one 
which I think we made the right choice.
     MR. OTTER.  The Chair's time is up.  Mr. Secretary, as per our 
agreement, we agreed to--
     MR. MARKEY.  Mr. Chairman?
     MR. OTTER.  Yes.
     MR. MARKEY.  May I ask unanimous consent to be allowed to ask a 
couple of questions at this point?
     MR. OTTER.  The chair would remind the gentleman from 
Massachusetts that we have agreed that we could get the Secretary out of 
here at exactly one o'clock.
     MR. MARKEY.  And we have five minutes left up there.
     MR. OTTER.  And I would ask the Secretary if he minds?
     SECRETARY BODMAN.  No, no.  I would be happy to hear from Mr. 
Markey.
     MR. OTTER.  The Secretary doesn't mind.  The gentleman's request 
is agreed to without objection.  The Chair would recognize the gentleman 
from Massachusetts.
     MR. MARKEY.  I thank the Chairman very much.  Mr. Secretary, you 
say in your statement, as part of the GNEP strategy, the United States 
will work with key international partners to develop and demonstrate 
new proliferation resistant technologies to recycle spent nuclear fuel to 
reduce waste.  In this proposed budget you are requesting a $250 million 
down payment on what looks like to be a $4.5 billion GNEP effort over 
the next five years merely to demonstrate an engineering scale, the urex-
plus process for spent fuel reprocessing.  Urex, I am told, stands for 
Uranium Extraction, but it really seems like it should stand for You Are 
Expensive.  So I have to ask you, Mr. Secretary, what is it specifically 
about the urex-plus process that persuades you that it represents an 
improvement in proliferation resistance worthy of such a large 
expenditure?
     SECRETARY BODMAN.  You recover plutonium, neptunium, cerium 
and americium.  Those are called transuranic elements.  You recover 
them as an alloy, as a blend, and therefore you produce materials which, 
as opposed to the purex process, which is used in France and Russia, 
among other places, in that process they recover pure plutonium, which 
is the reason we have so much plutonium in the world today and that is 
what presents the proliferation risk.  That is why this process, we think, 
is something that should be considered.
     MR. MARKEY.  Now, would you agree that the plutonium in the 
Urex separated product is inherently less cell protected by radiotoxic 
vision products against theft and diversion than plutonium that stays in 
spent fuel?
     SECRETARY BODMAN.  No.  I can't say that.  Perhaps your staff 
member knows, but I don't happen to know the answer to that.
     MR. MARKEY.  Obviously, if it stays in current spent fuel, then it is 
totally proliferation resistant.
     SECRETARY BODMAN.  Well, it is proliferation resistant in the sense 
that it can be processed and from that one can recover pure plutonium, 
which is what the Iranians are presumably planning to do.
     MR. MARKEY.  Well, a recent scientific analysis has concluded that 
the Urex separated product has a radiation dose rate three order of 
magnitude lower than the IAEA threshold for cell protection.  Would you 
agree that a material that is three orders of magnitude below the IAEA 
levels isn't really cell protected?
     SECRETARY BODMAN.  No.
     MR. MARKEY.  Okay.  So are you aware that the critical masses of 
the transuranic elements separated together with plutonium in the Urex 
processes are larger than plutonium and excellent nuclear weapons 
material, but smaller than U235, also an excellent nuclear weapons 
material?  So from a critical mass perspective, it is my understanding that 
the Urex product is intermediate between these two excellent nuclear 
weapons materials?  Could you explain to me how that increases our 
proliferation resistance?
     SECRETARY BODMAN.  It is my position that the use of the Urex 
process is not useful to making a nuclear weapon.
     MR. MARKEY.  To achieve the reductions and heat loading of 
nuclear waste requiring long-term isolation in a permanent repository, I 
am informed that you are going to need a lot more than your requested 
urex-plus demonstration plant.  In fact, to credibly deliver on its forecast 
benefit for waste management, it has been estimated that your GNEP 
program would require the next 100 or more new commercial reactors 
worldwide to be fast reactors.  In the United States alone this adds an 
extra $80 billion to $100 billion requirement for 20 to 25 fast reactors 
just to transmute the fuel discharged from existing U.S. power reactors 
globally.  This would add hundreds to billions of trillions of dollars to the 
cost of nuclear generator electricity.
     SECRETARY BODMAN.  I disagree with that statement, sir.
     MR. MARKEY.  Thank you.  I will leave it at that.
     MR. OTTER.  Thank you, Mr. Markey.  Mr. Secretary, once again, 
thank you very much for your attendance here.
     MR. ENGEL.  Mr. Chairman, I am not going to ask a question, I was 
just wondering if I could just, for the record, take 30 second to--I am 
going to submit my questions, but I just want to, for the record, to just 
mention the Department's budget proposing $42 million for the 21st 
Century Truck Partnership, which is an initiative aimed at increasing--
     MR. OTTER.  Mr. Engel, the committee made a commitment to the 
Secretary and the Secretary needs to leave now.  If you want to submit a 
question--
     MR. ENGEL.  Okay.
     MR. OTTER.  The Secretary has agreed to answer all questions.  Mr. 
Secretary, thank you once again very much for your attendance here.
     SECRETARY BODMAN.  Okay.
     MR. OTTER.  This meeting is adjourned.
     [Whereupon, at 1:01 p.m., the committee was adjourned.]

RESPONSE FOR THE RECORD BY SAMUEL W. BODMAN, SECRETARY, U.S. DEPARTMENT OF 
ENERGY

                            QUESTIONS FROM CHAIRMAN BARTON

Energy Efficiency

Q1. Last year during the Congressional debate over EPAct 2005, there was 
quite a discussion about the timetable for DOE to issue energy efficiency 
standards for a number of appliances. Many of the standards were years behind 
schedule. Recently, DOE submitted a report to Congress showing how DOE was 
going to issue all of the energy efficiency standards. Is the 11% increase in 
the budget for the Building Technologies program, which sets these standards, 
sufficient to meet that commitment to Congress? Is there anything else that 
DOE needs from Congress to meet its commitments? 

A1. The increased funding request for FY 2007 as shown in the table below 
is in direct response to the new requirements of EPAct 2005 and will also 
allow the Department to address the backlog of rulemaking activities.  In FY 
2007 the program will complete action on rulemakings started in FY 2005 and 
prior years, and will continue work on the 13 product standards and test 
procedures initiated in FY 2006.  

                 Funding Summary (dollars in thousands)
Program/Activity      FY 2005  FY 2006  FY 2006  FY       Approp. 
                      Approp.  Request  Approp.  2007     Vs 
                                                 Request  Request

Equipment 
Standards and 
Analysis             $10,147   $8,256   $10,153  $11,925 +$1,772

A complete schedule of activities, with dates for publication of proposed 
rulemakings and other milestones, is contained in the report to Congress as 
required by Sec. 141 of EPACT 2005.  The Department's proposed activities in 
FY 2007 represent firm and achievable schedules for very important and 
complex rulemaking activities that will have significant energy savings 
benefits for the Nation.  The Department's FY 2007 budget request reflects 
the resources needed to ramp up this activity and remain at a high level of 
output for several years until the backlog of rulemaking activities is 
addressed.


Solar

Q2. The Solar America Initiative will promote deployment of 5,000-10,000 
MW of electricity generated by the sun. This seems to be a very ambitious 
goal; what is DOE's plan to meet it? Does this program include both 
photovoltaic and solar concentration technologies?  

A2. While the SAI will support both photovoltaic (PV) and concentrating 
solar power (CSP) technologies, the focus of research funding will be on PV 
technology.  New competitively- awarded, industry-led partnerships will be 
funded to aggressively improve cost, performance, and reliability.  SAI will 
use a systems-driven approach, rather than focusing on incremental 
improvements to solar system components.   Aggressive milestones and metrics 
will be used to monitor progress.  The program will also use periodic 
down-selects to focus only on pathways with the best outlook for success.  

The technology goal is to produce levelized cost of power from 5 to 10 cents 
per kilowatt-hour, depending on the location and application.  We believe that 
if we continue to reduce costs steadily and meet this 2015 target, and if 
State incentives and programs continue to accelerate deployment, as much as 
5,000 to 10,000 additional MW could be deployed.  The Solar Program intends to 
work closely with the Building Technologies Program, the Office of Electricity 
Delivery and Energy Reliability, Office of Science, States, cities, utilities 
and industry to accomplish its goals.


Advanced Vehicles

Q3. What is the current status of the advanced vehicle program authorized 
in Sections 721-723 of EPAct 2005?  
A3. Sections 721-723 authorize the Department of Energy to establish a 
competitive grant pilot program for the demonstration of a number of types of 
alternative fuel and other advanced technologies vehicles.    

The Department did not request funds to implement this Section of EPACT.  As 
noted in the Statement of Administration Policy (SAP) submitted to energy bill 
conferees on July 17, 2005, "The House and Senate versions of H.R. 6 also 
include authorization levels that in many cases significantly exceed the 
President's Budget.  These authorizations set unrealistic targets and 
expectations for future program --funding decisions."  House and Senate SAPs 
contained similar language.  

The Department prioritized activities, including those authorized under EPACT, 
that would most contribute to the goal of reducing America's growing 
dependence on foreign oil.   The 2007 Budget reflects the Department's 
priorities.


Coal

Q4. EPAct 2005 contains not only the incentives for Innovative 
Technologies Title (Title XVII), but other loan guarantee programs in other 
titles of the Act.  What is the current status of the loan guarantees for 
petroleum coke gasification projects?  Has an office been created within the 
Department to handle the implementation of the loan guarantee programs?  When 
will the application process for the loan guarantee programs begin?

A4. The Department of Energy (DOE) has established a small loan guarantee 
office under the Department's Chief Financial Officer.  In implementing the 
program, we will follow the Federal Credit Reform Act of 1990 (FCRA) and 
Office of Management and Budget (OMB) guidelines, and we will emulate "best 
practices" of other federal agencies.  Toward that end we are drafting program 
policies and procedures, establishing a credit review board, and are planning 
to employ outside experts.  

Title XVII authorizes DOE to issue loan guarantees for projects that 
avoid, sequester, or reduce air pollutants and/or anthropogenic emissions of 
greenhouse gases, and "employ new or significantly improved technologies as 
compared to commercial technologies in service in the United States at the 
time the guarantee is issued."  Section 1703(b) lists some specific categories 
of projects that are eligible for these loan guarantees, including petroleum 
coke gasification.  Title XVII, in contrast to Title IV, allows for project 
developers to pay the cost of loan guarantees issued by DOE.  While this "self 
pay" mechanism may reduce the need for appropriations, it does not eliminate 
the taxpayer's exposure to the possible default of the total loan amount. Therefore, DOE's evaluations of applications will entail rigorous analysis 
and careful negotiation of terms and conditions.  

FCRA contains a requirement that prevents us from issuing a loan guarantee 
until we have authorization to do so in an appropriations bill.  We do not 
believe we have authority to proceed with an award absent having the 
necessary explicit authorization in an appropriations bill.

Q5. How does the decrease in the funding request for University Coal Research 
compliment the Administration's commitment to increasing American 
competitiveness in science, math, and engineering through greater educational 
opportunities and enticements?

A5. The small decrease (approximately 7%) in the funding request for the 
University Coal Research (UCR) program will not change the Administration's 
commitment to increasing American competitiveness in science, math and 
engineering through greater educational opportunities and enticements.  The 
small decrease in UCR funding in materials, sensors and controls, and 
modeling, is offset by increases in other, higher priority areas.


Ethanol

Q6. In your testimony, you mentioned the FY2007 Budget proposes $149.7 
million for the Biomass and Biorefinery Systems Research and Development (R&D) 
Program to support the new Biofuels Initiative to develop cost competitive 
ethanol from cellulosic materials by 2012. What is the status of the loan 
guarantees for projects that demonstrate the commercial feasibility and 
viability of producing cellulosic biomass ethanol (Section 1511 of the EPAct 
2005)?  

A6. The Department of Energy (DOE) has established a small loan guarantee 
office under the Department's Chief Financial Officer.  In implementing the 
program, we will follow the Federal Credit Reform Act of 1990 (FCRA) and 
Office of Management and Budget (OMB) guidelines, and we will emulate "best 
practices" of other federal agencies. Toward that end we are drafting program 
policies and procedures, establishing a credit review board, and are planning 
to employ outside experts.

Title XVII authorizes DOE to issue loan guarantees for projects that 
avoid, sequester, or reduce air pollutants and/or anthropogenic emissions of 
greenhouse gases, and "employ new or significantly improved technologies as 
compared to commercial technologies in service in the United States at the 
time the guarantee is issued."  Section 1703(b) lists some specific categories 
of projects that are eligible for these loan guarantees, including "renewable 
energy systems".  Technologies that produce ethanol from cellulosic biomass 
may qualify as renewable energy systems.  Title XVII, in contrast to Title XV, 
allows for project developers to pay the cost of loan guarantees issued by 
DOE.  While this "self pay" mechanism may reduce the need for appropriations, 
it does not eliminate the taxpayer's exposure to the possible default of the 
total loan amount.  Therefore, DOE's evaluation of applications will entail 
rigorous analysis and careful negotiation of terms and conditions.  

FCRA contains a requirement that prevents us from issuing a loan 
guarantee until we have authorization to do so in an appropriations bill.  We 
do not believe we have authority to proceed with an award absent having the 
necessary explicit authorization in an appropriations bill.

Gas Hydrates

Q7. One of the best ways to decrease our dependence on foreign sources 
of oil is to increase our domestic production.  In your budget proposal, you 
are terminating the Petroleum-Oil and Natural Gas Technologies programs.  
This would terminate all existing DOE methane hydrate research.  In addition, 
you do not appear to have allocated appropriation funding for your 
Congressionally directed obligations under EPAct 2005 Section 968 to develop 
a methane hydrate research and development program.  The United States 
Geological Survey estimates that natural gas hydrate resources in-place total 
over 300,000 trillion cubic feet (TCF).  As you know, technology to extract 
this resource is in a very early stage and private industry cannot afford to 
shoulder the burden.  How do you justify that this type of research is no 
longer necessary?  What happens to the limited research that has been done? 
Will it be lost in the termination?     

A7. The decision to terminate the gas hydrates program reflects a 
strategic assessment of the program compared to other DOE programs.  This 
is in line with our commitment to deliver results for the American taxpayer. 
The 2007 Budget's proposals to expand access to oil and gas resources, 
streamline permitting processes, and make the R&D investment tax credit 
permanent are better ways to increase domestic production of oil and gas 
than federally funded R&D. Several other government agencies, specifically 
Minerals Management Service (MMS), U.S. Geological Survey (USGS), National 
Oceanic and Atmospheric Administration (NOAA), National Science 
Foundation (NSF), and Naval Research Laboratory (NRL), support gas 
hydrate-related research that is relevant to their missions, focusing on 
resource characterization and basic research, rather than exploration and 
production.  Some private sector companies are also investigating this 
potential resource.  The results of all R&D completed by the Congressionally 
directed methane hydrate program will be publicly available to the research 
community and industry.   


Oil and Gas

Q8. In your FY 2007 congressional Budget Request, you propose a repeal 
of the Ultra-deepwater and Unconventional Natural Gas and Other Petroleum 
Research and Development Program (the "Ultradeep Program") enacted 
pursuant to the EPAct 2005.  As you are aware, a letter dated February 15 
stating our concerns about repeal of the Ultradeep Program was sent t you.  
Since the Ultradeep Program is a federal law and has been directly funded 
pursuant to that law, please explain where DOE is in its implementation of the 
Ultradeep Program and your full 2006 schedule for full implementation.

A8. The Department is complying, and will continue to comply, with the 
Energy Policy Act.  In compliance with the Energy Policy Act, on November 4, 
2005, the Department issued a solicitation for administration of the 
Ultra-deepwater and Unconventional Natural Gas and Other Petroleum Research 
and Development Program.  The solicitation closed on February 2, 2006, and the 
Department has completed its review and made a selection of the consortium in 
May 2006, as required by the Energy Policy Act. 

On April 27, 2006, Secretary Bodman transmitted to the House and Senate a 
legislative proposal to repeal the program. Oil and gas are mature industries 
and both have every incentive, particularly at today's prices, to enhance 
production and continue research and development of technologies on their 
own. There is no need for taxpayers to subsidize oil companies in these efforts.


Q9. In his 2006 State of the Union address, the President laid out an 
aggressive vision to decrease U.S. dependence on crude oil from the Middle 
East.  The Ultradeep Program is designed to accomplish that by increasing our 
economically available oil and gas resources through research and development 
and thereby decrease our dependence on Middle Eastern sources of oil.  By 
recommending that the Ultradeep Program be repealed, does DOE indirectly 
support increasing our foreign imports of oil and gas?  Wouldn't a national 
R&D program designed to increase our economically available domestic 
resources provide an alternative to less expensive foreign oil to companies?

A9. Oil and gas are mature industries and both have every incentive, 
particularly at today's prices, to enhance production and continue research 
and development of technologies in areas such as ultra-deepwater exploration 
on their own. There is no need for taxpayers to subsidize oil companies in 
these efforts.  The Administration's Research and Development Investment 
Criteria direct programs to avoid duplicating research in areas that are 
receiving funding from the private sector, especially for evolutionary 
advances and incremental improvements.  Private control of intellectual 
property provides a market incentive for the private sector to invest in 
R&D and advance technology. 

While not part of the Fossil Energy budget, The 2007 Budget's proposals to 
expand access to oil and gas resources, streamline permitting processes, and 
make the R&D investment tax credit permanent leverage private sector 
ingenuity and are better ways to increase domestic production of oil and gas 
than federally funded R&D. 

The President's goal of reducing dependence on foreign sources of oil will 
also be addressed by the Advanced Energy Initiative proposed in the budget 
including advancements in cellulosic ethanol, battery technology, and 
hydrogen, among others. The Department and the Administration has set its 
budget priorities for research and development to focus on these and other 
areas within the Advanced Energy Initiative because they hold the greatest 
promise in helping us diversify and strengthen domestic energy resources.


Independent Producers

Q10. Because 68 percent of domestic oil and 82 percent of domestic natural 
gas comes from independent producers that cannot economically manage full 
scale exploration and production R&D programs independently, and because 
there is a national benefit to any such intellectual property being available 
broadly across this segment of the industry, doesn't Congressional policy to 
advance technologies that explore new frontiers for domestic oil and natural 
gas production through federally funded research and development make good 
sense? 

A10. Oil and gas are mature industries and both have every incentive, 
particularly at today's prices, to enhance production and continue research 
and development of technologies on their own. There is no need for taxpayers 
to subsidize oil companies in these efforts.  The Administration's Research 
and Development Investment Criteria direct programs to avoid duplicating 
research in areas that are receiving funding from the private sector, 
especially for evolutionary advances and incremental improvements.  

Private control of intellectual property provides a market incentive for the 
private sector to invest in R&D and advance technology. Although independent 
operators may not fund technology development directly, the service industry 
that supplies them with equipment funds significant development of 
technologies with application to independent operators.  The Department 
expects the service industry to continue to provide technological innovations 
for use by major and independent producers.

While not part of the Fossil Energy budget, the 2007 Budget's proposals to 
expand access to oil and gas resources, streamline permitting processes, and 
make the R&D investment tax credit permanent leverage private sector 
ingenuity and are better ways to increase domestic production of oil and gas 
than federally funded R&D.  The President's goal of reducing dependence on 
foreign sources of oil will also be addressed by the Advanced Energy 
Initiative proposed in the budget including advancements in cellulosic 
ethanol, battery technology, and hydrogen, among others, some of which is 
included in the Fossil Energy budget.


Strategic Petroleum Reserve

Q11. Pursuant to the EPAct 2005 Section 301, you are directed to fill the 
Strategic Petroleum Reserve ("SPR") to its 1,000,000,000-barrel capacity as 
expeditiously as possible.  To this end, pursuant to Section of EPAct 2005, 
you are directed to complete a proceeding to select sites necessary to enable 
capacity expansion of the SPR to meet that 1,000,000,000-barrel mandate.  You 
do not appear to have allocated appropriation funding for the actual 
acquisition of the selected sites.  When do you expect to request such 
funding to fulfill your ultimate obligation of expanding and filling the 
SPR and do you have an estimate of how much that request will be?  Are there 
plans to acquire interim storage capacity while larger sites are being built?

A11. The Department initiated a proceeding in early Fall 2005 to identify 
potential sites for expansion of the Strategic Petroleum Reserve to 1 billion 
barrels.  Public meetings were held through the Fall to solicit community 
input and comments were received.  The proceeding to select sites is expected 
to be completed in late summer with the publication of an Environmental 
Impact Statement and recommendation for site selection.  

EPACT 2005 requires that the Secretary of Energy "shall, as expeditiously as 
practicable, without incurring excessive cost or appreciably affecting the 
price of petroleum products to consumers, acquire petroleum in quantities 
sufficient to fill" the SPR to the one billion barrel authorized capacity.  
The FY 2007 Request is sufficient to comply with responsibilities established 
under EPACT 2005.

Global Nuclear Energy Partnership (GNEP)

Q12. The DOE budget cuts every nuclear energy research and development 
program except for Advanced Fuel Cycle Initiative, which is the funding 
source for GNEP.  This suggests that previous Department goals, such as 
developing new generations of reactor technology and harnessing nuclear 
energy for the production of hydrogen, are no longer priorities.  
Considering that these goals have been major Department initiatives in 
the past, what assurance can you provide that GNEP not suffer a similar 
fate, thereby wasting taxpayer's funds on a program that will fall out of 
favor in a few short years?

A12. Developing new generations of reactor technology and harnessing nuclear 
energy for the production of hydrogen are key priorities for the Department.  
Both of these activities are part of the President's Advanced Energy 
Initiative.  With the funding requested in Fiscal Year 2007 for the Nuclear 
Hydrogen Initiative and the Next Generation Nuclear Plant concept, the 
Department will continue the research and development needed to bring these 
technologies to the point of maturity necessary to inform a decision in 2011 
on whether to proceed with construction of a reactor co-generation 
demonstration facility.  In addition, consistent with expectations expressed 
in the Energy Policy Act of 2005, we are also currently exploring the 
feasibility of using existing nuclear power plants for hydrogen production. 
We believe all of this research is important for the Nation.  Instead of 
reducing other initiatives, the Global Nuclear Energy Partnership initiative 
will support them by providing a sustainable path for the U.S. and global 
development of nuclear energy.


Q13. DOE is not requesting any additional legislative authority to pursue 
the GNEP initiative at this time.  Under what authority does the Department 
believe it may conduct each aspect of the initiative?

A13. DOE currently believes the existing legislative authority under the 
Atomic Energy Act of 1954 as amended, is sufficient for carrying out the 
activities currently proposed as part of the GNEP initiative.


Q14. What are the program's specific objectives?

A14. The Global Nuclear Energy Partnership (GNEP) initiative seeks to 
develop worldwide consensus on enabling expanded use of economical, 
carbon-free nuclear energy to meet growing electricity demand.  This 
initiative proposes to use a nuclear fuel cycle that enhances energy 
security, while promoting non-proliferation.  It would achieve its goal 
by having nations with secure, advanced nuclear capabilities provide fuel 
services -- fresh fuel and recovery of used fuel -- to other nations who 
agree to employ nuclear energy for power generation purposes only.  The 
closed fuel cycle model envisioned by this partnership requires development 
and deployment of technologies that enable recycling and consumption of 
long-lived radioactive waste.  Under the GNEP initiative, the Department 
would seek to demonstrate the critical technologies needed to change the 
way used nuclear fuel is managed -- to build recycling technologies that 
enhance energy security in a safe environmentally responsible manner, 
while simultaneously promoting non-proliferation.

Q15. Please describe any work that the Administration has begun on the GNEP 
program.

A15. Under GNEP, the Department has proposed $250 million in FY 2007 to 
accelerate the demonstration of integrated recycling technologies that are 
currently under development as part of the Department's ongoing Advanced 
Fuel Cycle Initiative (AFCI).  Under AFCI, the Department's current efforts 
are aimed at conducting the applied research, engineering and environmental 
studies that would be needed to inform a decision in 2008 on whether to 
proceed with detailed design and construction of the engineering scale 
demonstration facilities.  The Department recently approved the mission need 
for these demonstration facilities, the first critical decision in the 
Department's project management procedures.  In March 2006, the Department 
issued an advance notice of intent, announcing plans to prepare an 
environmental impact statement (EIS) for the GNEP technology demonstration 
program.  The EIS effort is anticipated to be completed over the next two 
years.  Also last month, the Department announced that it is seeking 
expressions of interest from the public and private sectors for hosting 
advanced recycling demonstration facilities and related activities.


Q16. How many people does the Department have working on the GNEP program 
now?  How many people does the Department anticipate it will have working 
on the GNEP program at its peak?  When will that peak occur?

A16. Currently, 15- 25 Federal staff provide technical and management 
support to the Advanced Fuel Cycle Initiative (AFCI).  About 100 engineers, 
scientists and technicians from DOE national laboratories are currently 
supporting AFCI.  Under GNEP, the Department would propose to accelerate 
the AFCI program to demonstrate the integrated recycling technologies.  
While the specific levels of staffing for the future cannot be provided 
until the conceptual designs are completed, it is anticipated that staffing 
would significantly increase as the technology demonstration program 
transitions to detailed design and to construction. 


Q17. Which countries are potential fuel cycle partners?  Would technology 
development be coordinated within the GNEP or will each partner pursue its 
own programs?

A17. The U.S. has completed initial consultations with fuel cycle countries 
and the International Atomic Energy Agency on the key objectives of GNEP. 
From a technical perspective, to date, France, Japan, Russia, and the United 
Kingdom have expressed strong interest in cooperative, coordinated research 
and development.  It is anticipated that the technology development and 
demonstration would be a coordinated effort among the partner nations.  In the 
course of meetings held in February and March 2006, these countries agreed in 
principle to substantial collaboration with the U.S. in the preparation for, 
and execution of, the GNEP technology demonstrations. The visions for the GNEP 
technical strategies are shared by all these countries.


Q18. What projects within the GNEP will be regulated by the Nuclear Regulatory 
Commission?

A18. DOE would regulate the GNEP technology demonstration program under its 
own authority granted by the Atomic Energy Act.  DOE would engage the 
Nuclear Regulatory Commission throughout the technology demonstration 
phase to ensure that the technologies developed and demonstrated are 
licensable by NRC.  


Q19. Do you believe, and has the Department done any studies that show that 
the infrastructure development necessary for GNEP will produce cost 
competitive power for consumers?

A19. A major objective of the demonstration phase of the GNEP initiative is to 
understand and determine the costs associated with a more proliferation 
resistant closed fuel cycle while demonstrating those technologies necessary 
to support the global expansion of emissions-free nuclear energy.  Engineering 
scale demonstrations will enable the Department to improve plant design and 
reduce costs.  It is too early to determine the cost competitiveness of power 
produced from the proposed integrated GNEP facilities.


GNEP -- Costs

Q20. What is the projected cost of the GNEP program over its lifetime?

A20. The Department's preliminary, order-of-magnitude estimate of costs for 
the GNEP initiative range from $20 billion to $40 billion, which includes the 
costs of the technology demonstration projects, including the Nuclear Power 
2010 and Yucca Mountain programs.  The preliminary, order-of-magnitude costs 
associated with the demonstration of technologies would be substantially less, 
and have previously been estimated to range from $3 billion to $6 billion over 
the next ten years to bring those technologies to the point of initial 
operations.  These estimates are based on pre-conceptual studies and 
information available from laboratory-scale testing.  We will be able to 
provide costs with a higher degree of confidence as the conceptual design 
studies are completed over the next two years.


Q21. What are the GNEP funding requirements for FY 2008 and succeeding years?

A21. The Department is currently developing and anticipates completing the 
GNEP Program Plan by the end of May 2006 which will guide the GNEP technology 
demonstration program work scope over the next five years and will identify 
the funding requirements for its implementation.


Q22. Will the Nuclear Waste Fund be used to pay for some of the program 
costs?

A22. The Department has no plans to use the Nuclear Waste Fund to fund any for 
GNEP technology activities.  The Nuclear Waste Policy Act of 1982 authorizes 
the Secretary to "make expenditures from the Waste Fund ... only for purposes 
of radioactive waste disposal activities ... including:  ... any costs that 
may be incurred by the Secretary in connection with the transportation, 
treating, or packaging of spent nuclear fuel or high-level radioactive waste 
to be disposed of in a repository, to be stored in a monitored, retrievable 
storage site, or to be used in a test and evaluation facility."  (42 U.S.C. 
10222(d)).  To the extent that GNEP activities involve the "treating, or 
packaging of spent nuclear fuel," for disposal at Yucca Mountain, such 
activities would come within the scope of radioactive waste disposal 
activities within the meaning of the Nuclear Waste Policy Act of 1982, and 
thus the Nuclear Waste Fund could potentially be used for such activities. 
Any use of the Nuclear Waste Fund for GNEP activities would require the 
approval of Congress through the appropriation process.


Q23. Considering that both GNEP and the Yucca Mountain programs will require 
dramatic funding increases in roughly similar timeframes, how will DOE 
accommodate those competing requirements within its budget?  What 
offsetting reductions in DOE activities is the Administration considering?

A23. DOE intends to request sufficient funding to support both GNEP and the 
Yucca Mountain programs.  The Administration has submitted legislation, 
"Nuclear Fuel Management and Disposal Act," which would provide stable and 
predictable funding for Yucca Mountain Program by making annual receipts 
from the Nuclear Waste Fund available to the program.  No decisions have 
been made at this stage concerning whether there would be offsetting 
reductions in other programs.


Q24. Deputy Secretary Clay Sell's testimony before Senate Appropriations 
states, "We will be looking for a sizable portion of GNEP costs to be shared 
by our partners and industry starting in 2008."  What aspects does the 
Administration envision the industry funding and how much would the industry 
contribute?

A24. Our industry and international partners would focus their contributions 
on the demonstration of the technologies that support the more proliferation 
resistant closed fuel cycle.  Industry and international partners have 
significant experience and capabilities that would support various aspects 
of the GNEP initiative.  While specific funding levels have not been set 
among possible participants, it is anticipated that cooperating on the 
development of these advanced recycle technologies would enable the U.S. to 
leverage its investment with fuel cycle partners.


Q25. Will fuel cycle partners provide funding support for the program?

A25. Industry and international partners have significant experience and 
capabilities that would support various aspects of the GNEP initiative.  
While specific funding levels have not been set among possible participants, 
it is anticipated that cooperating on the development of these advanced 
recycle technologies would enable the U.S. to leverage its investment with 
fuel cycle partners, increasing the U.S. investment several fold.  

GNEP -- Fuel Leasing

Q26. Which countries seeking to develop nuclear energy have expressed 
interest in the GNEP?

A26. The preliminary responses from major fuel supply nations such as Japan, 
France, the United Kingdom, Russia and China have been very encouraging.  
We recognize that there are responsible states that have partial fuel cycles 
whose interests can be accommodated in the GNEP framework.  Government 
delegations from Canada and South Korea were briefed at their request.  In 
addition, many science counselors from embassies that expressed interest in 
learning more about GNEP from Europe, Asia, Latin America and Africa were 
briefed in Washington.  The IAEA has been supportive of GNEP goals.  In 
March, the International Atomic Energy Agency Board of Governors was 
briefed, including representatives from nearly 40 nations.  We are still in 
the outreach stage, attempting to provide more information in response to 
inquiries, for example, concerning Indonesia, Vietnam and Turkey.


GNEP

Q27. Countries wishing to purchase nuclear fuel services could do so through 
existing markets.  How would GNEP fuel-leasing concept be different?  What 
incentives are there for those countries to utilize GNEP fuel leasing? Will 
GNEP provide subsidies or incentives that would make fuel cheaper than the 
competitive market?  If so, who would pay the costs of those subsidies or 
incentives?

A27. The commercial uranium market provides some margin of fuel supply 
security.  Under GNEP, we envision extending the security through fuel supply 
assurances and cradle-to-grave fuel services. This provides two important 
incentives for nuclear power users: (1) access to fuel in the event of a 
supply disruption, and (2) elimination of a requirement to store spent 
reactor fuel for an extended period of time.  No subsidies are envisioned 
under this arrangement.  We anticipate all fuel transactions would be at 
prevailing market prices and conditions, consistent with our goal of not 
adversely impacting the commercial nuclear fuel market.  


Q28. What potential role might the International Atomic Energy Agency play 
in fuel leasing arrangements?

A28. The International Atomic Energy Agency is expected to play a significant 
role in any fuel supply arrangements.  Under the Reliable Fuel Supply 
Initiative we envision, the IAEA will serve as the central point of contact 
for states facing (Note: don't want to let states get near actually 
experiencing a disruption -- time between contracting of uranium for fuel and 
fabrication can be fairly lengthy) a short-term, fuel supply disruption.  In 
such circumstances, the IAEA would act as a broker, helping states identify 
alternative sources of nuclear fuel from supplies around the world.  This 
role is consistent with the IAEA's charter and mission.


Q29. I understand that DOE has allocated 17 metric tons of High Enriched 
Uranium for fuel leasing under the GNEP concept.  Considering that the value 
of that material at current market prices is near $800 million, how does the 
Department plan to ensure that American taxpayers benefit?  Where is this 
reflected in the DOE's budget?

A29. As part of the Reliable Fuel Supply initiative announced by Secretary 
Bodman last year, 17 metric tons of highly-enriched uranium (HEU) is to be 
downblended to low-enriched uranium (LEU) and the LEU set aside as an 
emergency stockpile for states that refrain from pursuing national enrichment 
and reprocessing programs and that experience a short-term fuel supply 
disruption.  The Reliable Fuel Supply is separate from the GNEP initiative.  
Limiting the spread of enrichment and reprocessing programs is one of the 
nation's highest priorities, and its achievement will provide a crucial 
benefit to U.S. taxpayers.  Under the fuel supply arrangement we envision, the 
Department will sell LEU from the reserve at current market prices. Revenues 
from any sales of this material will be returned to the U.S. Treasury.  At 
today's prices, the gross market value of the material is estimated to be 
approximately $640 million.  After taking into account processing and 
downblending costs, the net market value is estimated to be just over $500 
million.  These potential future revenues to the Treasury cannot be reflected 
in the DOE budget, since the timing and extent of any such future sales are 
unknown.  


GNEP -- Fast reactors

Q30. Who is working on development of fast reactors and what is the status 
in the U.S.?  In the world?

A30. While the U.S. has considerable experience with fast reactor technology 
and is exploring a sodium fast reactor concept under the Generation IV nuclear 
energy systems initiative, there are no fast reactors currently operating in 
the U.S.  Worldwide, Russia, Japan, France, China, and India are also working 
on fast reactors and fast reactor technology.  Russia, France, Japan, and 
India have operating fast reactors.  China and India are each currently 
building a fast reactor.  All of these countries envision a long-term 
expansion of nuclear energy with significant contributions from fast reactor 
technologies to ensure sustainability.  

Recently, the U.S., France and Japan signed a systems arrangement to 
cooperate on the development of sodium fast reactor technology.  It is 
anticipated that this arrangement will provide the framework under which these 
countries could cooperate on developing advanced burner reactors under the 
GNEP program.  


Q31. What is your best estimate of how much it will cost to take to develop 
fast reactors?  What is your best estimate of how long that development will 
take?  When would fast reactors be deployed?

A31. DOE has estimated that it will take between $2 billion and $5 billion 
to develop an advanced fast test reactor in which to demonstrate the burning 
of transuranics and support the qualification of larger advanced burner 
reactors.  The Department has set a goal of developing the fast spectrum test 
reactor between 2014 and 2019.  The Department would need several years of 
experience operating the technology demonstration facilities in parallel with 
the design of commercial-scale facilities.  It is anticipated that 
commercial-scale operations could begin over the next twenty years. 


Q32. What is your best estimate for the cost of a fast reactor?  Do you 
expect that fast reactors will be commercially deployed?  If so, what is the 
basis for assuming that such plants will be economically feasible?

A32. The Department does not have a specific cost estimate for the design of 
fast reactors.  These costs will be estimated over the next two years as the 
Department conducts conceptual design on the advanced burner reactor and 
works to develop a baseline schedule and cost for demonstration of the 
technology.  

Under the Advanced Fuel Cycle Initiative, the Department would propose to 
invest $25 million on the advanced burner test reactor technology in FY 2007, 
to complete much of the conceptual design and complete a series of extensive 
studies to establish cost and schedule baselines and determine the scope, 
safety, and health risks associated with fuel design, siting and acquisition 
options.  In addition, under the Generation IV program, the Department would 
propose to allocate about $3 million in FY 2007 to explore research and 
development associated with fast reactor technology.

We believe that innovative design features and modern project management, 
fabrication, and installation technologies offer the promise of significant 
cost reductions for fast reactor technology as well as other reactor systems. 
However, with any new reactor technology, the cost of first-of-a-kind 
demonstration facility will be higher than the eventual commercial system.  
One of the fundamental objectives of demonstrating the advanced burner 
reactor technology is to determine the commercial feasibility of the 
technology, and to incorporate and demonstrate technical innovations that 
would improve reactor economics.  The Department's plan calls for a 
demonstration of the technology in the 2014 - 2019 timeframe.  The Department 
would need several years of experience operating the GNEP technology 
demonstration facilities in parallel with the design of commercial-scale 
facilities.  It is anticipated that commercial-scale operations could begin 
over the next twenty years. 


Q33. How many fast reactors are envisioned under the GNEP program?

A33. Under GNEP, the Department's preliminary estimate is that approximately 
one advanced burner reactor would be required for every four to ten 
light-water commercial power reactors.  The exact number will not be known 
until the reactor design is substantially completed.


Q34. Given this number of fast reactors, how long will it take to eliminate 
all of the material expected to be generated by the existing fleet of nuclear 
plants in the U.S.?

A34. A determination of the time required to recycle the current and projected 
inventories of spent nuclear fuel from the existing fleet is dependent on the 
ultimate size of the separations facility or facilities required to produce 
the feedstock for fueling the fast burner reactors.  The Department is not 
currently in a position to make this determination.


Q35. Has the NRC ever licensed a fast reactor design?  What is your best 
estimate of when it could do so?

A35. NRC has previous experience in reviewing fast reactor technology, 
including both the Fast Flux Test Facility (FFTF) and the Clinch River 
Breeder Reactor.  In the case of FFTF, the NRC completed a safety evaluation 
and issued the FFTF Safety Evaluation Report.  The Clinch River Breeder 
Reactor licensing effort was almost complete at the time the project was 
terminated.  It is DOE's hope that the NRC would be ready to license an 
advance burner reactor by 2025.  


GNEP -- Reprocessing

Q36. Would existing reprocessing facilities be utilized until UREX+ 
technology is deployed?

A36. The Department has made no decisions concerning the use of existing 
facilities for demonstrating the recycling technologies and there currently 
are no plans for the U.S. to use the existing recycling facilities in the 
interim while the UREX+ technology is deployed.


Q37. Can the reprocessed material be used in the existing fleet of nuclear 
reactors or does it require a fast reactor?

A37. The uranium separated from the spent fuel could be used in fast spectrum 
reactors or re-enriched and used in light water reactors.  The transuranic 
material would not be usable as fuel for light water reactors but could be 
consumed as fuel in a fast spectrum reactor.  For this reason, the Department 
is considering a sodium-cooled fast reactor for the GNEP program.  Use of 
recycled plutonium and other transuranic elements in some existing 
commercial reactors is technically feasible but does not produce the 
environmental benefits which can be achieved through the use of fast reactors 
to consume transuranics.


Q38. According to DOE's Global Nuclear Energy Partnership proposal, the United 
States would provide nuclear fuel services to other countries including the 
return of spent fuel for reprocessing.  Where will the ultimate waste product 
be disposed?

A38. We do not envision accepting spent fuel pursuant to GNEP until there is 
sufficient advanced recycling capability available in the U.S.  At that time, 
we would have to consider the conditions under which the U.S. would reprocess 
another country's spent fuel.  It is anticipated that other countries 
resultant bi-product waste materials would be returned to the country of 
origin.  


Q39. I understand that the GNEP program anticipates use of the UREX + 
process.  What is the status of developing that process?

A39. Over the last five years, the Department has pursued development of more 
proliferation resistant separations technology.  The Uranium Extraction Plus 
(UREX+) technology has been successfully demonstrated at the "laboratory 
scale," demonstrating that uranium can be separated at a very high level of 
purity from light water reactor spent fuel.  While we have had success in 
demonstrating the technology at the "laboratory scale," a central challenge is 
demonstrating the ability to separate spent fuel at an "engineering scale," at 
those same levels of purity.  It is also necessary to demonstrate waste forms 
for the products of the UREX+ technologies. The GNEP program would enable the 
Department to accelerate the demonstration of the UREX+ technology at a 
sufficient scale to demonstrate the feasibility and performance of a full 
scale facility.  


Q40. Who is working on development of the UREX+ process in the U.S.?  In the 
world?

A40. The UREX+ process has been developed by the DOE and its national 
laboratories up to this point.  This technology was chosen because of the 
purity with which we have been able to separate constitutents of spent fuel 
at the "laboratory scale" level and because many of its process steps are 
similar to well demonstrated processes, further increasing the probability 
of success at the "engineering scale."  Other countries such as France, 
Japan and Russia are working on similar processes.


Q41. What is your best estimate of how much it will cost to take the UREX+ 
process from where it is today to deployment?  What is your best estimate of 
how long that development will take?

A41. DOE has previously estimated that it would require between $700 million 
and $1.5 billion to bring the UREX+ demonstration facility to the stage of 
initial operation.  The Department has set a goal of facility start-up between 
2011 and 2015.  The Department would need several years of experience 
operating the facility in parallel with the design of a commercial-scale 
facility.  It is anticipated that commercial-scale operations could begin 
over the next twenty years. 


Q42. What is your best estimate for the cost of a commercial UREX+ facility?  
Do you expect that reprocessing plants will be commercial, profit-making 
enterprises?  If so, what is the basis for that assumption?  Are any of the 
existing foreign reprocessing facilities profitable?

A42. An engineering scale demonstration of the spent fuel separations process 
is expected to provide a significant amount of information that could be used 
to estimate the cost of a commercial UREX+ facility and the potential for 
establishing a profitable enterprise.  The profitability of foreign facilities 
is difficult to assess but we believe that France and the United Kingdom have 
demonstrated profitable operations, using the potentially more expensive 
PUREX process.  We are making the economics of spent fuel processing one of 
the major focal points of our development program.


Q43. How many UREX+ facilities are envisioned under the GNEP program?

A43. During the technology demonstration phase of GNEP, a single spent fuel 
separations facility is required to demonstrate the technical feasibility for 
scaling up the technology to a commercial scale.  The number of commercial 
spent fuel separations facilities ultimately needed would be contingent upon 
several factors including the rate of spent fuel generation, the existing 
inventory of spent fuel at the time a decision is made to commercially recycle 
spent fuel, and the size of the separations facility.


Q44. Given this number of UREX+ facilities, how long will it take to reprocess 
all of the spent fuel from the existing U.S. fleet of nuclear plants?

A44. A determination of the time required to recycle the current and projected 
inventories of spent nuclear fuel from the existing fleet is dependent on the 
ultimate size of the commercial facility or facilities deployed.  The 
Department is not currently in a position to make this determination.


NGNP

Q45. In accordance with the President's decisions to strive for a hydrogen 
economy and to further nuclear power, the EPAct 2005 authorized an aggressive 
project to demonstrate the use of nuclear energy to generate hydrogen.  This 
project was authorized for $1.25 billion for fiscal year 2006-2015. 
Considering the important role of this project in demonstrating emission-free 
energy production, why is the budget request merely $23 million for FY '07?

A45. The funding requested for FY 2007 is the level needed to continue the 
progress necessary to inform a decision in 2011 on whether to proceed with the 
construction of the Next Generation Nuclear Plant (NGNP) as required by 
EPACT.  With these funds, the Department will continue the graphite particle 
fuels development effort, which is on critical path for determining the 
feasibility of the technology.  In FY 2007, we will also continue irradiation 
testing of the fuel and begin preparation for post-irradiation examination of 
the fuel.  


University Assistance

Q46. FY 2006 appropriations included $27 million for a program called 
University Reactor Infrastructure and Education Assistance.  This program is 
intended to address the increasing shortage of graduates in nuclear-related 
fields by improving reactor facilities and providing fellowships and 
scholarships to attract students.  This year, the DOE budget declared victory 
and eliminated the program because enrollments have increased.

However, the number of graduates is still flat and less than 500 per year.  
Considering that the Nuclear Regulatory Commission alone will hire 350 
personnel next year for the next several years, what action is DOE taking to 
ensure that our universities will be able to produce the graduates needed to 
power the rebirth of nuclear energy, including the Global Nuclear Energy 
Partnership?

A46. The Department will continue its efforts to attract and prepare nuclear 
engineering students for careers in advanced fuel cycle technologies and 
related disciplines by continuing the Advanced Fuel Cycle Fellowship Program.  
Through the Nuclear Energy Research Initiative, the Department will continue 
to sponsor university-conducted research and development associated with the 
Advanced Fuel Cycle Initiative, Generation IV program, and the Nuclear 
Hydrogen Initiative.  On an annual basis, the Department solicits proposals 
and awards grants for university-led research projects that support the goals 
and objectives of the AFCI, Generation IV and Nuclear Hydrogen programs.   
University participation in our research is important to strengthening nuclear 
engineering education infrastructure in the U.S. and to enabling the 
Department to accomplish its goals and objectives with respect to developing 
advanced nuclear reactor and fuel cycle technologies.  

In addition, the contractor organizations that operate DOE's national 
laboratories are also strong supporters of nuclear engineering education in 
the U.S.  Several of the national laboratories specifically support nuclear 
engineering education on advanced fuel cycles through joint appointments, 
sabbaticals and internships that enable students to obtain practical 
experience with fuel cycle technologies in a national laboratory setting.  
For example, last year the University of Chicago, which manages and operates 
Argonne National Laboratory established and funded an initiative with the 
University of Wisconsin to enable nuclear engineering students to obtain 
practical experience with nuclear fuel cycle technology through short-term 
internships at the laboratory.  Batelle Energy Alliance, which manages and 
operates the Idaho National Laboratory, has similar efforts underway to 
involve the three Idaho state universities (University of Idaho, Idaho State 
University, and Boise State University) and a consortium of five other nuclear 
engineering programs across the country in the work of the laboratory and to 
provide educational opportunities for students.  Many of the Department's 
national laboratories sponsor summer internships for engineering students. 


Q47. EPAct 2005 Section 1405 gives the Secretary certain obligations for the 
National Priority Project Designation. We understand that DOE has not met its 
deadline for promulgating guidance for implementation of the National Priority 
Project award, which would recognize large renewable energy projects. What is 
the status of implementation of this the National Priority Project provisions 
of EPAct 2005? Does the Department have an estimate for when it will be 
promulgating guidelines to implement this provision of the EPAct 2005?

A47. EPACT section 1405 places authority with the Secretary of Energy to 
establish a Presidential Awards program to advance the field of renewable 
energy technology and contribute to North American energy independence through 
the designation of National Priority Projects that promote the recognition of 
large wind, biomass, solar, photovoltaic, fuel cell, and energy-efficient 
building projects. The Department's General Counsel is currently reviewing 
the relevant provisions, including Section (a) Designation of National 
Priority Projects; Section (c) Selection Criteria; and Section (e) 
Certification. Once the review is complete, the Department will establish a 
path forward.


                   QUESTION FROM CONGRESSMAN STEARNS

New Nuclear Plants

Q1. Last year's energy bill established numerous incentives for the 
construction of new nuclear plants.  The Treasury Department is currently 
developing regulations on how a production tax credit will work.  Is the 
Department of Energy working the Treasury to develop these regulations, and 
are both agencies consulting with industry on what is needed in the credit to 
achieve Congress's intent:  as many new nuclear plants as possible?

A1. The Department of Energy (DOE) is supporting the Treasury Department in 
its development of the regulations to allocate the production tax credit.  The 
Treasury Department has published an Advance Notice in the Internal Revenue 
Bulletin setting forth interim guidance pending issuance of the regulations.  
Since the Energy Policy Act of 2005 limits the total tax credit to a total 
capacity of 6,000 megawatts nationally, the interim guidance provides a 
process for allocating the tax credit among those new plants that begin 
construction by 2014.  In addition, the Notice states that applications for 
the tax credit must be filed with the DOE.  The DOE must then certify that the 
applicant's technology is an advanced nuclear facility, in order to qualify 
for the production tax credit.  


QUESTIONS FROM CONGRESSMAN GILLMOR

Q1. I understand that DOE has funded an environmental clean up project at the 
former Lockbourne Air Force Base in Columbus, Ohio.  Is this the case?  What 
oversight measures do the Department's Office of Environmental Management 
and Office of Environment, Health, and Safety undertake on contracts issued 
by the Department pertaining to activities in their area?

A1. No, in fact, the Department of Energy (DOE) has not funded an 
environmental cleanup project at the former Lockbourne Air Force Base in 
Columbus, Ohio.   However, there is a U.S. Army Corps of Engineers project 
for clean up at the former air base.

Regarding the DOE's oversight policies, DOE Policy 226.1, Department of 
Energy Oversight Policy, establishes a DOE-wide oversight process to protect 
the public, workers, environment, and national security assets, to ensure 
compliance with all Federal, State and local statutes and regulations and DOE 
Headquarters and site requirements.  It covers such operational aspects as 
environment, safety, and health; safeguards and security; cyber security; 
emergency management; and business operations (project management, 
contract administration, financial management).  As defined in the Policy, DOE 
oversight encompasses activities performed by DOE organizations to determine 
the effectiveness of Federal and contractor programs and management systems, 
including assurance and oversight systems.  Oversight programs include 
operational awareness activities, on-site reviews, assessments, 
self-assessments, performance evaluations, and other activities that involve 
evaluation of contractor organizations and Federal organizations that operate 
Federal government-owned sites.

DOE's assurance systems and oversight programs include four essential 
elements:
 a comprehensive and rigorous assurance system at all sites 
implemented by the contractor and Federal organizations that manage 
or operate on a DOE site;
 DOE field element line management oversight processes, such as 
inspections, reviews, surveillances, surveys, operational awareness, 
and walkthroughs, that evaluate programs and management systems 
and the validity of the site assurance system;
 DOE Headquarters line management oversight processes that are 
focused on the DOE field elements and also look at contractor 
activities to evaluate the implementation and effectiveness of field 
element line management oversight; and 
 independent oversight processes that are performed by DOE 
organizations that do not have line management responsibility for the 
management of the activity and thus provide an independent 
perspective for senior management on the effectiveness of programs 
and activities at all organizational levels (Headquarters, field, and 
contractor).


Q2. If DOE terminates a contract because it does not consider it cost 
effective, is there monitoring of future contracts to insure that either 
entities related to or entities deploying the same technology application as 
one that has been rejected by the Department are prevented from filing for or 
being awarded a DOE contract?  Does DOE coordinate with the U.S. Army Corps 
of Engineers or the U.S. Environmental Protection Agency to ensure there is 
not a circumvention of Federal contracting procedures for environmental 
remediation projects?

A2. Contract termination does not necessarily preclude an entity from 
receiving a future contract award.  The Department of Energy (DOE) would 
consider the circumstances that led to the termination.  For example, a 
contract may be terminated for reasons that are not the fault of the 
contractor, such as changes in Federal or state environmental regulations.  
On the other hand, if a contract was terminated because of an entity's 
failure to meet its contractual obligations (for example, an inability to 
control costs), the termination could adversely impact the entity's chances 
for future contract awards.  

Contractual Statements of Work are routinely reviewed to determine whether 
the scope of work duplicates an existing contract.  Prior to awarding a 
contract for a technology that may have previously been unsuccessful, DOE 
would review the current proposed approach and assess its probability of 
success.  If the new approach appears to resolve the technical issues that 
led to a prior failure, the DOE may go forward with a new award.  

DOE considers contractor past performance as a factor in all of its 
procurement decisions. Information on a contractor's past performance, 
including contract termination, is recorded in the Past Performance 
Information Retrieval System, a web-enabled, Federal government-wide computer 
database that DOE uses to check a contractor's performance history.  An 
entity that did not perform successfully on a prior contract would be 
ineligible for consideration of a future award if the entity is suspended, 
debarred, or proposed for debarment.  (Individuals and companies are 
typically debarred or suspended for reasons of gross negligence or 
misconduct, often involving ethical violations, or failure to 
follow certain statutory requirements.) 

Unless the U.S. Environmental Protection Agency or the U. S. Army Corps of 
Engineers is provided as a reference for past performance information on a 
competitively awarded contract, the DOE does not routinely consult with them 
regarding procurement procedures.


Q3. Does DOE have a procedure in place by which DOE reviews contracts issued 
as a Research and Development (R&D) project to ensure that R&D efforts are 
not being used to circumvent a process that would ordinarily result in a 
contract being awarded through an open for fair and open bidding process?	 

A3. Contract and financial assistance awards, including those for research 
and development (R&D) projects, are made in compliance with all applicable 
statutory and regulatory requirements, including the Competition in 
Contracting Act of 1984 and the Department of Energy Financial Assistance 
Regulation.  This means that a competitive process is utilized to make such 
awards, unless an exception to competition is documented, justified and 
approved, consistent with regulatory requirements.

Consistent with these laws and regulations, a research and development project 
may also be assigned to a DOE management and operating contractor for 
performance, provided the project falls within the contract's scope of work.  
While in that case there is no requirement for competition, the Department 
often solicits and evaluates proposals for the research and development work 
from more than one laboratory or site before deciding which DOE contractor 
will be assigned the R&D project.


Q4. What is the status of DOE activities at the Miamisburg Mound site and in 
particular the OU-1 property?  How is DOE using Federal funds at this site? 
Is any Federal money being used to support public outreach efforts at this 
site and, if so, how much and what activities and dates have these outreach 
efforts occurred?

A4. The Department of Energy (DOE) is using Federal funds to achieve cleanup 
of the Mound Site in 2006.  The CH2MHill contract currently reflects a 
completion target in September 2006; work remaining includes: remediation of 
newly identified low-level waste soil volumes, decontamination in T building, 
and backfilling and re-contouring previously cleaned areas.  
          
The Conference Report (109-275) accompanying the Energy and Water 
Development Appropriations Act, for Fiscal Year 2006 (P.L. 109-103), 
directed the DOE to work with the Miamisburg Mound Community 
Improvement Corporation (MMCIC) to develop a mutually agreed upon 
remedy for the Operable Unit (OU)-1 landfill and appropriated $30 million to 
conduct the additional remedial work at OU-1.  This congressional direction to 
remediate the OU-1 landfill represents a significant increase in work.  
Therefore, current plans are to manage the OU-1 work as a distinct project.  
Every effort will be made to achieve the remediation in parallel with 
CH2MHill's efforts to complete the balance of site cleanup.  To cost-
effectively implement this work, a small share of the work scope, and 
corresponding funds currently under contract to CH2MHill (the rail spur and 
waste staging area) will be transferred into the new contract for the OU-1 work.  These changes will not adversely impact CH2MHill's ability to 
complete the previously planned Mound cleanup project on schedule. 

DOE developed a Project Team (Team) consisting of representatives from the 
MMCIC, the City of Miamisburg, the U. S. Environmental Protection Agency 
(EPA), and the Ohio Environmental Protection Agency (OEPA).  The Team 
has been meeting weekly over the past few months to: 1) perform additional 
assessments of available information to better define the nature and extent of 
contaminants within the OU-1 area; 2) establish removal priorities for the 
waste types believed present; 3) evaluate various excavation strategies to 
target priority wastes; and 4) agree on the regulatory approach to ensure 
adequate EPA and OEPA oversight during remedy implementation.  DOE and MMCIC 
have reached general agreement on a remedial approach for OU-1.  DOE is 
preparing to hold a public meeting to discuss the proposed cleanup plan and 
initiate a formal 30-day public comment period (during the month of May). 

In addition to the OU-1 activities, the DOE participates in monthly meetings of the Mound Reuse Committee (MRC), which consists of a variety of community 
leaders/representatives and is chaired by the city manager, to answer 
questions and provide updates on the status of cleanup activities at the 
site.  As a closure site with the majority of cleanup work winding down, 
the monthly meetings with the MRC constitute the principal forum for public 
outreach at this time and requires minimal (approximately $1000.00/month) 
DOE and contractor resources.


Q5. What is the status of the project as well as DOE's efforts with regard 
to the Moab Uranium Mill Tailings Site (Moab site), Grand County, Utah?

A5. On August 25, 2005, the Department of Energy (DOE) approved the mission 
need (Critical Decision (CD) 0) for the Uranium Mill Tailings Remedial Action 
Project at Moab, Utah.  DOE has since developed an Acquisition Strategy, 
which details the project schedule, major work activities, estimated annual 
expenditures for the life-cycle of the project, and the various acquisition 
alternatives.  DOE expects to approve the preliminary baseline/proposed work 
plan (CD-1) in May.  Once approved, we will conduct a competitive 
procurement to procure contractor(s) who will be responsible for developing a 
project baseline and cost estimate that can be validated and approved by the 
DOE, as part of the CD-2 decision process.  

In the meantime, we are continuing with interim remedial soils and 
groundwater actions, which include dust control measures, groundwater 
cleanup, sampling and monitoring at the site, soil characterization, and 
environmental air monitoring.  In addition, contaminated soils from the former 
uranium mill site area have been remediated, resulting in a cumulative 
reduction of the contaminated area footprint by a total of 40 acres. 
Additional soil remediation adjacent to the site is planned later this year.  
Field characterization efforts at the Crescent Junction disposal site have 
also been completed to support preparation of the Remedial Action Plan for 
submittal to the U.S. Nuclear Regulatory Commission.


Q6. What is the status of the project and site as well as DOE's efforts 
with regard to the Santa Susana Field Laboratory?  Does DOE have any future 
plans for work at SSFL?

A6. The Department of Energy (DOE) has not conducted any research at the 
Santa Susana Field Laboratory (SSFL), owned by Boeing Corporation, since 
1996, and has no plans for any future research or other type of activities. 
The DOE's involvement at the SSFL is confined to the former Energy Technology 
Engineering Center (ETEC).  ETEC is comprised of a few buildings on land 
owned by the Boeing Corporation within the 2,900 acre SSFL.   DOE 
remediation and cleanup activities at ETEC are divided into two areas: the 
decontamination and demolition (D&D) of contaminated buildings and 
associated systems, and the cleanup of contaminated soils and ground water 
pursuant to the Resource Conservation and Recovery Act (RCRA) corrective 
action process.  The D&D effort is nearly complete, with two radiological 
facilities and two sodium facilities remaining to be completed.  The RCRA 
corrective action process for soils and ground water is in the late 
characterization phase.  The remediation activities, under the regulatory 
oversight of the California Department of Substances Control, are ongoing, and 
DOE is using its best efforts to complete the ETEC cleanup in 2009.


QUESTIONS FROM CONGRESSMAN BURGESS

Oil recovery

Q1. One of the best ways to decrease our dependence on foreign sources of oil 
is to make the most of our domestic oil resources we do have. Enhanced oil 
recovery through CO2 injection is one way to get more oil out of the same 
well.  According to recent DOE oil and gas research, CO2 injection for 
enhanced oil recovery could add 89 billion new barrels to the recoverable oil 
resources of the United States.  That's nearly a 400% increase from current 
proved reserves using current technology.  If multiple advances are made in 
technology and the availability of carbon dioxide, we could eventually add as 
much as 430 billion new barrels to the technically recoverable reserves.  That 
would put us ahead of Saudi Arabia's reserve count.  Yet, in your budget 
proposal, you are terminating the petroleum-Oil and Natural Gas technologies 
programs that would have helped us develop the technologies necessary to 
realize these reserves.  Why doesn't the Administration think that this 
research is necessary any longer?  Isn't it true that the increase will occur 
in fields and wells that are owned by independent operators that have not 
necessarily made the phenomenal profits we witnessed last year? 

A1. Oil and gas are mature industries and both have every incentive, 
particularly at today's prices, to enhance production and continue research 
and development of technologies on their own. In particular, enhanced oil 
recovery is a mature, commercially deployed technology receiving funding 
from the private sector for evolutionary advances and incremental 
improvements. There is no need for taxpayers to subsidize oil companies in 
these efforts.  The Administration's Research and Development Investment 
Criteria direct programs to avoid duplicating research in areas that are 
receiving funding from the private sector, especially for evolutionary 
advances and incremental improvements.  

Private control of intellectual property provides a market incentive for the 
private sector to invest in R&D and advance technology. Although independent 
operators may not fund technology development directly, the service industry 
that supplies them with equipment funds significant development of 
technologies with application to independent operators.  The Department 
expects the service industry to continue to provide technological innovations 
for use by major and independent producers.

The 2007 Budget does provide funding for achieving long-term carbon storage 
through a variety of methods, including in conjunction with enhanced oil 
recovery, as a means to reduce emissions of greenhouse gases. This R&D is 
consistent with the R&D Investment Criteria because there is currently not a 
market incentive for ensuring long-term storage of carbon.

Oil and gas companies have generally done well financially as a result of high 
worldwide oil and gas prices.  For example, the International Petroleum 
Finance index of oil company shares rose a collective 15.7% in 2005, following 
an increase of 21.5% in 2004.  Share gains in 2005 for independent oil 
producers were generally higher than those for the majors.

While not part of the Fossil Energy budget, The 2007 Budget's proposals to 
expand access to oil and gas resources, streamline permitting processes, and 
make the R&D investment tax credit permanent will leverage private sector 
ingenuity and are better ways to increase domestic production of oil and gas 
than federally funded R&D. The President's goal of reducing dependence on 
foreign sources of oil will also be addressed by the Advanced Energy 
Initiative proposed in the budget including advancements in cellulosic 
ethanol, battery technology, and hydrogen, among others, some of which is 
included in the Fossil Energy budget.


Price gouging

Q2. In the GAS Act, the House included provisions that would outlaw price 
gouging on gasoline. My understanding is that the Department of Energy 
collected information about reported price gouging following Hurricanes 
Katrina and Rita. Can you please share this information with the Committee?

A2. The Department collects information from consumers via the Gas Price Watch 
(GPW) Hotline operation.  The methods used to gather the information include 
an Internet web form (http://gaswatch.energy.gov/) and phone bank operations 
(1-800-244-3301).  Consumer information is stored in a data base from which a 
report by State is generated and distributed on a weekly basis.  Electronic 
copies of the report are distributed to the Federal Trade Commission, US 
Department of Justice and also to each State Attorneys General Office for 
investigation and prosecution where appropriate.  Information collected by the 
GPW operation for the period of Hurricanes Katrina and Rita (August thru 
December 2005) was voluminous and included 32,123 responses.  In 
September, 2005 alone there were 22,629 consumer complaints reported.  This 
large volume of information has been made available to you on the web at 
http://gaswatch.energy.gov/reports.html .  


Oil and Gas

Q3. I would also like for the Department to provide an update on the 
implementation of the Ultra-Deepwater and Unconventional Natural Gas 
program that was created by the EPAct 2005.

A3. The Department is complying, and will continue to comply with, the Energy 
Policy Act.  In compliance with the Energy Policy Act, on November 4, 2005, 
the Department issued a solicitation for administration of the Ultra-Deepwater 
and Unconventional Natural Gas and Other Petroleum Research and 
Development Program.  The solicitation closed on February 2, 2006, and the 
Department has completed its review and made a selection of the consortium in 
May 2006, as required by the Energy Policy Act. 

On April 27, 2006, Secretary Bodman transmitted to the House and Senate a 
legislative proposal to repeal the program. Oil and gas are mature industries 
and both have every incentive, particularly at today's prices, to enhance 
production and continue research and development of technologies on their 
own. There is no need for taxpayers to subsidize oil companies in these efforts.
	

QUESTIONS FROM REPRESENTATIVE DINGELL

Q1. Please provide a legal memorandum indicating what authority, if any, the 
Department has under the Nuclear Waste Policy Act, the Atomic Energy Act, or 
any other law, to store high-level radioactive waste and spent nuclear fuel on 
an interim basis?

A1. Prior to the enactment of the Nuclear Waste Policy Act of 1982 (NWPA) DOE 
had authority and continues to have authority, to accept spent nuclear fuel 
(SNF) in certain circumstances.  Section 55 of the Atomic Energy Act of 1954, 
as amended, (AEA) (42 U.S.C. 2075), provides that "DOE is authorized to the 
extent it deems necessary to effectuate the provisions of [the Act] to 
purchase, ... take, requisition, condemn or otherwise acquire any special 
nuclear material or any interest therein."  The authority under the AEA may 
be exercised to further any of its purposes including international 
cooperation and nuclear nonproliferation, support of research and development 
in nuclear power, and management of the U.S. nuclear defense programs.  42 
U.S.C. 2111, 2112, 2013, 2051(a), and 2152.  

Pursuant to this AEA authority, the Department has accepted and stored U.S. 
supplied foreign reactor fuel at various DOE sites.  DOE has also used this 
authority to accept for research and development purposes small amounts of 
spent nuclear fuel such as parts of the Three Mile Island melted reactor core 
and other damaged SNF.  DOE also has accepted commercial spent fuel under 
contracts that pre-date enactment of the Nuclear Waste Policy Act of 1982 
(NWPA or the Act).

With enactment of the NWPA, Congress provided a detailed statutory scheme 
for commercial SNF storage and disposal that, by its specificity, severely 
limited the Department's commercial SNF storage and disposal options.  The 
NWPA did not affect the Department's authority to accept spent fuel not 
covered by the Standard Contract mandated by the NWPA.  However, the 
NWPA limits DOE's authority under the AEA to accept SNF from commercial 
reactors subject to the Standard Contract to the situations specified in the 
NWPA and, in very limited circumstances, to specific research and 
development activities that further the goals of the NWPA. 42 U.S.C.10199.  
The NWPA, in sections 111(a)(5)  and 302(a)(4), states that SNF generators 
should pay for the ultimate disposal of their waste, including the interim 
storage of that waste until such time that the DOE accepts it for disposal.  
42 U.S.C. 10131 (a)(5); 42 U.S.C. 10222(a)(4).

Consistent with this more limited authorization, the NWPA permits the 
Department to pay for interim storage in two distinct instances.  Section 
135 of the Act authorized the Department to enter into contracts to assist 
or provide temporary storage of small amounts of SNF until a repository was 
available.  This authority expired in 1990. Section 141 of the Act authorizes 
the Department to site, construct and operate a Monitored Retrievable Storage 
(MRS) facility, but restricts DOE's ability to pursue this option by linking 
any activity under this section to almost unattainable milestones. 42 U.S.C. 
10155-10157.  For example, before the MRS can be constructed, the Nuclear 
Regulatory Commission must have issued a construction authorization license 
for the main repository; until the main repository starts accepting SNF, the 
quantity of spent fuel stored at the MRS site cannot exceed 10,000 MTUs; after 
the main repository starts accepting SNF, the total quantity of SNF at the MRS 
site cannot exceed 15,000 MTUs at any one time, and the MRS cannot be 
located in Nevada.  

In a 1989 report to Congress regarding dry cask storage, the Department 
concluded that the Nuclear Waste Fund was not legally available to pay for on-
site storage.  That study further concluded that the Fund should not be made 
available "as a means of providing direct assistance to utilities in their 
at-reactor storage activities." See Final Version Dry Cask Storage Study at 
I-110  (U.S. Dept. of Energy, February 1989). 

In 1994, a Notice of Inquiry on Waste Acceptance Issues (NOI) issued by the 
Department sought public comment on, among other issues, whether DOE had 
statutory authority under the NWPA to provide interim storage of SNF.  59 FR 
27007 (1994).  In the subsequent 1995 Final Report responding to public 
comments, the Department determined again that the NWPA explicitly 
contemplated interim storage in only two instances:  interim storage under 
section 135 of the Act and monitored retrievable storage under section 142 of 
the Act.  Final Interpretation of Nuclear Waste Acceptance Issues, 60 FR 21793 
(1995).  However, the Report also noted that the interim storage provision had 
expired and the MRS provisions were unusable because of the required linkages 
to repository development.  The Report concluded that because neither of the 
NWPA's explicit interim storage authorities applied and because the NWF 
statutory uses precluded the Secretary from spending NWF monies for 
construction or expansion of a facility without express authorization from 
Congress, the Department lacked authority to provide interim storage under 
existing law.  Specifically, the report stated:

Interim storage by DOE was contemplated by the Act in only two 
situations, neither of which currently applies.  Under the Act, DOE had 
authority to offer a limited interim storage option.  See 42 U.S.C. 10156.  
However, that authority has, by its express terms, expired.  Under the Act, 
DOE also has the authority to provide for interim storage in an MRS.  That 
authority is also inapplicable, however, because the Act ties construction of 
an MRS to the schedule for development of a repository.  See 42 U.S.C. 
10165, 10168.  Because these are the only interim storage authorities 
provided by the Act, and because the Act expressly forbids use of the 
Nuclear Waste Fund to construct or expand any facility without express 
congressional authorization (42 U.S.C. 10222(d)), DOE lacks authority 
under the Act to provide interim storage services under present 
circumstances.  60 FR 21793, 21797.     
                       
This final interpretation was later one of the issues litigated by commercial 
nuclear utilities seeking to have DOE begin taking their fuel in two cases 
filed in the U.S. Court of Appeals for the District of Columbia.  See Indiana 
Michigan Power Co. v. Department of Energy, 88 F.3d 1272 (D.C. Cir. 1996); 
and  Northern States Power Co. v. U.S., 128 F.3d 754 (D.C. Cir. 1997), cert. 
denied, 119 S. Ct. 540 (1998).   In those cases the Department again 
reiterated that it did not have authority under the NWPA to provide interim 
storage of SNF. 

In 1991, the State of Idaho filed suit against the Department challenging 
DOE's authority to ship spent nuclear fuel for storage at its Idaho facility.  
In that case, the 9th Circuit found that the Department's contract to store 
and dispose of fuel with a Colorado utility that was entered into prior to 
enactment of the NWPA was not subject to the NWPA's restrictions on the 
Department's payment of SNF storage costs.  Idaho v. Department of Energy, 
945 F.2d 295 (9th Cir. 1991.)   In other words, this case is an anomaly that 
deals with spent nuclear fuel covered by a contract with DOE that pre-dates 
the enactment of the NWPA and provides no authority for the Department to 
store utility SNF under NWPA provisions.  

In 2000, the Department settled one of the SNF cases in which the Department 
permitted a utility to offset its delay damages by taking credits against 
its future fee payments into the Nuclear Waste Fund (NWF).   Utilities not 
parties to the settlement challenged the settlement on the grounds that 
credits to fee payments were an improper use of the NWF.  That Court found 
that the Secretary's authority to use the NWF, while not limited to those 
activities explicitly set out in Section 302(d) of the NWPA (Use of the Waste 
Fund), did not authorize expenditures of  NWF monies on settlement agreements 
aimed at compensating utilities for their on-site storage costs.  Alabama 
Power v. U.S. Department of Energy 307 F.3d 1300, 1313 (11th Cir. 2002).

		
Q2. Please provide a legal memorandum addressing the question of whether or 
not the Nuclear Waste Policy Act of 1982 authorizes the Department of Energy 
(DOE) to use money in the Nuclear Waste Fund for activities in furtherance of 
the Global Nuclear Energy Partnership (GNEP).

A2. The Nuclear Waste Policy Act of 1982 authorizes the Secretary to "make 
expenditures from the Waste Fund [...] only for purposes of radioactive waste 
disposal activities [...] including: [...] any costs that may be incurred by 
the Secretary in connection with the transportation, treating, or packaging 
of spent nuclear fuel or high-level radioactive waste to be disposed of in a 
repository, to be stored in a monitored, retrievable storage site, or to be 
used in a test and evaluation facility.@ (42 U.S.C. 10222(d)).  To the extent 
that GNEP activities involve the "treating, or packaging of spent nuclear 
fuel," for disposal at Yucca Mountain, such activities would come within the 
scope of radioactive waste disposal activities within the meaning of the 
Nuclear Waste Policy Act of 1982, and thus the Nuclear Waste Fund could 
potentially be used for such activities.  Any use of the Nuclear Waste Fund 
for GNEP activities would require the approval of Congress through the 
appropriation process.


Q3. Could some of the activities DOE plans to undertake in connection with 
GNEP (such as research and development or waste treatment) also be 
characterized as integral to the Yucca Mountain repository program?  If so, 
do you believe the Waste Fund could be used to pursue such activities?

A3. As explained above in the answer to Q2, to the extent that GNEP activities 
involve the treatment or packaging of spent nuclear fuel in furtherance of its 
disposal at Yucca Mountain, the Nuclear Waste Fund potentially could be used 
for these activities.  Any proposed use of the Nuclear Waste Fund for such 
activities would require the approval of Congress through the appropriation 
process.  The Department currently has no plans to use the Waste Fund to fund 
any GNEP activities.  


                   QUESTIONS FROM CONGRESSMAN MARKEY

GNEP

Q1. How long will it take, and what will it cost to develop, deploy, and 
operate the UREX-ESD to the point of decision on whether to proceed to the 
full GNEP program?
A1. The Department would need several years of experience operating the 
technology demonstration facilities in parallel with the design of commercial-
scale facilities.  It is anticipated that commercial-scale operations could 
begin over the next twenty years.  Initial pre-conceptual estimates are that 
the cost to bring the UREX+ technology demonstration facility to the point of 
initial operation ranges from $700 million to $1.5 billion.  More detailed 
baseline cost and schedule estimates will be developed as part of the 
conceptual design and prior to a decision on whether to proceed to detailed 
design and construction.   


Q2. Assuming a positive outcome to the ESD trials, please provide an 
approximate annual top line funding profile for the GNEP from FY 07 through:
    a. the planned deployment and operation of the SRS MOX plant up to the 
point that it will exhaust the feed material coming from the Plutonium 
Disposition program;
    b. up to the point of commercial operation of the first 2000 MTHM/yr 
reprocessing plant;
    c. up to the point of the commercial operation of the first FBR engaged in 
transmutation.

A2. The Department is not currently in a position to make this determination.


Q3. Please provide a year-by-year funding profiles to completion, estimated 
Total Project Cost (TPC), planned construction start and completion dates, and 
estimated annual operating cost, for each of the following facilities 
identified in the FY 2007 DOE/NE budget request as being part of the GNEP 
program plan over the next 15 years:
      UREX + Engineering-Scale Demonstration (ESD)
      Advanced Fuel Cycle Facility (AFCF)
      Advanced Burner Reactor (ABR) prototype
      UREX + Commercial Scale Reprocessing Plant (2000 MTHM/yr)
      Idaho National Laboratory (INL) Infrastructure Support

A3. The Department is currently not in a position to make this determination. 
The preliminary, order-of-magnitude costs associated with the demonstration of 
technologies have previously been estimated to range from $3 billion to $6 
billion over the next ten years to bring those technologies to the point of 
initial operations.  


Q4. Please provide a year-by-year funding profile to completion, estimated 
Total Project Cost (TPC), planned construction start and completion dates, and 
estimated annual operating cost, for each of the following facilities 
identified in the FY2007 DOE/NE budget request as being part of the GNEP 
program plan over the next 15 years for MOX-fuel related facilities funded 
in the NNSA/Defense Nuclear Nonproliferation budget:
    A. Pit Disassembly and Conversion Facility (PDCF), Aiken, SC
    B. PDCF-MOX Waste Facility, Aiken, SC
    C. Mixed Oxide (MOX) Fuel Fabrication Plant, Aiken, SC
    D. U.S. Funding for analogous Russian MOX Facility and Fuels 
Research

A4. The plutonium disposition program and the Global Nuclear Energy 
Partnership are two separate programs.  To implement the U.S. plutonium 
disposition program, DOE will build a Pit Disassembly and Conversion Facility, 
a MOX Fuel Fabrication Facility, and a Waste Facility at the Savannah River 
Site in South Carolina.  For the Pit Disassembly and Conversion Facility, 
construction is planned to begin in 2011 and completed in 2015, with an 
estimated annual operating cost of approximately $100 million.  For the MOX 
facility, construction is planned to begin in 2006 and completed in 2014, 
with an estimated annual operating cost of approximately $100 million.  For 
the Waste Facility, construction is planned to begin in 2008 and completed 
in 2011, with an estimated annual operating cost of approximately $30 million. 
We are working to develop cost and schedule baselines for all three facilities 
that will be validated as part of the Department's critical decision process. 
As for the Russian plutonium disposition program, the United States and Russia 
currently working together to determine the technical path forward.


Q5. How many Liquid Metal Fast Burner Reactors (LMFBR) and spent fuel 
reprocessing plants, with what capacity, deployed when, would be required to 
transmute the transuranics contained in the existing backlog and projected 
discharges of spent fuel from U.S. reactors, such that the capacity of Yucca 
Mountain or a similar sized repository located elsewhere would suffice to 
dispose of all spent fuel discharges as claimed, to the end of the century?

A5. The number of spent fuel separations plants needed to process spent 
nuclear fuel depends on how many nuclear power plants are built and the size 
of the separation plants.  The current 103 operating U.S. Light Water Reactors 
(LWRs) generate about 2,000 metric tons/year of spent fuel, which is roughly 
an appropriate annual throughput for a large chemical separation plant.  Thus, 
there would be approximately one separation plant for every 100 LWRs.  One 
separations plant could be sufficient for the existing inventory under certain 
conditions.  The exact ratio of separations facilities to nuclear power plants 
depends on separations facility plant size, the operating lifetimes, and the 
number of thermal reactors and burner reactors deployed.


Q6. Based on historical costs for commercial liquid-metal breeder reactors of 
similar capacity, what would the first demonstration LMFBR be likely to cost?  
The first commercially-deployed LMFBR?

A6. DOE has estimated that it will take between $2 billion and $5 billion to 
develop an advanced fast test reactor in which to demonstrate the burning of 
transuranics and support the qualification of larger advance burner reactors.  
The Department has set a goal of developing the fast spectrum test reactor 
between 2014 and 2019.  The Department would need several years of 
experience operating the technology demonstration facilities in parallel 
with the design of commercial-scale facilities.  It is anticipated that 
commercial-scale operations could begin over the next twenty years. 


Q7. Assuming production of such reactors can be standardized, what are the 
best, worst, and most likely or expected capital cost ratios for the LMFBR 
versus conventional Generation III+ LWR designs currently in the final stages 
of licensing review by the NRC?  What are the comparable operating-cost 
ratios?  Fuel-cost ratios?

A7. The purpose of the Advanced Burner Test Reactor (ABTR) includes 
clarification and improvement of costs for future Advanced Burner Reactors.  
Such reactors may be slightly less expensive or more expensive than advanced 
LWR designs for both capital and operating costs.  The cost ratios depend on 
the reactor type as well as whether a once-through fuel cycle or a closed fuel 
cycle is adopted.  The cost of recycling must be weighed against the cost of 
the additional geologic repositories that would have to be built with the once 
through fuel cycle.  In any case, nuclear fuel cycle costs are a minor portion 
of the overall cost of nuclear energy.


Q8. What evidence do you have that demonstrates or even suggests that the GNEP 
plutonium fuel cycle (UREX + MOX fuel in LWR's followed by 
pyroprocessed MOX fuels in FBR's) with transmutation can compete 
commercially, on a fully amortized cost-per-kilowatt basis, with LEU-fueled 
LWR's on a once-through cycle?  With Integrated Gasified Coal Combined 
Cycle with Carbon Capture and Storage?  With combination of increased 
efficiency, wind, solar, and distributed co-generation?  Please provide 
references and or copies of studies that support your judgments and 
conclusions.

A8. The GNEP approach does not involve the recycle of plutonium with LWRs.  
The economics of the GNEP closed fuel cycle cannot be estimated with any 
degree of accuracy at this time, and it is one of the main purposes of the 
GNEP Technology Demonstration Program to assess the economics of the system.  
The Department believes that nuclear power is a necessity for baseload 
production of emissions-free electricity and expects that it will continue to 
be fully competitive with other electricity sources as it is today.


Q9. Which of the following countries would be treated as non-fuel cycle owning 
'client-states' of the GNEP, and which would be treated as nuclear-fuel cycle 
states considered eligible for plutonium fuel-cycle facilities, and what is 
the rationale for making each determination: South Korea, Taiwan, India, 
Japan, China, Russia, Pakistan, South Africa, Germany, Italy, Span, Brazil, 
Argentina, Israel, Iran Ukraine, China, Iran Kazakhstan, Pakistan, Finland, 
Sweden, Belgium. 

A9. GNEP's purpose is to promote nuclear energy growth worldwide using 
technologies, systems, and arrangements that reduce the risk of nuclear 
weapons proliferation.  We do not envision a formal division of "fuel-cycle" 
versus "reactor" states, but instead a partnership that includes states at 
various stages of nuclear fuel cycle development.  A principle we seek to 
advance is that states not now in possession of full scale, fully functioning 
enrichment and reprocessing programs should agree to refrain from pursuing 
those programs.  Those that do agree will be eligible for reliable fuel 
supplies and cradle-to-grave fuel services, two important incentives to 
discourage additional states from closing the fuel cycle.  While no formal 
decision has been made as to which states would qualify as fuel-cycle states, 
we expect at a minimum it would include the U.S., U.K., France, Russia, 
China, Germany, the Netherlands, and Japan. 


Q10. Which of the above named states already have nuclear cooperation 
agreements or other less formal arrangements with the United States allowing 
for the exchange of information on plutonium fuel cycles, fast reactors, 
and/or uranium enrichment, and what types of information can currently be 
shared with each state?

A10. The United States has entered into agreements for cooperation with 
Argentina, Australia, Bangladesh, Brazil, Bulgaria, Canada, China, Columbia, 
Egypt, Indonesia, Japan, Kazakhstan, the Republic of Korea, Morocco, Norway, 
Romania, South Africa, Switzerland, Thailand, Taiwan, and Ukraine.  The 
United States also engages in peaceful nuclear cooperation with Austria, 
Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, 
Germany, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the 
Netherlands, Poland, Portugal, Slovakia, Spain, Slovenia, Sweden, and the 
United Kingdom under the Agreement for Cooperation with the European 
Atomic Energy Community (EURATOM).  An agreement for cooperation is 
also proposed for India.

Under such agreements for cooperation, the United States may transfer 
information concerning the use of nuclear energy for peaceful purposes.  Such 
transfers may include information pertaining to: nuclear reactors; the use of 
nuclear material in research, medicine, agriculture and industry; nuclear fuel 
cycle studies; safeguards and physical protection of nuclear material, 
equipment, and components; health, safety, and environmental considerations; 
and assessments of the role nuclear power may play in national energy plans.  
The United States may not transfer Restricted Data and sensitive nuclear 
technology under agreements for cooperation, unless the agreement specifically 
provides for the transfer of such information.


Q11. During the hearing I asked you whether India would be allowed to become a 
part of the GNEP program and you said, "I would think that they would not." 
However, press reports have quoted you as having stated, just one week 
earlier, that "we would think India would be a perfectly good and, in fact, 
an excellent participant in the GNEP program" Which is it? Is India going to 
be allowed to participate in GNEP or not?

A11. As an advanced state with nuclear technology, India has great potential 
to contribute to GNEP.  We have discussed with India ways in which India might 
participate in GNEP.  In particular, U.S. and GNEP partners would consider 
Indian participation in activities that are made available for international 
safeguards.  


Q12. Has the President, you, or any other official of the United States 
government extended an invitation to India to join the GNEP as a "nuclear 
fuel-cycle state?" If so, under what circumstances would India be invited to 
participate? Would India be given access to UREX, pyroprocessing or other 
breeder reactor technologies that may be developed as part of GNEP?

A12. India has not been extended an invitation to join GNEP as a "nuclear 
fuel-cycle state."  We will continue to have discussions with India about how 
it might participate in GNEP on activities that are made available for 
international safeguards and that do not contribute to India's weapons 
program.  Currently, we would not be able to engage in cooperation that would 
involve India's fast reactor program, and we do not envision any future 
cooperation on reprocessing.


Indian Nationals at DOE Laboratories

Q13. Please provide a table listing how many Indian nationals have been given 
access to each of the Department's national laboratories over the last 5 
years.  Since India is a nation which is a non-signatory to the NPT and is 
known to have a nuclear weapons program, are any access or other restrictions 
placed on Indian nationals visiting the Department's national laboratories.

A13. India is included on the Department of Energy (DOE) Sensitive Countries 
List. Countries may appear on this list for national security, nuclear 
nonproliferation, or terrorism support reasons. For visit requests involving 
foreign nationals from countries on the Sensitive Countries List, particular 
consideration is given during the DOE internal review and approval process.   
The requirements that must be met for an Indian or other Sensitive Country 
national visitor include:  
      Subject matter expert reviews by security, export control, 
technology transfer, counterintelligence and intelligence (when there is an 
onsite field intelligence element);
      Indices checks by appropriate U.S. Government agencies to 
determine whether information exists on the foreign national;
      A specific security plan under which the visit will be 
conducted. The plan must address site security concerns related to the 
foreign national's visit, must include information on what physical areas 
will be accessed, and must include what information will be shared with the 
foreign national (to include information on the DOE Sensitive Subjects List); 
and
      Approval by the site/laboratory approval authority prior to 
access being granted.  The approval authority must take into consideration 
all information from the review process, including subject matter expert 
reviews, and must evaluate potential impacts on local site operations.  
Determination of access approval must ensure that any identified risk to 
the Government associated with the access granted to the foreign national 
has been appropriately evaluated and mitigated. 
I would like to provide a table for the record to show how many Indian 
nationals have been given access to each of the Department's national 
laboratories over the last 5 years. The information follows.


                                      2001     2002     2003    2004    2005
Ames Laboratory                        21       29       44      43      50
Argonne National Laboratory           346      430      471     512     534
Brookhaven National Laboratory        237      258      323     372     400
Fermi National Accelerator Laboratory  58       67       96      87      79
Idaho National Engineering Laboratory   4        4        6      10      17
Lawrence Berkeley Laboratory           35       73      123     157     208
Lawrence Livermore National 
Laboratory                             34       36       55      72      57
Los Alamos National Laboratory         15       29       39      81     163
National Energy Technology 
Laboratory                             59       47       41      29      29
National Renewable Energy 
Laboratory
                                      --         1       13      42      42
Oak Ridge National Laboratory
                                     111       134      152     202     221
Pacific Northwest National Laboratory 51        45       79     109     104
Princeton Plasma Physics Laboratory   --        --        1       2       3
Sandia National Laboratories, 
Albuquerque                            8        28       32       9      43
Sandia National Laboratories, 
Livermore, CA                         12        26       21      28      19
Stanford Linear Accelerator Center     1         1       33      77      91
Thomas Jefferson National Accelerator 
Facility                               1         1       17      15      17
     Total                           993     1,209    1,546   1,847   2,077



GNEP

Q15. In light of the U.S. government's obligation under Article 1 of the 
Nuclear Nonproliferation Treaty "not in any way to assist, encourage or 
induce any non-nuclear-weapon state to manufacture or otherwise acquire 
nuclear weapons," India's refusal to place its fast reactors, other reactors, 
and sensitive nuclear fuel-cycle facilities under IAEA peaceful uses, please 
explain how India, a "non-nuclear weapon state" for the purposes of the NPT, 
could participate in nuclear technology sharing under the GNEP without the US 
violating its Article I NPT obligation?

A15. While we are prepared to discuss ways in which India might participate in 
GNEP, it is clear that India could only participate in those areas that have 
been declared as civil and placed under international safeguards.  The purpose 
of safeguards is to ensure that peaceful nuclear transfers are not diverted to 
India's weapons program.  In this way, such transfers from GNEP partners to 
India would be in accordance with U.S. law, treaty obligations, and policies. 
We currently would not be able to engage in cooperation and technology sharing 
related to India's fast reactor program as long as it is not part of the civil 
program, and do not envision any future cooperation on reprocessing.


Q16. During the hearing you indicated that you were not at all troubled by the 
fact that the recently signed U.S.-Indian nuclear deal would exclude India's 
existing fast reactors from safeguards, and allow India to exclude future fast 
reactors from safeguards.  If India's existing fast reactors are excluded from 
safeguards, how many bombs worth of material could they produce annually?

A16. India does not currently have any fast reactors that produce more 
plutonium than they consume.  India's only existing fast reactor-- the Fast 
Breeder Test Reactor (FBTR) -- consumes more fissile material than it produces 
and, over time, reduces India's overall stockpile of plutonium.  Although 
India has used weapon-grade plutonium to fuel the FBTR core in the past, this 
type of reactor also offers the possibility of burning reactor-grade plutonium 
in the core to produce a small amount of weapon-grade plutonium annually, 
though not enough for a single weapon.  


Q17. During the hearing I asked you whether the Department has approved any 
Part 810 nuclear technology transfer to India since the President's July 18, 
2005 announcement, and you indicated you had not. I also asked whether there 
were any pending requests before the Department for approval of such transfers 
and you indicated you would supply this information for the Record.  Please 
provide this information now.

A17. No.  Since the July 18, 2005 Presidential announcement, the Department 
has received no requests for nuclear technology transfers to India requiring 
authorizations under 10 CFR Part 810.  


Q18. During the hearing I noted that "a recent scientific analysis has 
concluded that the UREX separated product (in this instance comprised of 
plutonium plus neptunium, curium, and americium) has a radiation dose rate 
three orders of magnitude lower than the IAEA threshold for self-protection." 
I then asked you whether you would "agree that a material that is three orders 
of magnitude below the IAEA levels isn't really self protected?" You answered 
with a simple "No," but declined to offer any evidence or argument in support 
of your position. Please explain the technical or other basis for your answer?

A18. Physical protection measures, including radiation barriers, are designed 
to address one aspect of the proliferation problem by preventing unauthorized 
theft or diversion, whether criminal organizations, terrorists, or others. 
But the proliferation resistance of any fuel cycle depends on many additional 
factors, including international safeguards to detect and deter diversion and 
the structure of international cooperation and export control arrangements 
that take into account such factors as the nonproliferation record of the 
countries hosting sensitive nuclear facilities and regional stability. 

GNEP aims to develop and demonstrate technologies that are more 
proliferation-resistant and therefore advance nonproliferation goals, but this 
concept needs to be viewed broadly.  The GNEP model works because only the 
supplier states will be engaged in the recycling of spent fuel. These are 
states with strong non-proliferation records, already possess advanced nuclear 
technology, and in most cases, are nuclear weapons states. 

The plutonium mix from UREX+ would not meet the self-protection standard 
of spent fuel and, therefore, the physical protection measures and safeguards 
associated with the process will need to be stringent.  Nonetheless, the 
material would be significantly more difficult to handle than separated 
plutonium and mixed oxide fuel which are already the global norm for 
commercial recycled fuel.  Therefore UREX+ represents a significant 
improvement over current separations technology.

One of the principal objectives of GNEP is to develop successor technologies 
to those in commercial use today.  These technologies would be more 
proliferation resistant and more robust, by design, from a physical protection 
standpoint, and would employ advanced international safeguards.  These 
processes will be under IAEA verification auspices.  GNEP will also consider a 
variety of recycling approaches, beginning with the one that is most mature, 
UREX+. 


Q19. I also noted that someone in your position would likely be aware of the 
fact that the critical masses of the transuaranic elements separated together 
with plutonium in the UREX process are large(r) than plutonium, an excellent 
nuclear weapons materials, but smaller than U-235, also an excellent nuclear 
weapons material? So from a critical mass perspective, I noted that it was my 
understanding that the UREX product is intermediate between these two 
excellent nuclear weapons materials, and therefore potentially usable in 
weapons. I asked you to explain how this mixture could be considered as 
affording increased proliferation resistance.  You replied, "it is my position 
that the use of the output of the UREX process is not useful to making a 
nuclear weapon." I recognize this may be your position, but I am wondering 
whether it is supported by nuclear weapons experts at the DOE laboratories and 
independent scientists and experts.  Please provide the technical basis for 
your position on this important issue for the record, and inform the committee 
whether there are different views regarding this issue among experts at the 
DOE laboratories, and what the substance of those differing views are. 

A19. Your question about the relative attractiveness of different nuclear 
materials for nuclear weapons use requires a classified answer.   Basically, 
UREX+ has multiple intrinsic and extrinsic features that will be engineered in 
to maintain proliferation resistance of the process.  The classified response 
can be provided through the appropriate channels. 


Q20. To achieve the reductions in the volume and heat loading of nuclear waste 
requiring long-term isolation in a permanent repository, I'm informed that 
you're going to need a lot more than your requested UREX-plus demonstration 
plant. In fact, to credibly deliver on its forecast benefit for waste 
management, it has been estimated that your GNEP program would require the 
next 100 or more new commercial reactors worldwide to be fast reactors. In the 
United States alone this adds an extra 80 billion (dollars) to 100 billion 
(dollars) requirement for 20 to 25 fast reactors just to transmute the fuel 
discharge from existing U.S. power reactors. Globally this would hundreds to 
billions or trillions of dollars to the cost of nuclear generated electricity.

In reply, you stated that you disagreed with my statement, but again offered 
no evidence or argument to support your answer. Since you disagreed with the 
estimated requirements that I suggested would need to be met in order to 
credibly transmute the fuel discharged from existing U.S. power reactors, 
please provide your own estimate of the number, capacity, and cost of US fast 
reactors, MOX thermal reactors, and reprocessing plants required to ensure 
that a single repository the size of Yucca Mountain would suffice, as 
advertised, until the year 2100? Please identify the major analytical 
assumptions that enter into your estimate.

A20. In order to eliminate the transuranic elements (that dominate long term 
heat load, toxicity, and dose) created during LWR fuel irradiation three 
technologies are needed: (1) an advanced separations technology such as UREX+ 
technology that can separate the various constituents of the irradiated fuel, 
(2) fast reactors, that can eliminate transuranic elements through the fission 
process, and (3) fast reactor fuel cycle technologies that will put these 
elements into a form suitable for irradiation in fast reactors.  In order to 
consume the transuranic elements produced by the current reactors operating in 
the U.S., approximately 30GWe of installed fast reactor capability would be 
needed (i.e., one advanced burner reactor would be required for every four to 
ten light-water commercial power reactors). 

Early, pre-conceptual order-of-magnitude estimates of the cost to bring these 
three integrated recycle demonstration facilities to the point of initial 
operation range from $3 billion to $6 billion. While more accurate estimates 
of cost of commercial scale facilities will be developed as the technology 
matures and the demonstrations are conducted, a key objective of the GNEP 
technology demonstration is to reduce the future cost of commercial scale 
facilities. 


Q21. Under the GNEP rubric, DOE is also seeking to advance a possible 
follow-on reprocessing technology, called "pyro-processing," for extracting 
plutonium from the future advanced burner reactor's fuel elements.  This 
process would result in a highly radioactive byproduct of fission -- Ce-144 
-- remaining in the separated transuranic product stream containing the 
plutonium in metallic form (i.e. one step closer to weapons).  But Ce-144 
has a radioactive "half-life" of only 0.8 years, and will have decayed away 
to insignificance for "self-protection" purposes by the time the advanced 
burner reactor fuel is reprocessed.  In light of this fact, why do you 
consider pyro-processing as offering meaningfully enhanced "proliferation 
resistance?

A21. In contrast to current international practice with the PUREX process, 
GNEP recycling would keep several transuranic elements together at all times; 
plutonium is never separated from the others.  In fact, it does not appear 
possible to separate plutonium from other transuranic elements via 
pyroprocessing.  The other transuranic elements make the recycled material 
far more difficult to handle than plutonium alone.  The Department would not 
depend on short-lived fission products for proliferation resistance.  In 
contrast, the self protection of current used nuclear fuel, accumulating 
around the country is limited to several decades.  GNEP would consume the 
weapon-usable material via recycling, rather than pass the responsibility to 
future generations.

Q22. Because pyro-processing produces a metal fuel, some GNEP scientists are 
now proposing to revert to metal-fueled fast reactors for transmutation. 
These designs are known to be less safe than fast reactors using ceramic 
oxide fuels, which in turn are less safe than today's conventional light 
water reactors.  Do you agree with this reasoning, and if so, what is gained 
from accepting the higher safety risks of pyro-processed fuels?

A22. The Department does not agree that metal-fueled reactors are less safe 
than oxide-fueled reactors.  Sodium-cooled fast reactors with metal-alloy 
fuel are extremely safe.  For example, the metal-alloy fueled EBR-II test 
reactor in Idaho demonstrated experimentally that it could survive very 
severe off-normal conditions, in large part because sodium is an excellent 
coolant and because of several favorable safety characteristics of metal 
fuels.  Metal fuels have higher thermal conductivity and expand more during 
high-temperature conditions than oxide fuels.  As a result, EBR-II 
demonstrated that as temperatures increase, nuclear power rate drops without 
the need for safety systems or operator action -- a significant safety 
feature.


Q23. Could transmutation be accomplished in fast reactors with MOX fuels?  
In conventional LWR's with MOX fuels?

A23. Transmutation is easier in fast reactors than thermal reactors because 
the higher energy neutrons in fast reactors can split, or fission, more of 
the transuranic isotopes.  Transmutation can be accomplished in both reactors 
using several types of fuels; the type of fuel appropriate for a particular 
reactor depends in part on the coolant of that reactor.  For light water 
reactors (LWRs), the current fuel is uranium oxide, so transmutation could 
use mixed oxides of uranium and plutonium. Nevertheless, it is expected that 
the transmutation of minor actinides (e.g., americium and curium) would be 
particularly difficult in LWRs.  For fast reactors, several candidate fuels 
are under consideration, including mixed oxides, metals, carbides, or 
nitrides.  All could accomplish transmutation but at this point only oxide 
and metal fuels are sufficiently mature to offer a high probability of 
success.


Appliance Standards

Q24. The appliance standards program is small in its funding, but huge in 
its impact on our energy situation. I helped pass the provision in the 1987 
and 1992 laws requiring DOE to set many of the standards, so I've been 
distressed as year after year passed and the deadlines slipped and slipped. 
DOE has now missed legal deadlines for setting standards on about twenty 
products. A few weeks ago you issued a plan and schedule for issuing the 
required standards over the next six years. That is an improvement. But I'm 
still shocked at how slow even your target dates are. The first standards, 
other than for certain ceiling fan niche products, would be on furnaces and 
highest priorities for years. DOE issued Advanced Notices of Proposed 
Rulemaking (ANOPR) on these products, accompanied by hundreds of pages of 
technical analysis, back in July of 2004.  According to DOE's own guidelines, 
it should not take more than 18 months from the Advanced Notice to issuing 
the final rule. It's already been more than 18 months. But now you say you 
need another 19 months to issue the rule. Why do you need another 19 months 
to get your highest priority standards out?

A24. On January 31, 2006, the Department published its rulemaking schedules 
in a Report to Congress. "Energy Conservation Standards Activities Submitted 
Pursuant to Section 141 of the Energy Policy Act of 2005."  As documented in 
the Report, the Department is no longer using a priority setting process but 
is using a schedule setting process that ensures that all backlog rulemaking 
requirements are completed by June 2011.  The published schedule also allows 
the Department to stay on schedule for the new rulemaking responsibilities in 
EPACT 2005.  The schedule is firm and achievable, but if one rulemaking is 
selectively accelerated it would cause delays in other parts of the schedule. 
The Department will use the remaining time in the schedule relating to 
furnaces to publish the Notice of Proposed Rulemaking (NOPR), solicit public 
comment, and complete the final rule.  The Department recognizes the 
importance of this rulemaking and is dedicated to meeting the September 2007 
final rule date as set forth in the Report to Congress.


Q25. What have you done on these products-supposedly your Department's highest 
priorities-since issuing the "ANOPR" 19 months ago?

A25. Regarding the residential furnaces and boilers rulemaking, we have 
conducted the analyses required to prepare the notice of proposed rulemaking 
(NOPR) and we are in the final stages of completing the NOPR.  The ANOPR 
public meeting was held on September 29, 2004, and the comment period closed 
on November 10, 2004.  Because of the Department's commitment to stakeholder 
involvement and because of the complexity of the analyses, the staff reviewed 
over 40 different categories of comments from over 100 individual commenters 
resulting in significant analysis changes during the NOPR phase.  A number of 
critical issues were raised including safety concerns over necessary venting, 
an investigation into furnace fan electricity consumption as a result of EPACT 
2005, and significant changes in AEO 2006 natural gas price forecasts which 
led to additional analyses.


Q26. When do you expect to issue the Notice of Proposed Rulemaking? 

A26. We expect to publish it by September 2006, and stay on schedule to meet 
the September 2007 final rule publication date.


Q27. The furnace standard could eventually save 187 billion cubic feet of 
natural gas a year, which would help relieve pressure on tight supplies and 
bring down prices, and it will save consumers billions of dollars. Don't you 
feel some urgency to get these out?

A27. Yes.  The Department recognizes the importance of this rulemaking and is 
dedicated to meeting the September 2007 final rule date as set forth in the 
report to Congress.


Energy Situation

Q28. The Administration's National Energy Policy and the energy bill that 
finally passed last year were spurred in part by a spike in energy prices 
in 2001. Since then, prices have only risen higher as rising demand squeezes 
supply. Last year gasoline prices nationwide shot up to over $3 a gallon for 
the first time, roughly double prices at the beginning of 2004. Wholesale 
natural gas prices, which had doubled between 2002 and the beginning of this 
year, doubled again by the end of last August. These price increases have cost 
consumers hundreds of billions of dollars. Yet the proposed budget would cut 
energy efficiency programs at the EERE office, which are intended to address 
the demand side of the problem, by 18%. This would be the fifth cut in a 
row-the budget provides one-third less funding than these programs received 
in FY2002. You have recognized energy efficiency as a critical response to 
the nation's energy challenges, but the budget does not seem to recognize 
that fact. Do you believe that the funding for energy efficiency programs in 
the budget match the nation's need for saving energy?

A28. The Department's FY 2007 budget represents an aggressive, focused and 
appropriately balanced approach to developing and deploying the technologies 
that will help to improve the Nation's energy efficiency.  
	
The Department's FY 2007 budget request maintains robust funding levels in a 
variety of energy efficiency programs. Funding for energy efficient vehicle 
technologies, exclusive of Congressionally directed activities and transfers, 
is level compared to the FY 2006 appropriation.  Funding for the Building 
Technologies program is level with 2006 appropriations on a comparable basis, 
excluding transfer of some activities into the program (which actually 
increase the Building Technology funding total by about $8 million). While 
funding for the Federal Energy Management Program (FEMP) is $2 million below 
the FY 2006 appropriation, that decrease reflects the contribution of new 
efficiencies within the program that will allow the Department to achieve 
more with less. The reduction in FEMP is offset by a $2 million increase in 
Technology Advancement and Outreach, which will consolidate and streamline 
EERE outreach efforts. With regard to Industrial Technologies, high energy 
prices give the industrial sector incentive to reduce their own energy use. 


Q29. Programs to increase deployment of energy-efficiency technologies have 
the most immediate impact on energy demand, yet the budget would eliminate 
several of these programs and cut almost all the others. If there is a 
national interest in saving energy, why should we cut the programs to 
accomplish that goal?

A29. Facing greater uncertainty over the price of petroleum, the Department 
concluded that reducing America's growing dependence on foreign oil is the 
highest priority for the Office of Energy Efficiency and Renewable Energy in 
FY 2007 and we have directed our resources to those programs with the 
greatest potential to contribute to that goal.  Thus, priority has been 
given to science and technology R&D initiatives, such as the Advanced Energy 
Initiative, to develop clean, affordable sources of energy that will help 
reduce the use of fossil fuels and lead to changes in the way we power our 
homes, businesses and cars.  


Q30. Will this budget leave the Department prepared to promote energy 
efficiency in case there are more price spikes next year due to natural 
disasters or foreign events?

A30. The Department is always prepared to reach out to the public on energy 
efficiency.  The vehicles for reaching large numbers of people, i.e., the 
consumer information site and the EERE information center, are flexible and 
can expand to meet increases in demand with minimal effort. 

In addition, the Department's request includes a $2 million increase in the 
Technology Advancement and Outreach activity designed specifically to 
further promote communications with consumers, industry, States, and other 
Federal programs.  This is more than double the 2006 appropriation.


Q32. Mr. Secretary, given the Administration's public support for reducing 
America's dependence on oil, can you tell the Committee just what the 
President meant by setting a goal of reducing our Mideast oil imports by 75% 
by 2020 (NOTE: this is presumably a typo. The President said 2025, not 
2020). By how many million barrels a day do you hope to reduce U.S. oil 
consumption?

A32. Reducing America's dependency on imported oil has been and will 
continue to be a priority for this Administration.  The goal President Bush 
set forth in his State of the Union address was not a change in policy, but 
the acceleration of a priority.  To achieve this goal, we must accelerate 
our research in energy technologies that will fundamentally transform how 
we produce and consume energy.

Diversification of our energy supply has always been a priority of this 
Administration. Since 2001, the Administration has spent nearly $10 billion 
to develop cleaner, cheaper and more reliable energy sources.  The Advanced 
Energy Initiative (AEI) will accelerate investment into clean energy 
technologies in order to transform the way we produce and use energy in our 
homes, business and our transportation sector.  To achieve these goals, the 
President has requested $2.1 billion in FY 2007 - a 22 percent budget increase 
- to develop new technologies and alternative sources of energy to help 
diversify and strengthen our nation's energy mix. The AEI is focusing on 
technologies that we believe hold the greatest promise for American taxpayers, 
including solar, biofuels, hydrogen, nuclear, and clean coal technology.

As part of President Bush's Advanced Energy Initiative, the FY 2007 budget 
request for the Hydrogen Fuel Initiative increased by $53 million over FY 
2006 to $289.5 million to accelerate the development of hydrogen fuel cells 
and affordable hydrogen production, storage, and infrastructure technologies. 
The Administration estimates that, if hydrogen reaches its full potential, 
the Hydrogen Fuel Initiative and FreedomCAR program could reduce our oil 
demand by over 11 million barrels per day by 2040 -- approximately the same 
amount of crude oil America imports today. 


Oil Savings

Q33. If we are serious about addressing our "addiction" to oil, don't you 
think we need to invest more in vehicle efficiency as well as in new fuels?

A33. Transportation research remains a key factor in our plans to decrease the 
Nation's dependence on foreign oil, and DOE's request strongly supports this 
goal.  Although it appears that we are asking for less money in the Vehicle 
Technologies Program, a closer look at the details shows that the FY 2006 
appropriation contains more than $20 million in congressionally directed 
activities that do not directly support the Vehicle Technologies Program's 
mission and goals.  Once an adjustment is made for these Congressionally 
directed activities and program transfers, it becomes clear that DOE's FY 2007 
budget request is level with the FY 2006 appropriation.  Additionally, this 
year's request realigns some internal priorities by placing greater emphasis 
on those research activities with the greatest potential for oil savings, 
particularly to increase funding for the development of lithium-ion batteries 
and other technologies for plug-in hybrid vehicles.


Q34. Is the Administration planning to review transportation and vehicle 
policies as well as research funding in order to address this serious problem? 
While I recognize that research funding is an important component of a 
long-term strategy, don't you believe that this problem is urgent enough to 
require immediate action?

A34. In addition to the research and technology development that is planned 
under the President's Advanced Energy Initiative, transportation and policy 
options will be evaluated to determine their effectiveness in addressing this 
issue.   Many near term transportation policy options fall under the purview 
of the Department of Transportation and policy tools such as tax incentives 
are primarily the responsibility of the Department of Treasury.


Energy Bill

Q35. Last year the Congress passed an energy bill for the first time since 
1992, authorizing a number of new energy-efficiency programs on public 
education, utility efficiency programs, building codes, appliance rebates, 
and other areas. Yet I am hard-pressed to see all the work we did on that 
bill reflected in the proposed budget. Please explain this budget discrepancy.

A35. The Department prioritized activities, including those authorized under 
EPACT, that would most contribute to the goal of reducing America's growing 
dependence on foreign oil.  Thus, priority was given to science and technology 
R&D initiatives, such as the Advanced Energy Initiative, to develop clean, 
affordable sources of energy that will help reduce the use of fossil fuels and 
lead to changes in the way we power our homes, businesses and cars. The 2007 
Budget reflects the Department's priorities.

As noted in the Statement of Administration Policy (SAP) submitted to energy 
bill conferees on July 17, 2005, "The House and Senate versions of H.R. 6 also 
include authorization levels that in many cases significantly exceed the 
President's Budget.  These authorizations set unrealistic targets and 
expectations for future program --funding decisions."  House and Senate SAPs 
contained similar language.  


Q36. Are there any new energy-efficiency programs authorized in the Energy 
Policy Act of 2005 that are fully funded in the proposed budget?

A36. There are no new EERE programs funded at levels authorized in the Energy 
Policy Act of 2005. As noted in the Statement of Administration Policy (SAP) 
submitted to energy bill conferees on July 17, 2005, "The House and Senate 
versions of H.R. 6 also include authorization levels that in many cases 
significantly exceed the President's Budget.  These authorizations set 
unrealistic targets and expectations for future program --funding decisions."  
House and Senate SAPs contained similar language.

The Department prioritized activities, including those authorized under 
EPACT, that would most contribute to the goal of reducing America's growing 
dependence on foreign oil.  Thus, priority was given to science and technology 
R&D initiatives, such as the Advanced Energy Initiative, to develop clean, 
affordable sources of energy that will help reduce the use of fossil fuels and 
lead to changes in the way we power our homes, businesses and cars. The 2007 
Budget reflects the Department's priorities.


Q37. Does this budget allow you sufficient funding to implement the energy 
bill, including the added requirements on the appliance standards, federal 
energy management, and Energy Star programs, reporting requirements, and 
other provisions?

A37. Yes, the 2007 Budget provides sufficient funding to implement the 
requirements you mention.  However, the 2007 Budget does not provide 
funding for all programs authorized in the Energy Policy Act.  The 
Department's priorities are reflected in the 2007 Budget.  


Public Education

Q38. Public education is the quickest way to reduce energy use and address 
current energy prices and supply-demand imbalance. Yet there is almost no 
money for public education on energy efficiency in the budget, despite a $90 
million authorization in last year's energy law. Mr. Secretary, you have spent 
a great deal of time trying to educate the public about their energy 
consumption. How much funding would be available for proactive 
energy-efficiency public education programs under this budget? Where is that 
funding in the budget?

A38. If approved, the FY 2007 budget would provide $3.5 million for support of 
energy efficiency and renewable energy public education and outreach, more 
than double 2006 appropriations.  This funding is located in the Technology 
Advancement and Outreach activity within the Program Support portion of the 
budget.  

Of course, this is not the only place funding is requested.  Most of the EERE 
program offices do some form of public education and outreach.  For example, 
the Solar program supports the Solar Decathlon, a university competition held 
biannually on the National Mall that promotes awareness of solar technologies 
among the general population.  The Vehicle Technologies program supports an 
Advanced Vehicle Competition that also serves to educate the public.  It also 
supports development of the Fuel Economy Guide (www.fueleconomy.gov).  
And every EERE program produces pamphlets about their respective 
technologies and updates their websites with the latest information useful for 
consumers.  For example, the Building Technologies program website offers 
consumer tips for saving energy around the house and information on new tax 
credits in the Energy Policy Act of 2005 
(http://www.eere.energy.gov/buildings/info/). 


Q39. What is your plan for using those funds, including plans for partnering 
or contracting with other organizations?

A39. The $3.5 million for Technology Advancement and Outreach will be used to 
continue and expand the operations of the EERE Information Service and the 
EERE Consumer Website.  It is expected the inquiries to the EERE Information 
Center will grow as energy concerns continue.  It is also expected that newly 
developed products, technologies and information on energy efficiency and 
renewable energy will need to be added to the Consumer Information Page and 
to the portfolio of the EERE Information Center expertise.  EERE is always 
evaluating the opportunities to cooperate with private sector organizations 
and other government entities as evidenced by the Powerful Savings effort.  
We will continue to evaluate proposals from outside partners as they come to 
us to determine the benefit of our joining in already developed partnerships 
and seek out new partners as energy information needs require.  

We are looking at the possibility of:
Expanding our "Energy Hog" campaign-- Using existing interactive web 
program for kids and redeveloping and distributing this to elementary schools 
to incorporate as part of their education discussions on energy.
Industry partnering on renewable initiatives -- Looking at participating in 
public/private partnership which would further some of the renewable 
initiatives we have.  

Final decisions will be made when funding is available and opportunities 
present themselves.  EERE is currently developing a Request For Proposal 
seeking support for its outreach efforts.  The contractor selected from this 
process will support the Office of Technology Advancement and Outreach in 
making timely information on energy efficiency and renewable technologies 
and processes available to the public.


Q40. Can you describe current public education efforts, funding levels, and 
how effective you think those efforts are?

A40. In addition to government-only funded outreach mechanisms, EERE is 
involved with private sector partners, such as the Alliance to Save Energy to 
promote energy efficiency and alert citizens to the means by which they can 
save energy and money at home and on the road:

Powerful Savings--A joint effort with the Alliance to Save Energy to promote 
energy savings in the home and on the road through proactive media 
placement, satellite media tours, joint public appearances and support for 
printing the "PowerSmart" book.  Funding:  $150,000.

Power is in Your Hands--A joint effort led by the Alliance to Save Energy 
and including the Environmental Protection Agency, American Gas 
Association, DOW Chemical and many others.  The effort developed public 
service announcement newspaper ads and paid advertising to promote energy 
efficiency during the winter heating season.  Using paid and free media, the 
effort directed consumers to information on how they could save energy.  
Funding:  $100,000.

EnergyHog--An effort started by the Colorado Energy Office and currently 
managed by the Alliance to Save Energy, the education program involves 
Home Depot, the Northern American Insulation Manufacturers and more than 
10 state energy offices.  EnergyHog is a three-year program to educate young 
and old on energy efficiency through the use of public service announcements 
(radio, television and billboard) directing the public to a website with 
information on energy savings directed at both adult and juvenile audiences.  
Funding:  $975,000 over three years.

Consumer Information Sites--Web based sites within the Department of 
Energy home page providing information to consumers on ways they can save 
energy or use renewable energy technologies.  Additionally, the 
Energysavers.gov website directs consumers to energy saving information at 
DOE, the Department of Housing and Urban Development and the 
Environmental Protection Agency.  Funding:  $20,000 for EnergySavers.  DOE 
consumer site is funded as part of the overall website budget and provides 
links to information at a number of sites, so separate budget information is 
not available.  The EERE websites have recorded more than 28.8 million web 
pages viewed in FY2005.

Consumer Directed Preprinted Newspaper Articles--Through the North 
American Precis Syndicate, 10 preprinted newspaper articles  were distributed 
to 10,000 weekly and small daily newspapers across the country with 
information on energy efficiency and renewable energy technologies.  Five of 
the articles were translated for distribution to Spanish language newspapers.  
Estimated audience reached for the English articles was more than 329 million 
readers and more than 22 million for the Spanish language articles.  Funding:  
$50,000.

EERE Information Center--EERE maintains a toll free telephone service to 
answer consumer inquiries on energy efficiency and renewable energy.  The 
service responds to some 20,000 inquiries per year and distributes more than 
225,000 documents to consumers, businesses and schools.  Funding:  $2.2 
million.  



FEMP

Q41. Last fall in the wake of the hurricanes you and President Bush gave a 
series of speeches strongly urging Americans to use energy more efficiently, 
and President Bush directed all federal agencies  to conserve fuels a much as 
possible. Yet the proposed budget would cut the Federal Energy Management 
Program, which leads the government-wide effort to save energy, by another 
12%. Is this "leading by example," is this setting a good example for the 
American people in investing in energy efficiency?

A41. The 2007 Energy Efficiency and Renewable Energy budget request for the 
Federal Energy Management Program is $2 million below 2006 enacted due to 
streamlining the Program's management, training and communications efforts.   
We expect to be able to achieve the same, or better, results at the 2007 
request level.  It's noteworthy that FEMP Federal employees are funded 
through the Program Direction line item.  So the FEMP budget does not 
represent the full amount of resources dedicated to improving Federal 
energy efficiency.  Also, our Technology Advancement and Outreach request 
increases by $2 million.  Some of these funds will be used to promote 
deployment of energy efficient technologies.

In response to Hurricanes Katrina and Rita, FEMP led an effort to show federal 
agencies how to reduce their natural gas consumption and expenses through 
relatively low cost, operations and maintenance methods.  To that end, FEMP 
sent Energy Saving Expert Teams to 28 sites in November and December of 
2005.  These teams identified opportunities for federal agencies to save 
almost 10% of their natural gas consumption, or about $6.5 million annually 
at current natural gas prices.  FEMP will continue to work with the sites to 
follow through with the recommendations of the teams.


Q42. Wouldn't additional funding for FEMP save the federal government more 
money than it would cost by reducing energy waste?

A42. We believe the FEMP 2007 budget allows it to provide adequate support to 
facilitate Federal agency progress in implementing cost effective energy 
efficiency and renewable energy measures.  We expect similar or better results 
from FEMP activities compared to previous years, because of efforts to 
streamline the Program's management, training and communications efforts.  


Q43. The Energy Policy Act of 2005 reauthorized Energy Savings Performance 
Contracts, a program which allows federal agencies to contract with energy 
service companies to upgrade the efficiency of federal buildings, with the 
payment for these services coming out of the reduction in the agency's utility 
bills. This is an innovative program that has saved millions of tax dollars. 
How many ESPCs has the federal government entered into since authority for 
the contracts was first restored in October 2004?

A43. The ESPC program has rebounded well after the lapse in legal authority.  
During the third and fourth quarters of FY 2005 and the first quarter of FY 
2006, the Department of Energy facilitated awards on 15 ESPC projects.  
	
We agree that ESPCs are important for saving energy for the Federal 
government.  However, we note that the program has not saved millions of 
taxpayer dollars. Reduced energy cost savings from an ESPC is used to pay 
back the energy service company (ESCO) for its initial investment, plus 
interest at private sector financing rates.  Generally, only after the 
contract term (average ~17 years) would the government actually save money, 
assuming the energy conservation measures would still produce savings after 
the contract term.


Q44. What is the Department of Energy doing to encourage federal agencies to 
take advantage of this program?

A44. The Department is  providing expert Energy Savings Performance Contract 
Project Facilitators to federal agencies to ensure the process is user 
friendly and expedient;  standardizing templates and report requirements for 
each phase of the contract process, especially for measurement and 
verification;  educating agencies on their roles and responsibilities through 
workshops and web-based training opportunities;  and recommending that future 
ESPC indefinite delivery, indefinite quantity contracts are consolidated into 
one umbrella contract for the federal government.


Building Codes

Q45. A small DOE program to assist states in setting and achieving compliance 
with their building energy codes leverages a few million dollars to improve 
the efficiency of every new building in much of the country. It has been 
rated the most cost-effective of all DOE programs assisting states. Yet the 
proposed budget would eliminate it. Mr. Secretary, I do not see how it makes 
sense to cut such a valuable program at a time where there is so much building 
occurring around the country. Doesn't it make sense to provide a national 
source of technical expertise on the national model building codes, rather 
than trying to make each of the 50 states replicate that expertise? Why would 
you eliminate this highly effective program?

A45. The Department's FY 2007 budget request includes an increase of $13.8 
million for the State Energy Program to support the Energy Policy Act as 
appropriate and as they determine their own priorities.  States can choose to 
use funding from the State Energy Program formula grants to support programs 
that increase building code compliance.  The Department believes that the 
States have developed sufficient expertise and capability to upgrade, 
implement and enforce their building energy codes and has requested no 
specific funding for increasing and verifying compliance with national model 
building codes in FY 2007.


Q46. The budget would also reduce funding for analysis of the national model 
building energy codes. Among other responsibilities this program is required, 
every time there is an update to a model energy code, to make a determination 
within a year on whether the code would save energy.  Not on the cost or other 
impacts, just on whether it would or would not save energy. DOE has not yet 
made a determination on the 2003 IECC residential code, the 2004 supplement 
to that code, the 2001 ASHRAE commercial standard, or the 2004 ASHRAE 
standard (and now there is a 2006 IECC residential code). When do you expect 
to make a determination on these codes and standards, and on which versions?

A46. We expect to make a joint determination regarding the 2003 IECC and the 
2006 IECC by December 30, 2006.  We have no plans to make a determination 
regarding the 2004 supplement to the IECC because this interim document has 
been superseded by the 2006 IECC.  We expect to make a joint determination 
regarding ASHRAE Standard 90.1-2004 by December 30, 2006.


Q47. Does the budget include sufficient funding and staff to make the required 
determinations?

A47. Yes, the Department's FY 2007 budget request reflects the resources 
needed to complete the required determinations for building codes.


National Lab Layoffs

Q48. When President Bush visited the National Renewable Energy Lab recently, 
DOE announced it had found funds to reverse layoffs there. However, I 
understand that Lawrence Berkeley National Lab also has recently laid off a 
couple dozen people in its energy efficiency program. In particular, the lab 
has been a key contractor in doing the technical analysis for the appliance 
standards, but has had to lay off about half of its group of experienced 
analysts-about a dozen people-even as Congress has increased funding for this 
program. Why are these posts being eliminated?

A48. The changes in appliance standards work levels at Lawrence Berkeley 
National Lab (LBNL) are needed in order to accelerate our productivity and 
meet the schedules presented to Congress.  LBNL management is working closely 
with the Department on several critical rulemakings that are included in the 
published schedule and we fully intend to use LBNL resources in the context of 
the program's overall resource plan.

On January 31, 2006, the Department published its rulemaking schedules in a 
report to Congress "Energy Conservation Standards Activities Submitted 
Pursuant to Section 141 of the Energy Policy Act of 2005." Chapter 6 of this 
report documents numerous productivity enhancements and changes the 
Department has made to expedite its rulemaking process.  New management 
processes, including review and reporting requirements, have been instituted.  
Productivity improvements in the rulemaking program are taking effect and 
will significantly increase the number of new standards to be issued. As 
documented in the report, the recent and forthcoming process improvements 
will increase the standards output by increasing the number of products in the 
active rulemaking process, by bundling multiple products into single 
rulemakings, by shortening the time to complete successive rulemakings, and 
by implementing other productivity-enhancing techniques.

Many of the posts at LBNL that are being eliminated were held by part-time 
employees whose contributions to specific technical rulemakings were minimal 
and are no longer needed or are being performed at other locations due to the 
productivity improvements.  LBNL involvement has also been reduced in areas 
of project management and fiscal management because those functions are 
being performed at the Project Management Center of the Office of Energy 
Efficiency and Renewable Energy. 


Q49. Will the loss of this expertise affect the work on appliance standards, 
and how do you plan to replace it?

A49. No.  Many of the posts at LBNL that are being eliminated were held by 
part-time employees whose contributions to specific technical rulemakings were 
minimal and are no longer needed or are being performed at other locations due 
to the productivity improvements.  LBNL involvement has also been reduced in 
areas of project management and fiscal management because those functions 
are being performed at the Project Management Center of the Office of Energy 
Efficiency and Renewable Energy.


Q50. How will these layoffs affect the new schedule for completing required 
rulemakings on appliance standards?

A50. The schedule was designed in light of significant changes that needed 
to be made to the Department's resource plan for appliance standards, 
including contractor resources.  The Department's schedule will not be 
affected by these layoffs.


Q51. Will you commit to restoring funds to reverse the layoffs at Lawrence 
Berkeley National Lab as well?

A51. No.  The changes in appliance standards work levels at Lawrence Berkeley 
National Lab (LBNL) are needed in order to accelerate our productivity and 
meet the schedules presented to Congress.  LBNL management is working 
closely with the Department on several critical rulemakings that are included 
in the published schedule and we fully intend to use LBNL resources in the 
context of the program's overall resource plan.


Oil and Gas

Q52. The Administration's budget request rightly calls for cancellation of 
both the Oil Technology and Natural Gas Technologies research and development 
programs, as well as the Ultradeep Water and Unconventional Resources 
program that was created by last year's Energy Policy Act, noting that "the 
budget proposes to repeal the [Ultradeep and Unconventional] program through 
a future legislative proposal, consistent with the decision to terminate the 
discretionary Oil and Gas programs." I applaud this announcement by the 
Administration. When can we expect the Administration's future legislative 
proposal to be introduced?

A52. Secretary Bodman transmitted the legislative proposal to the House and 
Senate on April 27, 2006.

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