- ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2006

[Senate Hearing 109-]
[From the U.S. Government Publishing Office]

ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2006

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U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.

NONDEPARTMENTAL WITNESSES

[Clerk's note.--At the direction of the subcommittee
chairman, the following statements received by the subcommittee
are made part of the hearing record on the Fiscal Year 2006
Energy and Water Development Appropriations Act.]

DEPARTMENT OF DEFENSE--CIVIL

Department of the Army

Corps of Engineers--Civil

Prepared Statement of the Arkansas River Basin Interstate Committee
Mr. Chairman and members of this distinguished committee, my name
is Lew Meibergen. I am Chairman of the Board of Johnston Enterprises
headquartered in Enid, Oklahoma. It is my honor to serve as Chairman of
the Arkansas River Basin Interstate Committee, members of which are
appointed by the governors of the great States of Arkansas, Colorado,
Kansas, Missouri, and Oklahoma.
In these times of war on terrorism, homeland defense and needed
economic recovery, our thanks go to each of you, your staff members and
the Congress. Your efforts to protect our Nation's infrastructure and
stimulate economic growth in a time of budget constraints are both
needed and appreciated.
Our Nation's growing dependence on others for energy, and the need
to protect and improve our environment, make your efforts especially
important. Greater use and development of one of our Nation's most
important transportation modes--our navigable inland waterways--will
help remedy these problems. At the same time, these fuel-efficient and
cost-effective waterways keep us competitive in international markets.
In this regard, we must maintain our inland waterway transportation
system. We ask that the Congress restore adequate funding to the Corps
of Engineers budget--$6.6 billion in fiscal year 2006--to keep the
Nation's navigation system from further deterioration. If this
catastrophic problem is not addressed immediately, we are in real
danger of losing the use of this most important transportation mode.
As Chairman of the Interstate Committee, I present this summary
testimony as a compilation of the most important projects from each of
the member States. Each of the States unanimously supports these
projects without reservation. I request that the copies of each State's
individual statement be made a part of the record, along with this
testimony.
Equus Beds Aquifer--Kansas
Equus Beds Aquifer Storage and Recovery Project.--Continuation of a
City of Wichita Groundwater Management District No. 2 and State of
Kansas project to construct storage and recovery facilities for a major
groundwater resource supplying water to more than 20 percent of Kansas
municipal, industrial and irrigation users. The project will capture
and recharge in excess of 100 million gallons per day and will also
reduce on-going degradation of the existing groundwater by minimizing
migration of saline water. Federal authorization of the project HR 4650
introduced last year or through similar legislation this year and
continued Federal funding is requested in the minimum amount of $1.5
million for fiscal year 2006.
Arkansas River Navigation Improvements
Mr. Chairman, Public Law 108-137 authorized a 12-foot channel on
the McClellan-Kerr Arkansas River Navigation System. The Corps is now
obligated to operate and maintain the system as a 12-foot channel. Over
90 percent of the system currently is adequate for a 12-foot channel.
Deepening the remainder of the channel to 12 feet will allow carriers
to place 43 percent more cargo on each barge, which will reduce the
amount of fuel consumed and emissions released. Other environmental
benefits include the creation of new aquatic habitat through new dike
construction and the construction of least tern islands through
beneficial use of dredged material.
Therefore, we request $40 million to construct dike structures to
scour out the channel, and dredge necessary areas for improving the
depth of the channel. This investment will increase the cost
competitiveness of this low-cost, environment-friendly transportation
mode and help us combat the loss of industry and jobs to overseas.
Tow Haulage Equipment--Oklahoma
We request funding of $3.0 million to initiate the installation of
tow haulage equipment on the locks located along the Arkansas River
portion of the McClellan-Kerr Arkansas River Navigation System. Total
cost for these three locks is $4.7 million. This project will involve
installation of tow haulage equipment on W.D. Mayo Lock and Dam No. 14,
Robert S. Kerr Lock and Dam No. 15, and Webbers Falls Lock and Dam No.
16, on the Oklahoma portion of the waterway. The tow haulage equipment
is needed to make transportation of barges more efficient and
economical by allowing less time for tows to pass through the various
locks.
The testimony we present reveals our firm belief that our inland
waterways and the Corps of Engineers' efforts are especially important
to our Nation in this time of trial. Transportation infrastructure like
the inland waterways need to be operated and maintained for the benefit
of the populace. Without adequate annual budgets, this is impossible.
Mr. Chairman, members of this committee, we respectfully request
that you and members of your staff review and respond in a positive way
to the attached individual statements from each of our States which set
forth specific requests pertaining to those States.
We sincerely appreciate your consideration and assistance.
arkansas
prepared statement of paul latture, ii, chairman for arkansas
Mr. Chairman and members of the Committee, thank you for the
opportunity to present testimony to this most important committee. I
serve as Executive Director for the Little Rock Port Authority and as
Arkansas Chairman for the Interstate Committee. Other committee members
representing Arkansas, in whose behalf this statement is made, are
Mssrs. Wally Gieringer of Hot Springs Village, retired Executive
Director of the Pine Bluff-Jefferson County Port Authority; Scott
McGeorge, President, Pine Bluff Sand and Gravel Company, Pine Bluff;
Barry McKuin of Morrilton, President of the Conway County Economic
Development Corporation; and N.M. ``Buck'' Shell, CEO, Five Rivers
Distribution in Van Buren and Fort Smith, Arkansas.
We call to your attention four projects on the McClellan-Kerr
Arkansas River Navigation System (the ``System'') that are especially
important to navigation and the economy of this multi-State area:
Arkansas River Navigation Improvements, Port of Little Rock Tow-Haulage
in Oklahoma.
Arkansas River Navigation Improvements
Mr. Chairman, Public Law 108-137 authorized a 12-foot channel on
the McClellan-Kerr Arkansas River Navigation System. The Corps is now
obligated to operate and maintain the system as a 12-foot channel. Over
90 percent of the system currently is adequate for a 12-foot channel.
Deepening the remainder of the channel to 12 feet will allow carriers
to place 43 percent more cargo on each barge which will reduce the
amount of fuel consumed and emissions released. Other environmental
benefits include the creation of new aquatic habitat through new dike
construction and the construction of least tern islands through
beneficial use of dredged material.
Therefore, we request $40 million to construct dike structures to
scour out the channel, and dredge necessary areas for improving the
depth of the channel. This investment will increase the cost
competitiveness of this low-cost environment-friendly transportation
method and help us combat the loss of industry and jobs to overseas.
Little Rock Port
We recognize the significant reduction in new work and understand
the need to combat the Global War on Terrorism. We also recognize the
need to look for economic advantages where the needs of the government
cross with the good of public entities to serve both needs. We believe
a prime example of this effort would be to utilize Section 107 of the
River and Harbors Act of 1960 (Public Law 86-645) in the Continuing
Authorities Program which would allow the disposal of dredge disposal
material to be utilized by the Little Rock Port for beneficial fill
material.
Therefore, $7.6 million is requested for this project. This project
will compliment the goal of Homeland Security by providing a safe, mid-
America environment for shipping while complimenting other Federal
investments, including the 12-foot channel project by providing
completion of a major economic development engine.
Tow-haulage in Oklahoma
In the State of Arkansas, tow-haulage equipment has reduced the
time required for lockage of a large tow configuration from 4 hours to
pass a lock to 2 hours per passage. Due to funding constraints, this
system has not been placed on the locks in Oklahoma.
We request, for the benefit of the entire system, $4.2 million to
design and install a tow-haulage system on the first three locks going
up the System in Oklahoma: Robert S. Kerr, Webbers Falls, and W.D. Mayo
Locks.
Ark-White Cutoff
A cutoff is developing between the Arkansas and White Rivers which,
if not corrected, could have dramatic adverse effects on the navigation
system as well as significant bottomland hardwoods and pristine
environment that provides unique wildlife habitat in southeast
Arkansas.
Unless corrected, it is inevitable that a major cutoff will occur
negatively impacting navigation on the river, significantly increasing
siltation and dredging requirements and, at worst, cutting off the
lower end of the Navigation System from the Mississippi River.
We request, for the benefit of the entire system, $7 million to
protect the Navigation System from incurring significant increases in
dredging, hazardous navigation conditions, and to preclude a
devastating loss of habitat in bottom land hardwoods in the Big Island
region between the Arkansas River, the White River and the Mississippi
River. This pristine habitat is being threatened from the meandering of
these rivers while also adversely impacting the Navigation System. The
funds are greatly needed to preserve Navigation by completing the study
and initiating construction.
In addition to these three vital requests, we urge you to continue
to support funding for the construction, and operation and maintenance
of the McClellan-Kerr Arkansas River Navigation System which provides
low-cost and dependable transportation for farm products, construction
aggregates, raw materials and finished products important to our
Nation's economic recovery.
It is also most important that you continue construction authority
of the McClellan-Kerr Project until remaining channel stabilization
problems identified by the Little Rock District Corps of Engineers have
been resolved. The Corps needs to develop a permanent solution to the
threat of cutoffs developing in the lower reaches of the navigation
system and to use environmentally sustainable methods under the
existing construction authority.
Mr. Chairman, we appreciate the work of this essential committee
and thank you for your efforts that contribute so much to the social
and economic well-being of the United States of America.
We fully endorse the statement presented to you today by the
Chairman of the Arkansas River Basin Interstate Committee and urge you
to favorably consider these requests that are so important to the
economic recovery of our region and Nation.
kansas
prepared statement of gerald h. holman, chairman for kansas
Mr. Chairman and members of the committee, I am Gerald H. Holman,
Senior Vice President of the Wichita Area Chamber of Commerce, Wichita,
Kansas and Chairman of the Kansas Interstate Committee for the Arkansas
Basin Development Association (ABDA).
The Kansas ABDA representatives join with our colleagues from the
other Arkansas River Basin States to form the multi-State Arkansas
Basin Development Association. We fully endorse the summary statement
presented to you by the Chairman of the Arkansas River Basin Interstate
Committee.
Public Law 108-137 authorized a 12-foot channel on the McClellan-
Kerr Arkansas River Navigation System. The Corps is now obligated to
operate and maintain the system as a 12-foot channel. Over 90 percent
of the system currently is adequate for a 12-foot channel. Deepening
the remainder of the channel to 12 feet will allow carriers to place 43
percent more cargo on barges which will reduce the amount of fuel
consumed and emissions released. Other environmental benefits include
the creation of new aquatic habitat through new dike construction and
the construction of least tern islands through beneficial use of
dredged material. Therefore, we request $40 million to maintain the
authorized depth by constructing dike structures to minimize dredging
and dredging only necessary areas. This investment will increase the
cost competitiveness of this low-cost environment-friendly
transportation method and help us combat the loss of industry and jobs
to overseas.
We are encouraged about water resource development opportunities in
the Arkansas River Basin for not only navigation, but also hydropower,
flood control, recreation, water supply and environmental stewardship.
We also support the promotion of economic development around Corps
reservoirs. While encouraged, we are also concerned that existing and
proposed funding levels will not support the needs and therefore, we
support the return of proceeds from hydropower facilities, water
storage contracts, recreation use, and proceeds from leases and sale of
Federal lands, to be returned to the respective projects for
infrastructure maintenance and improvements for the public benefit
involving those projects.
The critical water resources projects in the Kansas portion of the
Arkansas River Basin are identified below. The projects are safety,
environmental and conservation oriented and all have regional and/or
multi-State impact. We are grateful for your past commitment to
critical needs in Kansas.
We ask for your continued support for this important Bureau of
Reclamation project on behalf of the Wichita/South Central Kansas area:
Equus Beds Aquifer Storage and Recovery Project.--This is the
continuation of a Bureau of Reclamation project jointly endorsed by the
City of Wichita, Groundwater Management District No. 2 and the State of
Kansas. This model technology has proven the feasibility of recharging
a major groundwater aquifer supplying water to nearly 600,000
irrigation, municipal and industrial users. The demonstration project
has successfully recharged more than 1 billion gallons of water from
the Little Arkansas River. The project is essential to help protect the
aquifer from on-going degradation caused by the migration of saline
water.
The demonstration project has confirmed earlier engineering models
that the full scale aquifer storage and recovery project is feasible
and capable of meeting the increasing water resource needs of the area
to the mid-21st century. The Equus Beds are also vital to the
surrounding agricultural economy. Environmental protection of the
aquifer, which this strategic project provides, has increasing
importance to ensure quality water for the future since south central
Kansas will rely to an even greater extent on the Equus Beds aquifer
for water resources.
The south-central Kansas economy including the Wichita MSA
represents:
--More than 20 percent of the State's employment.
--More than 1/3 of the State's manufacturing employment and payroll.
--At least 20 percent of the State personal income.
The quality of life and economic future for more than 20 percent of
the State's population and economy is dependent upon the availability
of reliable, high quality water resources from the Equus Beds.
The State of Kansas supports this much-needed project and includes
it within the Kansas Water Plan. All interested parties fully support
the project as the needed cornerstone for the area agricultural economy
and for the economy of the Wichita metropolitan area.
The aquifer storage and recovery project is a vital component of
Wichita's comprehensive and integrated water supply strategy. The full
scale design concept for the aquifer storage and recovery project calls
for a multi-year construction program. Phase One is estimated to cost
$17.1 million. The total project involving the capture and recharge of
more than 100 million gallons of water per day is estimated to cost
$110 million over 10 years. This is substantially less costly, both
environmentally and economically, when compared with reservoir
construction or other alternatives.
We are grateful for your previous cost share funding during the
demonstration phase, as a compliment to funds provided by the City of
Wichita. As we enter the construction phase, we request continued
Congressional support in two ways:
--HR 4650 was introduced and passed out of committee last year. That
bill, or similar legislation introduced this year, would
authorize the project and also provide cost share funding up to
25 percent of the project cost. We request your support of HR
4650 or similar legislation authorizing the Aquifer Storage and
Recovery Project as a Federal project and directing the Bureau
of Reclamation to participate in its final design and
construction to completion.
--Through continued cost share funding of the full-scale Aquifer
Storage and Recovery Project in the minimum amount of
$1,500,000 for fiscal year 2006 within the limits of HR 4650 or
similar legislation.
Many of our agricultural communities have historically experienced
major flood disasters, some of which have resulted in multi-State
hardships involving portions of the State of Oklahoma. The flood of
1998 emphasized again the need to rapidly move needed projects to
completion. Major losses also took place in the Wichita metropolitan
area. Projects in addition to local protection are also important. Our
small communities lack the necessary funds and engineering expertise
and Federal assistance is needed. This committee has given its previous
support to Corps of Engineers projects in Kansas and we request your
continued support for the following:
Arkansas City, Kansas Flood Protection.--Unfortunately, this
project was not completed prior to the flood of 1998. The flood
demonstrated again the critical need to protect the environment, homes
and businesses from catastrophic damages from either Walnut River or
Arkansas River flooding. When the project is complete, damage in a
multi-county area will be eliminated and benefits to the State of
Oklahoma just a few miles south will also result. The Secretary of the
Army was authorized to construct the project in fiscal year 1997. The
project is slated for completion in fiscal year 2005 but the funding is
not adequate in the President's budget. We request your continued
support in the amount of $3.619 million, which is $2.619 million above
the President's budget request so the Corps of Engineers can complete
this project.
The Arkansas River Basin is a treasure that must be protected for
future generations. We are experiencing decline in water quality due to
sediment and nutrient loading. The quality of the water in the Arkansas
River and its tributaries, including the numerous reservoirs in the
system, is a reflection of its watershed and land use practices. It is
imperative that the subbasins within the system are studied using the
watershed approach and that protective remedies are identified and
implemented to reverse the continuing decline in water quality. We
recommend that the following high priority watershed studies be added
to the fiscal year 2006 budget:
--Walnut River (El Dorado Lake) Watershed Feasibility Study.--A
reconnaissance study was conducted in July 2000 by the USACE,
Tulsa District, which identified ecosystem restoration as a
primary concern in the Walnut Basin. The Kansas Water Office
entered into an agreement with the USACE to begin a Walnut
River Basin Ecosystem Restoration Feasibility Study for the
entire basin.
Following the initial phase of the feasibility study, it was
decided that focusing the study to a smaller geographic area
would make more efficient use of existing local, State, and
Federal resources. The project was re-scoped to focus study
efforts on protection and restoration of El Dorado Lake and its
contributing watershed.
Public water supply storage in El Dorado Lake is owned by the
City of El Dorado and represents an important future regional
water supply source for the Walnut Basin. The reservoir and its
watershed have been designated by the Kansas Department of
Health and Environment as high priority for Total Maximum Daily
Load (TMDL) implementation for eutrophication (nutrients) and
siltation. Fecal coliform bacteria is another high priority
TMDL pollutant. Because of the importance of protecting both
water quality and quantity in El Dorado Lake, and to more
effectively target limited resources, KWO has partnered with
the City of El Dorado to address long-term protection and
restoration needs for the reservoir and its watershed, in
cooperation with other local, State and Federal agencies.
Study efforts include addressing identified opportunities to
reduce sedimentation in El Dorado Lake and meet the watershed
total daily maximum load (TMDL) issues of sediment and
eutrophication for the purpose of preserving existing water
supply storage, restoring riparian and aquatic habitat in the
lake and watershed.
We support the President's fiscal year 2006 budget for this
project in the amount of $200,000 for completion of the
feasibility study. The feasibility study is expected to be
completed in September 2006.
--Grand (Neosho) Basin Reconnaissance Study.--A need exists for a
basin-wide water resource planning effort in the Grand-Neosho
River basin, apart from the issues associated with Grand Lake,
Oklahoma. A Federal interest has been determined from the
reconnaissance study as a result from a Congressional add in
fiscal year 2003 and another add was appropriated in fiscal
year 2004. Additional funds are needed to continue the
reconnaissance stage of the project. The study would support
management efforts by Kansas and Oklahoma agencies to address
watershed and reservoir restoration issues in the Grand Lake
Watershed. Local interest may also exist for local ecosystem
restoration projects. We request funding in the amount of
$300,000 in fiscal year 2006.
Grand Lake Feasibility Study.--A need exists to complete evaluation
of water resource problems in the Grand-Neosho River basin in Kansas
and Oklahoma to evaluate solutions to upstream flooding problems
associated with the adequacy of existing real estate easements
necessary for flood control operations of Grand Lake, Oklahoma. A study
authorized by the Water Resources Development Act of 1996 was completed
in September of 1998 and determined that if the project were
constructed based on current criteria, additional easements would be
required. Section 449 of WRDA 2000 directed the Secretary to evaluate
backwater effects specifically due to flood control operations on land
around Grand Lake. That study indicated that Federal actions have been
a significant cause of the backwater effects and according to WRDA
2000, the feasibility study should be 100 percent federally funded. A
Feasibility study is necessary to determine the most cost-effective
solution to the real estate inadequacies. Changes in the operations of
the project or other upstream changes could have a significant impact
on flood control, hydropower, and navigation operations in the Grand
(Neosho) River system and on the Arkansas River basin system, as well.
We request funding in the amount of $650,000 in fiscal year 2006 to
fully fund Feasibility studies evaluating solutions to upstream
flooding associated with existing easements necessary for flood control
operations of Grand Lake. Although this has been a Congressional add
for the past 2 years, no money was made available in the fiscal year
2005 President's budget request.
Continuing Authorities Programs.--We support funding of needed
programs including the Small Flood Control Projects Program (Section
205 of the 1948 Flood Control Act, as amended), Aquatic Ecosystem
Restoration (Section 206 of the 1996 Water Resources Development Act,
as amended), Ecosystem Restoration (Section 1135 of the 1986 Water
Resources Development Act, as amended) as well as the Emergency
Streambank Stabilization Program (Section 14 of the 1946 Flood Control
Act, as amended). Smaller communities in Kansas (Iola, Liberal,
McPherson, Augusta, Parsons, Altoona, Kinsley, Newton, Arkansas City,
Coffeyville and Medicine Lodge) have previously requested assistance
from the Corps of Engineers under the Section 205 and Section 14
programs. The City of Wichita is also requesting funding through these
programs to address flooding problems. We urge you to support an
increase of these programs to a $65 million programmatic limit for the
Small Flood Control Projects Program, $35 million for Aquatic Ecosystem
Restoration, $35 million for the Ecosystem Restoration Program and $25
million for the Emergency Streambank Stabilization Program.
The Planning Assistance to States Program under section 22 of the
Water Resources Development Act of 1974, as amended, provides Federal
funding to assist the States in water resource planning. The State of
Kansas is grateful for previous funding under this program which has
assisted small Kansas communities in cost sharing needed resource
planning as called for and approved in the Kansas State Water Plan. We
request continued funding of this program at the $10 million
programmatic limit which will allow the State of Kansas to receive the
$500,000 limit.
Finally, we are very grateful that both the Corps of Engineers and
Bureau of Reclamation have the expertise needed for the development and
protection of water resources infrastructure. It is essential to have
the integrity and continuity these agencies provide on major public
projects. Your continued support of these vital agencies, including
funding, will be appreciated. Our infrastructure must be maintained and
where needed, enhanced for the future.
Mr. Chairman and members of these committees, thank you very much
for the dedicated manner in which you have dealt with the Water
Resources Programs and for allowing us to present our funding requests.
oklahoma
prepared statement of james m. hewgley, jr., chairman for oklahoma
Mr. Chairman and members of the committee, I am James M. Hewgley,
Jr., Oklahoma Chairman of the Arkansas River Basin Interstate
Committee, from Tulsa, Oklahoma.
It is my privilege to present this statement on behalf of the
Oklahoma Members of our committee in support of adequate funding for
water resource development projects in our area of the Arkansas River
Basin. Other members of the committee are Mssrs. Ted Coombes, Tulsa; A.
Earnest Gilder, Muskogee; Terry McDonald, Tulsa; and Lew Meibergen,
Enid, who also serves as Chairman of the combined Arkansas River Basin
Interstate Committee.
Together with representatives of the other Arkansas River Basin
States, we fully endorse the statement presented to you by the Chairman
of the Arkansas River Basin Interstate Committee. We appreciate the
opportunity to present our views of the special needs of our States
concerning several studies and projects.
The committee is encouraged about water resource developmental
opportunities in the Arkansas River Basin for not only navigation, but
also hydropower, flood control, recreation, water supply, and
environmental stewardship. However, we are concerned that existing and
proposed funding levels will not support the needs.
Tow Haulage Equipment--Oklahoma.--We request funding of $3.0
million to initiate the installation of tow haulage equipment on the
locks located along the Arkansas River portion of the McClellan-Kerr
Arkansas River Navigation System. Total cost for these three locks is
$4.7 million. This project will involve installation of tow haulage
equipment on W.D. Mayo Lock and Dam No. 14, Robert S. Kerr Lock and Dam
No. 15, and Webbers Falls Lock and Dam No. 16, on the Oklahoma portion
of the waterway. The tow haulage equipment is needed to make
transportation of barges more efficient and economical by allowing less
time for tows to pass through the various locks.
Mr. Chairman, Public Law 108-137 authorized a 12-foot channel on
the McClellan-Kerr Arkansas River Navigation System. The Corps is now
obligated to operate and maintain the system as a 12-foot channel. Over
90 percent of the system currently is adequate for a 12-foot channel.
Deepening the remainder of the channel to 12 feet will allow carriers
to place 43 percent more cargo on barges, which will reduce the amount
of fuel consumed and emissions released. Other environmental benefits
include the creation of new aquatic habitat through new dike
construction and the construction of least tern islands through
beneficial use of dredged material.
Therefore, we request $40 million to maintain the authorized depth
by constructing dike structures to minimize dredging and dredging only
necessary areas. This investment will increase the cost competitiveness
of this low-cost, environment-friendly transportation method and help
us combat the loss of industry and jobs to overseas.
The committee supports direct funding for hydropower and is
convinced that this is a great public/private partnership that will
make aging hydropower facilities more reliable and will utilize
hydropower revenue to protect the Federal investment. Similarly, the
committee supports initiatives to apply proceeds collected from Corps
hydropower facilities, water storage contracts, and from recreation use
fees to be returned to the projects where the revenue was generated in
order to properly maintain the infrastructure and provide quality
services. Finally, the committee promotes economic development around
Corps reservoirs, and endorses the return of proceeds from leases and
sale of Federal lands to be returned to the respective projects for
infrastructure maintenance and improvements for the recreating public.
The Power Plant at Webbers Falls Lock and Dam on the Arkansas River
has suffered from greatly reduced reliability due to turbine design
problems. Because this is a run-of-the-river facility with no storage,
energy spilled due to off-line units is energy that is lost forever. A
feasibility study recommending major rehabilitation of this unit has
been approved by the office of the Chief of Engineers.
Similar problems have been experienced at Ozark-Jeta Taylor Lock
and Dam on the Arkansas River in Arkansas. Congress approved a new
start and funding to begin the major rehabilitation of the Ozark
powerhouse in fiscal year 2003. Congress approved the administration's
fiscal year 2005 budget request of $5 million in Construction General
funding to continue this major rehabilitation. The Little Rock District
has solicited bids to replace the turbines with a more reliable design,
and was scheduled to sign the contract in April 2005. This contract
would have included an option to provide the newly designed turbines
for the Webbers Falls project as well if additional funding were
forthcoming. By combining the turbine replacements into a single
contract, as recommended by Corps' Hydropower Design Center, $5 million
could be saved. Anticipating the award of this contract, the consumer-
owned electric utilities that purchase the hydropower generated at
these projects committed in January 2005 to provide up to $38 million
to complete the Webbers Falls rehab if traditional appropriations were
unavailable for this project.
Unfortunately, the administration's fiscal year 2006 budget request
does not include the necessary follow-on funding to continue the Ozark
major rehab. On this basis Corps Headquarters has recommended that the
Little Rock District not issue the contract and that the remaining $3
million in fiscal year 2005 funding be reprogrammed to other projects.
If this recommendation is carried out, the major rehab of both Ozark
and Webbers Falls power plants would be terminated.
The committee recommends that Congress appropriate $9.5 million to
start the Webbers Falls major rehab in fiscal year 2006. If traditional
appropriation funding is unavailable for these projects, we recommend
that the committee fund these projects from the receipts provided by
the sale of Federal hydropower--a process which is recommended in the
administration's budget request.
Mr. Chairman, it is my pleasure to point out to this distinguished
committee that this navigation system has brought low cost water
transportation to Oklahoma, Arkansas and the surrounding States. There
has been over $5.5 billion invested in the construction and development
of the McClellan-Kerr Arkansas River Navigation system by the Federal
Government ($1.3 billion) and the public and private sector ($4.2
billion+), resulting in the creation of over 50,000 jobs in this
partnered project.
Maintenance of the Navigation System.--In preparation for the
deepening of the navigation system from 9 to 12 feet, there is a
backlog of maintenance items that has been deferred due to insufficient
budgets to allow proper maintenance. These maintenance items are
required even to support navigation at the 9-foot depth in order to not
jeopardize the reliability of the system. Therefore, we request
additional funding in the amount of $1,549,000--plus the amount from
Little Rock, over and above normal funding, for deferred channel
maintenance. These funds would be used for such things as repair of
bank stabilization work, needed advance maintenance dredging, and other
repairs needed on the system's components that have deteriorated over
the past three decades.
In addition to the system-wide needed maintenance items mentioned
above, the budget for the Corps of Engineers for the past several years
has been insufficient to allow proper maintenance of the McClellan-Kerr
Arkansas River Navigation System--Oklahoma portion. As a result, the
backlog of maintenance items has continued to increase. If these
important maintenance issues are not addressed soon, the reliability of
the system will be jeopardized. The portion of the system in Oklahoma
alone is responsible for returning $2.6 billion in annual benefits to
the regional economy. The fiscal year 2006 O&M President's budget for
Tulsa District is $9.4 million less (over 12 percent) than the fiscal
year 2005 appropriation, which will result in no funding being
available for critical infrastructure maintenance in fiscal year 2006.
We therefore request that $2.33 million be added to the budget to
accomplish critical infrastructure maintenance items on the Oklahoma
portion of the system as follows:
--Robert S. Kerr.--$1,334,000 to repair erosion and construct
emergency mooring wood dolphins.
--Webbers Falls.--$498,000 for emergency dredging and to install a
debris boom.
Additional O&M funds are also requested for other high priority,
non-navigation, water resource needs including $543,000 for tainter
gate repair at Kaw; $1,200,000 for floating bulkhead mooring facility
repair at Keystone; $1,303,000 for tainter gate repair at Fort Gibson;
and $250,000 for tainter gate hoist equipment replacement at Tenkiller.
The Arkansas River Basin is a treasure that must be protected for
future generations. We are already experiencing a decline in water
quality due to sediment and nutrient loading. The quality of the water
in the Arkansas River and its tributaries, including the numerous
reservoirs in the system, is a reflection of its watershed and land use
practices. It is imperative that the sub-basins within the system are
studied using the watershed approach, similar to that currently being
performed in the Oologah feasibility studies, and that protective
remedies are identified and implemented to reverse the continuing
decline in water quality. We recommend that the following high priority
watershed studies be added to the fiscal year 2006 budgets:
Miami, Oklahoma and Vicinity Feasibility Study.--We request funding
of $350,000 to move into the feasibility stage for the vicinity in
Ottawa County including and surrounding Miami, Oklahoma in the Grand
(Neosho) Basin. Water resource planning-related concerns include
chronic flooding, ecosystem impairment, poor water quality, subsidence,
chat piles, mine shafts, health effects, and Native American issues.
The State of Oklahoma's desire is to address the watershed issues in a
holistic fashion and restore the watershed to acceptable levels. Study
alternatives could include structural and non-structural flood damage
measures, creation of riverine corridors for habitat and flood storage,
development of wetlands to improve aquatic habitat and other measures
to enhance the quality and availability of habitat and reduce flood
damages.
Oologah Lake Watershed Feasibility Study.--We request funding of
$370,000, which is $42,000 more than the President's budget request,
for ongoing feasibility studies at Oologah Lake and in the upstream
watershed. The lake is an important water supply source for the city of
Tulsa and protection of the lake and maintaining and enhancing the
quality of the water is important for the economic development of the
city. Recent concerns have been expressed by the City of Tulsa and
others regarding potential water quality issues that impact water
users, as well as important aquatic and terrestrial habitat. Concerns
are related to sediment loading and turbidity, oilfield-related
contaminants and nutrient loading.
Grand (Neosho) Basin Reconnaissance Study.--We request funding in
the amount of $300,000 to conduct a feasibility study of the water
resource problems in the Grand (Neosho) Basin in Oklahoma and Kansas.
There is a need for a basin-wide water resource planning effort in the
Grand-Neosho River basin, apart from the issues associated with Grand
Lake, Oklahoma. The reconnaissance study indicated that there is a
Federal interest in this project and the feasibility will focus on the
evaluation of institutional measures which could assist communities,
landowners, and other interests in northeastern Oklahoma and
southeastern Kansas in the development of non-structural measures to
reduce flood damages in the basin. The reconnaissance study was a
Congressional add new start, but no funding was put into the fiscal
year 2006 President's budget request to continue into the feasibility
stage.
Wister Lake Watershed Ecosystem Restoration Study.--This ecosystem
restoration study will evaluate alternatives for in-lake solutions on
Wister Lake. Excessive sedimentation and turbidity, nutrient loading
and excessive algae growth, taste and odor; and excessive iron and
manganese are problems at Wister Lake. Wind and wave action, combined
with shoreline erosion and nutrient inputs, contribute to habitat loss
and degradation of the lake. We request funds in the amount of $140,000
to continue this study.
Spavinaw Creek Watershed Study.--Spavinaw Creek and its downstream
impoundments Eucha and Spavinaw Lakes are severely impacted by nutrient
loading and excessive algae growth as a result of agricultural
practices located in Arkansas and Oklahoma. Degradation of water
quality has led to taste and odor problems, increased treatment costs,
and a decreased recreational and aesthetic value of the lakes.
Together, Spavinaw and Eucha Lakes provide 47 percent of the water
supply for the Tulsa metropolitan area. The Metropolitan Utility
Authority entered into the feasibility cost-share agreement in June
2004. We request funds in the amount of $266,000 to continue this
study.
Grand Lake Feasibility Study.--A need exists to evaluate water
resource problems in the Grand-Neosho River basin in Kansas and
Oklahoma to evaluate solutions to upstream flooding problems associated
with the adequacy of existing real estate easements necessary for flood
control operations of Grand Lake, Oklahoma. A study authorized by the
Water Resources Development Act of 1996 was completed in September of
1998 and determined that if the project were constructed based on
current criteria, additional easements would be required. Section 449
of WRDA 2000 directed the Secretary to evaluate backwater effects
specifically due to flood control operations on land around Grand Lake.
That study indicated that Federal actions have been a significant cause
of the backwater effects and, according to WRDA 2000, the feasibility
study should be 100 percent federally funded. A feasibility study is
necessary to determine the most cost-effective solution to the real
estate inadequacies. Changes in the operations of the project or other
upstream changes could have a significant impact on flood control,
hydropower and navigation operations in the Grand (Neosho) River system
and on the Arkansas River Basin system, as well. We urge you to provide
$650,000 to fund feasibility studies for this important project in
fiscal year 2006 and to direct the Corps of Engineers to execute the
study at full Federal expense. This project has been a Congressional
add for the past 2 years, but there are no funds in the fiscal year
2006 President's budget request to continue this project.
Tenkiller Dam Safety Project.--We are pleased that the President's
budget includes funds to advance work for flood control and other water
resource needs in Oklahoma. Of special interest to our committee is
funding for the Tenkiller Ferry Lakes Dam Safety Assurance Project in
Oklahoma. This project is slated to be complete in fiscal year 2006 and
continued funding is necessary for safety purposes and economic
efficiencies. We would like to see Tenkiller funded at the $5.2 million
level, which is the Corps' capability for fiscal year 2006.
Canton Dam Safety.--We request that funding in the amount of $6.0
million be provided to continue the Canton Lake Dam Safety Project. The
stability of the existing spillway requires restrictions on the flood
control pool. The flood pool can only be held to a 17-year flood event.
Installation of steel anchors is required to stabilize the existing
spillway so that the project can be operated as originally designed.
Funds were provided by Congress in the fiscal year 2005 Appropriations
bill to work on this important project.
Section 205.--Although the Small Flood Control Projects Program
addresses flood problems which generally impact smaller communities and
rural areas and would appear to benefit only those communities, the
impact of those projects on economic development crosses county,
regional and sometimes State boundaries. The communities served by the
program frequently do not have the funds or engineering expertise
necessary to provide adequate flood damage reduction measures for their
citizens. Continued flooding can have a devastating impact on community
development and regional economic stability. The program is extremely
beneficial and has been recognized nationwide as a vital part of
community development, so much so in fact that there is currently a
backlog of requests from communities who have requested assistance
under this program. There is limited funding available for these
projects and we urge this program be increased to an annual limit of
$65 million.
We also request your continued support of the Flood Plain
Management Services Program (Section 206 of the 1960 Flood Control
Act), which authorizes the Corps of Engineers to use its technical
expertise to provide guidance in flood plain management matters to all
private, local, State and Federal entities. The objective of the
program is to support comprehensive flood plain management planning.
The program is one of the most beneficial programs available for
reducing flood losses and provides assistance to officials from cities,
counties, States and Indian Tribes to ensure that new facilities are
not built in areas prone to floods. Assistance includes flood warning,
flood proofing, and other flood damage reduction measures, and critical
flood plain information is provided on a cost-reimbursable basis to
home owners, mortgage companies, realtors and others for use in flood
plain awareness and flood insurance requirements.
We also request your support of the Planning Assistance to States
Program (Section 22 of the 1974 Water Resources Development Act) which
authorizes the Corps of Engineers to use its technical expertise in
water and related land resource management to help States and Indian
tribes solve their water resource problems. The program is used by many
States to support their State water plans. As natural resources
diminish, the need to manage those resources becomes more urgent. We
urge your continued support of this program as it supports States and
Native American tribes in developing resource management plans which
will benefit citizens for years to come. The program is very valuable
and effective, matching Federal and non-Federal funds to provide cost-
effective engineering expertise and support to assist communities,
States and tribes in the development of plans for the management,
optimization and preservation of basin, watershed and ecosystem
resources. The Water Resources Development Act of 1996 increased the
annual program limit from $6 million to $10 million and we urge this
program be fully funded to the programmatic limit of $10 million.
We strongly urge the Appropriations Committee to raise the Corps of
Engineers' budget to $6.6 billion to help get delayed construction
projects back on schedule and to reduce the deferred maintenance
backlog which is out of control. This will help the Corps of Engineers
meet the obligations of the Federal Government to people of this great
country.
Concerning another related matter, we have deep concerns about the
attempt to re-authorize the Endangered Species Act without significant
beneficial reforms. If a bill is passed through without reforms, it
will be devastating to industry and the country as a whole. We strongly
urge you to take a hard look at any bill concerning this re-
authorization and insure that it contains reasonable and meaningful
reforms. We urge the re-authorization of the act with reforms at the
earliest possible time.
Mr. Chairman, we appreciate this opportunity to present our view on
these subject.
______

Prepared Statement of the Tennessee-Tombigbee Waterway Development
Authority
Mr. Chairman, we appreciate the opportunity to once again submit to
you for your committee's consideration our requests for fiscal year
2006 appropriations for the Tennessee-Tombigbee Waterway and other
waterway projects of importance to our region. This is the 46th
consecutive year the Authority has presented its funding requests to
the Congress.
The Tennessee-Tombigbee Waterway Development Authority is a
federally authorized interstate compact comprised of the States of
Alabama, Kentucky, Mississippi, and Tennessee. Governor Bob Riley of
Alabama is chairman of the compact.
We recognize the demands the war in Iraq and homeland security have
had on Federal spending and the need to restrict appropriations for
other programs in order to reduce budget deficits. However, the
proposed budget for the Nation's ports and waterways is woefully
inadequate and must be increased if the Nation is to sustain a
projected two-fold increase in commerce and trade by the end of the
next decade. While fiscal year 2006 is the largest for the Corps of
Engineers by an administration in memory, the proposed budget is nearly
$200 million less than that approved by the Congress for this year and
$1.1 billion less than that needed to meet projected needs next year.
The Tennessee-Tombigbee Waterway is a good example how ports and
waterways are suffering from inadequate funding.

TENNESSEE-TOMBIGBEE WATERWAY
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
Authority's
Fiscal Year Proposed 2006 2006
2005 Level Budget Recommendation
----------------------------------------------------------------------------------------------------------------
O&M............................................................. 23.0 20.1 24.0
Wildlife Mitigation............................................. 2.0 1.4 2.0
----------------------------------------------------------------------------------------------------------------

While over one-half of the Nation's 257 locks are more than 50
years old, the Tenn-Tom is relatively a new project. The waterway is
now celebrating its 20th anniversary and has always enjoyed strong
political support by members of Congress from this region.
Nevertheless, Tenn-Tom's operation and maintenance has been under
funded nearly every year since the 1997 Balanced Budget Act was
enacted. As a result, the waterway has accumulated a backlog of nearly
$12 million of repairs that were previously scheduled but have been
indefinitely deferred due to lack of funding. The President's request
of $20.1 million is nearly $3 million less than the current level of
funding and nearly $4 million below that needed to adequately maintain
the waterway and enable it to generate expected economic benefits. We
recommend that $24 million be appropriated in 2006 for the operation
and maintenance of the waterway. The requested increase in funds above
the President's budget are needed for the following table.

[In millions of dollars]
------------------------------------------------------------------------
Amount
------------------------------------------------------------------------
Additional dredging to keep the navigation channel open 2.0
to commerce............................................
More capacity of spoil disposal areas to accommodate 1.2
increased dredging needs...............................
Determine measures to reduce channel dredging in 0.5
Aberdeen Lake, the waterway's most costly dredging
problem................................................
Eradication of aquatic weeds, the public's No. 1 0.2
complaint about the waterway's environment.............
---------------
Total Increase.................................... 3.9
------------------------------------------------------------------------

An additional $600,000 is needed to reimburse the States of Alabama
and Mississippi for their expenses for managing 126,000 acres of
wildlife habitat that are the major part of the Tenn-Tom Wildlife
Mitigation Project. A total payment of $2 million is required to meet
the contractual obligations of the Federal Government to the two
States. Environmental projects were given top budget priority in the
2006 proposed budget. Although this project is recognized as one of the
Corps' most successful efforts to restore lost wildlife habitat, OMB
nevertheless cut its funding from a current level of $2.0 million to
$1.4 million. These funds need to be restored.

KENTUCKY LOCK
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
Authority's
Fiscal Year Proposed 2006 2006
2005 Level Budget Recommendation
----------------------------------------------------------------------------------------------------------------
Lock Construction............................................... 32.5 .............. 40.0
----------------------------------------------------------------------------------------------------------------

The Corps has spent a total of $165 million since 1998 on
construction of a new lock at Kentucky Dam, the gateway to waterborne
commerce on the Tennessee River and the connecting Tenn-Tom Waterway.
Nearly 60 million tons of commerce are shipped each year on these two
systems with some 37 million tons traversing Kentucky Lock, itself. The
nearly 60-year old, out-moded, existing lock cannot efficiently
accommodate such a large volume of traffic causing 4-hour to 7-hour
delays to transit the lock that cost shippers more than $70 million
annually in wasted transportation costs. This is one of the most costly
bottlenecks on the entire waterway system.
OMB instituted a new policy for next fiscal year that eliminated
all on-going construction for projects that do not have a remaining
benefits-to-costs ratio of 3 to 1 or higher. Although construction is
25 percent complete, funding for Kentucky Lock was eliminated based on
this OMB policy. If not reversed by the Congress, the project will be
mothballed and likely never completed. Its B/C ratio was calculated at
2.7 to 1 but if more optimal funding had been requested by OMB and
approved by the Congress in prior years, its B/C would be 3.1 to 1.
Traditionally, the Congress has authorized and funded those civil works
projects, including waterways, that have a 1 to 1 or greater B/C ratio
or those that demonstrated their economic benefits equaled or exceeded
their costs.
We respectfully implore your committee to resoundingly reject this
ill-advised budget policy and restore funding for Kentucky Lock and the
other affected projects. To stop construction of this much needed
waterway improvement at this time and waste nearly $165 million already
invested would be unconscionable. Forty million dollars is needed to
keep construction on a reasonable timetable that will permit completion
of the project by 2012.
The Authority also recommends that you inform the Corps immediately
that your committee rejects this policy and that it will restore funds
for construction. Further, we request that you direct the agency to
award those contracts as originally scheduled for this year, based on
those appropriations already provided by the Congress. This is
especially important for the superstructure contract planned for award
this spring. This work is on a critical path and any delay of the
contract's award results in a corresponding delay in the overall
completion of Kentucky Lock. It is critically important this contract
is awarded this spring.

CHICKAMAUGA LOCK
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
Authority's
Fiscal Year Proposed 2006 2006
2005 Level Budget Recommendation
----------------------------------------------------------------------------------------------------------------
Lock Construction............................................... 17.0 .............. 10.0
Lock Repairs.................................................... 1.0 2.4 2.4
----------------------------------------------------------------------------------------------------------------

Although the Congress approved this project as a new construction
start in fiscal year 2004, OMB has failed for the second year to
include funding for the new lock. Unless this project is built soon to
replace the structurally deteriorating and undersized, existing lock,
eastern Tennessee will become landlocked, causing serious economic
disruptions. Ongoing repairs to patch up the more than 60-year-old lock
will only postpone the inevitability of its permanent closure as a
safety precaution and block commercial navigation between Chattanooga
and Knoxville, TN until the new lock is completed.
The Authority requests an appropriation of $10 million to enable
the Corps of Engineers to start construction of the cofferdam needed to
build the new lock. This will be the first major contract for this
critically needed project.
Mr. Chairman, we greatly appreciate the leadership you have given
to water resource development. These projects have greatly increased
the Nation's economic worth and improved the quality of life of its
citizens. We especially thank you for your past support of the
Tennessee-Tombigbee Waterway and for the other projects in our region.
We again ask for your careful consideration of the above requests for
continued funding of these very important projects.
______

Prepared Statement of the Upper Mississippi River Basin Association
(UMRBA)

[In millions of dollars]
------------------------------------------------------------------------
President's UMRBA
Request Recommendation
------------------------------------------------------------------------
Construction General:
Upper Miss. River System 33.50 33.50
Environmental Mgt. Program.........
Lock and Dam 3 (Major .............. 5.30
Rehabilitation)....................
Lock and Dam 11 (Major 7.58 7.58
Rehabilitation)....................
Lock and Dam 19 (Major 17.50 17.50
Rehabilitation)....................
Lock and Dam 24 (Major 4.30 4.30
Rehabilitation)....................
Lock and Dam 27 (Major .............. 2.00
Rehabilitation)....................
Upper Mississippi and Illinois .............. 16.20
Rivers Navigation Study (if
construction is authorized)........
Operation and Maintenance:
O&M of the Upper Mississippi and 180.43 232.57
Illinois Rivers Navigation System..
General Investigations:
Upper Mississippi and Illinois .............. 24.00
Rivers Navigation Study (PED)......
Upper Mississippi River .............. 1.10
Comprehensive Plan.................
------------------------------------------------------------------------

The Upper Mississippi River Basin Association (UMRBA) is the
organization created in 1981 by the Governors of Illinois, Iowa,
Minnesota, Missouri, and Wisconsin to serve as a forum for coordinating
river-related State programs and policies and for collaborating with
Federal agencies on regional issues. As such, the UMRBA works closely
with the Corps of Engineers on a variety of programs. Of particular
interest to the basin States are the following:
upper mississippi and illinois rivers navigation study
The Corps of Engineers recently completed its 14-year Upper
Mississippi and Illinois Rivers Navigation Study, issuing the final
feasibility report in September 2004 and the Chief's Report in December
2004. However, Congress has not yet authorized the recommended
integrated plan for navigation improvements and ecosystem restoration.
To insure that the necessary planning and design work can proceed, in
anticipation of construction authorization, Congress appropriated $13.5
million for Preconstruction Engineering and Design (PED) in fiscal year
2005. A similar bridging strategy will be necessary in fiscal year 2006
if authorization is still pending.
PED.--The UMRBA supports $24 million for PED in fiscal year 2006.
Many of the large scale projects, such as new locks or fish passage at
dams, require 3 years or more of PED before they can move to
construction. It is thus critical that PED work proceed immediately and
be sustained over time. In fiscal year 2005, PED funding is being
directed to both navigation improvements and ecosystem restoration
projects. To continue this balanced approach, the Corps proposes
directing $13 million to navigation measures (mooring facilities,
switchboats, and lock design), $9 million to 30 ecosystem restoration
projects, and $2 million for program management in fiscal year 2006.
Construction.--If the integrated navigation and ecosystem
restoration program is authorized for construction this year,
construction could be initiated on some projects as early as fiscal
year 2006. In that event, UMRBA would support construction funding of
$16.2 million, which is the Corps of Engineers' maximum expressed
capability. This funding would support mooring facilities at 7 sites,
switchboats at 2 sites, and 10 ecosystem restoration projects.
environmental management program
For the past 18 years, the Upper Mississippi River System
Environmental Management Program (EMP) has been the premier program for
restoring the river's habitat and monitoring the river's ecological
health. As such, the EMP is key to achieving Congress' vision of the
Upper Mississippi as a ``nationally significant ecosystem and a
nationally significant commercial navigation system.'' Congress
reaffirmed its support for this program in the 1999 Water Resources
Development Act by reauthorizing the EMP as a continuing authority and
increasing the annual authorized appropriation to $33.5 million. The
UMRBA is pleased that the administration has requested full funding of
$33.5 million for the EMP in fiscal year 2006. The fact that the
administration has identified the EMP as one of nine projects ``that
are the highest priorities in the Nation,'' is tribute to the EMP's
success. Yet annual appropriations for the EMP have fallen short of the
authorized funding levels for the past 8 years and the program is still
suffering from the dramatic 40 percent cut it experienced in fiscal
year 2003. Thus, the UMRBA strongly urges Congress to appropriate full
funding of $33.5 million for the EMP in fiscal year 2006.
The administration's proposed funding level of $33.5 million will
support planning and design of 21 habitat restoration projects and
construction of 11 projects. Once completed, these 11 projects will
benefit over 32,000 acres of aquatic and floodplain habitat. In
addition, fiscal year 2006 funds will support expanded efforts of the
Long Term Resource Monitoring program (LTRMP), which has suffered
substantially from the funding shortfalls in recent years. This year,
the LTRMP was restructured to enhance its ability to meet increasing
demands for information with decreasing resources. But it is essential
that funding be increased in fiscal year 2006 to revive many of the
critical functions that have been eliminated, deferred, or reduced.
UMRBA is particularly concerned about an apparent directive from
OMB that $3 million of fiscal year 2006 EMP funding be devoted to
development of a ``10-year aquatic ecosystem restoration plan.'' Such a
plan is unnecessary and would be duplicative of plans that the Corps of
Engineers just completed as part of the Upper Mississippi and Illinois
Rivers Navigation Study. Given the backlog of EMP habitat restoration
projects awaiting construction, and the vast number of unmet needs
under the Long Term Resource Monitoring Program, it would be misguided
to divert construction funds from this important work to develop a plan
that is largely duplicative. Congress should direct the Corps of
Engineers to use EMP funds exclusively for construction of habitat
restoration projects and long term monitoring, as authorized in the
1999 Water Resources Development Act.
UMRBA recognizes that one of the biggest challenges facing future
restoration efforts on the Upper Mississippi River (UMR) will be
integrating the work that is currently done under EMP with the new
ecosystem/navigation authority being proposed. Congress is currently
considering authorization of a new dual-purpose authority for the Corps
of Engineers, as recommended in the recently completed navigation
feasibility study. For now, however, the EMP remains the single most
effective and long-standing UMR ecosystem restoration program.
Moreover, the EMP's monitoring element is entirely unique and would not
be replicated in the proposed new authority. Therefore, fully funding
the EMP is as important today as it has ever been. The EMP must not
languish as questions related to future program streamlining and
coordination are being addressed.
major rehabilitation of locks and dams (l&d)
Most of the locks and dams on the Upper Mississippi River System
are over 60 years old and many are in serious need of repair and
rehabilitation. For the past 19 years, the Corps has been undertaking
major rehabilitation of individual facilities throughout the navigation
system in an effort to extend their useful life. This work is critical
to ensuring navigation reliability and safety.
The UMRBA supports the Corps' fiscal year 2006 budget request for
major rehabilitation work at L&D 11 ($7.58 million), L&D 19 ($17.5
million), and L&D 24 ($4.3 million). L&D 11, located near Dubuque,
Iowa, is nearly 70 years old and experiencing frequent breakdowns of
mechanical and electrical equipment. The major rehabilitation project
currently underway includes new bulkheads, lock chamber and guidewall
repairs, and electrical system upgrades. Rehabilitation needs are
especially urgent at L&D 19, where temporary use of the only available
spare lock gates risks closure of the river north of Keokuk, Iowa, if
those gates fail. L&D 24, located near Clarksville, Missouri, is
nearing completion of the first phase of its $87 million
rehabilitation. Fiscal year 2006 funding will support completion of the
dam tainter gate rehabilitation and lock wall concrete repairs.
The UMRBA also supports funding for two major rehabilitation
projects that are not included in the President's request: L&D 3 ($5.3
million) and Locks 27 ($2 million). Navigation safety and embankment
failure have been a concern for over 20 years at L&D 3. Downbound
commercial tows have difficulty negotiating the lock chamber and in
some cases have actually been sucked into the gated portion of the dam.
Releasing these barges from the dam involves manipulating the gates and
water levels in a way that puts increased pressure on the adjacent
embankments, which have been severely weakened by age and past
accidents. Should these structures be breached, commercial navigation
would be curtailed and two large power plants would be forced to shut
down. Lock 27 is located at a critical juncture on the inland waterway
system, downstream of the Mississippi, Illinois, and Missouri Rivers.
Because no funding has yet been provided to initiate rehabilitation as
a construction ``new start,'' emergency repairs continue using O&M
funds.
operation and maintenance (o&m) of the upper mississippi river
navigation system
The Corps of Engineers is responsible for operating and maintaining
the Upper Mississippi River System for navigation. This includes
channel maintenance dredging, placement and repair of channel training
structures, water level regulation, and routine care and operation of
29 locks and dams on the Mississippi River and 7 locks and dams on the
Illinois River. The fiscal year 2006 budget request totals
approximately $180 million for O&M of this river system. These funds
are critical to the Corps' ability to maintain a safe and reliable
commercial navigation system, while protecting and enhancing the
river's environmental values.

[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal Year Fiscal Year
Upper Mississippi River System O&M Accounts 2005 Fiscal Year 2006 Full
Allocation 2006 Request Capability
----------------------------------------------------------------------------------------------------------------
Mississippi River Between Missouri River and Minneapolis:
St. Paul District (MVP)..................................... 46.37 58.07 66.07
Rock Island District (MVR).................................. 40.65 48.11 64.40
St. Louis District (MVS).................................... 20.40 18.92 23.17
Mississippi River Between Ohio and Missouri Rivers.............. 20.15 29.56 40.48
Illinois Waterway:
Rock Island District (MVR).................................. 31.29 24.70 37.23
St. Louis District (MVS).................................... 1.85 1.07 1.22
----------------------------------------------------------------------------------------------------------------

The President's fiscal year 2006 funding request for O&M of most
Upper Mississippi River reaches is above fiscal year 2005 allocations,
with the exception of the pooled portion of the St. Louis District.
Unfortunately, all these funding levels are well below what is needed.
In particular, there is a growing backlog of maintenance needs as a
result of historically flat line budgets. In the case of the Illinois
Waterway, the President's fiscal year 2006 request, which is 20 percent
below the fiscal year 2005 allocation, is even more problematic.
Funding on the Illinois Waterway was increased substantially in fiscal
year 2005 to address a significant maintenance backlog. Under the
fiscal year 2006 request, all work on the backlog would stop and basic
service levels would be reduced.
The UMRBA supports increased funding for O&M of the Upper
Mississippi and Illinois River System to meet routine ongoing operation
and maintenance needs, and to address the growing unfunded maintenance
backlog. Full capability funding in fiscal year 2006 for all three
Upper Mississippi and Illinois River districts totals $232.57 million.
upper mississippi river comprehensive plan (flood damage reduction)
Section 459 of the Water Resources Development Act of 1999
authorized the Corps to develop what is called the ``Upper Mississippi
River Comprehensive Plan,'' the primary focus of which is systemic
flood damage reduction and flood protection. Since planning began in
December 2001, funding shortfalls have been significant and the study
has been suspended several times. It will thus be impossible to
complete the study within the 3-year time frame Congress established in
WRDA 1999, and later reaffirmed in WRDA 2000.
The fiscal year 2006 budget includes no funding for the
Comprehensive Plan, despite the fact that the study is nearly complete.
The analysis to date suggests that systemwide levee increases have
benefit-to-cost ratios less than one. However, this is the Corps' first
use of flow frequency data to analyze flood damage reduction options on
a systemwide basis. It is providing important insights into how local
changes to the flood protection system may impact flood levels
throughout the system. The Corps has also evaluated a series of
Emergency Action Scenarios that state floodplain managers can utilize
when making flood-fighting decisions. It is thus important that this
study be brought to a timely conclusion, including preparation of the
final report. Toward that end, UMRBA supports $1.1 million for
completion of the study in fiscal year 2006.
______

Prepared Statement of the Fort Peck Assiniboine and Sioux Tribes and
Dry Prairie Rural Water System
fiscal year 2006 budget request
The Fort Peck Assiniboine and Sioux Tribes and Dry Prairie Rural
Water respectfully request fiscal year 2006 appropriations in the
amount of $25,457,000 for the Bureau of Reclamation from the
subcommittee on Energy and Water Development. Funds will be used to
construct critical elements of the Fort Peck Reservation Rural Water
System, Montana, (Public Law 106-382, October 27, 2000). The amount
requested is based on need to build critical project elements and is
well within capability to spend the requested funds as set out below:

FISCAL YEAR 2006 WORK PLAN--PECK RESERVATION RURAL WATER SYSTEM (PUBLIC
LAW 106-382)
------------------------------------------------------------------------
Amount
------------------------------------------------------------------------
Fort Peck Tribes:
Work Plan (100% Federal):
Water Treatment Plant........................... $13,251,000
Pipelines:
Poplar to Big Muddy......................... 1,956,000
Poplar to Wolf Point........................ 1,956,000
FP OM Buildings................................. 856,000
---------------
Total............................................. 18,019,000
Dry Prairie:
Work Plan (Branch Pipelines):
Bainville, Dane Valley and East Medicine Lake:
Federal..................................... 7,438,000
State and Local............................. 2,349,000
---------------
Total..................................... 9,787,000
---------------
Total..................................... 27,806,000
===============
Federal................................................. 25,457,000
State and Local......................................... 2,349,000
------------------------------------------------------------------------

The sponsor Tribes and Dry Prairie greatly appreciate the previous
appropriations from the subcommittee that have permitted building the
Missouri River intake, the critical water source, and the first phase
of the Culbertson to Medicine Lake Pipeline Project.
The request is slightly less than the average annual appropriations
needed to complete the project in fiscal year 2012, as provided by the
authorizing legislation:

------------------------------------------------------------------------

------------------------------------------------------------------------
Total Federal Funds Authorized (October 2004 Dollars)... $234,860,000
Federal Funds Expended Through Fiscal Year 2005......... $22,510,000
Percent Complete........................................ 9.58
Amount Remaining........................................ $212,350,000
Average Annual Required for Fiscal Year 2012 Finish $30,336,000
(Public Law 106-382)...................................
Fiscal Year 2006 Amount Requested....................... $25,457,000
------------------------------------------------------------------------

Note that cost indexing from last year due to inflation increased
the cost of the project from $207 million to $235 million, an increase
of $28 million. This is more than the amount requested for fiscal year
2006. Increases in the level of appropriations are needed to outpace
inflation.
proposed activities
Public Law 106-382 (October 27, 2000) authorized this project,
which includes all of the Fort Peck Indian Reservation in Montana and
the Dry Prairie portion of the project outside the Reservation.
Fort Peck Indian Reservation
On the Fort Peck Indian Reservation the Tribes have used
appropriations from previous years to construct the Missouri River raw
water intake, a critical feature of the regional water project. The raw
water pump station has also been constructed, and the raw water
pipeline between the Missouri River and the water treatment plant has
been constructed to within 2 miles of the water treatment plant. The
sludge lagoons at the water treatment plant are currently under
construction. All projects have a head under the engineers estimate.
A contract for the construction of the Missouri River water
treatment plant will be initiated in fiscal year 2005. Completion of
construction of the water treatment plant is contemplated in fiscal
year 2007.
The request for fiscal year 2006 will continue the construction of
the Missouri River water treatment plant with the use of the
$13,251,000. Fiscal year 2007 funds in the amount of $10.2 million will
be required for completion of the water treatment plant. The request
for fiscal year 2006 also provides for construction of finished core
water pipelines from the water treatment plant toward the communities
of Poplar (Poplar to Big Muddy) and Wolf Point (Poplar to Wolf Point).
These are the principal core pipelines that extend east and west of the
water treatment plant to serve the Fort Peck Indian Reservation and to
connect to Dry Prairie facilities on the east and west boundaries of
the Reservation. The funds for the pipeline projects are equally
divided at $1,956,000 for each project. The Tribes will also use
$856,000 for operation and maintenance buildings. The Bureau of
Reclamation can confirm that the use of funds proposed for fiscal year
2006 is well within the project's capability based on current status of
plans and specifications.
The pipeline project from the water treatment plant to Poplar will
provide a source of water for a section of the Fort Peck Indian
Reservation contaminated by oil drilling operations and the subject of
EPA orders to the responsible oil company. The oil company will provide
the distribution system necessary to mitigate the problems and the
Assiniboine and Sioux Rural Water System will provide the
interconnecting pipeline without duplicating any facilities identified
in the Final Engineering Report.
Dry Prairie
Dry Prairie has used previous appropriations to construct core
pipelines and a booster pump station from the community of Culbertson
to serve the communities of Froid and Medicine Lake. This project
represents a significant portion of the main core pipeline for the
eastern half of the Dry Prairie Project. Pipelines were sized to serve
the area north of the Missouri River, south of the Canadian border and
between the Fort Peck Indian Reservation and the North Dakota border
(see general location map attached).
The project relies on interim water supplies. The regional water
treatment plant will provide finished water when pipelines are
constructed to the interconnection point for Dry Prairie at the Big
Muddy River. The project between Culbertson, Froid and Medicine Lake is
in full operation and serves the last two mentioned communities and a
small number of rural users.
The completed system provides Dry Prairie with capability to build
branch pipelines and connect rural areas in the south half of the east
half of the Dry Prairie Project. Bainville, Dane Valley and East
Medicine Lake area residents can be served with the existing system
capacity that is now constructed and in operation. The request for
fiscal year 2006 funds of $7,438,000 will be combined with a non-
Federal cost share of $2,349,000 to build nearly $10 million of branch
pipelines connecting with the Culbertson-Froid-Medicine Lake core
pipeline. Bidding of the project can be undertaken in by third-quarter
fiscal year 2005. The Bureau of Reclamation can confirm the capability
to construct these pipelines based on the current status of design.
Master Plan
The project master plan is provided for review on the following
page. The request for fiscal year 2006 is shown in relation to the
project components that remain to be completed by 2012.
local project support
The Fort Peck Tribes have supported the project since 1992 when
they conceived it and sought means of improving the quality of life in
the region. The planning was a logical step after successful completion
of an historic water rights compact with the State of Montana. This
compact was the national ``ice breaker'' that increased the level of
confidence by other Tribes in Indian water right settlement
initiatives. The Tribes did not seek financial compensation for the
settlement of their water rights but expected development of meaningful
water projects as now authorized.
The 1999 Montana Legislature approved a funding mechanism from its
Treasure State Endowment Program to finance the non-Federal share of
project planning and construction. Demonstrating support of Montana for
the project, there were only three votes against the statutory funding
mechanism in both the full House and Senate. The 2001 through 2005
Montana Legislatures have provided all authorizations and
appropriations necessary for the non-Federal cost share.
Dry Prairie support is demonstrated by a financial commitment of
all 14 communities within the service area to participate in the
project. Rural support is strong, with about 70 percent of area farms
and ranches intending to participate as evidenced by their intent fees
of $100 per household.
need for water quality improvement
The Fort Peck Indian Reservation was previously designated as an
``Enterprise Community'', underscoring the level of poverty and need
for economic development in the region. The success of economic
development within the Reservation will be significantly enhanced by
the availability of higher quality, safe and more ample municipal,
rural and industrial water supplies that this regional project will
bring to the Reservation, made more necessary by an extended drought in
the region. Outside the Fort Peck Indian Reservation, the Dry Prairie
area has income levels that are higher than within the Reservation but
lower than the State average.
The feature of this project that makes it more cost effective than
similar projects is its proximity to the Missouri River. The southern
boundary of the Fort Peck Indian Reservation is formed by the Missouri
River for a distance of more than 60 miles. Many of the towns in this
regional project are located 2 to 3 miles from the river, including
Nashua, Frazer, Oswego, Wolf Point, Poplar, Brockton, Culbertson, and
Bainville. As shown on the enclosed project map, a transmission system
outside the Fort Peck Indian Reservation will deliver water 30 to 40
miles north of the Missouri River. Therefore, the distances from the
Missouri River to all points in the main transmission system are
shorter than in other projects of this nature in the Northern Great
Plains.
administration's support
The Tribes and Dry Prairie worked extremely well and closely with
the Bureau of Reclamation prior to and following the authorization of
this project in fiscal year 2000. The Bureau of Reclamation hands
heavily reviewed and commented on the Final Engineering Report, and all
comments were incorporated into the report and agreement was reached on
final presentation. OMB reviewed the Final Engineering Report prior to
its submission to Congress in the final step of the approval process.
The Commissioner, Regional and Area Offices of the Bureau of
Reclamation have been consistently in full agreement with the need,
scope, total costs, and the ability to pay analysis that supported the
Federal and non-Federal cost shares. There have been no areas of
disagreement or controversy in the formulation of the project.
The Bureau of Reclamation collaborated with the Tribes and Dry
Prairie to conduct and complete value engineering investigations of the
Final Engineering Report (planning), the Culbertson to Medicine Lake
pipeline (design), the Poplar to Big Muddy River pipeline (design), the
Missouri River intake (design) and on the regional water treatment
plant (design). Each of these considerable efforts has been directed at
ways to save construction and future operation, maintenance and
replacement costs as planning and design proceeded. Agreement with
Reclamation has been reached in all value engineering sessions on steps
to take to save Federal and non-Federal costs in the project.
The Bureau of Reclamation conducted independent review of the final
plans and specifications for the Missouri River raw water intake, the
regional water treatment plant and the Culbertson to Medicine Lake
Project. The Agency participated heavily during the construction phases
of those projects and concurred in all aspects of construction from
bidding through the completion of construction. (The regional water
treatment plant has not yet been constructed).
Cooperative agreements have been developed and executed from the
beginning phases to date between the Bureau of Reclamation and the
Tribes and between Bureau of Reclamation and Dry Prairie. Those
cooperative agreements carefully set out goals, standards and
responsibilities of the parties for planning, design and construction.
All plans and specifications are subject to levels of review by the
Bureau of Reclamation pursuant to the cooperative agreements. The
sponsors do not have the power to undertake activities that are not
subject to oversight and approval by the Bureau of Reclamation. Each
year the Tribes and Dry Prairie are required by the cooperative
agreements to develop a work plan setting out the planning, design and
construction activities and the allocation of funding to be utilized on
each project feature.
Clearly, the Fort Peck Reservation Rural Water System is well
supported by the Bureau of Reclamation. Congress authorized the project
with a plan formulated in full cooperation and collaboration with the
Bureau of Reclamation, and major project features are under
construction with considerable oversight by the Agency.
______

Joint Prepared Statement of the Port Commerce Department, The Port
Authority of New York & New Jersey; Division of Intermodal Services,
Department of Transportation, State of New Jersey; Empire State
Development Corporation, State of New York; and New York City Economic
Development Corporation
The Port of New York & New Jersey is grateful for your continued
support of the Nation's navigation system and our bi-State gateway.
Strong funding is important to our work with the Federal Government in
providing infrastructure necessary to accommodate the Nation's demand
for international commerce. We strongly endorse the President's request
for $101,000,000 for the NY & NJ Harbor Deepening Project. We also
respectfully request $42,860,000 in added funds for projects, as
explained below.
The subcommittee's record over the years documents its recognition
of the importance of the Nation's navigation program to the economic
well being of the country. Closer to home, the administration's budget
states that the deepening of the Port's main system of channels is a
national priority. Both views are well founded. International commerce
across the country has grown tremendously, in fact straining the
capacity of port and landside systems. Marine terminals in the NY
Harbor region handled 4.4 million TEUs in 2004, an increase of roughly
400,000 TEUs over 2003. The freight moves not only into the region, the
Northeast, and Midwest but also into most States in the continental
United States. This activity is creating new jobs at the docks and well
into the country. The Port supports almost 40,000 terminal-based jobs,
over 189,000 off-terminal positions, and an additional 186,000 jobs
nationwide. Last year, this Port hired 1,153 new ILA longshoremen, and
plans are underway to replace 200 retirees and hire 1,200 additional
employees. We welcome all members of the subcommittee and staff to join
us in taking a first-hand look at the Port to learn more about its role
in the U.S. transportation system.
The Port and its partners are mindful of maintaining environmental
stewardship today while planning for tomorrow's commerce. Among other
things, the Port Authority has committed funds to continue a NY Academy
of Sciences study to identify and prevent sources of contamination from
entering the harbor estuary. A pilot project has installed nitrogen
oxide-reducing technology on a Staten Island ferry and plans to
retrofit six additional ferries. We are retrofitting tugboats to reduce
their emissions. We committed $60 million to acquire land for long-term
preservation. Terminal operators have installed electric cranes,
extended operating hours, and replaced cargo-handling equipment with
cleaner models to reduce emissions and improve the environment--a
strong signal of the private sector's commitment. We recognize that the
Nation's maritime infrastructure must be able to support cargo growth
while sustaining our natural resources. Only with adequate funding can
the Corps work with its local partners to provide the necessary
infrastructure and protect our environment.
Below are our comments on the fiscal year 2006 budget request. We
enthusiastically support the administration's request for the Harbor
Deepening Project and respectfully request that the subcommittee
appropriate additional funds for select projects as noted and discussed
below. Projects in bold lettering are requests beyond the
administration's fiscal year 2006 budget levels. For reasons of space,
we do not list maintenance projects for which we support the budget
request levels.

------------------------------------------------------------------------
Construction Budget Port Request
------------------------------------------------------------------------
New York & New Jersey Harbor............ $101,000,000 $101,000,000
===============================
Continuing Authority Program (CAP):
Gerritsen Creek, NY................. .............. 2,000,000
Jamaica Bay Marsh Island, NY........ .............. 3,500,000
Lincoln Park, NJ.................... .............. 1,000,000
Soundview Park, NY.................. .............. 375,000
-------------------------------
TOTAL............................. .............. 6,875,000
===============================
Surveys (Studies):
Hudson-Raritan Estuary (HRE), NY & 800,000 850,000
NJ.................................
HRE, Gowanus Canal, NY.............. 400,000 1,000,000
HRE, Lower Passaic River, NJ........ 400,000 2,300,000
HRE, Hackensack-Meadowlands, NJ..... 300,000 900,000
HRE, Flushing Bay & Creek, NY....... .............. \1\ 725,000
HRE, Jamaica Bay Ecosystem .............. \1\ 1,000,000
Restoration, NY....................
HRE, Liberty State Park, NJ......... .............. \1\ 1,000,000
SP (S324) Hackensack-Meadowlands, NJ .............. 1,000,000
-------------------------------
TOTAL............................. 1,900,000 8,775,000
===============================
Operation and Maintenance: \2\
Flushing Bay & Creek, NY............ 150,000 12,150,000
Hudson River Channel................ 350,000 9,550,000
Jamaica Bay, NY..................... 140,000 540,000
New York Harbor..................... 3,410,000 4,810,000
New York & New Jersey Channels...... 7,200,000 12,700,000
Project Condition Surveys, NJ....... 1,635,000 2,135,000
Project Condition Surveys, NY....... 930,000 1,040,000
-------------------------------
Total............................. 13,815,000 42,925,000
------------------------------------------------------------------------
\1\ Project requires authorization.
\2\ Not the full list of O&M projects.

construction
New York and New Jersey Harbor.--This project was authorized by
Section 101(a)(2) of WRDA 2000 (Public Law 106-541). The NY & NJ Harbor
Deepening Project will improve transportation efficiency and will
benefit the markets served by the port as well as the Nation's defense
capability. All-water services to the East Coast, increasingly embraced
by major steamship lines, promise growing cargo throughput in the years
ahead. The Port and private industry have been engaged in a $1.46
billion redevelopment program that includes waterways, terminal, and
access improvements to meet this anticipated growth. We urge adoption
of the $101,000,000 budget request with the understanding that
restoration of previously reprogrammed funds will be available, if
needed, to keep the harbor-deepening program on schedule.
Continuing Authority Program.--We request that $6,875,000 be added
to the Continuing Authority Program to enable construction of habitat
restoration at Gerritsen Creek, Lincoln Park and the Jamaica Bay Marsh
Island sites, and to complete the study phase for the Soundview Park
restoration site. We also note that the current budget request for
$15,000,000 is not adequate to support CAP projects ready for
construction. Funding CAP to the authorized limit of $25,000,000 would
be more realistic and would signal Congress' commitment to achieving
effective environmental restoration.
surveys (studies)
Hudson-Raritan Estuary Studies.--These studies were authorized by a
House Committee Resolution dated April 15, 1999, Docket Number 2596.
Increases are requested for the studies in order to achieve the
completion schedules for the New York & New Jersey, Lower Passaic, and
Gowanus studies.
New York & New Jersey.--The study purpose is to identify projects
to restore estuarine, wetland and adjacent upland buffer habitat in the
region consistent with existing port and regional management plans. A
Feasibility Cost Sharing Agreement (FCSA) was signed July 12, 2001, and
study initiated. One fast-tracked project is Liberty State Park. New
Jersey has all required project funds on hand and ready to provide to
the Corps for construction. The Corps is unable to proceed with both
the comprehensive study and the Liberty State Park project without more
funds. We respectfully request that the budget be augmented by $50,000
to $850,000 to allow the Corps to proceed.
Lower Passaic.--Communities throughout the Passaic River Basin
requested improvements to remediate and restore the river. In June
2003, the Corps, in partnership with EPA and the NJ Office of Maritime
Resources (OMR), completed a comprehensive Project Management Plan
(PMP) that integrates the work of all three agencies into a single
study. In the same month, the Corps signed a FCSA with OMR and began
the study. This has been designated as a pilot project under the joint
Corps-EPA Urban Rivers Restoration Initiative. The non-Federal matching
funding will be available as the project requires. Lack of Federal
funding will jeopardize the Corps' ability to participate in the joint
fieldwork envisioned in the PMP. We request that the budget be
augmented to $2,300,000.
Gowanus.--The feasibility study will assess the environmental
problems and potential solutions in the Gowanus Canal and Bay.
Restoration measures will assess clean up of off-channel contaminated
hot spots, contaminant reduction measures, wetland creation, water
quality improvements, and alteration of hydrology/hydraulics to improve
water movement and quality. It was designated as a pilot project under
the joint Corps-EPA Urban Rivers Restoration Initiative. A FCSA was
executed with the NYC Department of Environmental Protection in March
2002. The City has committed its full share to the project and awaits
the Federal match. To continue the restoration study of this highly
contaminated, urban body of water, we request that the budget be
augmented to $1,000,000.
Hackensack Meadowlands.--This study looks at the feasibility of
restoring wetlands in the project area and assesses toxic waste
remediation potential. The area's wildlife habitat preserves are
threatened by dwindling open marshes. In April 2003, the Corps executed
the FCSA with the local sponsor, the NJ Meadowlands Commission, and
initiated the feasibility study. We respectfully request that the
budget be augmented to $900,000 for this study aimed at protecting
marshes, tidal creeks and open spaces and to $1,000,000 in S234 funds
to begin projects ready for construction.
Liberty State Park.--The feasibility study looks to restore a major
saltwater marsh system and remediate on-site contamination. We request
$1,000,000 to complete the study and to initiate the Preliminary
Engineering and Design (PED) phase, contingent upon authorization of
this significant regional project.
Jamaica Bay and Flushing Bay.--These important regional projects
require conditional authorization to begin work on the final designs.
We request $1,000,000 and $725,000, respectively, for Preliminary
Engineering & Design, contingent on authorization, for these important
projects.
operation and maintenance
Maintenance projects are critical to the commerce, navigation and
security of the Port, as well as the Nation's security. If channels are
not maintained to official depths and as needed by today's commerce,
the efficiency of the Federal system of channels is lost and the risk
of groundings increases. Past and current budgets enable only partial
maintenance of the channels, leaving significant areas at shallow and
potentially unsafe depths. The Port is one the Nation's busiest
petroleum ports and the Arthur Kill (under NY & NJ Channels) is
critical to that trade. Maintenance of the channel is needed to support
the industry, which serves the greater New York Metropolitan area and
much of the American Northeast. Maintenance also protects and
perpetuates the Federal infrastructure investment. We identified
several critical projects with pressing dredging safety concerns. With
those concerns in mind, it is important to be on the record in stating
that this part of the fiscal year 2006 budget is insufficient to meet
the practical needs of commerce. While the total port maintenance need
well exceeds the President's O&M budget for the projects identified on
the above table, we respectfully request the budget be augmented by
$29,110,000 to $42,925,000.
conclusion
The administration's budget includes language that would restrict
the use of continuing contracts, which is extremely troubling. On
reading the budget documents the full intent on this matter is not
clear but it is evident that Congress is being requested to adopt a
``1-year contract'' approach that would have very serious impacts on
the Port's deepening program. There are 17 contracts to be awarded in
the project with a current estimated date of completion in 2014. As
best as we can tell, the administration proposal would mean the
completion of the deepening program 8 years later (in 2022). That would
increase the overall construction cost significantly, undermine the
value of our terminal development investments, and possibly even put at
least one terminal operator out of business. As such we strongly oppose
the policy change. The Port of New York & New Jersey continues to be a
major international gateway for the Nation. The civil works program,
coupled with public and private sector investments, has served well the
Nation's economic and security interests for the better part of two
centuries. We are proud of that history and commit to continuing this
productive partnership with the Federal Government for centuries to
come.
______

Prepared Statement of the Perkins County Rural Water System, Inc.
Perkins County Rural Water System, Inc. respectfully submits this
written testimony to the Appropriations Subcommittee on Energy and
Water Development for appropriations of $6.0 million for fiscal year
2006. This project was authorized under Public Law 106-136.
Perkins County Rural Water System, (PCRWS) gained the approval of
the Office of Management and Budget and the Bureau of Reclamation to
proceed with construction in 2004. We have been appropriated $7.6
million in years 2002 and 2003. We were appropriated $1.0 million and
$2.25 million in 2004 and 2005 respectively. The administration has
zeroed out our funding for 2006. To stay on course with our project, we
need at least $6.0 million a year. Since we were not in the president's
budget, it is very important that we get a write-in on the Senate's
Appropriations Committee. Cost share for the system is 75 percent
Federal, 15 percent local and 10 percent State. The State of South
Dakota has offered to loan PCRWS the local share for 40 years at 3
percent interest to keep costs down to the customer.
Breakdown for the project for 2006 is as follows:

2006 BUDGET
------------------------------------------------------------------------
Amount
------------------------------------------------------------------------
INCOME:
BUREAU OF RECLAMATION............................... $6,000,000
STATE OF SOUTH DAKOTA............................... 1,500,000
MISC................................................ 75,000
---------------
TOTAL............................................. 7,575,000
===============
EXPENSE:
FINISH PIPE FOR 2005................................ 1,430,000
NORTH DAKOTA STATE WATER COMM....................... 1,320,000
RESERVOIR........................................... 500,000
LEMMON AND SHADEHILL RURAL PIPE..................... 2,280,000
BISON & PRAIRIE CITY RURAL.......................... 1,500,000
ADMINISTRATION, ENGINEERING......................... 545,000
---------------
TOTAL............................................. 7,575,000
------------------------------------------------------------------------

PCRWS will need $6.0 million for each of the next 3 years to
complete our project on time. This consists of 550 miles of various
size pipes ranging from 8 inches to 1.5 inches, one pump station
capable of moving 800 gallons per minute, a 1.0 million gallon tank and
telemetry to operate the whole system from one localized location.
The quality of water in Northwest South Dakota is the main concern
for the health and well being of the people. Although the water
typically meets primary standards established by the USEPA, most of the
chemicals in the water are exceedingly high by the State of South
Dakota standards. Water quality and quantity in Perkins County has been
a plague for the county over many years. Droughts, both long and short
term, are a fact of life for the people in this area. Being able to
obtain quality water during these periods and having a backup system
for other times would make life a lot easier for those in the rural
area. Due to the isolation from major water supplies, this may be our
only chance to obtain water at an affordable cost.
On the behalf of the Board of Directors of PCRWS and the people of
Perkins County, South Dakota, thank you for allowing us to enter this
testimony in the subcommittee's record.
______

Prepared Statement of the New York-New Jersey Harbor Roundtable
The authors of this statement have participated in a process known
as the Harbor Roundtable initiated to develop a sound and comprehensive
environmental agenda to complement the ongoing port development and
navigation initiatives in the Port of New York and New Jersey. The goal
is to establish both a World Class Port and a World Class Estuary. The
Harbor Roundtable appreciates the continued support of the
Appropriations Subcommittee on Energy and Water for the NY/NJ Harbor
Estuary's ecosystem restoration projects. We acknowledge the
President's request for $1,900,000 for studies in the region and
$15,000,000 allocated nationally for the Corp's Continuing Authority
Program. We respectfully request $13,750,000 in added funds for
restoration projects within the NY/NJ Harbor Estuary. This funding is
necessary so that these critical restoration projects can proceed on
timelines complementary to Harbor deepening and Port revitalization.
Funding requests for these same restoration projects was submitted to,
and have been supported by Richard M. Larrabee, Director, Port Commerce
Department, The Port Authority of New York & New Jersey, Richard
Gimello, Executive Director, Division Of Intermodal Services, State of
New Jersey, Department of Transportation, Eileen Mildenberger, Chief
Operating Officer and Executive Vice President, State of New York,
Empire State Development Corporation, Kate Ascher, Executive Vice
President New York City Economic Development Corporation.
The NY/NJ Harbor Estuary has been much transformed in recent
decades as urban and port development has progressed. Initially, with
New York City and northern New Jersey an early center of industrial
development, industrial contamination flowed, with little restriction,
into Harbor waters, prior to pollution control programs adopted in the
1970's. Recreational opportunities, species, and ecological functions
vanished. More recent efforts have reversed this trend, but clearly
more can be done. While the Harbor has lost a significant portion of
its estuarine and tributary river wetlands, it still has major
ecosystems that we can restore. These include Jamaica Bay, home of the
Jamaica Bay Unit of the National Park's Gateway Recreation Area, that
has witnessed accelerating erosion of its wetland islands, and the
marsh complex that stretches from the Arthur-Kill around Staten Island
to the Hackensack Meadowlands in northern New Jersey. All these marshes
have been criss-crossed with transportation levees and other
impediments to water interchange. Physical restoration of such
ecosystems serves the interest of the Port and will improve Harbor
water quality as well as habitat for wildlife. These systems are
potential ecological gems in the midst of the most densely populated
metropolitan area in the United States.
Contaminated sediments in tributaries of the Harbor such as the
Lower Passaic River and Gowanus Canal in Brooklyn are also a major
source of heavy metal and synthetic organic contaminants to the Harbor.
Migration of these contaminants adds significantly to the cost of
navigational dredging, at the same time it detracts from the health of
fish and wildlife populations. In addition, the contaminated state of
these sediments is hindering the revitalization of old urban areas
along these waterways. Thus, a program to restore these degraded
estuarine habitats and to remediate and restore these contaminated
waterways is vital for the NY/NJ Harbor Estuary and serves the economic
interests of the Port and the region as a whole.
The subcommittee's record over the years documents its recognition
of the importance of restoration in NY/NJ Harbor Estuary. We are
pleased that the Port, its partners, and a consortium of regional and
national conservation organizations have recognized that the Port's
maritime infrastructure must be able to support cargo growth while
sustaining and enhancing our natural resources, and do so while
concurrently expanding recreational opportunities for regional
residents and visitors. Only with adequate funding can the Corps work
with its local partners to continue to protect and restore our Estuary.
Below are our comments on the fiscal year 2006 budget request. We
respectfully request that the subcommittee appropriate additional funds
for select projects as noted and discussed below. Projects in bold
lettering are requests beyond the administration's fiscal year 2006
budget levels.

------------------------------------------------------------------------
President's
Continuing Authority Program (CAP) Budget Requested
------------------------------------------------------------------------
Gerritsen Creek, NY..................... .............. $2,000,000
Jamaica Bay Marsh Island, NY............ .............. 3,500,000
Lincoln Park, NJ........................ .............. 1,000,000
Soundview Park, NY...................... .............. 375,000
-------------------------------
TOTAL............................. .............. 6,875,000
===============================
Surveys (Studies):
Hudson-Raritan Estuary (HRE), NY & 800,000 850,000
NJ.................................
HRE, Gowanus Canal, NY.............. 400,000 1,000,000
HRE, Lower Passaic River, NJ........ 400,000 2,300,000
HRE, Hackensack-Meadowlands, NJ..... 300,000 900,000
SP (Sec. 324) Hackensack- .............. 1,000,000
Meadowlands, NJ....................
HRE, Jamaica Bay Ecosystem .............. \1\ 1,000,000
Restoration, NY....................
HRE, Liberty State Park, NJ......... .............. \1\ 1,000,000
HRE, Flushing Bay & Creek, NY....... .............. \1\ 725,000
-------------------------------
TOTAL............................. 1,900,000 8,775,000
------------------------------------------------------------------------
\1\ Project requires construction authorization.

Continuing Authority Program.--We request that $6,875,000 be added
to the Continuing Authority Program to enable construction of habitat
restoration at Gerritsen Creek, Lincoln Park and the Jamaica Bay Marsh
Island sites, and to complete the study phase for the Soundview Park
restoration site. We also note that the current budget request for
$15,000,000 is not adequate to support the CAP projects ready for
construction. Funding CAP to the authorized limit of $25,000,000 would
signal Congress' commitment to achieving effective environmental
restoration.
Hudson-Raritan Estuary Studies.--These studies were authorized by a
House Committee Resolution dated April 15, 1999, Docket Number 2596.
Increases are requested for the studies in order to achieve the
completion schedules for the New York & New Jersey, and Gowanus
studies.
Hudson-Raritan Estuary, NY & NJ.--As part of this study, the Corps
and the Port Authority are sponsoring the development of a
Comprehensive Restoration Improvement Plan (CRIP). The CRIP will
provide the framework to develop a harbor-wide ecosystem restoration
strategy. The environmental community sees development of this
framework, integrating the ongoing habitat and sediment restoration
efforts, as a critical component of a world class estuary. We
respectfully request that the budget be augmented by $50,000, to
$850,000, to allow the Corps to proceed.
Gowanus.--The feasibility study will assess the environmental
problems and potential solutions in the Gowanus Canal and Bay.
Restoration measures will assess clean up of off-channel contaminated
hot spots, contaminant reduction measures, wetland creation, water
quality improvements, and alteration of hydrology/hydraulics to improve
water movement and quality. It was designated as a pilot project under
the joint Corps-EPA Urban Rivers Restoration Initiative. A FCSA was
executed with the NYC Department of Environmental Protection in March
2002. The city has committed its full share to the project and awaits
the Federal match. To continue the restoration study of this highly
contaminated, urban body of water, we request that the budget be
augmented to $1,000,000.
Lower Passaic.--The Passaic River is one of the most degraded
rivers in the Nation, one of our regions greatest environmental threats
and one of our highest priorities. In June 2003, the Corps, in
partnership with EPA and the NJ Office of Maritime Resources (OMR),
completed a comprehensive Project Management Plan (PMP) that integrates
the work of all three agencies into a single study. In the same month,
the Corps signed a FCSA with OMR and began the study. This has been
designated as a pilot project under the joint Corps-EPA Urban Rivers
Restoration Initiative. The non-Federal matching funding will be
available as the project requires. Lack of Federal funding will
jeopardize the Corps' ability to participate in the joint fieldwork
envisioned in the PMP. We request that the budget be augmented to
$2,300,000 with the stipulation that a portion of the funds be used to
investigate interim and/or expedited remediation and restoration
opportunities.
Hackensack Meadowlands.--The Hackensack Meadowlands is the largest
remaining brackish tidal wetland complex in the estuary, and one of our
region's highest priorities for preservation because of its still
existing values and tremendous potential. Opportunities exist for the
careful removal of impairments to fish migration on tributaries and the
removal and/or covering of contaminated sediment hot spots with clean
sediments. In April 2003, the Corps executed the FCSA with the local
sponsor, the NJ Meadowlands Commission, and initiated the feasibility
study. We respectfully request that the budget be augmented to $900,000
for this study aimed at protecting marshes, tidal creeks and open
spaces and to $1,000,000 in 324 funds to begin projects ready for
construction.
Jamaica Bay Ecosystem Restoration.--Jamaica Bay, like the
Hackensack Meadowlands, is an integral part of the New York--New Jersey
Harbor estuary. It is one of the largest remaining estuarine tidal
wetland complex in the estuary, and one that the CCMP targets as
deserving special attention to protect and preserve because of its
still existing values and tremendous potential. These remaining
wetlands and open space are especially significant for concentrations
of Federal trust species including waterfowl, wading birds, shorebirds,
raptors, anadromous fish, estuarine fish, and terrapins. Restoration
measures will include re-contouring to restore flow patterns and
flushing rates that will benefit benthic and fishery habitats and site
specific restoration measures, such as regrading, ditching, vegetative
plantings, and dike removal designed to improve local habitat value,
especially salt marshes and coastal grasslands. These important
regional projects require conditional authorization to begin work on
the final designs. We request $1,000,000 for Preliminary Engineering &
Design, contingent on authorization, for this critically important
regional project.
Liberty State Park.--The feasibility study looks to restore a major
saltwater marsh system and remediate on-site contamination. We request
$1,000,000 to complete the study and to initiate the Preliminary
Engineering and Design (PED) phase, contingent upon authorization of
this significant regional project.
Flushing Bay and Creek.--Flushing Bay is an embayment of western
Long Island Sound adjoining a portion of the northern coast of New York
City, in the Borough of Queens. Over the past century, the Bay's entire
ecosystem has been degraded through fill activities, bulkheading,
dredging, landfills, sewage and Combined Sewer Outfall (CSO)
discharges. We request $725,000 to complete the study and to initiate
the PED phase, contingent on authorization, for this important regional
project.
conclusion
The Port of New York & New Jersey is an important part of the
economy of the New York/New Jersey metropolitan area, and with fishing,
swimming, and boating it is holds great potential as a major
recreational opportunity and economic engine for the region. Port
development has also been a major beneficiary of the Estuary's natural
resources. Several of the facilities have been built on former wetlands
(in some cases predating Clean Water Act protections of those
wetlands). Maintenance channel dredging, necessary for port commerce
also has significant impacts on benthic habitat, mudflats, and
wetlands. Recognizing this, the Port Authority and Port interests have
committed to significant improvements in water and air quality,
priority habitat preservation and restoration, and activities to
mitigate for environmental impacts from Port operations and expansion.
We are encouraged by the constructive dialogue between Port
interests and the environmental conservation community that has
resulted in this appropriations request. Thank you for the opportunity
to submit testimony on this important appropriation.
______

Prepared Statement of the Ouachita River Valley Association
appropriations for the ouachita-black navigation project
Mr. Chairman and members of the committee, thank you for the
opportunity to present testimony to this committee that influences so
much of the economy of our region through the Ouachita-Black Navigation
Project. The Project was authorized by the River and Harbor Act of 1950
as modified by the River and Harbor Act of 1960.
The Ouachita River Valley Association is a nonprofit organization
with a 112-year history having as its purpose the ``development of
projects that have been proven to be economically sound, socially
justified which enhance the general welfare of the people in the
Ouachita River basin in Arkansas, Louisiana, and the Nation''. Mr.
Chairman, sometimes it is prudent and helpful to state the obvious to
ensure a common understanding of a situation and to enable informed
evaluation. The following statements lie in this domain. The 337-mile
Ouachita-Black Navigation System is the only commercially navigable
waterway serving the eleven Parishes and Counties in northeast
Louisiana and Southeast Arkansas. All project benefits rely on the four
small locks and dams that have been in place for up to 30 years. None
of which have an auxiliary structure nor are there feasible
alternatives to the many services they provide. With few exceptions,
the waterway throughout its 30-year history has received funding
sufficient only for operations with little attention to maintenance.
Neglect of this waterway following construction is symbolized by the
absence of navigation charts on a project in operation for 30 years.
We submit our request in three major categories for your
consideration. The first and foremost need is that of Operations and
Maintenance, General (O&M) funding; second is the need for funding for
stabilization of eroding banks that are endangering existing public and
private infrastructure; and the third is funding for a study to
identify and document the contributions of this waterway to the Nation
and the region it serves in Louisiana and Arkansas.
operation and maintenance, general
Historical funding shortfalls for Operations and Maintenance (O&M)
are seriously threatening the reliability and dependability of the
Ouachita-Black Navigation System. The waterway is an important
industrial/agricultural economic generator, vital transportation
artery, irreplaceable source for municipal, industrial and agricultural
water supplies, a vast recreational asset and natural resource
preservation project serving this region and the Nation. These many
benefits depend upon safe and reliable operation of four locks and dams
and periodic channel maintenance work. A $1 investment in preventive
O&M yields more than $14 in returns to the Nation. Programmed
maintenance has been demonstrated to be and is intuitively more
economical than breakdown maintenance. Economic losses from service
failures brought about by long-term system closures are magnified by
unscheduled and more costly ``break down'' repairs.
An ominous concern specific to the Ouachita-Black System is the
inability to dewater the locks to inspect critical lock components and
to repair them in a timely manner without long and costly outages.
Absent the stoplog slots, a failure of the lock miter gates and other
underwater components as a result of deterioration or a marine accident
will require months or years to repair as compared to perhaps weeks
with a working stoplog system. Jonesville Lock was modified with
stoplog slots in fiscal year 2004 to provide this capability. However,
funding provided in fiscal year 2005 was insufficient to continue this
work at the three upstream structures. We strongly urge and recommend
that the highest priority be given to continuation of the stoplog slot
installation program followed closely with inspection and repair of the
critical components that have not been maintained for 30 years.
Request is made for $12.5 million for routine operations,
continuation of the stoplog slot modification program, repair critical
components, initiate preventive maintenance work, and perform channel
maintenance dredging. This amount is only 58 percent of the more than
$21 million for work that is identified as needed and within the
capability of the Corps of Engineers to perform in fiscal year 2006.
construction general, bank stabilization
As with any alluvial stream, the Ouachita River tends to meander
with the annual rise and fall of river flows. The degree of this attack
has been relatively minor but has now reached the point of endangering
critical and irreplaceable infrastructure. Protection of federally
funded infrastructure such as levees, roads and bridges, ports, as well
as historical sites is best and most economically provided by judicious
hardening or stabilizing the banks of the river. Prevention of damages
is more economical that repair and replacement. Levees protecting the
cities of Columbia and Monroe, Louisiana are threatened by encroaching
erosion at miles 113, 121, and 169 and an irreplaceable historical site
is endangered at Camden, Arkansas.
Request is made for $5.0 million for bank protection at these
sites. Proposed Bill and Report language are attached.
general investigations, post-construction benefit study
It is our strongest contention that expenditure of Federal funds
should be thoroughly evaluated and justified on the basis of sound
investments. However, much of the difficulty in providing acceptable
evidence of waterway benefits is the lack of a comprehensive post-
construction evaluation.
Benefits for this project have been narrowly defined in the past
and decisions made from an uninformed perspective without regard to the
actual contributions of the waterway system to the region and Nation.
Initial administration budget proposals for fiscal year 2005, that
would have abandoned the project, produced stakeholder meetings
throughout the basin. The largest was a hearing held by the Arkansas
Legislature at Camden, Arkansas with more than 150 people of all
interests in attendance. The 30 stakeholders testifying before the
committee brought out the widespread impact of the waterway on the
people, industries, and environment of the region.
The effort to abandon significant portions of the national waterway
infrastructure based solely on arbitrary tons or ton-miles of cargo
moved is rooted in the concept that tributary streams provide only
limited transportation benefits. Analysis of Waterborne Commerce
Statistics Center data by Institute for Water Resources and TVA reveals
that 68 percent of cargo tonnage and 56 percent of waterway ton-miles
are generated on tributary streams. The ancillary benefits generated in
connection with navigation projects are perhaps even greater than
transportation benefits and should be determined in greater detail
through basin specific studies.
Funds in the amount of $250,000 are requested to conduct a post-
construction benefit evaluation of the Ouachita-Black Navigation System
to provide a basis for future levels of investments.
summation
Mr. Chairman we appreciate the opportunity to bring these issues to
the attention of the committee. And, to help ``connect the dots'' for
prevention of catastrophic failures but most importantly to strengthen
the Nation through wise investment in our natural resources from which
springs our wealth. Investments by the Federal Government in the
Ouachita-Black Navigation System have and are continuing to make a
significant difference in the lives of the people residing in the
valley while contributing to the Nation at-large. For this we are
grateful. We urge the Congress through its power of the budget to
restore and maintain this important component of the national waterway
infrastructure through very modest investments. Proposed Bill and
Report Language are enclosed.
bill language
ouachita and black rivers bank stabilization, arkansas and louisiana
Provided further, that using the funds appropriated herein, the
Secretary of the Army, acting through the Chief of Engineers, is
authorized and directed to design and construct bank stabilization
measures, at Federal expense with local sponsors providing necessary
lands, easements, and rights of way, along the Ouachita and Black
Rivers, Arkansas and Louisiana, between mile 0 on the Black River,
Louisiana, to mile 460 on the Ouachita River, Arkansas at the outlet of
Remmel Dam, such measures to be constructed as the Secretary determines
necessary to maintain navigation, for flood damage prevention, for
control of erosion and for historic preservation.
report language
ouachita and black rivers bank stabilization, arkansas and louisiana
The Committee is aware of the severe bank caving and erosion
occurring along the Ouachita and Black Rivers, Arkansas and Louisiana,
between mile 0 on the Black River, Louisiana, to mile 460 on the
Ouachita River, Arkansas at the outlet of Remmel Dam and has included
bill language directing the Corps of Engineers to use funds provided,
to design and construct bank stabilization measures, at Federal expense
with local sponsors providing necessary lands, easements, and rights of
way, along the Ouachita and Black Rivers, Arkansas and Louisiana, as
the Secretary determines necessary to maintain navigation, for flood
damage prevention, for control of erosion, and for historical
preservation.
______

Prepared Statement of the Clark County Regional Flood Control District
Testimony for the Tropicana and Flamingo Washes Flood Control
Project, Las Vegas, Nevada.--$15,000,000 construction appropriations
and $3,000,000 appropriations for work performed pursuant to Section
211 of the Water Resources Development Act of 1996.
Presented herewith is testimony in support of $15,000,000 for the
construction appropriation necessary for the U.S. Army Corps of
Engineers to continue the Tropicana and Flamingo Washes flood control
project in Clark County, Nevada. Also, testimony in support of
$3,000,000 appropriation to reimburse the non-Federal sponsors, Clark
County and the Clark County Regional Flood Control District, for work
performed in advance of the Federal project pursuant to Section 211 of
the Water Resources Development Act (WRDA) of 1996. The total requested
appropriations are $18 million. The President's fiscal year 2006 Civil
Works budget request to Congress identifies only $13,000,000 for this
project. Critical flood control projects would be severely hampered at
that funding level. It is imperative that we receive the requested
Federal funding to protect residents of the rapidly growing Las Vegas
Valley in Southern Nevada from devastating floods.
The Las Vegas Valley continues to experience unprecedented growth.
In the past 20+ years, people have moved into our area from all parts
of the Nation to seek employment, provide necessary services, retire in
the Sunbelt, and become part of this dynamic community. Approximately
6,000 people relocate to the Las Vegas Valley every month of the year.
Currently the population exceeds 1.7 million. The latest statistics
show that more than 25,000 residential units are built annually. Once
all of these factors are combined, the result is that the Las Vegas
Valley continues to be one of the fastest-growing metropolitan areas in
the Nation.
The Federal project being constructed by the Corps of Engineers
(Corps) is designed to collect flood flows from a 174-square mile
contributing drainage area. The Corps' project includes three debris
basins, five detention basins, 28 miles of primary channels, and a
network of lateral collector channels. The debris basins collect flood
flows from undeveloped Federal lands at the headwaters of the alluvial
fans and trap large bedload debris before it enters the channels and
causes erosion damage. The detention basins greatly reduce the
magnitude of the flood flows so that the flows can be safely released
and conveyed through the urbanized area at non-damaging rates. A
primary system of channels collects outflows from the debris and
detention basins and conveys these floodwaters through our urban area.
Lateral collector channels, which are funded locally, collect runoff
from smaller developed watersheds and deliver it to the primary
channels. Since flood flow over the alluvial fans, which ring the Las
Vegas Valley, is so unpredictable in terms of the direction it will
take during any given flood, all of the components of the Corps' plan
are critical.
Torrential rains deluged the Las Vegas Valley the morning of July
8, 1999, causing widespread drainage problems and major damages to
public and private properties. Some of the greatest rainfall depths
occurred over the southwest portions of the Las Vegas Valley resulting
in significant flows in the Tropicana and Flamingo Washes. The runoff
from this intense rainfall caused widespread street flooding and record
high flows in normally dry washes and flood control facilities. The
news media reported two deaths during this flood event, one of which
was a drowning in the Flamingo Wash. Damages to public property caused
by this storm are estimated at $20,500,000. The President declared
Clark County a Federal disaster area on July 19, 1999, recognizing the
severity of damages to public and private properties. Significant
damages could have been avoided if the Corps' Tropicana and Flamingo
Washes Project had been fully implemented. However, those features of
the Corps' project that were completed did help to mitigate damages.
On August 19, 2003 another flash flood hit the Las Vegas Valley and
damaged hundreds of homes and businesses. Storms of this magnitude only
reinforce the need to expeditiously build all flood control projects in
the Las Vegas Valley.
This past winter, the area experienced heavier than normal rainfall
amounts. This winter we have seen twice our average annual rainfall.
The flood control features built as part of the Tropicana and Flamingo
Washes Project helped to protect vast areas of our community.
The Feasibility Report for this project was completed in October
1991, and Congressional authorization was included in the WRDA of 1992.
The first Federal appropriation to initiate construction of the project
became available through the Energy and Water Resources Development
Appropriations Bill signed into law by the President in October 1993.
The Project Cooperation Agreement (PCA) was fully executed in February
1995. Federal appropriations to date have totaled $252,345,000
(allocations $211 million), allowing the project to continue to be
implemented. The total cost of the flood control portion of the project
is currently estimated at $297,400,000, higher than originally
anticipated primarily due to the delay in Federal appropriations.
The local community had constructed certain elements of the Corps'
plan prior to the execution of the PCA. These project elements required
modifications in order to fit into the Corps' plan and fulfill the need
for a ``total fan approach'' to the flooding problems in the Las Vegas
Valley. The work performed by the non-Federal sponsors, construction of
Red Rock Detention Basin and Flamingo Detention Basin, has been
accounted for in Section 104 credits and totals $9,906,000.
We have already realized some benefits from construction of flood
control features on the Federal project. We have removed 18 square
miles of flood zones from Federal Emergency Management Agency's (FEMA)
Flood Insurance Rate Maps. This was accomplished through the completion
of the Red Rock Detention Basin Modifications, the Blue Diamond
Detention Basin, and the F-1 and F-2 Debris Basins and Outfall
Channels. We anticipate removal of additional flood zones as a result
of recently completed portions of the Federal project and even more
removed when the entire project is complete.
Both the Clark County Regional Flood Control District and Clark
County are looking forward to the construction of the remaining
portions of this project.
The non-Federal sponsors are requesting $15,000,000 for the
continued construction of this project. Funding at this level will
allow the Corps of Engineers to continue the construction of the
following project features:
--Upper Blue Diamond Channel;
--F-4 Debris Basin and Channel.
In order to provide the required flood protection in a timely
fashion, the non-Federal sponsors are implementing certain features in
advance of the Federal Government pursuant to Section 211 of WRDA 1996.
An amendment to the PCA was fully executed on December 17, 1999, that
formalizes the provisions of Section 211 of WRDA 1996. Section 211(f)
of WRDA 1996 recognized the Tropicana and Flamingo Washes project as
one of eight projects in the Nation to demonstrate the potential
advantages and effectiveness of non-Federal implementation of Federal
flood control projects. The work funded by the non-Federal sponsors and
completed to date totals approximately $24.7 million, and includes
features that were designed by the non-Federal sponsors and constructed
by either the Federal Government or the non-Federal sponsors. The
estimated Federal proportionate share of the work performed by the non-
Federal sponsors is $18.6 million. To date, $12.5 million has been
reimbursed.
The non-Federal sponsors are requesting $3 million in reimbursement
under Section 211. This amount is requested in light of the language
contained in the fiscal year 2000 Energy and Water Development Bill,
Senate Report 106-58, which states in part, ``The Committee expects . .
. every effort to even out reimbursement payments to lessen future
budgetary impacts.'' The non-Federal sponsors' contributions to the
project are for the primary purpose of providing flood protection as
quickly as possible.
In summary, the Tropicana and Flamingo Washes project is an
important public safety project designed to provide flood protection
for one of the fastest growing urban areas in the Nation. We ask that
the committee provide the Secretary of the Army with $15 million, in
fiscal year 2006, in order to facilitate continued design and
construction of additional phases of this critical flood control
project. In addition, we are also asking that the committee provide the
Secretary of the Army with $3 million to reimburse the non-Federal
sponsors the Federal proportionate share of the work completed by the
sponsors in advance of the Federal Government. The total requested is
$18 million.
The committee is aware that flood control measures are a necessary
investment required to prevent loss of life and damages to people's
homes and businesses. Flood control is a wise investment that will pay
for itself by preserving life and property and reducing the probability
of repeatedly asking the Federal Government for disaster assistance.
Therefore, when balancing the Federal budget, we believe a thorough
analysis will show that there is substantial future Federal savings in
disaster assistance that supports sufficient appropriations through the
Civil Works Budget.
______

Prepared Statement of the City of Flagstaff, Arizona
rio de flag flood control project
Chairman Domenici, Ranking Member Reid, and distinguished members
of the subcommittee, thank you for allowing me to testify on behalf of
the City of Flagstaff, Arizona in support of $8 million in the Army
Corps of Engineers budget for the Rio de Flag flood control project in
fiscal year 2006. I believe this project is critically important to the
City, to northern Arizona, and, ultimately, to the Nation.
As you may know, Mr. Chairman, with this subcommittee's help over
the last 2 fiscal years, Rio de Flag received $5.8 million to continue
construction on this important project. We are extremely grateful that
the subcommittee boosted this project well above the president's
request both years, and we would appreciate your continued support for
this project in fiscal year 2006.
Like many other projects under the Army Corps's jurisdiction, Rio
de Flag received no funding in the president's fiscal year 2006 budget,
although the Corps has expressed capability of $8 million to continue
construction on the project. We are hopeful that the subcommittee will
fund the Rio de Flag project at $8 million when drafting its bill in
order to keep the project on an optimal schedule.
Flooding along the Rio de Flag dates back as far as 1888. The Army
Corps has identified a Federal interest in solving this long-standing
flooding problem through the Rio de Flag, Flagstaff, Arizona
Feasibility Report and Environmental Impact Study (EIS). The
recommended plan contained in this feasibility report was developed
based on the following opportunities: (1) flood control and flood
damage reduction; (2) environmental mitigation and enhancement; (3)
water resource management; (4) public recreation; and (5) redevelopment
opportunities. This plan will result in benefits to not only the local
community, but to the region and the Nation.
The feasibility study by the Corps of Engineers has revealed that a
500-year flood could cause serious economic hardship to the City. In
fact, a devastating 500-year flood could damage or destroy
approximately 1,500 structures valued at more than $400 million.
Similarly, a 100-year flood would cause an estimated $100 million in
damages. In the event of a catastrophic flood, over half of Flagstaff's
population of more than 60,000 would be directly impacted or affected.
In addition, a wide range of residential, commercial, downtown
business and tourism, and industrial properties are at risk. Damages
could also occur to numerous historic structures and historic Route 66.
The Burlington Northern & Santa Fe Railway (BNSF), one of the primary
east-west corridors for rail freight, could be destroyed, as well as
U.S. Interstate 40, one of the country's most important east-west
interstate links. Additionally, a significant portion of Northern
Arizona University (NAU) could incur catastrophic physical damages,
disruptions, and closings. Public infrastructure (e.g., streets,
bridges, water, and sewer facilities), and franchised utilities (e.g.,
power and telecommunications) could be affected or destroyed.
Transportation disruptions could make large areas of the City
inaccessible for days.
Mr. Chairman, the intense wildfires that have devastated the West
during the last several years have only exacerbated the flood potential
and hazard in Flagstaff. An intense wildfire near Flagstaff could strip
the soil of ground cover and vegetation, which could, in turn, increase
runoff and pose an even greater threat of a catastrophic flood.
In short, a large flood could cripple Flagstaff for years. This is
why the City believes it is so important to ensure that this project
remains on schedule and that the Corps is able to maximize its
capability of $8 million in fiscal year 2006 for construction of this
flood control project.
In the City's discussions with the Corps, both the central office
in Washington and its Los Angeles District Office also believe that the
Rio de Flag project is of the utmost importance and both offices
believe the project should be placed high on the subcommittee's
priority list. We are hopeful that the subcommittee will consider this
advice and also place the project high on its priority list and fully
fund the project at $10 million for fiscal year 2005.
As you may know, project construction and implementation of Rio de
Flag was authorized in the Water Resources Development Act (WRDA) of
2000. The total project cost is estimated to be $30,000,000 in and
above the reconnaissance study or the feasibility study. The Non-
Federal share is currently $10,500,000 and the Federal share is
currently $19,500,000. Final project costs must be adjusted based on
Value Engineering and final design features. It is important to note
the City of Flagstaff has already committed more than $10,500,000 to
this project, and an additional $2,000,000 in excess of its cost share
agreement. This clearly demonstrates the City's commitment to
completing this important project. Through this investment in the
project, the City has entered into the Project Cooperation Agreement
(PCA) with the Department of the Army.
The City of Flagstaff, as the non-Federal sponsor, is responsible
for all costs related to required Lands, Easements, Rights-of-Way,
Relocations, and Disposals (LERRD's). The City has already secured the
necessary property rights to begin construction in 2004. Implementation
of the City's Downtown and Southside Redevelopment Initiatives
($100,000,000 in private funds) are entirely dependent on the success
of the Rio de Flag project. The Rio de Flag project will also provide a
critical missing bike/pedestrian connection under Route 66 and the BNSF
Railroad to replace the existing hazardous at grade crossings.
Both design and construction are divided into two phases. Phase I
construction will commence in 2004. Phase II of the project is
scheduled to commence in April of 2005.
Mr. Chairman, the Rio de Flag project is exactly the kind of
project that was envisioned when the Corps was created because it will
avert catastrophic floods, it will save lives and property, and it will
promote economic growth. In short, this project is a win-win for the
Federal Government, the City, and the surrounding communities.
Furthermore, the amount of money invested in this project by the
Federal Government--approximately $19 million--will be saved
exponentially in costs to the Federal Government in the case of a large
and catastrophic flood, which could be more than $395 million. It will
also promote economic growth and redevelopment along areas that are
currently underserved because of the flood potential.
In conclusion, the Rio de Flag project should be considered a high
priority for this subcommittee, and I encourage you to support full
funding of $8 million for this project in the fiscal year 2006 Energy
and Water Development Appropriations bill. Thank you in advance for
your consideration.
______

Prepared Statement of the Metropolitan Water Reclamation District of
Greater Chicago
mccook & thornton reservoirs summary recommendation.--$3,000,000
construction
On behalf of the Metropolitan Water Reclamation District of Greater
Chicago (District), I want to thank the subcommittee for this
opportunity to present our priorities for fiscal year 2006 and, at the
same time, express our appreciation for your support of the District's
projects in the years past. The District is the local sponsor for three
Corps of Engineers (Corps) priority projects of the Chicagoland
Underflow Plan: the O'Hare, McCook and Thornton Reservoirs. We are
requesting the subcommittee's full support for McCook and Thornton
Reservoirs, as the O'Hare Reservoir has been completed. Specifically,
we request the subcommittee to include a total of $30,000,000 in
construction funding for the McCook and Thornton Reservoir projects in
the bill. The following text outlines these projects and the need for
the requested funding.
the chicagoland underflow plan
The Chicagoland Underflow Plan (CUP) consists of three reservoirs:
the O'Hare, McCook and Thornton Reservoirs. These reservoirs are a part
of the Tunnel and Reservoir Plan (TARP). The O'Hare Reservoir Project
was fully authorized for construction in the Water Resources
Development Act of 1986 (Public Law 99-662) and completed by the Corps
in fiscal year 1999. This reservoir is connected to the existing O'Hare
segment of the TARP. Adopted in 1972, TARP was the result of a multi-
agency effort, which included officials of the State of Illinois,
County of Cook, City of Chicago, and the District.
TARP was designed to address the overwhelming water pollution and
flooding problems of the Chicagoland combined sewer areas. These
problems stem from the fact that the capacity of the area's waterways
has been overburdened over the years and has become woefully inadequate
in both hydraulic and assimilative capacities. These waterways are no
longer able to carry away the combined sewer overflow (CSO) discharges
nor are they able to assimilate the pollution associated with these
discharges. Severe basement flooding and polluted waterways are the
inevitable result. More critically, larger storms generate back flows
to Lake Michigan and pollute water supply for the six-county area. We
point with pride to the fact that TARP was found to be the most cost-
effective and socially and environmentally acceptable way for reducing
these flooding and water pollution problems. Experience to date has
reinforced such findings with respect to economics and efficiency.
The TARP plan calls for the construction of the new ``underground
rivers'' beneath the area's waterways. The ``underground rivers'' are
tunnels up to 35 feet in diameter and 350 feet below the surface. To
provide an outlet for these tunnels, reservoirs will be constructed at
the end of the tunnel systems. Approximately 101.5 miles of tunnels,
constructed at a total cost of $2.2 billion, are operational. The final
7.9 miles of tunnels, costing $168 million, are under construction. The
tunnels capture the majority of the pollution load by capturing all of
the small storms and the first flush of the large storms. The completed
O'Hare CUP Reservoir provides 350 million gallons of storage. This
Reservoir has a service area of 11.2 square miles and provides flood
relief to 21,535 homes in Arlington Heights, Des Plaines and Mount
Prospect. In its first 7 years of operation, O'Hare CUP Reservoir has
taken water in 22 storm events, and yielded $70.7 million in flood
damage reduction benefits, which exceeds its $44.5 million construction
costs. The Thornton and McCook Reservoirs are currently under
construction, but until they are completed, significant areas will
remain unprotected. Without these outlets, the local drainage has
nowhere to go when large storms hit the area.
Since its inception, TARP has not only abated flooding and
pollution in the Chicagoland area, but has helped to preserve the
integrity of Lake Michigan. In the years prior to TARP, a major storm
in the area would cause local sewers and interceptors to surcharge,
resulting in CSO spills into the Chicagoland waterways and, during
major storms, into Lake Michigan, the source of drinking water for the
region. Since these waterways have a limited capacity, major storms
have caused them to reach dangerously high levels resulting in massive
sewer backups into basements and causing multi-million dollar damage to
property.
Since implementation of TARP, 787 billion gallons of CSOs have been
captured, that otherwise would have reached waterways. Area waterways
are once again abundant with many species of aquatic life and the
riverfront has been reclaimed as a natural resource for recreation and
development. Closure of Lake Michigan beaches due to pollution from
CSOs has become a rarity. The elimination of CSOs will reduce the
quantity of discretionary dilution water needed to keep the area
waterways fresh. This water can be used instead for increasing the
drinking water allocation for communities in Cook, Lake, Will and
DuPage counties that are now on a waiting list to receive such water.
Specifically, since 1977, these counties received an additional 162
million gallons of Lake Michigan water per day, partially as a result
of the reduction in the District's discretionary diversion since 1980.
Additional allotments of Lake Michigan water will be made to these
communities as more water becomes available from reduced discretionary
diversion.
With new allocations of lake water, more than 20 communities that
previously did not get lake water are in the process of building, or
have already built, water mains to accommodate their new source of
drinking water. The new source of drinking water will be a substitute
for the poorer quality well water previously used by these communities.
Partly due to TARP, it is estimated that between 1981 and 2020, 283
million gallons per day of Lake Michigan water would be added to
domestic consumption. This translates into approximately 2 million
additional people that would be able to enjoy Lake Michigan water. This
new source of water supply will not only benefit its immediate
receivers but will also result in an economic stimulus to the entire
Chicagoland area by providing a reliable source of good quality water
supply.
remaining components: the mccook and thornton reservoirs
The McCook and Thornton Reservoirs of the Chicagoland Underflow
Plan (CUP) were fully authorized for construction in the Water
Resources Development Act of 1988 (Public Law 100-676). These CUP
reservoirs are an integral part of TARP; the flood protection component
of this plan that is designed to reduce basement flooding due to
combined sewer back-ups and inadequate hydraulic capacity of the urban
waterways.
These reservoirs will provide a storage capacity of 18 billion
gallons and will provide annual benefits of $115 million. The total
estimated annual benefits of these projects are more than twice as much
as their total annual cost. The District, as the local sponsor, has
acquired the land necessary for these projects, and will meet its cost
sharing obligations under Public Law 99-662.
These projects are a very sound investment with a high rate of
return. The remaining benefit to cost ratios for these projects, after
fiscal year 2005, are 3.01 for the McCook Reservoir and 3.17 for the
Thornton Composite Reservoir. Preliminary design indicates that the
remaining benefit to cost ratio for the McCook Reservoir is actually
closer to 3.90, due to capital cost reductions of approximately $100
million. When completed, the reservoirs will enhance the quality of
life, safety and the peace of mind of the residents of this region. The
State of Illinois has endorsed these projects and has urged their
implementation. In professional circles, these projects are hailed for
their foresight, innovation, and benefits.
Based on two successive Presidentially-declared flood disasters in
our area in 1986 and again in 1987, and dramatic flooding in the last
several years, we believe the probability of this type of flood
emergency occurring before implementation of the critical flood
prevention measure is quite high. As the public agency for the greater
Chicagoland area responsible for water pollution control and flood
control projects, we have an obligation to protect the health and
safety of our citizens. Due to the need to provide continuous flood
protection to the community, our delegation is working in Congress on
language for the Water Resources Development Act of 2005 to allow the
District to advance construction of the Thornton Composite Reservoir
and be reimbursed for the work under the authority of Section 211 of
the Water Resources Development of 1996. We are asking your support in
helping us achieve this necessary and important goal of construction
completion.
We appreciate that the subcommittee has included critical levels of
funds for these important projects. We were delighted to see the
$29,150,000 in construction and engineering funds included in the
fiscal year 2005 Energy and Water Development Appropriations Act for
the McCook and Thornton Reservoirs. However, it is important that we
receive a total of $30,000,000 in construction funds in fiscal year
2006 to maintain the schedule of these critical projects. This funding
would be used to complete the construction of the distribution tunnels,
to continue work on the groundwater cut-off wall and grout curtain for
the McCook Reservoir and to continue the design engineering for both
reservoirs. The community has waited long enough for protection and we
need these funds now to move the project into construction. We
respectfully request your consideration of our request.
summary
Our most significant recent flooding occurred on February 20, 1997,
when almost 4 inches of rain fell on the greater Chicagoland area. Due
to the frozen ground, almost all of the rainfall entered our combined
sewers, causing sewerage back-ups throughout the area. When the
existing TARP tunnels filled with approximately 1.2 billion gallons of
sewage and runoff, the only remaining outlets for the sewers were our
waterways. Between 9 p.m. and 3 a.m., the Chicago and Calumet Rivers
rose 6 feet. For the first time since 1981 we had to open the locks at
all three of the waterway control points; these include Wilmette,
downtown Chicago, and Calumet. Approximately 4.2 billion gallons of
combined sewage and stormwater had to be released directly into Lake
Michigan.
Given our large regional jurisdiction and the severity of flooding
in our area, the Corps was compelled to develop a plan that would
complete TARP and be large enough to accommodate the area we serve.
With a combined sewer area of 375 square miles, consisting of the city
of Chicago and 51 contiguous suburbs, there are 1,443,000 structures
within our jurisdiction, that are subject to flooding. The annual
damages sustained exceed $150 million. If TARP, including the CUP
Reservoirs, were in place, these damages could be eliminated. We must
consider the safety and peace of mind of the 2 million people who are
affected, as well as the disaster relief funds that will be saved when
these projects are in place. As the public agency in the greater
Chicagoland area responsible for water pollution control, and as the
regional sponsor for flood control, we have an obligation to protect
the health and safety of our citizens. We are asking your support in
helping us achieve this necessary and important goal. It is absolutely
critical that the Corps' work, which has been proceeding for a number
of years, now continues on schedule through construction.
Therefore, we urgently request that a total of $30,000,000 in
construction funds be made available in the fiscal year 2006 Energy and
Water Development Appropriations Act to continue construction of the
McCook and Thornton Reservoir Projects.
Again, we thank the subcommittee for its support of this important
project over the years, and we thank you in advance for your
consideration of our request this year.
______

Prepared Statement of the Napa County Flood Control and Water
Conservation District
summary recommendations

------------------------------------------------------------------------
Funding
Project Request
------------------------------------------------------------------------
Napa River Flood Control: Corps of Engineers, $24,000,000
Construction...........................................
Napa River Maintenance Dredging: Corps of Engineers, 2,644,000
Operation and Maintenance..............................
Napa Valley Watershed Management: Corps of Engineers, 500,000
Feasibility Study......................................
------------------------------------------------------------------------

napa river flood control project
Background
The project is located in the city and county of Napa, California.
Excluding public facilities, the present value of damageable property
within the project flood plain is well over $500 million. The Napa
River Basin, comprising 426 square miles, ranging from tidal marshes to
mountainous terrain, is subject to severe winter storms and frequent
flooding. In the lower reaches of the river, flood conditions are
aggravated by high tides and local runoff. Floods in the Napa area have
occurred in 1955, 1958, 1963, 1965, 1986 (flood of record), 1995, and
1997. In 1998, the river rose just above flood stage on three
occasions, but subsided before major property damage occurred. In
December of 2002, flooding occurred from the Napa Creek at the
transition to the Napa River, resulting in damage to numerous residents
and several businesses.
Since 1962, 27 major floods have struck the Valley region, exacting
a heavy toll in loss of life and property. The flood on 1986, for
example, killed three people and caused more than $100 million in
damage. Damages throughout Napa County totaled about $85 million from
the January and March 1995 floods. The floods resulted in 27 businesses
and 843 residences damaged countrywide. Almost all of the damages from
the 1986, 1995, and 1997 floods were within the project area. Congress
has authorized a flood control project since 1944, but due to expense,
lack of public consensus on the design and concern about environment
impacts, a project had never been realized. In mid-1995, Federal and
State resource agencies reviewed the plan and gave notice to the Corps
that this plan had significant regulatory hurdles to face.
Approved Plan--Project Overview
In an effort to identify a meaningful and successful plan, a new
approach emerged that looked at flood control from a broader, more
comprehensive perspective. Citizens for Napa River Flood Management was
formed, bringing together a diverse group of local engineers,
architects, aquatic ecologists, business and agricultural leasers,
environmentalists, government officials, homeowners and renters and
numerous community organizations.
Through a series of public meetings and intensive debate over every
aspect of Napa's flooding problems, the Citizens for Napa River Flood
Management crafted a flood management plan offering a range of benefits
for the entire Napa region. The Corps of Engineers served as a partner
and a resource for the group, helping to evaluate their approach to
flood management. The final plan produced by the Citizens for Napa
River Flood Management was successfully evaluated through the research,
experience and state-of-the-art simulation tools developed by the Corps
and numerous international experts in the field of hydrology and other
related disciplines. The success of this collaboration serves as a
model for the Nation.
Acknowledging the river's natural state, the project utilizes a set
of living river strategies that minimize the disruption and alteration
of the river habitat, and maximizes the opportunities for environmental
restoration and enhancement throughout the watershed.
Construction of the project began 4 years ago. The benefits of the
plan include reducing or elimination of loss of life, property damage,
cleanup costs, community disruption due to unemployment and lost
business revenue, and the need for flood insurance. In fact, the
project has created an economic renaissance in Napa with new
investment, schools and housing coming into a livable community on a
living river. As a key feature, the plan will improve water quality,
create urban wetlands and enhance wildlife habitats.
The plan will protect over 7,000 people and over 3,000 residential/
commercial units from the 100-year flood event on the Napa River and
its main tributary, the Napa Creek, and the project has a remaining
benefit/remaining cost ratio of over 3 to 1 as calculated by the Corps.
One billion dollars in damages will be saved over the useful life of
the project. The Napa County Flood Control District is meeting its
local cost-sharing responsibilities for the project. A countywide sales
tax, along with a number of other funding options, was approved 5 years
ago by a two-thirds majority of the county's voters for the local
share.
Project Synopsis
Fiscal Year 2005 Funding
The fiscal year 2005 Energy and Water Development Appropriations
Act included $16,000,000 to continue construction of the project.
Necessary Fiscal Year 2006 Funding
Funding for the Napa River Project during 2006 in the amount of
$24,000,000 is needed to continue construction of the project and
maintain the current project schedule.
napa river maintenance dredging
Background
The Napa River project is a shallow-draft, mainly light commercial
and recreational, navigation channel. The operations and maintenance
schedule provides for a 6-year cycle of maintenance dredging for the
Napa River Channel to -15 feet Mean Lower Low Water (MLLW) from Mare
Island Strait Causeway to Asylum Slough (downstream portion); thence
-10 feet MLLW to head of navigation at the Third Street Bridge in the
City of Napa (upstream portion). The sponsor (Napa County Flood Control
and Water Conservation District) is responsible for furnishing a
suitable upland dredged material disposal site for the project. The
most recent maintenance dredging for the project was completed in
fiscal year 1999.
Necessary Fiscal Year 2006 Funding
Funding in the amount of $2,644,000 for maintenance dredging of the
Napa River project is required in fiscal year 2006. With maintenance
normally performed on a 6-year cycle, dredging to restore authorized
project depths is overdue. Maintenance dredging is required to restore
depths required for existing traffic and in anticipation of the
additional boat traffic resulting from the replacement of the Maxwell
Bridge as part of the Napa River flood control project.
napa valley watershed management
Background
The Napa Valley watershed faces many challenges and stresses to its
environmental health and flood management abilities. From a healthy
river point of view, the Napa River has been on a recovery path since
its low point in the 1960's, when the last of the native salmon were
taken from the system by severe water pollution and habitat
destruction. Steelhead trout have survived as a remnant population of
200 that is presently in need of higher quality and more extensive
spawning areas for recovery to a significant population.
In order to address issues such as encroachment of the river and
loss of wetlands and to develop local tools for improving natural
resource management, the U.S. Army Corps of Engineers, San Francisco
District (Corps) and the Napa County Flood Control and Water
Conservation District (NCFCWCD) is currently developing a Napa Valley
Watershed Management Plan (WMP) which identifies problems and
opportunities for implementing environmentally and economically
beneficial restoration in the Napa Valley watershed providing ecosystem
benefits, such as flood reduction, erosion control, sedimentation
management, and pollution abatement. The authority for this study is
the Northern California Streams Study Authority stemming from the
Rivers and Harbors Act of 1962, Public Law 87-874. The plan, which the
District is requesting funds for, would include the identification,
review, refinement, and prioritization of restoration and flood
protection opportunities with an emphasis on restoration of the
watershed's ecosystem (e.g., important plant communities, healthy fish
and wildlife populations, rare and endangered habitats and species and
wildlife and riparian habitats).
Project Synopsis
Fiscal Year 2005 Budget Funding
The fiscal year 2005 Energy and Water Development Appropriations
Act included $200,000 to continue the Napa Valley Watershed Management
Study. Funds are being used for data evaluation and outreach and to
create a data monitoring framework for the watershed.
Necessary Fiscal Year 2006 Funding
Funding for the Napa Valley Watershed Management Study during
fiscal year 2006 in the amount of $500,000 is needed to continue work
on the Napa Valley Watershed Resource Analysis & Report. This amount is
included in the President's Budget Request for the Corps of Engineers.
The purpose of this work is to provide a foundation assessment for
resource allocation that improves the habitat and water quality in the
Napa River watershed.
______

Prepared Statement of the Board of Levee Commissioners for the Yazoo-
Mississippi Delta
u.s. army corps of engineers mississippi river & tributaries project
request--$450 million
Perhaps at no time in the modern era have this Nation's flood
control community and the citizens it seeks to protect been as
threatened as they are today.
Not only does the proposed Federal budget provide only 60 percent
of the funding needed to carry out the country's needed work, but
legislative fiat and subsequent bureaucratic changes would also result
in a dangerously restrictive manner in which monies which are received
might be allocated.
Like other flood control entities, the Yazoo-Mississippi Delta
Levee Board is used to appealing to the Congress for more funding than
respective administrations would send to help keep our people dry, but
the double-whammy now in place is most ominous, indeed.
We will address first the needed funding.
The committee is aware that the comprehensive project for Flood
Control, the Mississippi River and Tributaries Project (MR&T) will
provide flood protection for the alluvial valley of the Mississippi
River from Cape Girardeau, Missouri, to the Head of Passes, Louisiana,
and for the improvement of the Mississippi River for navigation from
Cairo, Illinois, to Baton Rouge, Louisiana. This, ladies and gentlemen,
is truly the heartland of America.
And it has worked, fabulously. For the investment of $12.1 billion,
the project has accumulated benefits in flood damages prevented of
about $293 billion. That's a benefit to cost ratio of 24:1. Every
endeavor in the country should be so successful. So now we must bring
it to what is effectively a grinding halt? The fiscal year 2006
proposed budget would fund the MR&T only at a level of $270 million,
only 60 percent of what the U.S. Army Corps of Engineers has
demonstrated to be its capabilities of $450 million.
As prime, and to the Yazoo-Mississippi Delta Levee Board preeminent
example is the Upper Yazoo Project in our 10-county district of
Mississippi, arguably the most effectively progressing and least
controversy-plagued flood control project in the entire country. Yet,
this public works success, which already provides urban flood
protection to Greenwood and upon completion would provide additional
urban flood protection to such as Marks, Lambert, Moorhead (the site of
Mississippi Delta Community College), Tutwiler, Glendora, Sumner and
Webb, as well as eliminating interbasin transfer, is slated to receive
exactly zero funding--not 1 red cent--in the proposed Federal budget.
We urge lawmakers that the Upper Yazoo Project be funded at the 2006
capability level of $13.275 million.
And while of the highest priority to this levee board, this project
is not a lone example of funding inequity proposed. We join with the
Mississippi Valley Flood Control association in urging that the
Mississippi Rivers and Tributaries Project be funded at the full Corps
capability of $450 million.
Also of paramount concern to us, however, are new restrictions
being imposed on the Corps of Engineers within the confines of the
MR&T.
Ladies and gentlemen, these new restrictions, most notably the lack
of authority to award continuing contracts and the reprogramming of
current projects, literally threaten to shut down every rural flood
control project in the United States and consequently will serve to
effectively write off all the men, women and children who live there.
If the Corps cannot utilize continuing contracts, then flood
control will be effectively out of business in our part of the country.
It is enormously self-defeating.
The MR&T project, in addition to its flood control benefits, also
provides approximately $900 million in navigation savings on the
Mississippi River each year. While the project is approximately 88
percent physically complete, there is considerable work to be done--
some of it in our back yard.
It is important to note that the MR&T project was conceived and
designed as a multi-component system to convey floodwaters that pass
through the Lower Mississippi Valley to the Gulf of Mexico comprised of
the drainage of 41 percent of the continental United States. Until the
system is completed, it cannot safely convey a project flood or assure
stability of the river for navigation.
We urge that the United States House of Representatives and the
United States Senate grant the Corps of Engineers authority to award
continuing contracts within the MR&T appropriation.
______

Prepared Statement of the Red River Valley Association
civil works
Mr. Chairman and members of the committee, I am Wayne Dowd, and
pleased to represent the Red River Valley Association as its President.
Our organization was founded in 1925 with the express purpose of
uniting the Citizens of Arkansas, Louisiana, Oklahoma and Texas to
develop the land and water resources of the Red River Basin.
The Resolutions contained herein were adopted by the Association
during its 80th Annual Meeting in Bossier City, Louisiana on February
24, 2005, and represent the combined concerns of the citizens of the
Red River Basin area as they pertain to the goals of the Association.
The President's budget included $4.513 billion for the civil works
programs. Even though the President's budget is only $200 million less
than what was appropriated in fiscal year 2005, $4.705 billion (4.4
percent reduction), the problem is how the funds were distributed. A
few projects received as much as twice as much as was appropriated in
fiscal year 2005 to the detriment of many projects that received no
funding. The $4.513 billion level does not come close to the real needs
of our Nation. A more realistic funding level to meet the requirements
for continuing the existing needs of the civil works program is $5.5
billion in fiscal year 2006. The traditional programs, inland waterways
and flood protection remain at the low, unacceptable level as in past
years. These projects are the backbone to our Nation's infrastructure
for waterways, flood control and water supply. We remind you that civil
works projects are a true ``jobs program'' in that up to 85 percent of
project funding is contracted to the private sector for construction
and much of the architect and engineer work. Not only do these funds
provide jobs, but provide economic development opportunities for our
communities to grow and prosper, creating jobs.
In the past we have worked hard to ``add'' funding to the Energy
and Water Bill for the Water projects. We want to bring to your
attention that in fiscal year 1998 the Water projects received
approximately 20 percent of the total bill. Over the next 7 years the
Water portion steadily decreased to only 16.6 percent of the total bill
in fiscal year 2005. The Nation's Energy program is very important, but
we believe the Water program is too. We ask that the Subcommittee on
Energy and Water and the full Appropriations Committee support bringing
the Water share of the bill back to the 20 percent it once was.
The inland waterway tributary rivers continue to face scrutiny on
what determines a successful waterway. This has an impact on the
operations and maintenance funding a waterway receives. Using criteria
that only considers tons, actually moved on the waterway, neglects the
main benefit that justified the original waterway project,
transportation cost savings. Currently there is no criteria used to
consider ``water compelled rates'' (competition with rail). We know
that there are industries not using our waterway because rail rates
were reduced, to match the waterborne rates, the same year our waterway
became operational. If the operation of our waterway was terminated the
rail rates would increase. Many industries have experienced great
transportation savings without using the waterway.
The main problem is that there is no ``post-project'' evaluation
for navigation projects. We support the development of such an
evaluation and volunteer the J. Bennett Johnston Waterway and our
efforts to develop one. Such an evaluation could be made once every 5
years to insure the waterway continues to meet the determined criteria.
We also believe any evaluation adopted must have input from and be
validated by the administration, Congress and industry. Too much money
has been expended to use an evaluation that is unfair and disregards
the true benefits realized from these waterway projects.
We do not support any efforts to increase the benefit-to-cost ratio
for projects above 1.0 and we do not support increasing the local
sponsor's cost sharing requirements. This is not ``Corps reform,'' it
is an initiative to eliminate the civil works program. We do support
true reform that would make civil works projects less expensive and
faster to complete. Corps reform should make the Corps of Engineers
more efficient, less expensive and faster in the execution of civil
works studies and completion of projects, not eliminate the program.
I would now like to comment on our specific requests for the future
economic well-being of the citizens residing in the four-State Red
River Basin regions.
Navigation.--The J. Bennett Johnston Waterway is living up to the
expectations of the benefits projected. We are extremely proud of our
public ports, municipalities and State agencies that have created this
success. The official calendar year 2003 statistics, just released,
shows that the J. Bennett Johnston Waterway tonnage was 4.2 million
tons, a 12.6 percent increase from calendar year 2002. We also point
out that the 4.2 billion tons is exactly on track with the projected
tonnage that justified the project. This upward ``trend'' in usage will
continue, as we know the public ports experienced a 40 percent increase
in tonnage in calendar year 2004.
You are reminded that the Waterway is not complete; 6 percent
remains to be constructed, $119 million. We appreciate Congress's
appropriation level in fiscal year 2005 of $13 million, however, the
President's fiscal year 2006 budget drastically cuts that to $1.5
million, which is unacceptable. There is a capability for $20 million
of work, but we realistically request $10 million to keep the project
moving toward completion.
Now that the J. Bennett Johnston Waterway is reliable year round we
must address efficiency. Presently a 9-foot draft is authorized for the
J. Bennett Johnston Waterway. Our Waterway feeds into the Mississippi
River, Atchafalaya River and Gulf Inter-coastal Canal, which are all
authorized at a 12-foot draft. A 12-foot channel would allow an
additional one-third cargo capacity, per barge, which will greatly
increase the efficiency of our Waterway and reduce transportation
rates. This one action would have the greatest, positive impact to
reduce rates to a competitive level that would bring more industries to
use waterborne transportation. We request that the Corps conduct a
reconnaissance study, to evaluate this proposal, at a cost of $100,000.
The feasibility study to continue navigation from Shreveport-
Bossier City, Louisiana into the State of Arkansas will be completed in
calendar year 2005. We appreciate that Congress appropriated adequate
funding to complete this study. There is great optimism that the study
will recommend a favorable project. This region of SW Arkansas and NE
Texas continues to suffer major unemployment and this navigation
project, although not the total solution, will help revitalize the
economy. We request funding of $400,000 to initiate planning,
engineering and design, PED.
Bank Stabilization.--One of the most important, continuing
programs, on the Red River is bank stabilization in Arkansas and North
Louisiana. We must stop the loss of valuable farmland that erodes down
the river and interferes with the navigation channel. In addition to
the loss of farmland is the threat to public utilities such as roads,
electric power lines and bridges; as well as increased dredging cost in
the navigable waterway in Louisiana. These bank stabilization projects
are compatible with subsequent navigation and we urge that they be
continued in those locations designated by the Corps of Engineers to be
the areas of highest priority. We appreciated the Congressional funding
in fiscal year 2005 and request you fund this project at a level of $10
million in fiscal year 2006.
Flood Control.--You will recall that in 1990 major areas of
northeast Texas, Southwest Arkansas and the entire length of the Red
River in Louisiana were ravaged by the worst flooding to hit the region
since 1945 and 1957. More than 700,000 acres were flooded with total
damages estimated at $20.4 million. However, it could have been much
worse. The Corps of Engineers estimates that without the flood control
measure authorized by Congress over the past several decades an
additional 1.3 million acres would have been flooded with an estimated
$330 million in additional flood damage to agriculture and urban
developments.
We continue to consider flood control a major objective and request
you continue funding the levee rehabilitation projects ongoing in
Arkansas. Five of eleven levee sections have been completed and brought
to Federal standards. Appropriations of $5 million will construct two
more levee sections in Lafayette County, AR.
The levees in Louisiana have been incorporated into the Federal
system; however, they do not meet current safety standards. These
levees do not have a gravel surface roadway, threatening their
integrity during times of flooding. It is essential for personnel to
traverse the levees during a flood to inspect them for problems.
Without the gravel surface the vehicles used cause rutting which can
create conditions for the levees to fail. A gravel surface will insure
inspection personnel can check the levees during the saturated
conditions of a flood. Funding has been appropriated and approximately
50 miles of levees in the Natchitoches Levee District will be completed
this year. We request $2 million to continue this important project in
other Louisiana parishes.
Water Quality.--Nearly 3,500 tons of natural salts, primarily
sodium chloride, enter the upper reaches of the Red River each day,
rendering downstream waters unusable for most purposes. The Truscott
Brine Lake project, which is located on the South Fork of the Wichita
River in King and Knox Counties, Texas became operational in 1987. An
independent panel of experts found that the project not only continues
to perform beyond design expectations in providing cleaner water, but
also has an exceptionally favorable cost-benefit ratio.
Due to a conflict over environmental issues, raised by the U.S.
Fish and Wildlife Service, completion of the SFEIS was delayed pending
further study to determine the extent of possible impacts to fish and
wildlife, their habitats and biological communities along the Red River
and Lake Texoma. In an effort to resolve these issues and ensure that
no harmful impact to the environment or ecosystems would result, a
comprehensive environmental and ecological monitoring program was
implemented. It evaluates the actual impacts of reducing chloride
concentrations within the Red River watershed. This base line data is
crucial to understanding the ecosystem of the Red River basin west of
Lake Texoma and funding for this must continue.
The Assistant Secretary of the Army (Civil Works), in October 1998,
agreed to support a re-evaluation of the Wichita River Basin tributary
of the project. The re-evaluation report was completed and the
Environmental Record of Decision was signed by the Director of Civil
Works. The plan was found to be economically justified. Completion of
this project will reclaim Lake Kemp as a usable water source for the
City of Wichita Falls and the region. This project will provide
improved water quality throughout the four States of the Red River
providing the opportunity to use surface water and reduce dependency on
ground water. We request appropriations of $3,000,000 to continue this
important environmental monitoring and to complete plans and
specifications of the Wichita River control features.
Over the past year there has been a renewed interest by the Lugart-
Altus Irrigation District to evaluate construction of Area VI, of the
Chloride Control Project, in Oklahoma. They have obtained the support
of many State and Federal legislators, as well as a letter from the
Oklahoma Governor in support of a re-evaluation report. We request an
appropriation of $250,000 to initiate a re-evaluation report.
Water Supply.--Northwest Texas has been overrun with non-native
species of brush and mesquite. It now dominates millions of acres of
rangelands and has negatively impacted water runoff. Studies have
indicated that brush management could increase runoff by as much as 30
percent to 40 percent. This would be of great value in opportunities
for more surface water use and less dependency on ground water. Other
benefits include an ecological diversity of plant and animal species,
range fire control and cattle production. A $100,000 reconnaissance
study would determine if there is a Federal interest and what magnitude
these benefits would be.
Lake Kemp, just west of Wichita Falls, TX, is a water supply for
the needs of this region. Due to siltation the available storage of
water has been impacted. A $750,000 reallocation study is requested to
determine water distribution needs and raising the conservation pool.
$375,000 is requested in fiscal year 2006 to initiate this 2-year
study.
Operation & Maintenance.--We appreciate the support of your
subcommittee to support navigation to Shreveport/Bossier City, which is
now providing a catalyst to our industrial base, creating jobs and
providing economic growth. Our major project for O&M is the J. Bennett
Johnston Waterway. From this project four public ports and three
private terminals have been established. The President's budget
included $10,115,000; however, a minimum of $11,800,000 is required to
address our annual dredging needs and operations costs for the five
locks and dams. This does not address any backlog maintenance.
Full O&M capability levels are not only important for our Waterway
project but for all our Corps projects and flood control lakes. The
backlog of critical maintenance only becomes worse and more expensive
with time. We urge you to appropriate funding to address this serious
issue at the expressed full Corps capability.
We are sincerely grateful to you for the past support you have
provided our projects. We hope that we can count on you again to fund
our needs and complete the projects started that will help us diversify
our economy and create the jobs so badly needed by our citizens. We
have included a summary of our requests for easy reference.
Thank you for the opportunity to present this testimony and project
details of the Red River Valley Association on behalf of the
industries, organizations, municipalities and citizens we represent
throughout the four-State Red River Valley region. We believe that any
Federal monies spent on civil work projects are truly investments in
our future and will return several times the original investment in
benefits that will accrue back to the Federal Government.
attachment.--summary of fiscal year 2006 requests
red river valley association
Note.--Projects are NOT in any order of priority.
General Investigation Studies (GI)
Red River Navigation, SW Arkansas.--This is a feasibility study
initiated on March 24, 1999 to investigate the potential to extend
navigation from Shreveport/Bossier, LA to Index, AR. To date $3,428,000
has been appropriated for this study and matched by the State of
Arkansas. These funds will complete the study in fiscal year 2005. The
initial study results indicate the probability that a project will be
recommended. Funds are requested in fiscal year 2006 to initiate pre-
construction, engineering and design (PED). Total Fiscal Year 2006
Request.--$400,000.
J. Bennett Johnston Waterway, LA, 12 Channel Reconnaissance
Study.--The waterway flows directly into the Atchafalaya River and then
to the Gulf Inter-coastal Waterway, both have authorized 12 channels.
Except under extreme low water conditions the Mississippi River
accommodates barges of 12 draft. It is inefficient for industry to
have to ``special load'' barges destined for the Red River to 9 when
all other barges are loaded to 12. More important the added cargo per
barge (one-third more) will have a dramatic impact on reducing the
waterborne rates for the Waterway, making it more competitive. Total
Fiscal Year 2006 Request.--$100,000.
Southeast Oklahoma Water Resource Study.--Conduct a reconnaissance
study to evaluate the water resources in the study area. The study area
includes the Kiamichi River basin and other tributaries of the Red
River. A comprehensive plan will be developed to determine how best to
conserve and utilize this water. In fiscal year 2004 $50,000 was
received for this study. This is a complex 11-year study of ecosystem
restoration issues and the Oklahoma Water Resource Board has signed on
as the local sponsor. Total Fiscal Year 2006 Request.--$350,000.
Washita River Basin, OK.--The Washita River is a tributary of the
Red River that flows into Lake Texoma. The initial reconnaissance
report identified that a feasibility study should be conducted to study
problems caused by golden algae. The Oklahoma Department of Wildlife
Conservation has expressed an interest in being the local sponsor.
Funding of $100,000 was received in fiscal year 2004 to initiate the
study and $105,000 was appropriated in fiscal year 2005. Total Fiscal
Year 2006 Request.--$75,000.
Southwest Arkansas Study.--Conduct a reconnaissance report in the
four county areas of the Red River/Little River basins. Included would
be the four Corps lakes; DeQueen, Dierks, Gillham and Millwood. The
watershed study would evaluate; flooding, irrigation, fish and wildlife
habitat, water quality, recreation and water releases for navigation.
The State of Arkansas has expressed an interest in cost sharing the
feasibility study. Total Fiscal Year 2006 Request.--$400,000.
Red River Basin Above Denison Dam, OK & TX, Water Resources
Development and Ecosystem Restoration.--Over the past 200 years
invasive and non-native brush species have taken over this region.
These species, especially mesquite and salt cedar, absorbs enormous
amount of water. Brush control could yield as much as 30 percent to 40
percent increase in rangeland runoff. Other benefits include an
ecological diversity of plant and animal species, range fire control
and cattle production. This is an eco-system restoration study. Total
Fiscal Year 2006 Request.--$100,000.
Bossier Parish Levee and Flood Control, LA.--A multipurpose
reconnaissance study was initiated in fiscal year 2004 receiving
$65,000. Additional funds of $153,000 were appropriated in fiscal year
2005. Bossier Parish has agreed to be the local sponsor. The study will
investigate competing demands of flooding, increased water use and a
decline of environmental resources. Total Fiscal Year 2006 Request.--
$332,000.
Construction General (CG)
Red River Waterway Project, J. Bennett Johnston Waterway, LA.--Two
projects will be completed in fiscal year 2005 as well as recreation
facilities and continued mitigation. These ongoing projects will be
completed using the $13.0 million appropriated in fiscal year 2005.
Additional funds could be used for new projects, which include;
Westdale Realignment ($1,400,000), Gahagan Reinforcement ($3,200,000),
Fausse/Natchitoches/Clarence Reinforcement ($1,200,000), Teague Parkway
Revetment ($1,900,000), Lumbra Dikes ($5,416,000), Lindy C. Boggs
Barrier Upgrade ($3,700,000) and continued mitigation ($1,684,000).
Total Fiscal Year 2006 Request.--$20,000,000.
Red River Chloride Control Project (Wichita River Basin), TX:
--Wichita River Basin, TX.--A reevaluation for the Wichita River
Basin features have been ongoing using reprogrammed funds. The
office of the ASA (CW) has supported this project and the re-
evaluation report was completed in March 2004. Funds are needed
for design, plans and specifications and to continue
environmental monitoring activities. Total Fiscal Year 2006
Request.--$3,000,000.
--Area VI, OK.--Over the past year there has been a renewed interest
in Area VI in Oklahoma. The Governor of Oklahoma signed a
letter supporting a re-evaluation report be initiated. Many
State and Federal legislators have expressed support to
evaluate this project. Total Fiscal Year 2006 Request.--
$250,000.
Red River Below Denison Dam Levees & Bank Stabilization, LA, AR and
TX:
--Levee Rehabilitation, AR.--Funds are required to initiate and
complete construction of Levee Items 9A and 9B in north
Lafayette County and initiate design for Levee Item 6. Total
Fiscal Year 2006 Request.--$7,000,000.
--Upgrade Levees, LA.--Approximately 220 miles of levees in Louisiana
do not have gravel surfaces on top of the levee, therefore do
not meet Federal standards. These levees are in the Federal
system and must be upgraded. This surface is required for safe
inspections of the levees during times of floods and to
maintain the integrity of the levee. The total project can be
completed in four phases over 4 years. $1,000,000 was
appropriated in fiscal year 2003 and approximately 50 miles of
levee are being upgraded in the Natchitoches Levee District,
LA. Total Fiscal Year 2006 Request.--$2,000,000.
Red River Emergency Bank Protection, Arkansas.--Funds are required
to initiate construction of Bois D'Arc Revetment ($4,200,000) and
Dickson Revetment ($5,800,000). These funds would also complete the
design on Finn Revetment Phase II. These are important projects for
protection of valuable farmlands, public infrastructure and to maintain
the existing alignment of the river in advance of navigation. Total
Fiscal Year 2006 Request.--$10,000,000.
Little River County (Ogden Levee), AR.--A reconnaissance report in
1991 determined that flood control levees were justified along Little
River. The project sponsor, Arkansas Soil and Water Conservation
Commission requests that the project proceed directly to PED, without a
cost shared feasibility study. We request language and funding to
accomplish this. Total Fiscal Year 2006 Request.--$200,000.
Big Cypress Valley Watershed (Section 1135).--The main focus of
this study is within the City of Jefferson, Texas. Informal
coordination with Jefferson has showed their continued support and
intent to participate. Their total share is estimated to be $539,000
with annual O&M costs of approximately $21,000. In fiscal year 2001
$120,000 was appropriated to initiate this project. The Master Plan and
acquisition of land by the local sponsor is being completed; however,
funding can be used to complete the plans and specifications and to
initiate construction. Total Fiscal Year 2006 Request.--$530,000.
Lawton, Oklahoma, Waste Water Infrastructure Rehabilitation
Project.--The City of Lawton is located approximately 100 miles
southwest of Oklahoma City in Comanche County, Oklahoma. The project
consists of constructing wastewater infrastructure for the City of
Lawton, Oklahoma, which includes off base housing for Fort Sill. The
sponsor and Corps will finalize the scope of the project. The Sponsor
will begin design and the Corps will draft a Project Cooperation
Agreement and initiate real estate acquisition. Total Fiscal Year 2006
Request.--$50,000.
Operation & Maintenance (O&M)
J. Bennett Johnston Waterway.--The President's budget is usually
sufficient to only operate the waterway and perform preventive
maintenance. There are major, unfunded backlog maintenance items that
must be accomplished. These items include inspection and repair of lock
& dam stop logs ($860,000) inspection and repairs to tainter gates
($3,255,000), revetment repairs ($2,000,000) and other backlog items
($3,176,000). The President's budget, of $10,115,000 included no
funding for backlog maintenance. Total Fiscal Year 2006 Request.--
$19,406,000.
Flood Control Lakes.--There are nine major flood control lakes in
the Red River Valley, plus the Truscott Brine Reservoir. These lakes
have served to prevent hundreds of millions of dollars of damage over
the past 50 years. However, they are getting to the age where
maintenance cannot be deferred any longer. Backlog maintenance items
include repair to flood gates, powerhouse maintenance, dam structures
and recreation facilities. If upgrades are not made at recreation
facilities they may have to be closed due to safety concerns to the
public. We request funding levels at the Full Corps capabilities.
Support of MR&T Operations and Maintenance (O&M).--Old River Lock
is the access tows have from the Mississippi River to the Red River
Waterway. When this structure is not in service tows must go down the
Atchafalaya River to the gulf and back to the Mississippi past New
Orleans, LA, adding days to the trip. It is critical to the success of
the Red River Waterway that the Old River structure be maintained.
______

Prepared Statement of the Board of Mississippi Levee Commissioners
Mr. Chairman and members of the committee, this statement is
prepared by Peter Nimrod, Chief Engineer for the Board of Mississippi
Levee Commissioners, Greenville, Mississippi, and submitted on behalf
of the Board and the citizens of the Mississippi Levee District. The
Board of Mississippi Levee Commissioners is comprised of 7 elected
commissioners representing the counties of Bolivar, Issaquena, Sharkey,
Washington, and parts of Humphreys and Warren counties in the Lower
Yazoo Basin in Mississippi. The Board of Mississippi Levee
Commissioners is charged with the responsibility of providing
protection to the Mississippi Delta from flooding of the Mississippi
River and maintaining major drainage outlets for removing the flood
waters from the area. These responsibilities are carried out by
providing the local sponsor requirements for the Congressionally
authorized projects in the Mississippi Levee District. The Mississippi
Levee Board and the Mississippi Valley Flood Control Association
support an appropriation of $450 million for fiscal year 2006 for the
Mississippi River & Tributaries Project. This is the minimum amount
that we consider necessary to allow for an orderly completion of the
remaining work in the Valley and to provide for the operation and
maintenance, as required, to prevent further deterioration of the
completed flood control and navigation work.
It is apparent that the administration loses sight of the fact that
the Mississippi River & Tributaries Project provides protection to the
Lower Mississippi Valley from flood waters generated across 41 percent
of the Continental United States. These flood waters flow from 31
States and 2 provinces of Canada and must pass through the Lower
Mississippi Valley on its way to the Gulf of Mexico. We will remind you
that the Mississippi River & Tributaries Project is one of, if not the
most, cost-effective project ever undertaken by the United States. The
foresight used by the Congress and their authorization of the many
features of this project is exemplary.
The many projects that are part of the Mississippi River &
Tributaries Project not only provides protection from flooding in the
area, but the award of construction contracts throughout the Valley
provides assistance to the overall economy of this area that is also
encompassed by the Delta Regional Authority. The employment of the
local workforce and purchases from local vendors by the contractors
help stabilize the economy in one of the most impoverished areas of our
country.
Thanks to the additional funding provided by the Congress over the
last several years over and above the administration's budget, work on
the Mainline Mississippi River Levee Enlargement Project is continuing.
This funding has resulted in having 7.6 miles of work completed and
returned to the Levee Board for maintenance, and 24.4 miles are
currently under contract. Right of way is being acquired on the next
3.4 miles with the contract being scheduled for award in September of
this year. This will result in over half of the deficient 69 miles in
our District being completed or under contract. We are requesting $55.1
million for construction on the Mainline Mississippi River Levees in
the Lower Mississippi Valley Division which will allow the Vicksburg
and Memphis districts to keep existing contracts on schedule and award
contracts to avoid any unnecessary delays in completing this vital
project. We are all well aware that the Valley some day will have to
endure a Project Flood, we just don't know when. We must be prepared.
The President's fiscal year 2006 budget did not include funding for
any construction projects within the Yazoo Basin. These are all
projects authorized and funded so wisely by the Congress. This action
is especially difficult to understand during a time when our Nation
needs an economic boost. All of these projects are encompassed in the
footprint of the Delta Regional Authority, an area recognized by the
Congress as requiring special economic assistance to keep pace with the
rest of our great Nation. We can not lose sight of the fact that all of
these projects are required to return more than a dollar in benefits
for each dollar spent. No project authorized and funded by the Congress
should be indiscriminately terminated without the benefit of having the
opportunity to complete the study process and subsequent construction
after complying with the Corps Policy and Guidelines.
The Yazoo Backwater Project will provide benefits to parts of six
counties in the south part of the Mississippi Delta. The citizens of
this area continue to patiently wait for the completion of this much
needed project. This work authorized by the Congress to provide
protection from higher stages on the Mississippi River resulting from
changes made to the Mississippi River and Tributaries Project, must
safely pass flood water from 41 percent of the continental United
States. Also, the same change in the flow line of the Mississippi River
that is requiring the Enlargement of the Mainline Mississippi River
Levee will also increase stages in the South Delta. The Corps and EPA
have made an extraordinary effort to resolve differences in wetland
impacts resulting from the construction of the Corps recommended plan
for this project. This plan has received the support of all six county
Boards of Supervisors in the project area. We are requesting this
project be funded by the Congress in the amount of $25 million. These
funds will allow the Corps to begin acquisition of the reforestation
easements and initiate the award of the pump supply contract.
The first item of work has been completed for the Big Sunflower
River Maintenance Project and the right-of-way has been acquired for
the next item of work. Our request for $2.21 million will allow right-
of-way acquisition to continue and for the award of the first dredging
contract. The residents in South Washington County continue to suffer
damages from flooding while they continue to wait for this maintenance
project to reach their area.
Work on the Delta Headwaters Project, formerly the Demonstration
Erosion Control Project, has proven effective in reducing sediments to
downstream channels. To discontinue this project will only increase
sediment in downstream channels, reducing the level of protection to
the citizens of the Delta and increasing required maintenance. We are
requesting $25 million to continue this project.
The Upper Yazoo Project is critical to the Delta. The Corps of
Engineers operates four major flood control reservoirs on the bluff
hills overlooking the Mississippi Delta. These reservoirs hold back
heavy spring rains and must have adequate outlet channel capacity to
pass this excess runoff during the summer and fall months. Without
completion of the Upper Yazoo Project, the Corps is forced to hold
flood water from the previous spring, thereby reducing the ability to
provide protection from the current year's flood water. We urge the
Congress to provide $13.275 million allowing construction to continue
and the award of additional channel items that will extend construction
upstream of Money, Mississippi.
Maintenance of completed works can not be overlooked. The four
flood control reservoirs over looking the Delta have been in place for
50 years and have functioned as designed. Required maintenance must be
performed to avoid any possibility of failure during a flood event. We
are asking for $14.8 million for Arkabutla Lake, $16.5 million for
Sardis Lake, $12.3 million for Enid Lake, and $9.5 million for Grenada
Lake. Additional funding will be used to replace rip rap, add needed
infrastructure, and repair and upgrade existing infrastructure around
all the lakes.
We are requesting $21.2 million for Maintenance of the Mainline
Mississippi River Levees in the Lower Mississippi Valley Division which
will provide for repair of levee slides, slope repair, and repair of
the gravel maintenance roadway which is so vital to access during high
water.
Other Mississippi projects that require additional funding to keep
on schedule include:
--Big Sunflower River (Upper Steele Bayou).--$2 million;
--Yazoo Basin Reformulation Unit.--$2.2 million;
--Yazoo Basin Main Stem.--$25,000; and,
--Yazoo Backwater (Greentree Reservoirs).--$300,000.
I have reviewed a great deal of information regarding the needs of
providing flood protection to our area. Another major feature of the
Mississippi River & Tributaries Project relates to navigation interests
along the Mississippi River. Several of our ports have been informed
that the President's budget does not include funding for Critical
Harbor Dredging necessary to keep these harbors opened for navigation.
Our port commissioners have been notified that lack of dredging will
cause these ports to be a hazard to navigation and be shut down. This
will impact the movement of over 4.5 million tons of cargo being
shipped on our waterways annually from these ports. This equates to an
additional 180,000 truck loads of products on our highways. It is
imperative that funding be made available for Critical Harbor Dredging
to allow continued operation of these facilities, which are key
features to the economic growth of the region.
The President's fiscal year 2006 budget not only lacked funding but
it also included language to hurt our critical flood control projects.
OMB included an $80 million Construction Suspension Fund. This fund
will cover the cost of suspending or terminating existing projects
under contract. The money will be used to pay off contractors to stop
existing on-going work. This money should be used to continue work
instead of stop work!
The President's fiscal year 2006 budget also included language to
only fund projects with benefit/cost ratios of better than three to
one. This ``Performance Based Budgeting'' means projects with higher
remaining benefit/cost ratios should be given funding priority over
those with lower BC ratios. If a project has been authorized by the
Congress, has a positive BC ratio and is funded by the Congress, it
should be given equal consideration for construction. The Lower
Mississippi Valley, being a part of the Delta Regional Authority, must
see that its projects be given equal treatment with the wealthier areas
of the United States. Also included was the use of a straight 7 percent
``real discount rate'' instead of the current official interest/
discount rate of 5.375 percent. This use of a higher rate favors
projects which have near-term benefits over projects which build up
benefits over time. The overall effect of the use of this higher rate
will be that it will lower the B/C ratios for projects with long term
benefits.
Finally, the President's fiscal year 2006 budget included language
to eliminate the continuing contract clause which will force the Corps
to have all the money in place before a project can be awarded. This
will greatly slow down construction on the Mainline Mississippi River
Levee Enlargement Project in which individual contracts can cost up to
$25 million.
As members of the Congress representing the citizens of our Nation
who live with the Mississippi River everyday, you clearly understand
both the benefits provided by this resource, and the destructive force
that must be controlled during a flood. On behalf of the Mississippi
Levee Board, I can not express enough, our appreciation for your
efforts in providing adequate funding over the last several years that
has allowed construction to continue on our much needed projects.
______

Prepared Statement of the Louisiana Department of Transportation and
Development
On behalf of the State of Louisiana and its 20 levee boards, we
present recommendations for fiscal year 2006 appropriations for U.S.
Army Corps of Engineers Civil Works Projects in Louisiana. Request.--
$845,000,000.
Louisiana contains the terminus of the Mississippi River, third
largest drainage basin in the world, draining 41 percent of the
contiguous United States. When combined with the other interstate
rivers flowing through the State, almost 50 percent of the contiguous
land mass of this Nation drains through Louisiana. This same river
drainage system forms the backbone of the federally constructed Inland
Waterway System that provides our heartland cost effective access to
the global marketplace via the 230-mile deepwater channel of the lower
Mississippi River from Baton Rouge to the Gulf. This strategic gateway
to international markets is the largest port complex in the world. The
Inland Waterway System allows industrial facilities scattered
throughout the central portion of the Nation to obtain raw materials
and fuel from distant locations and to reach worldwide markets. These
industries, and most of the agricultural industries in mid-America, are
heavily dependent on the federally maintained navigable waterways to
remain globally competitive in transporting their products. The lack of
adequate funding for the preservation and efficient operation of this
system will wreak havoc on the economies of all the communities located
on these waterways.
A comprehensive and extensive flood control system is required to
protect the landside facilities and related industries supporting that
waterborne commerce. In Louisiana there are almost 3,000 miles of
levees constructed jointly by Federal, State and local entities that
provide protection from riverine and tidal flooding. Louisiana's 20
levee boards are responsible for the maintenance and upkeep of these
levees, which allow one-third of Louisiana to be habitable year-round.
The petrochemical, oil and gas industries in Louisiana that contribute
to the economic well being of the Nation are almost totally dependent
on the federally constructed flood control system to protect their
facilities. But these same levees and channel improvements that benefit
the entire Nation have been blamed for the rapid deterioration of our
coastal wetlands. The loss of these wetlands is adversely impacting
both the area's natural resources and the effectiveness of our
hurricane protection system. These wetlands are not Louisiana's alone;
they constitute 40 percent of the Nation's wetlands and their
restoration must be considered a national priority.
The Mississippi River and Tributaries Project (MR&T) has been
underway since 1928 and isn't scheduled for completion until beyond
2031. The administration's proposed budget of $270 million for fiscal
year 2006 is totally unacceptable. We strongly support the Mississippi
Valley Flood Control Association's request for the MR&T Project.
In making the following funding recommendations for Louisiana
projects regarding specific construction, studies, and operation and
maintenance items, the State of Louisiana would hope that Congress and
the administration will honor their prior commitments to infrastructure
development and continue to fund our requests. It is appropriate that
the Federal Government has committed to providing combined flood
control and navigation measures that benefit the economy of both
Louisiana and the rest of the Nation. We believe these types of water
resources projects are the most cost effective projects in the federal
budget, having to meet stringent economic criteria not required by
other programs.
The State of Louisiana requests funding for the following projects
that differs from what is in the Fiscal Year 2006 Administration Budget
or is a project of particular importance for the State. Those items
that the State of Louisiana believes have been appropriately funded
have not been included.

SUMMARY OF RECOMMENDED APPROPRIATIONS FISCAL YEAR 2006 FOR LOUISIANA
FLOOD CONTROL, NAVIGATION, HURRICANE PROTECTION & WATER RESOURCES
PROJECTS
------------------------------------------------------------------------
Administration Louisiana
Louisiana Projects Budget Request
------------------------------------------------------------------------
GENERAL INVESTIGATIONS:
STUDIES:
Amite River-Ecosystem .............. $850,000
Restoration, LA................
Amite River & Tributaries, LA .............. 550,000
Bayou Manchac..................
Atchafalaya River, Bayous Chene, $585,000 585,000
Boeuf & Black..................
Calcasieu Lock, LA.............. .............. 900,000
Calcasieu River Basin, LA....... 612,000 612,000
Calcasieu River Pass Ship 700,000 700,000
Channel Enlargement, LA........
Hurricane Protection, LA........ .............. 500,000
LCA--Ecosystem Restoration, LA.. 15,000,000 15,000,000
LCA--Science & Technology, LA... 5,000,000 5,000,000
Plaquemines Parish, LA.......... .............. 500,000
St. Bernard Parish Urban Flood 656,000 656,000
Control, LA....................
St. Charles Parish Urban Flood .............. 900,000
Control, LA....................
St. John the Baptist Parish, LA. .............. 700,000
West Baton Rouge Parish, LA..... .............. 300,000
Bossier Parish Levee & FC....... .............. 332,000
Cross Lake Water Supply......... .............. 200,000
PED:
Bayou Sorrel Lock, LA............... 1,500,000 1,500,000
West Shore--Lake Pontchartrain, LA.. .............. 500,000
Port of Iberia, LA.................. .............. 750,000
Southwest, AR (AR, LA).............. .............. 400,000
NEW STUDIES:
Bayou Nezpique Watershed, LA........ .............. 100,000
Port Fourchon Enlargement, LA....... .............. 100,000
Southwest La Multi-Purpose Water .............. 100,000
Resources..........................
Tangipahoa River Ecosystem .............. 100,000
Restoration, LA....................
Pearl River & Vicinity of Bogalusa .............. 100,000
(LA & MS)..........................
Red River Waterway, LA--12 Channel.. .............. 100,000
Comprehensive Study of LA's Inland .............. 300,000
Waterway System....................
CONSTRUCTION GENERAL:
Comite River, LA.................... 6,254,000 14,000,000
East Baton Rouge Parish, LA......... .............. 2,000,000
Grand Isle, LA...................... .............. 1,800,000
Inner Harbor Navigation Canal Lock, .............. 25,000,000
LA.................................
Lake Pontchartrain, LA.............. 2,977,000 20,000,000
Larose to Golden Meadow, LA......... .............. 1,300,000
Mississippi River Ship Channel, .............. 229,000
Baton Rouge to Gulf................
New Orleans to Venice, LA........... .............. 7,200,000
Southeast, LA....................... 10,491,000 62,500,000
West Bank and Vicinity, New Orleans, 28,000,000 53,000,000
LA.................................
Red River Below Den Dam (AR, LA).... .............. 7,000,000
Red River Emergency (AR, LA)........ .............. 10,000,000
Red River Chloride Control Project .............. 3,250,000
(TX & OK)..........................
J Bennett Johnston WW, Miss. R. to 1,500,000 20,000,000
Shreveport.........................
Ouachita River Levees............... .............. 2,921,000
Ouachita River Bank Stabilization... .............. 3,500,000
OPERATIONS & MAINTENANCE GENERAL:
Atchafalaya River, Bayous Chene, 15,948,000 64,000,000
Boeuf & Black......................
Barataria Bay Waterway.............. .............. 2,600,000
Bayou Lacombe....................... .............. 900,000
Bayou Lafourche..................... .............. 2,000,000
Bayou Segnette...................... .............. 2,900,000
Bayou Teche......................... .............. 800,000
Bayou Teche & Vermilion River....... .............. 50,000
Calcasieu River & Pass.............. 9,032,000 34,000,000
(T) Chefuncte River................. .............. 900,000
Freshwater Bayou.................... 1,466,000 1,800,000
Grand Isle, LA & Vicinity........... .............. 700,000
Gulf Intracoastal Waterway.......... 19,614,000 31,000,000
Houma Navigation Canal.............. 253,000 2,000,000
Mermentau River..................... 2,538,000 4,200,000
Mississippi River, Baton Rouge to 54,053,000 80,000,000
the Gulf...........................
Mississippi River--Gulf Outlet...... 14,111,000 25,000,000
Mississippi River, Outlets at Venice .............. 3,200,000
Tangipahoa River.................... .............. 1,300,000
Waterway Empire to the Gulf......... .............. 240,000
WW Intracoastal Waterway to Bayou .............. 200,000
Dulac..............................
Ouachita & Black Rivers (AR, LA).... 8,500,000 21,428,000
J Bennett Johnston Waterway......... 10,115,000 19,406,000
Lake Providence Harbor.............. .............. 491,000
Madison Parish Port................. .............. 86,000
------------------------------------------------------------------------

SUMMARY OF RECOMMENDED APPROPRIATIONS FISCAL YEAR 2006 FOR LOUISIANA
MISSISSIPPI RIVER AND TRIBUTARIES
------------------------------------------------------------------------
Administration Louisiana
Louisiana Projects Budget Request
------------------------------------------------------------------------
FC, MR&T GENERAL INVESTIGATIONS:
Alexandria to the Gulf.............. $450,000 $450,000
Donaldsonville to the Gulf.......... .............. 814,000
Morganza to the Gulf, PED........... .............. 10,000,000
Spring Bayou Area, LA............... .............. 500,000
Tensas River Basin, LA.............. .............. 500,000
NEW STUDIES:
Atchafalaya Basin Floodway System 100,000 300,000
Land Study, LA.....................
Donaldsonville Port Development, LA. .............. 500,000
Point Coupee Parish to St. Mary .............. 100,000
Parish.............................
FC, MR&T CONSTRUCTION:
Atchafalaya Basin................... 21,000,000 25,000,000
Atchafalaya Basin Floodway System... 2,324,000 9,600,000
Channel Improvement (N.O. Dist.).... 11,930,000 11,930,000
Mississippi Delta Region............ 2,244,000 3,700,000
Mississippi River Levees, LA (N.O. 6,200,000 6,200,000
Dist.).............................
MS-LA Estuarine Area................ .............. 50,000
Mississippi River Levees (AR, LA, 21,475,000 33,000,000
MS) (V. Dist.).....................
Channel Improvement (AR, LA, MS) (V. 17,025,000 23,135,000
Dist.).............................
FC, MR&T MAINTENANCE:
Atchafalaya Basin................... 13,400,000 33,000,000
Atchafalaya Basin Floodway System... 2,860,000 3,600,000
Baton Rouge Harbor (Devil's Swamp).. .............. 420,000
Bayou Cocodrie and Tributaries...... 65,000 65,000
Bonnet Carre Spillway............... 2,713,000 3,000,000
Channel Improvement (N.O. Dist.).... 19,150,000 19,150,000
Dredging (N.O. Dist.)............... 800,000 800,000
MS Delta Region..................... 239,000 239,000
Mississippi River Levees, LA (N.O. 2,850,000 11,700,000
Dist.).............................
Old River........................... 10,200,000 19,200,000
Mississippi River Levees (AR, LA, 2,106,000 2,706,000
MS) (V. Dist.).....................
Revetments & Dikes (AR, LA, MS) (V. 16,300,000 16,300,000
Dist.).............................
Dredging (AR, LA, MS) (V. Dist.).... 5,000,000 5,000,000
Boeuf & Tensas Rivers............... 2,600,000 2,600,000
Red River Backwater................. 3,950,000 14,653,000
Lower Red River..................... 66,000 66,000
------------------------------------------------------------------------

We wish to express our thanks to the Appropriations Subcommittees
on Energy and Water Development of the House and Senate for allowing us
to present this brief on the needs of Louisiana for fiscal year 2006.
We solicit your favorable consideration and request this statement be
included in the formal hearing record.
______

Prepared Statement of the City of Los Angeles Board of Harbor
Commissioners and Port of Los Angeles
Mr. Chairman and members of the subcommittee, thank you for the
opportunity to submit testimony in support of the Channel Deepening
Project at the Port of Los Angeles/Los Angeles Harbor, the largest
container seaport in the United States. Our testimony speaks in support
of a fiscal year 2006 appropriation of $14 million for the Federal
share of continued construction of the Channel Deepening Project at the
Port of Los Angeles, which we anticipate will be the final year's
appropriation for this project. This critical Federal navigation
improvement project underpins the United States' decisive role in
international trade. Consistent with the goals and priorities of the
administration and Congress, the Channel Deepening Project will provide
immediate and significant economic return to the Nation, fulfill the
commitment to environmental stewardship, and foster positive
international relations. We respectfully request the subcommittee to
fully fund our fiscal year 2006 appropriation request of $14 million.
revised total project costs
The Corps of Engineers recently revised the Total Project Cost for
the Channel Deepening Project. This revision accounts for credits for
in-kind services provided by the Port and other project modifications.
These modifications include adjustments to the disposal costs for the
dredged material, adjustments for construction contract changes, and
project administration costs. The Corps' revised Total Project Cost is
now $222,000,000, representing a Federal share of $72,000,000 and a
local share of $150,000,000. Furthermore, in fiscal year 2003, the Port
experienced a funding shortfall challenging us to meet construction
contract earnings. As such, under authority provided by Section 11 of
the Rivers and Harbors Act of 1929, the Port of Los Angeles advanced to
the Corps of Engineers more than $13,000,000 in fiscal year 2003 to
cover the shortfall, thereby avoiding costly construction shutdown or
debt service on interest accruals. Mr. Chairman, the increased Total
Project Cost requires an immediate modification in the next Water
Resources Development Act, or in an appropriations bill. The Corps
anticipates that the Section 902 limit established for the project may
be exceeded close to the end of this fiscal year. Without this
modification, we will be forced to shut down the project. While we are
pleased the President's fiscal year 2006 budget includes $2.7 million
for the Channel Deepening Project, the increased project costs and
previous funding shortfalls compel us to request this higher funding
level for fiscal year 2006.
port navigation demands
Dramatic increases in Pacific Rim and Latin American trade volumes
have made infrastructure development at the Port of Los Angeles more
critical than ever. Currently, more than 42 percent of containerized
cargo entering the United States through the San Pedro Bay port
complex. The Port of Los Angeles, alone, handled more than 7.4 million
20-foot equivalent units of containers (TEUs) in calendar year 2004,
representing unprecedented growth for any American seaport. This
burgeoning international trade has resulted in the manufacture of
larger state-of-the-art containerships with drafts of more than -50
feet. As such, the Port embarked upon the Channel Deepening Project--
along with its Federal partner, the Army Corps of Engineers--to deepen
its Federal channel from -45 feet to -53 feet. Currently, more than 50
of these state-of-the-art containerships are on order to serve the
United States West Coast container fleet. The first of these deeper-
draft ships began calling at the Port of Los Angeles in August of 2004,
carrying 8,000 TEUs and drafting at -50 feet. Some of the deeper-draft
ships have been diverted to the Port of Long Beach because our channels
are too shallow to accommodate them.
As we have testified before, cargo throughput for the San Pedro
Bay--the Port of Los Angeles in particular--has a tremendous impact on
the United States economy. We at the Port of Los Angeles cannot over
emphasize this fact. The ability of the Port to meet the spiraling
demands of this phenomenal growth in international trade is dependent
upon the speedy construction of sufficiently deep navigation channels
to accommodate the new containerships. These new ships provide greater
efficiencies in cargo transportation, carrying one-third more cargo
than most of the current fleet, and making more product inventory of
imported goods available to American consumers at lower prices. In
addition, exports from the United States have become more competitive
in foreign markets. However, for American seaports to keep up, they
must immediately make the necessary infrastructure improvements that
will enable them to participate in this rapidly changing global trading
arena.
Mr. Chairman, these state-of-the-art container ships represent the
new competitive requirements for international container shipping
efficiencies in the 21st Century, as evidenced by the increased volume
of international commerce. As such, we strongly urge Congress to
appropriate the $14 million for fiscal year 2006 which will enable the
Corps of Engineers to continue construction of the Channel Deepening
Project, on schedule, through the project's anticipated completion in
2006.
economic benefits
The Channel Deepening Project is clearly a commercial navigation
project of national economic significance and one that will yield
exponential economic and environmental returns to the United States
annually. The national economic benefits are evidenced by the creation
of more than 1 million permanent well-paying jobs across the United
States; more than $1 billion in wages and salaries, as well as local,
State and Federal sales and income tax revenues deposited into the
Federal treasury. As an aside, the 7.4 million TEUs handled by the Port
of Los Angeles in 2004 had a commercial value of more than $300 billion
in container cargo, with significant tax revenues accruing to the
Federal Government. Similarly, according to the U.S. Customs Service,
users of the Port pay approximately $12 million a day in Customs
Duties. The Los Angeles Customs District leads the Nation in total
duties collected for maritime activities, collecting $5.5 billion in
2004 alone. Clearly, the return on the Federal investment at the Port
of Los Angeles is real and quantifiable, and we expect it to surpass
the cost-benefit ratio--as determined by the Corps of Engineers'
project Feasibility Study--many times over.
In closing, Federal investment in the Channel Deepening Project
will ensure that the Port of Los Angeles, the Nation's busiest
container seaport, remains at the forefront of the new international
trade network well into this century. The Channel Deepening Project
marks the second phase of the 2020 Infrastructure Development Plan that
began with the Pier 400 Deep-Draft Navigation and Landfill Project. The
Port of Los Angeles is moving forward with the 2020 Plan designed to
meet the extraordinary infrastructure demands placed on it in the face
of the continued high volume of international trade. Mr. Chairman, the
Port of Los Angeles respectfully urges your subcommittee to appropriate
$14 million in fiscal year 2006 to support the U.S. Army Corps of
Engineers' continued construction of the Channel Deepening project on
behalf of the Port of Los Angeles.
Thank you, Mr. Chairman, for the opportunity to submit this
testimony for continued Congressional support of the Channel Deepening
Project at the Port of Los Angeles. The Port has long valued the
support of your subcommittee and its appreciation of the port
industry's importance to the economic vitality of the United States,
and, in particular, the role of the Port of Los Angeles in contributing
to this country's economic strength.
______

Prepared Statement of The American Society of Civil Engineers
The American Society of Civil Engineers (ASCE) respectfully
recommends that Congress appropriate $5.6 billion for the U.S. Army
Corps of Engineers Civil Works program, including a minimum of $2.55
billion for the inland waterways programs, in fiscal year 2006.
Congress should appropriate the entire balance of $307 million in the
Inland Waterways Trust Fund and the entire current balance of $2.6
billion in the Harbor Maintenance Trust Fund for critical
infrastructure projects maintained and operated by the Corps. Congress
also needs to appropriate $150 million for beach nourishment
investigations and construction in fiscal year 2006.
inland waterways trust fund
The U.S. Army Corps of Engineers maintains more than 12,000 miles
(19,200 kilometers) of inland waterways, and owns or operates 257 locks
at 212 sites on inland waterways. These waterways--a system of rivers,
lakes and coastal bays improved for commercial and recreational
transportation--carry about one-sixth of the Nation's intercity
freight, at a cost per ton-mile about half that of rail, or one-tenth
that of trucks. The physical condition of these waterways received a
grade of D- from ASCE on our 2005 Report Card for America's
Infrastructure released on March 9, 2005.
Waterways are excellent ways to move large volumes of bulk
commodities over long distances. The cargo capacity of a typical barge
is equivalent to that of 15 large railroad cars, or 58 semi-trucks. A
representative 15-barge tow on a main stem waterway moves the same
cargo as 870 trucks stretching 35 miles on the interstate highway
system. That same 15-barge tow would require two 100-car unit trains,
extending nearly 3 miles in length.
Locks and dams affect the environment. They slow the natural
velocity immediately upriver from their locations, so that organisms
adapted to fast-flowing water are replaced by those adapted to slow-
flowing water, and dams trap sediments that would otherwise flow
farther downstream. Dredging is necessary to keep the navigation
channels open.
The 12,000 miles of inland and intracoastal waterways, as do
highways, operate as a system, and much of the commerce moves on
multiple segments. They serve as connecting arteries, much as
neighborhood streets help people reach interstate highways. These
waterways are operated by the Corps of Engineers as multi-purpose,
multi-objective projects. They not only serve commercial navigation,
but, in many cases, also provide hydropower, flood protection,
municipal water supply, agricultural irrigation, recreation and
regional development.
Forty-one States, 16 State capitals and all States east of the
Mississippi River are served by commercially navigable waterways.
Domestic companies operating vessels on U.S. waterways increased 19.6
percent from 2002 to 2003.
Waterway usage is increasing, but the facilities are aging; many
Corps-owned or -operated locks are well past their planned design life
of 50 years. Of the 257 locks still in use in the United States, 30
were built in the 19th century, another 92 locks are more than 60 years
old. In other words, nearly 50 percent of all Corps-maintained locks
were functionally obsolete by the beginning of 2005. Assuming that no
new locks are built in the next 20 years, by 2020, another 93 existing
locks will be obsolete--rendering more than 8 of every 10 locks now in
service archaic.
As the system ages, the infrastructure cannot support the growing
traffic loads, resulting in frequent delays for repairs. At the same
time, the repairs are more expensive due to long-deferred maintenance.
We estimate that the inland waterways system requires $4 billion a year
over the next 5 years to upgrade the system's locks and other
facilities.
The Inland Waterway Trust Fund, created in 1978, pays half the cost
of the construction and major rehabilitation costs for specified
Federal inland waterways projects. It receives money from a tax on fuel
(currently set at 20 cents per gallon) on vessels engaged in commercial
transportation on inland waterways.
In recent years, there have been a number of major inland waterway
infrastructure failures--a few years ago, the entire Ohio River system
was closed for a time due to infrastructure breakdowns.
The fund will earn $105 million in fiscal year 2006, including $92
million paid by the barge and towing industry, and $13 million in
interest. In fiscal year 2005, the Corps of Engineers received $149
million for construction projects, leaving a balance of approximately
$307 million. In fiscal year 2006, the Corps is planning to spend $394
million on current maintenance projects, a sum that will not reduce the
backlog of pending repairs that exceed $600 million.
The Corps estimates that it would cost more than $125 billion to
replace the present inland waterway system.
--Congress should amend the Inland Waterways Trust Fund Act of 1978
to allow all funds collected to be used for repair and
construction of dams and locks. Congress should then
appropriate the full fund balance each year to pay for the cost
of rehabilitating the Nation's oldest locks. The government
needs to set a priority system for restoring locks that have
outlasted their design lives, with an initial focus on all
locks built in the 19th century. The current Federal budget
process does not differentiate between expenditures for current
consumption and long-term investment. This causes major
inefficiencies in the planning, design and construction process
for long-term investments.
--In the interim, Congress must appropriate at least $2.55 billion
for inland waterways programs.
--ASCE supports the creation of a Federal capital budget to create a
funding mechanism that would help reduce the constant conflict
between short-term and long-term maintenance needs. This would
increase public awareness of the problems and needs facing this
country's physical infrastructure, and would assist Congress in
focusing on those specific programs that are necessarily
devoted to long-term growth and productivity.
harbor maintenance trust fund
ASCE believes Congress must commit the entire current balance of
$2.6 billion in the HMTF in fiscal year 2006 to port and harbor
improvements. Growing traffic volumes and ever-larger ships are
expected to strain U.S. port facilities in the first half of the 21st
century. In a 2002 study for the U.S. Army Corps of Engineers on U.S.
harbor needs through 2020, analysts concluded that foreign commerce now
makes up about 27 percent of the U.S. Gross Domestic Product (GDP) and
is worth roughly $1.5 trillion. Forecasts indicate that foreign cargo
traffic will more than double by the year 2020. By 2040, imports and
exports are expected to increase eightfold.
There are about 9,300 commercial harbor and waterway piers, wharves
and docks in the United States. Of these, 150 deep-draft ports account
for more than 99 percent of foreign waterborne trade entering the
United States. Moreover, about 75 percent of international tonnage and
almost 90 percent of international cargo value flows through only 25
U.S. ports. Increasingly, the cargo traffic entering U.S. ports is
being carried on a new class of ``mega ships.''
Containerships are growing in terms of both fleet capacity and
vessel size. Their share of the world fleet's cargo-carrying capacity
increased 8.8 percent per annum from 1985 to 1999 making containership
fleet capacity the fastest growing for any type of vessel.
Containerships are also becoming increasingly larger. Containership
size is generally measured by the number of containers that a vessel
can carry expressed in 20-foot equivalent units (TEUs). In the 1980's,
containerships of 2,000 to 3,000 TEUs were considered the norm. Since
then, deregulation of the transportation industry, consolidation among
containership companies and growing volumes of container trade have
spawned a race among major carriers to build larger vessels in pursuit
of lower costs and increased competitiveness.
Today, companies are introducing ``mega ships'' that range from
6,000 to 7,500 TEUs, and plans are under way for vessels of 10,000 to
12,000 TEUs. Fully loaded by weight, mega ships require channels of 50
feet or more in depth. In the United States, only a handful of ports
currently meet this requirement.
Major port development is responding to growth in container
shipping and larger containerships, as well as growth in dry and liquid
bulk shipping. Ports are investing heavily in dockside infrastructure,
such as expanded berths, newer and larger cranes, improved intermodal
capabilities, and deeper channels. U.S. ports appear to be keeping pace
with their foreign counterparts with regard to dockside infrastructure.
Many major container ports in the United States are developing new
terminals and implementing massive projects to reduce port congestion
and accommodate mega ships that are wider, longer, and deeper, and that
require quick turnaround times to remain profitable. But the Federal
Government's effort to provide navigable waterways is falling behind
the need. Ports are investing their funds with the understanding that
the Federal Government will meet its responsibility in maintaining
required water depths.
Vessel demand on the Nation's ports is escalating, as commodity
flows increase. The total number of annual vessel calls to and from the
United States is expected to more than double by the year 2020 from
about 114,500 in the year 2000 to approximately 261,000 in the year
2020. Between 2000 through 2020 containership calls are projected to
increase at a 5.5 percent annual rate and grow from about 42,000 to
almost 121,000.
The ultra-large crude oil tankers, the largest vessels in the world
fleet, have vessel drafts of more than 70 feet. The average draft of
the largest dry bulk vessels is almost 60 feet. The largest container
vessels now have design drafts close to 50 feet, with the average
design draft for the largest ones (more than 5,000 Twenty-foot
Equivalent Unit container capacity) being more than 45 feet.
Congress enacted the Harbor Maintenance Tax (HMT) and established
the Harbor Maintenance Trust Fund (HMTF) in the Water Resources
Development Act of 1986. The HMTF pays 100 percent of the Corps'
eligible Operations and Maintenance expenditures for commercial harbors
and channels. Section 201 of the Water Resources Development Act of
1996 expanded the use of HMTF to pay Federal expenditures for
construction of dredged material disposal facilities necessary for the
operation and maintenance of harbors.
Total HMTF revenues for fiscal year 2005 were $1 billion. The total
Fund balance, however, was approximately $2.6 billion as of September
30, 2004. But the President's budget for fiscal year 2006 calls for
spending only $665 million from the Fund on port and harbor
construction and maintenance. Congress must appropriate the full
balance in the HMTF in fiscal year 2006 to pay for critically needed
port and harbor improvements. The huge investment gap in our port and
harbor infrastructure can be overcome by spending down the annual HMTF
balances for the purposes the monies were intended.
beach nourishment program
ASCE recommends that Congress appropriate $150 million for studies
and beach restoration projects throughout the Nation. We encourage
Congress to: (1) continue to fund periodic beach renourishment, (2)
fund new beach nourishment studies and construction starts, and (3)
permit projects to move seamlessly from study to design to
construction.
The $150 million for beach nourishment investigations and
construction in fiscal year 2006 equals a one-third increase over the
fiscal year 2005 enacted level. The $49 million request for beach
restoration in 2006 is wholly inadequate. It is only one-third the
amount requested in 2005, and it is nearly two-thirds lower than the
$111.7 million that Congress enacted for 2005. That means there will be
less money to repair erosion and to restore critical coastal habitat,
which represents a real threat to America's economy.
With 20,506 miles of eroding shoreline (and 2,672 miles critically
eroding), beach attrition is a serious threat to the Nation's tourism,
which represents a significant threat to the national economy.
Federally funded beach restoration projects return $1 to $7 on the
initial investment.
______

Prepared Statement of Cameron County, Texas
We express full support of the inclusion in the fiscal year 2006
budget for the full capability of the USACE for $1 million.
history and background
On September 15, 2001, a tugboat and several barges struck the
Queen Isabella Causeway on the Gulf Intracoastal Waterway at the mouth
of the Brownsville Ship Channel east of Port Isabel. The accident took
the lives of eight people.
A January 1997 Reconnaissance Report of the Gulf Intracoastal
Waterway-Corpus Christi Bay to Port Isabel, Texas (Section 216), was
conducted by the United States Army Corps of Engineers. The study was
initiated to determine the Federal interest in rerouting the GIWW. The
information available at the time indicated a less than favorable
benefit to cost ratio for the proposed realignment. Since the September
15 incident, the Corps, Cameron County officials, and a number of local
entities and residents of the County have reopened discussion of the
rerouting of the GIWW. The Corps of Engineers agrees that new facts
regarding the safety of the current alignment warrants a revisiting of
the issue to determine the viability of rerouting the channel in a
direct line from the point where the waterway crosses underneath the
causeway to the point where it reaches the Brazos Santiago Pass and the
Brownsville Ship Channel. The route in question is the exact one
traveled by the tugboat and barges that struck the bridge on September
15, killing eight people. The tugboat captain failed to negotiate the
sharp turn after it passed through the Long Island Swing Bridge. This
particular turn is one of the most dangerous on the entire waterway.
project description
The reconnaissance study completed by the U.S. Army Corps of
Engineers (USACE) confirmed the Federal interest in moving forward with
reopening the study to reroute the Gulf Intracoastal Waterway at Port
Isabel. The USACE moved forward with the initiation of a feasibility
study that would allow the Corps to reopen the examination of the
rerouting of the GIWW on the basis of safety. The measure would seek to
eliminate safety hazards to Port Isabel and Long Island residents
created by barges that move large quantities of fuel and other
potentially dangerous explosive chemicals through the existing route
under the Queen Isabella Causeway. The overall goal of the study would
be to enhance safety and transportation efficiency on this busy Texas
waterway by removing the treacherous turn tug and barge operators are
forced to make as they navigate the passage through the Long Island
Swing Bridge. In addition to the hazardous curve, the winding and
congested course taken by the waterway through the City of Port Isabel
adds needless distance and time to the transportation of goods to and
from Cameron County ports. These costs are borne not only by commercial
operators using the waterway, but also by consumers and businesses all
across Texas and the Nation. The rerouting would also seek to correct
the adverse impact of waterway traffic on Cameron County residents.
Apart from the obvious potential for damage to the Queen Isabella
Causeway, adverse impacts are created by waterway traffic in the form
of traffic delays associated with the Long Island Swing Bridge and the
transportation of hazardous materials within several hundred feet of
densely populated areas in Port Isabel and Long Island. Currently, a
1950's era swing bridge that floats in the waterway channel connects
Long Island and the City of Port Isabel. As waterborne traffic
approaches the bridge, cables are used to swing it from the center of
the channel and then swing it back into place. This costly and time-
consuming process, which frequently backs up traffic into the downtown
business district of Port Isabel, is estimated to drain hundreds of
dollars a year from the economy of this economically distressed area.
More serious problems are created when the heavily used cables or winch
motors on the swing bridge fail, leaving the bridge stuck in an open or
closed position. Equipment failures often cause delays for several days
and leave Long Island residents cut-off from vehicle access or the
ports of Port Isabel and Brownsville cut-off from in-bound and out-
bound barge traffic. During these times, supplies of vital commodities
are halted all across the Rio Grande Valley as stocks dwindle and
produce and finished goods begin to pile up.
impact of the gulf intracoastal waterway
The Gulf Intracoastal Waterway is an integral part of the inland
transportation system of the United States. Stretching across more than
1,300 coastal miles of the Gulf of Mexico, this man-made, shallow-draft
canal moves a large variety and great number of vessels and cargoes.
The 426 miles of the waterway running through Texas makes it possible
to supply both domestic and foreign markets with chemicals, petroleum
and other essential goods. Barge traffic is essential to many of the
port economies from Texas to Great Lakes ports, indeed, throughout the
entire GIWW. Some ports feel their future strategic plans are closely
linked to the efficient operation of the GIWW. This is true for ports
that rely almost entirely on barge traffic as well as ports that
function primarily as recreational facilities. Most of the cargo moved
along Texas waterways is petroleum and petroleum products. The GIWW is
well suited for the movement of such cargo, and, therefore, has allowed
many of the smaller, shallow-draft facilities to engage in both
interstate and international trade. Commercial fishing access via the
GIWW has had a significant impact on these port economies as well.
conclusion
A 1995 Lyndon Baines Johnson School of Public Affairs report
entitled ``The Texas Seaport and Inland Waterway System'' warned of
concern with the safe operation of barges on the GIWW citing, ``a
serious accident perhaps involving a collision between two barges
carrying hazardous materials could force closure of the waterway''. No
one could foresee the terrible accident that occurred on September 15.
The lives of eight people came to an end and the lives of their loved
ones was irrevocably changed forever. This important waterway must be
improved to prevent another tragedy. The $1 million that must be added
to the fiscal year 2006 appropriations bill will allow the Corps of
Engineers to continue to study a preferred plan to remedy this
dangerous situation. The government has already invested nearly $2
million to move this project forward. Cameron County, the users of the
GIWW, and the residents of the area respectfully requests the addition
of this much-needed appropriation.
______

Prepared Statement of the Chambers County-Cedar Bayou Navigation
District, Texas
We express full support of the inclusion of the full capability of
the USACE for fiscal year 2006 to complete PED for the project to
deepen and widen Cedar Bayou, Texas:
--President's budget included.--$0;
--Additional funds needed in fiscal year 2006.--$505,000.
history and background
The Rivers and Harbor Act of 1890 originally authorized navigation
improvements to Cedar Bayou. The project was reauthorized in 1930 to
provide a 10 ft. deep and 100 ft. wide channel from the Houston Ship
Channel to a point on Cedar Bayou 11 miles above the mouth of the
bayou. In 1931, a portion of the channel was constructed from the
Houston Ship Channel to a point about 0.8 miles above the mouth of
Cedar Bayou, approximately 3.5 miles in length. A study of the project
in 1971 determined that an extension of the channel to project Mile 3
would have a favorable benefit to cost ratio. This portion of the
channel was realigned from Mile 0.1 to Mile 0.8 and extended from Mile
0.8 to Mile 3 in 1975. In October 1985, the portion of the original
navigation project from project Mile 3 to 11 was deauthorized due to
the lack of a local sponsor. In 1989, the Corps of Engineers, Galveston
District completed a Reconnaissance Report dated June 1989, which
recommended a channel improvement from the Houston Ship Channel Mile 3
to Cedar Bayou Mile 11 at the State Highway 146 Bridge.
The Texas Legislature created the Chambers County-Cedar Bayou
Navigation District in 1997 as an entity to improve the navigability of
Cedar Bayou.
The district was created to accomplish the purpose of Section 59,
Article XVI, of the Texas Constitution and has all the rights, powers,
privileges and authority applicable to Districts created under Chapters
60, 62, and 63 of the Water Code--Public Entity. The Chambers County-
Cedar Bayou Navigation District then became the local sponsor for the
Cedar Bayou Channel.
project description and reauthorization
Cedar Bayou is a small coastal stream, which originates in Liberty
County, Texas, and meanders through the urban area near the eastern
portion of the City of Baytown, Texas, before entering Galveston Bay.
The bayou forms the boundary between Harris County on the west and
Chambers County on the east. The project was authorized in Section 349
of the Water Resources Development Act 2000, which authorized a
navigation improvement of 12 feet deep by 125 feet wide from Mile 2.5
to Mile 11 on Cedar Bayou.The feasibility report, completed in 2005
indicated a preferred plan of widening the channel to 100 feet and
deepening it to 10 feet.
justification and industry support
First and foremost, the channel must be improved for safety. The
channel is the home to a busy barge industry. The most cost-efficient
and safe method of conveyance is barge transportation. Water
transportation offers considerable cost savings compared to other
freight modes (rail is nearly twice as costly and truck nearly four
times higher). In addition, the movement of cargo by barge is
environmentally friendly. Barges have enormous carrying capacity while
consuming less energy, due to the fact that mulitple barges can move
together in a single tow, controlled by only one power unit.
The result removes a significant number of trucks from Texas
highways. The reduction of air emissions by the movement of cargo on
barges is a significant factor as communities struggle with compliance
with the Clean Air Act.
Several navigation-dependent industries and commercial enterprises
have been established along the commercially navigable portions of
Cedar Bayou. Several industries have dock facilities at the mile
markers that would be affected by this much-needed improvement. These
industries include: Reliant Energy, Bayer Corporation, Koppel Steel,
CEMEX, US Filter Recovery Services and Dorsett Brothers Concrete, to
name a few.
project costs and benefits
Congress appropriated $100,000 in fiscal year 2001 for the Corps of
Engineers to conduct the feasibility study to determine the Federal
interest in this improvement project. The study indicated a benefit to
cost ratio of the project of 2.8 to 1. The estimated total cost of the
project is $16.5 million with a Federal share estimated at $13.5
million and the non-Federal sponsor share of approximately $3.5
million. Total annual benefits are estimated to be $4.8 million, with a
net benefit of $3 million. Congress appropriated $400,000 each in
fiscal year 2002 and fiscal year 2003, $374,000 in fiscal year 2004 and
$135,000 in fiscal year 2005 to support the feasibility study. This
project is environmentally sound and economically justified. We would
appreciate the subcommittee's support of the required add of the
appropriation needed by the Corps of Engineers to complete the plans
and specifications of the project so that it can move forward at an
optimum construction schedule. The users of the channel deserve to have
the benefits of a safer, most cost-effective Federal waterway.
______

Prepared Statement of Port Freeport, Texas
Channel Improvement Project included in administration's fiscal
year 2006 budget.--$500,000.
Corps capability for fiscal year 2006.--$750,000.
On behalf of the Brazos River Harbor Navigation District and the
users of Freeport Harbor, we extend gratitude to Chairman Domenici and
members of the subcommittee for the opportunity to submit testimony in
support of the continuation of the feasibility study for the proposed
channel improvement project for Freeport Harbor and Stauffer Channel,
Texas.
history and background
Port Freeport is an autonomous governmental entity authorized by an
act of the Texas Legislature in 1925. It is a deep-draft port, located
on Texas' central Gulf Coast, approximately 60 miles southwest of
Houston, and is an important Brazos River Navigation District
component. The port elevation is 3 to 12 feet above sea level. Port
Freeport is governed by a board of six commissioners elected by the
voters of the Navigation District of Brazoria County, which currently
encompasses 85 percent of the county. Port Freeport land and operations
currently include 186 acres of developed land and 7,723 acres of
undeveloped land, 5 operating berths, a 45" deep Freeport Harbor
Channel and a 70 deep berthing area. Future expansion includes
building a 1,300-acre multi-modal facility, cruise terminal and
container terminal. Port Freeport is conveniently accessible by rail,
waterway and highway routes. There is direct access to the Gulf
Intracoastal Waterway, Brazos River Diversion Channel, and, State
Highways 36 and 288. Located just 3 miles from deep water, Port
Freeport is one of the most accessible ports on the Gulf Coast.
project description
The fiscal year 2002 Energy and Water appropriations signed into
law included a $100,000 appropriation to allow the United States Army
Corps of Engineers (USACE) to conduct a reconnaissance study to
determine the Federal interest in an improvement project for Freeport
Harbor, Texas. The USACE, in cooperation with the Brazos River Harbor
Navigation District as the local sponsor, has completed that study. The
report indicates that ``transportation savings in the form of National
Economic Development Benefits (NED) appear to substantially exceed the
cost of project implementation'', thus confirming ``a strong Federal
interest in conducting the feasibility study of navigation improvements
at Freeport Harbor''.
In fact, early indications point to a benefit to cost ratio of the
project to be at an impressive more than 20 to 1 benefit to cost.
Port Freeport has the opportunity to solidify significant new
business for Texas with this improvement project. In addition, the
environment would be further protected since offshore lightering of
large petroleum crude vessels would no longer be necessary. Moreover,
the transportation of goods would be economically enhanced. Given the
projected growth of international and domestic cargoes and the state of
our Nation's current highway, rail and port infrastructures, Port
Freeport represents an economical investment in the State of Texas and
the Nation's ability to grow our G.D.P. for years to come. Freeport
Pilots and users of Freeport Harbor confirm that the enhanced safety of
a wider channel cannot be overstated.
economic impact of port freeport
According to the USACE 2004 report entitled ``The U.S. Waterway
System--Transportation Facts'', Port Freeport is 12th in foreign
tonnage in the United States and 24th in total tonnage. The port
handled over 30.5 million tons of cargo in 2003 and an additional
70,000 T.E.U.'s of containerized cargo. It is responsible for
augmenting the Nation's economy by $7.06 billion annually and
generating 8,090 direct and an additional 8,116 indirect jobs. Its
chief import commodities are petroleum crude, bananas, and fresh fruit
and aggregate while top export commodities are rice and chemicals. The
port's growth has been staggering in the past decade, becoming one of
the fastest growing ports on the Gulf Coast. Port Freeport's economic
impact and its future growth is justification for its budding
partnership with the Federal Government in this critical improvement
project. In addition, the port will be the home of one of the first
Liquefied Natural Gas plants in Texas as Freeport LNG, a cooperative
venture of Conoco-Phillips and Cheniere Energy received final FERC
approval for the permit for the facility.
defense support of our nation
Port Freeport is a strategic port in times of National Defense of
our Nation. It houses a critically important petroleum oil reserve--
Bryan Mound. Its close proximity to State Highways 36 and 288 make it a
convenient deployment port for Fort Hood. In these unusual times, it is
important to note the importance of our ports in the defense of our
Nation and to address the need to keep our Federal waterways open to
deep-draft navigation.
community and industry support
This proposed improvement project has wide community and industry
support. The safer transit and volume increase capability is an
appealing and exciting prospect for the users of Freeport Harbor and
Stauffer Channel. The anticipated more than 20-to-1 benefit-to-cost
ratio that was indicated from the Corps of Engineers reconnaissance
study firmly solidified the Federal interest.
what we need from the subcommittee in fiscal year 2006
The administration's budget included $500,000 for the continuation
of the feasibility study, which is being conducted at a 50/50 Federal
Government/local sponsor share. The Corps had indicated a capability
for fiscal year 2006 of $750,000 to continue the feasibility study and
keep this project on an optimal and most cost-efficient time frame for
the Federal Government and the local sponsor. Congress has thus far
invested over $1 million in this project. We respectfully request the
additional $250,000 for fiscal year 2006.
______

Prepared Statement of the Santa Clara Valley Water District
upper penitencia creek flood protection project, santa clara county,
california
summary
This statement urges the committee's support for an administration
budget request of $628,000 to continue with the feasibility study for
the Upper Penitencia Creek Flood Protection Project.
statement of support
upper penitencia creek flood protection project
Background.--The Upper Penitencia Creek Watershed is located in
northeast Santa Clara County, California, near the southern end of the
San Francisco Bay. In the last two decades, the creek has flooded in
1980, 1982, 1983, 1986, 1995, and 1998. The January 1995 flood damaged
a commercial nursery, a condominium complex, and a business park. The
February 1998 flood also damaged many homes, businesses, and surface
streets.
The proposed project on Upper Penitencia Creek, from the Coyote
Creek confluence to Dorel Drive, will protect portions of the cities of
San Jose and Milpitas. The floodplain is completely urbanized;
undeveloped land is limited to a few scattered agricultural parcels and
a corridor along Upper Penitencia Creek. Based on the U.S. Army Corps
of Engineers' (Corps) 1995 reconnaissance report, 4,300 buildings in
the cities of San Jose and Milpitas are located in the flood prone
area, 1,900 of which will have water entering the first floor. The
estimated damages from a 1 percent or 100-year flood exceed $121
million.
Study Synopsis.--Under authority of the Watershed Protection and
Flood Prevention Act (Public Law 83-566), the Natural Resources
Conservation Service (formerly the Soil Conservation Service) completed
an economic feasibility study (watershed plan) for constructing flood
damage reduction facilities on Upper Penitencia Creek. Following the
1990 U.S. Department of Agriculture Farm Bill, the Natural Resources
Conservation Service watershed plan stalled due to the very high ratio
of potential urban development flood damage compared to agricultural
damage in the project area.
In January 1993, the Santa Clara Valley Water District (District)
requested the Corps proceed with a reconnaissance study in the 1994
fiscal year while the Natural Resources Conservation Service plan was
on hold. Funds were appropriated by Congress for fiscal year 1995 and
the Corps started the reconnaissance study in October 1994. The
reconnaissance report was completed in July 1995, with the
recommendation to proceed with the feasibility study phase. The
feasibility study, initiated in February 1998, is currently scheduled
for completion in 2005.
Advance Construction.--To accelerate project implementation, the
District submitted a Section 104 application to the Corps for approval
to construct a portion of the project. The application was approved in
December 2000. The advance construction is for a 2,600-foot long
section of bypass channel between Coyote Creek and King Road. However,
due to funding constraints at the District and concerns raised by
regulatory agencies, the design was stopped and turned over to the
Corps to complete.
Fiscal Year 2005 Funding.--$273,000 was appropriated in fiscal year
2005 for the Upper Penitencia Creek Flood Protection Project for
project investigation.
Fiscal Year 2006 Funding Recommendation.--It is requested that the
congressional committee support the administration's fiscal year 2006
budget request of $628,000 for the Upper Penitencia Creek Flood
Protection Project to continue the Feasibility Study.
upper guadalupe river project, santa clara county, california
summary
This statement urges the committee's support for an appropriation
add-on of $6.5 million to initiate construction for the Upper Guadalupe
River Flood Protection Project.
statement of support
upper guadalupe river project
Background.--The Guadalupe River is one of two major waterways
flowing through a highly urbanized area of Santa Clara County,
California, the heart of Silicon Valley. Historically, the river has
flooded the central district and southern areas of San Jose. According
to U.S. Army Corps of Engineers (Corps) 1998 feasibility study, severe
flooding would result from a 100-year flooding event and potentially
cause $280 million in damages.
The probability of a large flood occurring before implementation of
flood prevention measures is high. The upper Guadalupe River overflowed
in March 1982, January 1983, February 1986, January 1995, March 1995,
and February 1998, causing damage to several residences and businesses
in the Alma Avenue and Willow Street areas. The 1995 floods in January
and March, as well as in February 1998, closed Highway 87 and the
parallel light-rail line, a major commute artery.
Project Synopsis.--In 1971, the Santa Clara Valley Water District
(District) requested the Corps reactivate an earlier study of Guadalupe
River. From 1971 to 1980, the Corps established the economic
feasibility and Federal interest in the Guadalupe River only between
Interstate 880 and Interstate 280. Following the 1982 and 1983 floods,
the District requested that the Corps reopen its study of the upper
Guadalupe River upstream of Interstate 280. The Corps completed a
reconnaissance study in November 1989, which established an
economically justifiable solution for flood protection in this reach.
The report recommended proceeding to the feasibility study phase, which
began in 1990. In January 1997, the Corps determined that the National
Economic Development (NED) Plan would be a 2 percent or 50-year level
of flood protection rather than the 1 percent or 100-year level. The
Corps feasibility study determined the cost of the locally preferred
100-year plan is $153 million and the Corps NED 50-year plan is $98
million. The District requested that the costs of providing 50-year and
100-year flood protection be analyzed during the preconstruction
engineering design phase. The Corps is now proceeding with the
preconstruction engineering design phase and has refined the NED Plan
to address the District's comments and Endangered Species Act issues
and has reevaluated the locally preferred plan for full Federal cost
sharing. The findings were submitted to Corps Headquarters for approval
in March 2004 in a Draft Limited Reevaluation Report on the Proposed
Project Modifications. This report contains an evaluation of the
revised NED Plan project and the Locally Preferred Plan project, which
costs $165 million with a benefit-to-cost ratio of 1:1.42 and $212
million with a benefit-to-cost ratio of 1:1.24, respectively. The Draft
Limited Reevaluation Report also recommended for full cost-sharing on
the Locally Preferred Plan project.
Fiscal Year 2005 Funding.--$75,000 was authorized in fiscal year
2005 for the Upper Guadalupe River Project to continue preconstruction
engineering and design.
Fiscal Year 2006 Funding Recommendation.--It is requested that the
congressional committee support an appropriation add-on of $6.5 million
in fiscal year 2006 to initiate construction on the Upper Guadalupe
River Flood Protection Project.
coyote creek watershed study, santa clara county, california
summary
This statement urges the committee's support of the administration
budget request of $100,000 to initiate a Reconnaissance Study of the
Coyote Creek Watershed.
statement of support
coyote creek watershed study
Background.--Coyote Creek drains Santa Clara County's largest
watershed, an area of more than 320 square miles encompassing most of
the eastern foothills, the City of Milpitas, and portions of the Cities
of San Jose and Morgan Hill. It flows northward from Anderson Reservoir
through more than 40 miles of rural and heavily urbanized areas and
empties into south San Francisco Bay.
Prior to construction of Coyote and Anderson Reservoirs, flooding
occurred in 1903, 1906, 1909, 1911, 1917, 1922, 1923, 1926, 1927, 1930
and 1931. Since 1950, the operation of the reservoirs has reduced the
magnitude of flooding, although flooding is still a threat and did
cause damages in 1982, 1983, 1986, 1995, and 1997. Significant areas of
older homes in downtown San Jose and some major transportation
corridors remain susceptible to extensive flooding. The federally-
supported lower Coyote Creek Project (San Francisco Bay to Montague
Expressway), which was completed in 1996, protected homes and
businesses from storms which generated record runoff in the northern
parts of San Jose and Milpitas.
The proposed Reconnaissance Study would evaluate the reaches
upstream of the completed Federal flood protection works on lower
Coyote Creek.
Objective of Study.--The objectives of the Reconnaissance Study are
to investigate flood damages within the Coyote Creek Watershed; to
identify potential alternatives for alleviating those damages which
also minimize impacts on fishery and wildlife resources, provide
opportunities for ecosystem restoration, provide for recreational
opportunities; and to determine whether there is a Federal interest to
proceed into the Feasibility Study Phase.
Study Authorization.--In May 2002, the House of Representatives
Committee on Transportation and Infrastructure passed a resolution
directing the Corps to ``. . . review the report of the Chief of
Engineers on Coyote and Berryessa Creeks . . . and other pertinent
reports, to determine whether modifications of the recommendations
contained therein are advisable in the interest of flood damage
reduction, environmental restoration and protection, water conservation
and supply, recreation, and other allied purposes . . .''.
Fiscal Year 2006 Administration Budget Request.--The Coyote
Watershed Study was one of only three ``new start'' studies proposed
for funding nationwide in the administration budget request.
Fiscal Year 2005 Funding.--No Federal funding was received in
fiscal year 2005.
Fiscal Year 2006 Funding Recommendation.--It is requested that the
congressional committee support the administration budget request of
$100,000 to initiate a multi-purpose Reconnaissance Study within the
Coyote Creek Watershed.
thompson creek restoration project, santa clara county, california
summary
This statement urges the committee to support an earmark of
$400,000 within the Section 206 Aquatic Ecosystem Restoration Program
to continue the Thompson Creek Restoration Project.
statement of support
thompson creek restoration project
Background.--Thompson Creek, a tributary of Coyote Creek, flows
through the City of San Jose, California. Historically, the creek was a
naturally-meandering stream and a component of the Coyote Creek
watershed. The watershed had extensive riparian and oak woodland
habitat along numerous tributary stream corridors and upland savanna.
Currently, these habitat types are restricted to thin sparse pockets in
the Thompson Creek restoration project area.
Significant urban development over the last 20 years has modified
the runoff characteristics of the stream resulting in significant
degradation of the riparian habitat and stream channel. The existing
habitats along Thompson Creek, riparian forest stands, are threatened
by a bank destabilization and lowering of the water table. Recent large
storm events (1995, 1997, and 1998) and the subsequent wet years in
conjunction with rapid development in the upper watershed have resulted
in a succession of high runoff events leading to rapid erosion.
The upstream project limits start at Aborn Road and the downstream
project limit is Quimby Road where Thompson creek has been modified as
a flood protection project. The project distance is approximately 1
mile.
Status.--In February 2000, the Santa Clara Valley Water District
(District) initiated discussions with U.S. Army Corps of Engineers
(Corps) for a study under the Corps' Section 206 Aquatic Ecosystem
Restoration Program. Based on the project merits, the Corps completed a
Preliminary Restoration Plan (PRP) and subsequent Project Management
Plan (PMP). After approval of the PRP the Detailed Project Report (DPR)
was initiated. The DPR will provide the information necessary to
develop plans and specifications for the construction of the
restoration project.

PROJECT TIMELINE
------------------------------------------------------------------------
Date
------------------------------------------------------------------------
Request Federal assistance under Sec. 206 Feb 2002
Aquatic Ecosystem Restoration Program.
Complete Preliminary Restoration Plan..... Jan 2004
Initiate Detailed Project Report Jan 2005
(Feasibility Study).
Public Scoping Meeting and Local Sept 2005
Involvement.
Final Detailed Project Report to South July 2006
Pacific Division of Corps.
Initiate Plans and Specifications......... Oct 2006
Complete Plans and Specifications......... Dec 2007
Project Cooperation Agreement signed...... Dec 2006
Certification of Real Estate.............. Mar 2007
Advertise Construction Contract........... May 2007
Award Construction Contract............... July 2007
Construction Start........................ Sept 2007
Complete Physical Construction............ Dec 2008
------------------------------------------------------------------------

Fiscal Year 2005 Funding.--$300,000 earmark was received in the
fiscal year 2005 Section 206 appropriation to complete the PRP.
Fiscal Year 2006 Funding Recommendation.--It is requested that the
congressional committee support an earmark of $400,000 within the
Section 206 Aquatic Ecosystem Restoration Program.
guadalupe river project, santa clara county, california
summary
This statement urges the committee's support for an administration
budget request of $5.6 million and an appropriation add-on of $400,000,
for a total of $6 million to continue construction of the final phase
of the Guadalupe River Flood Protection Project.
statement of support
guadalupe river project
Background.--The Guadalupe River is a major waterway flowing
through a highly developed area of San Jose, in Santa Clara County,
California. A major flood would damage homes and businesses in the
heart of Silicon Valley. Historically, the river has flooded downtown
San Jose and the community of Alviso. According to the U.S. Army Corps
of Engineers (Corps) 2000 Final General Reevaluation & Environmental
Report for Proposed Project Modifications, estimated damages from a 1
percent flood in the urban center of San Jose are over $576 million.
The Guadalupe River overflowed in February 1986, January 1995, and
March 1995, damaging homes and businesses in the St. John and Pleasant
Street areas of downtown San Jose. In March 1995, heavy rains resulted
in breakouts along the river that flooded approximately 300 homes and
business.
Project Synopsis.--In 1971, the local community requested that the
Corps reactivate its earlier study. Since 1972, substantial technical
and financial assistance have been provided by the local community
through the Santa Clara Valley Water District in an effort to
accelerate the project's completion. To date, more than $85.8 million
in local funds have been spent on planning, design, land purchases, and
construction in the Corps' project reach.
The Guadalupe River Project received authorization for construction
under the Water Resources Development Act of 1986; the General Design
Memorandum was completed in 1992, the local cooperative agreement was
executed in March 1992, the General Design Memorandum was revised in
1993, construction of the first phase of the project was completed in
August 1994, construction of the second phase was completed in August
1996. Project construction was temporarily halted due to environmental
concerns.
To achieve a successful, long-term resolution to the issues of
flood protection, environmental mitigation, avoidance of environmental
effects, and project monitoring and maintenance costs, a multi-agency
``Guadalupe Flood Control Project Collaborative'' was created in 1997.
A key outcome of the collaborative process was the signing of the
Dispute Resolution Memorandum in 1998, which modified the project to
resolve major mitigation issues and allowed the project to proceed.
Energy and Water Development Appropriations Act of 2002 was signed into
law on November 12, 2001. This authorized the modified Guadalupe River
Project at a total cost of $226.8 million. Subsequent to the
authorization, the project cost has been raised to $251 million.
Construction of the last phase of flood protection was completed
December 2004 and a completion celebration held in January 2005. The
remaining construction consists of railroad bridge replacements and
mitigation plantings. The overall construction of the project including
the river park and the recreation elements is scheduled for completion
in 2006.
Fiscal Year 2005 Funding.--$6 million was authorized in fiscal year
2005 to continue Guadalupe River Project construction.
Fiscal Year 2006 Funding Recommendation.--It is requested that the
congressional committee support an appropriation add-on of $400,000, in
addition to the $5.6 million in the administration's fiscal year 2006
budget request, for a total of $6 million to continue construction of
the final phase of the Guadalupe River Flood Protection Project.
south san francisco bay shoreline study, santa clara county, california
summary
This statement urges the committee's support for an administration
budget request of $600,000 and an appropriation add-on of $400,000, for
a total of $1 million to continue a Feasibility Study to evaluate
integrated flood protection and environmental restoration for the South
San Francisco Bay Shoreline.
statement of support
south san francisco bay shoreline study
Background.--Congressional passage of the Water Resources
Development Act of 1976, originally authorized the San Francisco Bay
Shoreline Study, and Santa Clara Valley Water District (District) was
one of the project sponsors. In 1990, the U.S. Army Corps of Engineers
(Corps) concluded that levee failure potential was low because the
existing non-Federal, non-engineered levees, which were routinely
maintained by Leslie Salt Company (subsequently Cargill Salt) to
protect their industrial interests, had historically withstood
overtopping without failure. As a result, the project was suspended
until adequate economic benefits could be demonstrated.
Since the project's suspension in 1990, many changes have occurred
in the South Bay. The State and Federal acquisition of approximately
15,000 acres of South Bay salt ponds was completed in early March 2003.
The proposed restoration of these ponds to tidal marsh will
significantly alter the hydrologic regime and levee maintenance
activities, which were assumed to be constant in the Corps' 1990 study.
In addition to the proposed restoration project, considerable
development has occurred in the project area. Many major corporations
are now located within Silicon Valley's Golden Triangle, lying within
and adjacent to the tidal flood zone. Damages from a 1 percent high
tide are anticipated to far exceed the $34.5 million estimated in 1981,
disrupting business operations, infrastructure, and residences. Also,
historical land subsidence of up to 6 feet near Alviso, as well as the
structural uncertainty of existing salt pond levees, increases the
potential for tidal flooding in Santa Clara County.
In July 2002, Congress authorized a review of the Final 1992 Letter
Report for the San Francisco Bay Shoreline Study. The final fiscal year
2004 appropriation for the Corps included funding for a new start
Reconnaissance Study.
Project Synopsis.--At present, large areas of Santa Clara, Alameda
and San Mateo Counties would be impacted by flooding during a 1 percent
high tide. The proposed restoration of the South San Francisco Bay salt
ponds will result in the largest restored wetland on the West Coast of
the United States, and also significantly alter the hydrologic regime
adjacent to South Bay urban areas. The success of the proposed
restoration is therefore dependent upon adequate tidal flood
protection, and so this project provides an opportunity for multi-
objective watershed planning in partnership with the California Coastal
Conservancy, the lead agency on the restoration project. Project
objectives include: restoration and enhancement of a diverse array of
habitats, especially several special status species; tidal flood
protection; and provision of wildlife-oriented public access.
Fiscal Year 2005 Funding.--$325,000 was appropriated in fiscal year
2004 to conduct a Reconnaissance Study and initiate a Feasibility
Study.
Fiscal Year 2006 Funding Request.--It is requested that the
congressional committee support an appropriation add-on of $400,000, in
addition to the $600,000 in the administration's fiscal year 2006
budget request, for a total of $1 million to continue the Feasibility
Study to evaluate integrated flood protection and environmental
restoration.
llagas creek project, santa clara county, california
summary
This statement urges the committee's support for an appropriation
add-on of $900,000 for planning, design, and environmental updates for
the Llagas Creek Flood Protection Project.
statement of support
llagas creek project
Background.--The Llagas Creek Watershed is located in southern
Santa Clara County, California, serving the communities of Gilroy,
Morgan Hill and San Martin. Historically, Llagas Creek has flooded in
1937, 1955, 1958, 1962, 1963, 1969, 1982, 1986, 1996, 1997, 1998, and
2002. The 1997, 1998, and 2002 floods damaged many homes, businesses,
and a recreational vehicle park located in areas of Morgan Hill and San
Martin. These are areas where flood protection is proposed. Overall,
the proposed project will protect the floodplain from a 1 percent flood
affecting more than 1,100 residential buildings, 500 commercial
buildings, and 1,300 acres of agricultural land.
Project Synopsis.--Under authority of the Watershed Protection and
Flood Prevention Act (Public Law 566), the Natural Resources
Conservation Service completed an economic feasibility study in 1982
for constructing flood damage reduction facilities on Llagas Creek. The
Natural Resources Conservation Service completed construction of the
last segment of the channel for Lower Llagas Creek in 1994, providing
protection to the project area in Gilroy. The U.S. Army Corps of
Engineers (Corps) is currently updating the 1982 environmental
assessment work and the engineering design for the project areas in
Morgan Hill and San Martin. The engineering design is being updated to
protect and improve creek water quality and to preserve and enhance the
creek's habitat, fish, and wildlife while satisfying current
environmental and regulatory requirement. Significant issues include
the presence of additional endangered species including the red-legged
frog and steelhead, listing of the area as probable critical habitat
for steelhead, and more extensive riparian habitat than were considered
in 1982. Project economics are currently being updated as directed by
Corps Headquarters to determine continued project economic viability.
Until 1996, the Llagas Creek Project was funded through the
traditional Public Law 566 Federal project funding agreement with the
Natural Resources Conservation Service paying for channel improvements
and the District paying local costs including utility relocation,
bridge construction, and right of way acquisition. Due to the steady
decrease in annual appropriations for the Public Law 566 construction
program since 1990, the Llagas Creek Project has not received adequate
funding from U.S. Department of Agriculture to complete the Public Law
566 project. To remedy this situation, the District worked with
congressional representatives to transfer the construction authority
from the Department of Agriculture to the Corps under the Water
Resources Development Act of 1999 (Section 501). Since the transfer of
responsibility to the Corps, the District has been working the Corps to
complete the project.
Fiscal Year 2005 Funding.--$450,000 was appropriated in fiscal year
2005 for the Llagas Creek Flood Protection Project for planning and
design.
Fiscal Year 2006 Funding Recommendation.--Based upon the high risk
of flood damage from Llagas Creek, it is requested that the
congressional committee support an appropriation add-on of $900,000 in
fiscal year 2006 for planning, design, and environmental updates for
the Llagas Creek Project.
san francisquito creek flood damage reduction and ecosystem restoration
project, santa clara county, california
summary
This statement urges the committee's support for an administration
budget request of $200,000 and an appropriation add-on of $150,000, for
a total of $350,000 to continue a Feasibility Study of the San
Francisquito Creek Watershed.
statement of support
san francisquito creek flood damage reduction and ecosystem restoration
project
Background.--The San Francisquito Creek watershed comprises 45
square miles and 70 miles of creek system. The creek mainstem flows
through five cities and two counties, from Searsville Lake, belonging
to Stanford University, to the San Francisco Bay at the boundary of
East Palo Alto and Palo Alto. Here it forms the boundary between Santa
Clara and San Mateo counties, California and separates the cities of
Palo Alto from East Palo Alto and Menlo Park. The upper watershed
tributaries are within the boundaries of Portola Valley and Woodside
townships. The creek flows through residential and commercial
properties, a biological preserve, and Stanford University campus. It
interfaces with regional and state transportation systems by flowing
under two freeways and the regional commuter rail system. San
Francisquito Creek is one of the last natural continuous riparian
corridors on the San Francisco Peninsula and home to one of the last
remaining viable steelhead trout runs. The riparian habitat and urban
setting offer unique opportunities for a multi objective flood
protection and ecosystem restoration project.
Flooding History.--The creeks mainstem has a flooding frequency of
approximately once in 11 years. It is estimated that over $155 million
in damages could occur in Santa Clara and San Mateo counties from a 1
percent flood, affecting 4,850 home and businesses. Significant areas
of Palo Alto flooded in December 1955, inundating about 1,200 acres of
commercial and residential property and about 70 acres of agricultural
land. April 1958 storms caused a levee failure downstream of Highway
101, flooding Palo Alto Airport, the city landfill, and the golf course
up to 4 feet deep. Overflow in 1982 caused extensive damage to private
and public property. The flood of record occurred on February 3, 1998,
when overflow from numerous locations caused severe, record
consequences with more than $28 million in damages. More than 1,100
homes were flooded in Palo Alto, 500 people were evacuated in East Palo
Alto, and the major commute and transportation artery, Highway 101, was
closed.
Status.--Active citizenry are anxious to avoid a repeat of February
1998 flood. Numerous watershed based studies have been conducted by the
Corps, the Santa Clara Valley Water District, Stanford University, and
the San Mateo County Flood Control District. Grassroots, consensus-
based organization, called the San Francisquito Watershed Council, has
united stakeholders including local and State agencies, citizens, flood
victims, developers, and environmental activists for over 10 years. The
San Francisquito Creek Joint Powers Authority was formed in 1999 to
coordinate creek activities with five member agencies and two associate
members. The Authority Board has agreed to be the local sponsor for a
Corps project and received Congressional authorization for a Corps
reconnaissance study in May 2002.
Fiscal Year 2005 Funding.--$100,000 was appropriated to San
Francisquito Creek in fiscal year 2005 to initiate a Feasibility Study.
Fiscal Year 2006 Funding Recommendation.--It is requested the
congressional committee support an appropriation add-on of $150,000, in
addition to the $200,000 in the administration's fiscal year 2006
budget request, for a total of $350,000 to continue the Feasibility
Study.
pajaro river watershed study, santa clara county, california
summary
This statement urges the committee's support for an appropriation
add-on of $400,000 for the Pajaro River Watershed Study.
statement of support
pajaro river watershed study
Background.--Pajaro River flows into the Pacific Ocean at Monterey
Bay, about 75 miles south of San Francisco. The drainage area
encompasses 1,300 square miles in Santa Clara, San Benito, Monterey,
and Santa Cruz counties. Potential flood damage reduction solutions
will require cooperation between four counties and four water/flood
management districts. There is critical habitat for endangered wildlife
and fisheries throughout the basin. Six separate flood events have
occurred on the Pajaro River in the past half century. Severe property
damage in Monterey and Santa Cruz counties resulted from floods in
1995, 1997, and 1998. Recent flood events have resulted in litigation
claims for damages approaching $50 million. Twenty million dollars in
U.S. Army Corps of Engineers (Corps) flood fight funds have been
expended in recent years.
Status.--Two separate Corps activities are taking place in the
watershed. The first activity is a Corps reconnaissance study
authorized by a House Resolution in May 1996 to address the need for
flood protection and water quality improvements, ecosystem restoration,
and other related issues. The second activity is a General Revaluation
Report initiated in response to claims by Santa Cruz and Monterey
Counties that the 13 mile levee project constructed in 1949 through
agricultural areas and the city of Watsonville is deficient. The
reconnaissance study on the entire watershed was completed by the San
Francisco District of the Corps in fiscal year 2002. The decision to
continue onto a cost-shared feasibility study is currently delayed
pending the Corps resolution of the flooding problems on the lower
Pajaro River (Murphy's Crossing to the Ocean) and defining feasibility
study goals that meet the interests of all Authority members.
Local Flood Prevention Authority.--Legislation passed by the State
of California (Assembly Bill 807) in 1999 titled ``The Pajaro River
Watershed Flood Prevention Authority Act'' mandated that a Flood
Prevention Authority be formed by June 30, 2000. The purpose of the
Flood Prevention Authority is ``to provide the leadership necessary to
. . . ensure the human, economic, and environmental resources of the
watershed are preserved, protected, and enhanced in terms of watershed
management and flood protection.'' The Flood Prevention Authority was
formed in July 2000 and consists of representatives from the Counties
of Monterey, San Benito, Santa Clara, and Santa Cruz, Zone 7 Flood
Control District, Monterey County Water Resources Agency, San Benito
County Water District, and the Santa Clara Valley Water District. The
Flood Prevention Authority Board sent a letter of intent to cost share
a feasibility study of the Pajaro River Watershed to the Corps in
September 2001.
Fiscal Year 2005 Funding.--$50,000 was authorized in fiscal year
2005 for the Pajaro Watershed Feasibility Study.
Fiscal Year 2006 Funding Recommendation.--It is requested that the
congressional committee support an appropriation add-on of $400,000 in
fiscal year 2006 for the Pajaro River Watershed Study.
coyote/berryessa creek project, berryessa creek project element, santa
clara county, california
summary
This statement urges the committee's support for an appropriation
add-on of $1.75 million to continue with the General Reevaluation
Report and update of environmental documents for the Berryessa Creek
Flood Protection Project element of the Coyote/Berryessa Creek Project.
statement of support
coyote/berryessa creek project
berryessa creek project element
Background.--The Berryessa Creek Watershed is located in northeast
Santa Clara County, California, near the southern end of the San
Francisco Bay. A major tributary of Coyote Creek, Berryessa Creek
drains 22 square miles in the City of Milpitas and a portion of San
Jose.
On average, Berryessa Creek floods once every 4 years. The most
recent flood in 1998 resulted in significant damage to homes and
automobiles. The proposed project on Berryessa Creek, from Calaveras
Boulevard to upstream of Old Piedmont Road, will protect portions of
the Cities of San Jose and Milpitas. The flood plain is largely
urbanized with a mix of residential and commercial development. Based
on the U.S. Army Corps of Engineers (Corps) 2004 report, a 1 percent or
100-year flood could potentially result in damages of $225 million with
depths of up to 3 feet.
Study Synopsis.--In January 1981, the Santa Clara Valley Water
District (District) applied for Federal assistance for flood protection
projects under Section 205 of the 1948 Flood Control Act. The Water
Resources Development Act of 1990 authorized construction on the
Berryessa Creek Flood Protection Project as part of a combined Coyote/
Berryessa Creek Project to protect portions of the Cities of Milpitas
and San Jose.
The Coyote Creek element of the project was completed in 1996. The
Berryessa Creek Project element proposed in the Corps' 1987 feasibility
report consisted primarily of a trapezoidal concrete lining. This was
not acceptable to the local community. The Corps and the District are
currently preparing a General Reevaluation Report which involves
reformulating a project which is more acceptable to the local community
and more environmentally sensitive. Project features will include
setback levees and floodwalls to preserve sensitive areas (minimizing
the use of concrete), appropriate aquatic and riparian habitat
restoration and fish passage, and sediment control structures to limit
turbidity and protect water quality. The project will also accommodate
the City of Milpitas' adopted trail master plan. Estimated total costs
of the General Reevaluation Report work are $5.2 million, and should be
completed in the summer of 2006.
Fiscal Year 2005 Funding.--$338,000 was appropriated in fiscal year
2005 for the Coyote/Berryessa Creek Flood Protection Project to
continue the General Reevaluation Report and environmental documents
update.
Fiscal Year 2006 Funding Recommendation.--Based on the continuing
threat of significant flood damage from Berryessa Creek and the need to
continue with the General Reevaluation Report, it is requested that the
congressional committee support an appropriation add-on of $1.75
million for the Berryessa Creek Flood Protection Project element of the
Coyote/Berryessa Creek Project.
______

Prepared Statement of the Calaveras County Water District

------------------------------------------------------------------------
Project Request
------------------------------------------------------------------------
COSGROVE CREEK (SECTION 205)............................ $550,000
NEW HOGAN LAKE REOPERATION (SECTION 205)................ 600,000
------------------------------------------------------------------------

On behalf of the Calaveras County Water District, I want to thank
the subcommittee for the opportunity to present our priorities for
fiscal year 2006.
calaveras county water district
Calaveras County (County) is located in the central Sierra Nevada
foothills about 25 miles east of the Sacramento-San Joaquin Delta
(Delta). Ground elevations within the County increase from 200 feet
above mean sea level near the northwest part of the County to 8,170
feet near Alpine County. It is a predominately rural county with a
relatively sparse but rapidly developing population and limited
agricultural and industrial development. Calaveras County is located
within the watersheds of the Mokelumne, Calaveras, and Stanislaus
Rivers. All three rivers flow west, through San Joaquin County into the
Delta. Most of the County is underlain by the igneous and metamorphic
rocks of the Sierra Nevada. Alluvial deposits of the Central Valley,
which overlie the westward plunging Sierra Nevada, are present along an
80-square-mile area located along the western edge of the county and
are part of the Eastern San Joaquin County Groundwater Basin (ESJCGB).
This on-going Calaveras County Watersheds Study under the authority of
the Corps of Engineers' Sacramento and San Joaquin Comprehensive Basin
Study is focused on the western part of Calaveras County.
In the fall of 1946, the Calaveras County Water District (CCWD) was
organized under the laws of the State of California as a public agency
for the purpose of developing and administering the water resources in
Calaveras County. Therefore, CCWD is a California Special District and
is governed by the California Constitution and the California
Government and Water Codes. CCWD is not a part of, or under the control
of, the County of Calaveras. CCWD was formed to preserve and develop
water resources and to provide water and wastewater service to the
citizens of Calaveras County.
Under State law, CCWD, through its Board of Directors, has general
powers over the use of water within its boundaries. These powers
include, but are not limited to: the right of eminent domain, authority
to acquire, control, distribute, store, spread, sink, treat, purify,
reclaim, process and salvage any water for beneficial use, to provide
sewer service, to sell treated or untreated water, to acquire or
construct hydroelectric facilities and sell the power and energy
produced to public agencies or public utilities engaged in the
distribution of power, to contract with the United States, other
political subdivisions, public utilities, or other persons, and subject
to the California State Constitution, levy taxes and improvements.
cosgrove creek project--under the authority of the corps of engineers
section 205 flood protection program
Current Issues
Cosgrove Creek is an intermittent stream within the Calaveras River
Watershed. The creek enters the lower Calaveras River downstream from
the spillway of New Hogan Lake. During average precipitation years,
stream flow is present from late fall through early summer. Cosgrove
Creek is approximately 9.8 miles long and has a drainage area of 21
square miles. The upper two thirds of the Cosgrove Creek watershed is
used for grazing and the lower third has been subject to urban
development. A portion of this lower reach, which passes through the
adjacent communities of Valley Springs, La Contenta and Rancho
Calaveras in western Calaveras County, has experienced significant
incidents of flooding.
The area is rapidly becoming urbanized and consists of residential
and agricultural properties within the floodplain. The nature of the
flood risk is overflows which occur on Cosgrove Creek and which have
been estimated as 10- and 100-year flows of 2,220 cfs and 3,950 cfs,
respectively. Calaveras County Public Works Department has identified
flooding occurring along the creek three times in the past 10 years.
The number of people within the area impacted is over 400 and a recent
floodplain evaluation identified over 100 damageable structures in the
100-year floodplain.
Project Objectives
The Cosgrove Creek multi-purpose flood protection project in Valley
Springs is to reduce flood damages, put flood flows to beneficial use,
including sprayfields and conjunctive use of recycled water, restore
wetlands and riparian habitat in Cosgrove Creek and provide recreation
within the floodplain by developing suitable hiking/riding trails and
playing fields. Current concepts for study review and formulation
include a dike or set back levee, along with channel widening and the
development of a detention basin to hold peak flows for beneficial use,
along with multi-purpose use for environmental restoration and
recreation for soccer, softball and open field sports.
Local officials have identified the need for flood protection,
beneficial use of peak flows and public recreation in this area and
determined that these needs are compatible within the flood zone and
the community will work to continue to ensure this compatibility.
Fiscal Year 2006 Request
Five hundred fifty thousand dollars is requested to continue the
feasibility phase of the project and initiate plans and specifications.
re-operations study of new hogan lake--under the authority of the corps
of engineers section 205 flood protection program
Project Need
A re-operations study of New Hogan Lake is being requested in order
to have the Corps evaluate re-operating New Hogan Lake to manage the
existing storage for downstream water supply and conjunctive use.
CCWD, which holds water rights in New Hogan Lake, believes that
changing conditions and identified need for additional water supply in
the developing foothills in Calaveras County could require a change in
historic operations in the lake.
While a broader San Joaquin and Sacramento River Basin Reservoir
Re-operation Study is now underway by the Corps, its objective is not
water supply and conjunctive use, nor does it focus in any detail on
New Hogan Lake. Therefore, a limited re-operations study of New Hogan
Lake is necessary and will be supported by key local partners.
Fiscal Year 2006 Request
Six hundred thousand dollars is requested to complete the
feasibility phase of the project and initiate plans and specifications.
______

Prepared Statement of the City of St. Helena, California

------------------------------------------------------------------------
Project Request
------------------------------------------------------------------------
ST. HELENA NAPA RIVER RESTORATION PROJECT (Section 206 $600,000
Aquatic Ecosystem Restoration Program).................
YORK CREEK DAM REMOVAL AND RESTORATION PROJECT (Section 350,000
206 Aquatic Ecosystem Restoration Program).............
------------------------------------------------------------------------

On behalf of the City of St. Helena, I want to thank the
subcommittee for the opportunity to present our priorities for fiscal
year 2006.
city of st. helena
The City of St. Helena is located in the center of the wine growing
Napa Valley, 65 miles north of San Francisco. The area was settled in
1834 as part of General Vallejo's land grant. The City of St. Helena
was incorporated as a City on March 24, 1876 and reincorporated on May
14, 1889.
The City from its inception has served as a rural agricultural
center. Over the years, with the growth and development of the wine
industry, the City has become an important business and banking center
for the wine industry. The City also receives many tourists as a result
of the wine industry. While, the main goal of the City is to maintain a
small-town atmosphere and to provide quality services to its citizens,
this is becoming increasingly difficult. Regulatory, administrative and
resource requirements placed on the City through the listing of
threatened and endangered species under the Endangered Species Act on
the Napa River, as well as significant Clean Water Act requirements
require the City with a small population base to face significant
financial costs.
The City of St. Helena is a General Law City and operates under the
Council-City Manager form of government. The City Council is the
governing body and has the power to make and enforce all laws and set
policy related to municipal affairs. The official population of the
City of St. Helena as of January 1, 2002 is 6,041. St. Helena is a full
service City and encompasses an area of 4 square miles. Because of its
size and its rural nature, St. Helena has serious infrastructure, as
well as, flood protection and environmental needs that far exceed its
financial capabilities.
The Napa River flows along the north boundary of the City of St.
Helena in northern Napa County. The overall Napa River Watershed
historically supported a dense riparian forest and significant wetland
habitat. Over the last 200 years, approximately 6,500 acres of valley
floor wetlands have been filled in and 45,700 acres of overall
watershed have been converted to urban and agricultural uses. This
degradation of natural habitats has had a significant effect on water
quality, vegetation and wildlife, and aquatic resources within the Napa
River Watershed.
Surface water quality of the Napa River is dependent upon the time
of year, runoff from York and Sulphur Creeks, and urban area
discharges. During the winter months when streamflow is high,
pollutants are diluted; however, sedimentation and turbidity is high as
well. During the summer months when streamflow is low, pollutants are
concentrated and oxygen levels are low, thereby decreasing water
quality. Agricultural runoff adds pesticides, fertilizer residue, and
sometimes sediment. Discharges from urban areas can include
contaminated stormwater runoff and treated city wastewater. The Napa
River has been placed on the Clean Water Act 303(d) List and TMDL
Priority Schedule due to unacceptable levels of bacteria,
sedimentation, and nutrients. It is against this backdrop that the City
of St. Helena faces its biggest challenges.
st. helena napa river restoration project
The Napa River and its riparian corridor are considered Critical
Habitat for Steelhead and Salmon Recovery. The Steelhead is one of 6
Federally listed threatened and endangered species within the Napa
River and its adjoining corridor which requires attention. Current
conditions are such that natural habitats and geomorphic processes of
the Napa River are highly confined with sediment transport and
geomorphic work occurring in a limited area of the streambed and
channel banks. Napa River's habitat for the steelhead is limited in its
ability to provide prime spawning habitat. Limitations include: (1)
urbanization removing significant amounts of shading and cover
vegetation within and adjacent to the river; and (2) a detrimental lack
of pool habitat. Encroachment and channelization of Napa River have
degraded riparian habitat for rearing, resident, and migratory fish and
wildlife. The lack of riparian cover, increasing water temperature and
sedimentation in the river, has resulted in poor water quality. These
changes have reduced the project area's ability to support the re-
establishment of listed species.
In an effort to address these Federal environmental issues, the St.
Helena Napa River Restoration Project, a Section 206 Aquatic Ecosystem
Restoration Project, was identified in the Napa Valley Watershed
Management Feasibility Study in April of 2001 as a specific opportunity
for restoration. The project would restore approximately 3 miles (20
acres) of riparian habitat and improve the migratory capacity of
Federally listed threatened and endangered species, providing greater
access to rearing, resident and migratory habitats in the 80 square
mile watershed above the project area.
The project will interface with and complement the City of St.
Helena's multiple objective flood project, the St. Helena Flood
Protection and Flood Corridor Restoration Project, which will provide
flood damage reduction through restoration and re-establishment of the
natural floodplain along the project reach, setting back levees and the
re-creation and restoration of a natural floodway providing high value
riparian forest.
This Section 206 project is necessary to ensure and improve the
viability of Federal and State listed species by providing rearing,
resident and migratory habitat in the project's 3 mile stream corridor.
The project will also work to improve area habitat to benefit the
migration of steelhead to high value fisheries habitat in upper
watershed channel reaches. In an effort to build on recent geomorphic
and riparian studies on the Napa River, the Corps will use these
efforts from Swanson Hydrology and Geomorphology and Stillwater Science
to secure baseline information for this project.
The City of St. Helena respectfully requests the committee's
support for $600,000 for completing the Detailed Project Report and
initiating plans and specifications for the St. Helena Napa River
Restoration Project under the Corps' Section 206 Aquatic Ecosystem
Restoration Program.
york creek dam removal and restoration project
York Creek originates from the Coast Range on the western side of
the Napa Valley Watershed at an elevation of approximately 1,800 feet
and flows through a narrow canyon before joining the Napa River
northeast of St. Helena. York Creek Dam on York Creek has been
identified as a significant obstacle to passage for federally listed
Steelhead in the Central California Coast. In fact, it has been
determined that York Creek Dam is a complete barrier to upstream fish
migration. In addition, since the City of St. Helena has owned York
Creek Dam, there has been a number of silt discharges from the dam into
York Creek that have caused fish kills.
Under the Corps of Engineers' Section 206 Authority, a study is
underway to remove the dam structure and to restore the creek in an
effort to improve fish passage and ecological stream function for this
Napa River tributary. Alternatives to be investigated and pursued
include complete removal of York Creek Dam, appurtenances and
accumulated sediment, re-grading and restoring the creek through the
reservoir area. Rather than merely removing the dam and accumulated
sediments, alternatives under consideration would use a portion of the
material to re-grade the reservoir area to simulate the configuration
of the undisturbed creek channel upstream. Material could also be used
to fill in and bury the spillway and to fill in the scour hole
immediately downstream of the spillway. Use of material on site will
greatly reduce hauling and disposal costs, as well as recreating a more
natural creek channel through the project area.
The revegetation plan for the site following removal of the earthen
dam will restore a self-sustaining native plant community that is
sufficiently established to exclude nonnative invasive plants.
Revegetation will replace vegetation that is removed due to
construction and stabilize sediments in the stream channel riparian
corridor and upper bank slopes. The species composition of the
revegetated site will be designed to match that of (relatively)
undisturbed sites both above and below the project site. In terms of
expected outcomes for the project, the removal of York Creek Dam will
open an additional 2 miles of steelhead habitat upstream of the dam,
and the channel restoration will reestablish natural channel geomorphic
processes and restore riparian vegetation.
The City of St. Helena respectfully requests the committee's
support for $350,000 in appropriations under the Corps of Engineers'
Section 206 Aquatic Ecosystem Restoration Program, so that the efforts
to allow the continuation of the Detailed Project Report can stay on
schedule for the York Creek Dam Removal and Restoration Project.
______

Prepared Statement of the American Shore and Beach Preservation
Association
Mr. Chairman and members of the distinguished subcommittee, I am
Harry Simmons, President of the American Shore and Beach Preservation
Association (ASBPA). ASBPA was formed nearly 80 years ago to bring
together coastal scientists, local community leaders, and others who
are devoted to improving and preserving America's diverse coastal
resources by nurturing the development of scientific knowledge and
public policies which promote their responsible stewardship.
America's coasts are home to some of the Nation's most precious
natural resources. Beyond their intrinsic natural beauty, healthy
beaches provide effective storm damage protection, offer residents and
visitors unequaled recreational opportunities, and provide unique
environmental habitat. Together with coastal wetlands, bird refuges,
estuaries, ports, intracoastal waterways and other resources, our
coastal regions are economic engines filled with environmental
treasures and recreational opportunities that deserve to be preserved
and protected.
To be specific in terms of ASBPA's requests:
--ASBPA supports increased funding for studies and beach restoration
projects throughout the Nation and urges Congress to: (1)
continue to fund periodic beach renourishment, (2) fund new
beach nourishment study and construction starts, and (3) permit
projects to move seamlessly from study to design to
construction. ASBPA estimates the cost of providing adequate
funding for beach restoration projects and studies in fiscal
year 2006 to be $150 million.
--ASBPA supports funding for the National Shoreline Technology
Demonstration Program (the ``Section 227 Program'') at no less
than $6 million, and the National Shoreline Management Study at
no less than $500,000. Equally important is the need to provide
adequate funding for the national ``Regional Sediment
Management (RSM) Demonstration Program'' as well as other RSM
programs in coastal States.
--In the wake of the National Oceans Commission report and the
President's Ocean Action Plan, ASBPA urges Congress to initiate
funding for the National Coastal Data Bank. By appropriating $1
million, Congress can begin a 4-year effort to establish an
Internet-based home for existing Federal, State, and academic
institution data. This data can then be joined with the
Integrated and Sustained Ocean Observing System (IOOS), which
collects data from a variety of Federal and State agencies, as
well as academic and scientific institutions.
We also ask that you reject the funding and policy changes proposed
under the President's fiscal year 2006 budget for the Army Corps of
Engineers' civil works programs.
The President's fiscal year 2006 budget once again proposes to cut
shore protection projects and studies by nearly 50 percent over the
level enacted by Congress for fiscal year 2005. Even worse, the
proposed budget continues the policy of refusing to support Federal
participation in the periodic renourishment phase of beach projects.
While the administration proposes to fund those renourishment projects
with a navigation impact, this standard has never been set by Congress
and is not an appropriate standard for either planning or budget
priority purposes.
We remain very concerned that the President's proposed budget would
eliminate the statutory and contractual commitments the Corps made with
non-Federal sponsors, essentially eliminating Federal participation in
all work beyond initial construction.
We know of the concerns of the Chairman and Ranking Member about
the use of the Corps' reprogramming authority. Like you, we support the
responsible use of that authority for purposes intended by Congress.
Beach nourishment projects and studies are both donors and recipients
of reprogrammed funds. We rely on the flexibility of the Corps to
reprogram funds into beach studies and construction just as we
understand when one of our studies or construction projects gets
delayed that the funds can better be used elsewhere.
We appreciate the opportunity to submit our views to the
subcommittee and look forward to working with you and your staff in the
development of the fiscal year 2006 Energy and Water Development
appropriations bill.
______

Prepared Statement of The Nature Conservancy
Mr. Chairman and members of the subcommittee, I appreciate this
opportunity to present The Nature Conservancy's recommendations for the
Army Corps of Engineers' and Department of Energy's fiscal 2006
appropriations. We understand and appreciate that the subcommittee's
ability to fund programs within its jurisdiction is limited by the
tight budget situation but appreciate your consideration of these
important programs.
The Nature Conservancy is an international, non-profit organization
dedicated to the conservation of biological diversity. Our mission is
to preserve the plants, animals and natural communities that represent
the diversity of life on Earth by protecting the lands and waters they
need to survive. The Conservancy has about 1,000,000 individual members
and 1,900 corporate associates. We have programs in all 50 States and
in 27 foreign countries. We have protected more than 15 million acres
in the United States, approximately 102 million acres and 5,000 river
miles with local partner organizations worldwide. The Conservancy owns
and manages 1,400 preserves throughout the United States--the largest
private system of nature sanctuaries in the world. Sound science and
strong partnerships with public and private landowners to achieve
tangible and lasting results characterize our conservation programs.
The Conservancy urges the subcommittee to support the following
appropriation levels in the fiscal 2006 Energy and Water Development
Appropriation bill:
construction general priorities
Section 1135: Project Modification for the Improvement of the
Environment.--The Section 1135 Program authorizes the Army Corps of
Engineers (Corps) to restore areas damaged by existing Corps projects.
This program permits modification of existing dams and flood control
projects to increase habitat for fish and wildlife without interrupting
a project's original purpose. This program continues to be in extremely
high demand with needs far greater than the $25 million appropriated in
fiscal 2005. This financial shortfall has stopped many important
projects. The Conservancy is the non-Federal cost share partner on six
ecologically significant Section 1135 restoration projects. These
projects include Spunky Bottoms, a floodplain restoration/reconnection
project on the Illinois River, for which we seek an earmark in the
amount of $200,000 in fiscal 2005; and McCarran Ranch a stream meander
and riparian habitat restoration project on the Truckee River in NV
which is seeking $3.7 million to continue construction. The Conservancy
strongly encourages full funding of $25 million for the Section 1135
program in fiscal 2006, an increase over the President's $15.0 million
request.
Section 206: Aquatic Ecosystem Restoration.--Section 206 is a newer
Corps program that authorizes the Corps to restore aquatic habitat
regardless of past activities. This is another popular restoration
program with demand far exceeding the $25 million appropriated for
fiscal 2005. The Conservancy is the non-Federal cost-share partner on
11 Section 206 projects. These projects restore important fish and
wildlife habitats. Ecologically significant projects for which the
Conservancy is the non-Federal sponsor include: Mad Island, TX, a
coastal restoration project that needs $1.475 million to continue
construction; Kanakakee Sands, IN, riparian and wetland prairie
restoration that seeks $1.2 million for continuing construction; and
Camp Creek, OR, a headwaters stream restoration project that needs
$175,000 to continue the feasibility study. The Conservancy strongly
encourages full funding of $25 million for the Section 1135 program in
fiscal 2006, an increase over the President's $15.0 million request.
Upper Mississippi River System Environmental Management Program.--
The Environmental Management Program (EMP) is an important Corps
program that constructs habitat restoration projects and conducts long-
term resource monitoring of the Upper Mississippi and Illinois Rivers.
The EMP operates as a unique Federal-State partnership affecting five
States (Illinois, Iowa, Minnesota, Missouri, and Wisconsin). The EMP
was reauthorized in WRDA 1999 with an increased authorization in the
amount of $33.2 million. The Conservancy supports the President's
request for full funding of $33.2 million for fiscal 2006.
Estuary Habitat Restoration Program.--The Estuary Habitat
Restoration Program was established with the intent to restore 1
million acres of estuary habitat by 2010. This multi-agency program
will promote projects that result in healthy ecosystems that support
wildlife, fish and shellfish, improve surface and groundwater quality,
quantity, and flood control; and provide outdoor recreation. The
Conservancy supports $20 million in fiscal 2006. This is an increase
over the President's budget request of $5.0 million.
Florida Keys Water Quality Program.--The Florida Keys Water Quality
Program is a unique restoration program designed to protect the Florida
Keys' fragile marine and coral ecosystem. This nationally significant
marine ecosystem is being impacted by excessive nutrients due to storm
and wastewater pollution. This program is cost shared with State and
local interests to repair and improve the storm and wastewater
treatment facilities on the Florida Keys to reduce the harmful levels
of nutrient pollution. The Nature Conservancy, and it's partners--the
State of Florida, Florida Keys Aqueduct Authority, Monroe County, City
of Islamorada, City of Layton, City of Key Colony Beach, City of
Marathon, and City of Key West--support $30 million for fiscal 2006.
This program was not included in the President's budget.
general investigation priorities
Middle Potomac River Watershed Study.--The preliminary Middle
Potomac Watershed Section 905(b) analysis identified 14 feasibility
studies to address flood control needs and environmental restoration
opportunities within the Middle Potomac Watershed. The study team
identified three study goals for the development of project management
plans: (1) to conserve, restore, and revitalize the Potomac River
basin; (2) to develop sustainable watershed management plans; and (3)
to cooperate with and support public and private entities in developing
watershed management plans. The Conservancy urges the committee to
provide $500,000 in fiscal 2006 to continue the development of these
plans. This study is not included in the President's budget.
Savannah Basin Comprehensive Water Resources Study.--The Savannah
Basin Comprehensive Water Resources Study will enable the Corps and
other partners to gain a better understanding of the influence of
hydrologic processes such as timing, duration, frequency, magnitude,
and rate of change of river flows on the river's ecology. The Nature
Conservancy, under a cooperative agreement funded by the Corps and its
cost share partners, Georgia and South Carolina, developed a set of
ecosystem flow recommendations for the Savannah River Basin. A test
release of the new flow recommendation was conducted March 15-18, 2004
and again in fall 2005. The Conservancy supports $436,000 in fiscal
2006. This study is not included in the President's Budget.
department of energy
Carbon Sequestration Technology Area.--The Carbon Sequestration
Technology Area of the Strategic Center for Coal at Department of
Energy's (DOE) National Energy Technology Laboratory has been used to
refine the tools and methods used to measure carbon emissions
reductions and uptake from improved land management. These tools and
methods are being tested on-the ground in Conservancy conservation
priority areas in Brazil, Belize, Peru, Chile and the United States.
The Conservancy is soon launching two more DOE funded projects to test
remote carbon measurement techniques in Northern California and another
study to evaluate the cost and location of carbon emissions reduction
and uptake opportunities in eleven Northeastern States. These projects
are producing cutting-edge technologies and methods that will lead to
quantifiable and verifiable reductions in greenhouse gases. The
Conservancy supports the President's request of $66,228,000, for
continued and increased funding for research.
Thank you for the opportunity to present The Nature Conservancy's
comments on the Energy and Water Appropriations bill. We recognize that
you receive many worthy requests for funding each year and appreciate
your consideration of these requests and the generous support you have
shown for these and other conservation programs in the past. If you
have any further questions, please do not hesitate to contact me or Ted
Illston, Senior Policy Advisor.
______

Prepared Statement of the Green Brook Flood Control Commission
Mr. Chairman and members of the subcommittee, my name is Vernon A.
Noble, and I am the Chairman of the Green Brook Flood Control
Commission. I submit this testimony in support of the Raritan River
Basin--Green Brook Sub-Basin project, which we request be budgeted in
fiscal year 2006 for $15,000,000 in Construction General funds.
As you know from our previous testimony, a tremendous flood took
place in September of 1999. Extremely heavy rainfall occurred,
concentrated in the upper part of Raritan River Basin. As a result, the
Borough of Bound Brook, New Jersey, located at the confluence of the
Green Brook with the Raritan River, suffered catastrophic flooding.
Water levels in the Raritan River and the lower Green Brook reached
record levels.
There were tremendous monetary damages, and extensive and tragic
human suffering.
The flooding of September 1999 is not the first bad flood to have
struck this area. Records show that major floods have occurred here as
far back as 1903.
Disastrous flooding took place in the Green Brook Basin in the late
summer of 1971. That flood caused $304,000,000 in damages (April 1996
price level) and disrupted the lives of thousands of persons.
In the late summer of 1973, another very severe storm struck the
area, and again, thousands of persons were displaced from their homes.
$482,000.000 damage was done (April 1996 price level) and six persons
lost their lives.
The first actual construction of the Project began in late fiscal
year 2001, in which an old bridge over the Green Brook, connecting the
Boroughs of Bound Brook and Middlesex, was replaced with a new and
higher bridge. That work is now complete.
The second construction contract, known as Segment T, began in
2002, and is now essentially complete. A ``ring wall'' around the low
sides of an adjacent apartment complex is now underway to complete the
protection for the eastern portion of Bound Brook Borough.
The next following segment of the Project, known as Segment U, is
now well underway along the Middle Brook, at the western boundary of
Bound Brook Borough.
To continue the protection along the Middle Brook, a contract was
recently placed by the Corps of Engineers for protective levees
immediately downstream of Segment U. This further protective
construction work, know as Segment R1, has now begun.
When Congress authorized the Project for construction, it did so
only for the lower and Stony Brook portions. This was the result of the
objections raised in 1997 by the Municipality of Berkeley Heights,
located in the highest elevation portion of the Green Brook Basin.
In 1998 a Task Force was formed to seek a new consensus for
protection of the upper portion of the Basin.
Following the recommendations of the Task Force, in calendar year
2003, Resolutions of Support for protection of the upper portion of the
Basin were adopted, along the lines of the recommendations of the Task
Force. These new Resolutions of Support for the protection of the upper
portion of the Basin, principally the Municipalities of Plainfield and
Scotch Plains, were adopted by those Municipalities, and by the two
affected Counties of Union and Somerset.
A final design for a new plan to protect these upper basin
Municipalities remains to be done. This work will involve a new effort
by the Corps of Engineers, and of course will require that the Corps of
Engineers enlist technical support for surveying, environmental
investigations, and design studies, by the placing of appropriate
contracts with qualified outside consulting engineering firms.
This work will require many months, and contracts for actual
construction of these protective measures for the upper portion of the
region are not likely to be ready until several more years. It is
understood that when these studies have been completed, it will be
necessary for Congress to specifically authorize the final design of
the recommended plan. That likely cannot happen until fiscal year 2007,
or later.
Meantime, it is essential that this preparatory work continue. And
it is thus essential that the Corps of Engineers be authorized and
allowed to place contracts for environmental and engineering studies in
order to develop an acceptable plan for the protection of the upper
portion of the Green Brook Basin.
It is understood that specific action by the Congress is required
at this time to authorize the Corps of Engineers to continue this work
in fiscal year 2006 and beyond. It is also understood that before final
design for protection of the upper portion of the Green Brook Basin can
proceed, it will be necessary that a Project Cooperation Agreement be
entered into between the Corps of Engineers and the State of New
Jersey. Presumably, this Project Cooperation Agreement will be similar
to the Agreement now in force between the Corps of Engineers and the
State of New Jersey, which was made for the lower and Stony Brook
portions of the Green Brook Basin.
To carry this work forward, it is essential that the Corps of
Engineers be authorized, within the funds appropriated to them in
fiscal year 2006, to place contracts for engineering and environmental
studies pertaining to the protection of the upper portion of the Basin.
It is to be noted that the Estimated Damages caused by the Flood of
1973, in the upper portion Municipalities only, reported in the final
GRR of May 1997, page 33, showed that Estimated Damages in Plainfield,
Scotch Plains and Watchung (the upper portion of the Basin) amounted to
an estimated $357 million.
We urge the members of Congress to direct the Corps of Engineers,
within the funds made available to them for fiscal year 2006, to
continue the necessary investigations and studies, and to authorize the
Corps of Engineers to place contracts for such investigations as may be
necessary, so that the preparatory work for the ultimate protection of
the people and property within the upper portion of the Basin can be
carried forward.
The Green Brook Flood Control Commission is made up of appointed
representatives from Middlesex, Somerset and Union Counties in New
Jersey, and from the 13 Municipalities within the Basin. This
represents a combined population of about one-quarter of a million
people.
The members of the Commission are all volunteers, and for 34 years
have served, without pay, to advance the cause of flood protection for
the Basin. Throughout this time, the Corps of Engineers, New York
District, has kept us informed of the progress of their work, and a
representative from the Corps has been a regular part of our monthly
meetings.
We believe that it is clearly essential that the Green Brook Flood
Control Project be carried forward, and pursued vigorously, to achieve
protection at the earliest possible date. This Project is needed to
prevent loss of life and property, as well as the trauma caused every
time there is a heavy rain.
New Jersey has programmed budget money for its share of the Project
in fiscal year 2006.
We urgently request an appropriation for the Project in fiscal year
2006 of $15,000,000.
With your continued support, the Green Brook Flood Control
Commission is determined to see this Project through to completion.
Thank you, Mr. Chairman, and members of the subcommittee, for your
vitally important past support for the Green Brook Flood Control
Project; and we thank you for the opportunity to submit this testimony.

______

DEPARTMENT OF THE INTERIOR

Bureau of Reclamation

Prepared Statement of Mid-Dakota Rural Water System
fiscal year 2006 funding request
The Mid-Dakota Project is requesting an appropriation of $5.015
million provided through the Bureau of Reclamation's project
construction program for fiscal year 2006. As with our past submissions
to this subcommittee, Mid-Dakota's fiscal year 2006 request is based on
a detailed analysis of our ability to proceed with construction during
the fiscal year. In all previous years, Mid-Dakota has fully obligated
its appropriated funds, including Federal, State, and local, and could
have obligated significantly more were they available.
An appropriation of $5.015 million for fiscal year 2006 will
complete the Federal Government's funding obligation for the initial
construction of the authorized Project. It is with pleasure that Mid-
Dakota agrees with President Bush's $5.015 million request for Mid-
Dakota in fiscal year 2006.
tentative fiscal year 2006 construction schedule
Construction proposed for fiscal year 2006 would complete pipelines
and appurtenances for the Mid-Dakota Project as is currently authorized
pursuant to Public Law 102-575 Title XIX. Construction activities will
be generally comprised of those construction projects begun in fiscal
year 2005.
Total project expenditures are currently greater than the amount
remaining in authorized funds by $1 million to $2 million dollars. If a
funding shortfall is realized, Mid-Dakota will examine its options for
funding the shortfall when the amount is known.
impacts of fiscal year 2006 award
The most obvious impact of any significant reduction from Mid-
Dakota's request will be the potential for delay of construction of one
or more Project components. The $5.015 million will allow for the
completion of the Mid-Dakota Project as it is currently authorized. The
requested appropriation will provide the necessary funds to proceed
with construction of contracts already awarded and underway.
history of project funding
The Project was authorized by Congress and signed into law by
President George H.W. Bush in October 1992. The Federal authorization
for the project totaled $100 million (1989 dollars) in a combination of
Federal grant and loan funds (grant funds may not exceed 85 percent of
Federal contribution). The State authorization was for $8.4 million
(1989 dollars). A breakdown of Project cost ceilings and expenditures
are provided on the following table(s):

MID-DAKOTA RURAL WATER SYSTEM, INC. CONSTRUCTION CONTRACT STATUS AND CASH-FLOW
----------------------------------------------------------------------------------------------------------------
Percent
Project Funds Current 2006 FER (1993) Increase
----------------------------------------------------------------------------------------------------------------
Federal Ceiling--Construction.................................. $145,709,000 $111,000,000 131.3
State Ceiling--Construction.................................... 9,670,000 9,000,000 107.4
Interest earned on Federal funds (neg)......................... (638,000) .............. ..............
------------------------------------------------
Total Construction Ceiling............................... 154,741,000 120,000,000 129.0
Wetland Component.............................................. 2,756,000 .............. ..............
Total Adjusted Federal Ceiling................................. 147,827,000 .............. ..............
------------------------------------------------
Total Project Authorized Ceiling......................... 157,497,000 .............. ..............
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
Contract Work Completed
Contract Number & ID Status Amount to Date Retainage Balance Due
----------------------------------------------------------------------------------------------------------------
Source & Production:
1-1 Intake & Pump Station. Complete........ $3,944,962 $3,944,962 .............. ..............
1-1A Intake Rip-Rap....... Complete........ 87,179 87,179 .............. ..............
1-1B Intake Road Surfacing Complete........ 26,188 26,188 .............. ..............
2-1 Water Treatment Plant. Complete........ 10,242,564 10,242,564 .............. ..............
2-1A WTP Controls......... Complete........ 14,629 14,629 .............. ..............
2-1B WTP Cold Storage..... Complete........ 92,000 92,000 .............. ..............
---------------------------------------------------------------
Subtotal Source & ................ 14,407,521 14,407,521 .............. ..............
Production.
===============================================================
Main Transmission Pipeline:
3-1A Raw Water Pipeline... Complete........ 1,719,251 1,719,251 .............. ..............
3-1B MTP to Blunt......... Complete........ 7,022,056 7,022,056 .............. ..............
3-1C MTP to Highmore...... Complete........ 4,793,105 4,793,105 .............. ..............
3-1D MTP CP System........ Complete........ 214,651 214,651 .............. ..............
3-2A MTP to Ree Heights... Complete........ 3,155,455 3,155,455 .............. ..............
3-2B MTP to St. Lawrence.. Complete........ 3,356,564 3,356,564 .............. ..............
3-3A MTP to Wessington.... Complete........ 2,383,513 2,383,513 .............. ..............
3-3B MTP to Wolsey........ Complete........ 3,881,892 3,881,892 .............. ..............
3-3C MTP to Huron......... Complete........ 2,630,672 2,630,672 .............. ..............
3-3D MTP CP System........ Complete........ 173,970 173,970 .............. ..............
---------------------------------------------------------------
Subtotal Main Trans. ................ 29,331,130 29,331,130 .............. ..............
Pipeline.
===============================================================
Secondary & Distribution
Pipeline:
4-1A/B 1-5 Distribution... Complete........ 10,572,232 10,572,232 .............. ..............
4-1A/B 6 Distribution..... Complete........ 9,027,572 9,027,572 .............. ..............
4-2 1 Distribution........ Complete........ 4,707,395 4,707,395 .............. ..............
4-2 2 Distribution........ Complete........ 3,000,176 3,000,176 .............. ..............
4-2 4&5 Distribution...... Complete........ 5,134,974 5,134,974 .............. ..............
4-2A 4 Distribution....... Complete........ 1,191,329 1,191,329 .............. ..............
4-2AP Distribution........ Complete........ 11,337,290 11,337,290 .............. ..............
4-2AV Distribution vaults. In Progress..... 686,749 686,749 $22,000 $22,000
4-3P 1 Distribution....... In Progress..... 7,512,370 7,302,670 182,602 392,302
4-3V 1 Distribution vaults In Progress..... 533,119 528,783 26,656 30,992
4-3P 2 Distribution....... In Progress..... 4,691,992 .............. .............. 4,691,992
4-3P 3 Distribution....... In Progress..... 5,591,944 .............. .............. 5,591,944
4-3V 2 Distribution vaults In Progress..... 182,497 .............. .............. 182,497
4-3V 3 Distribution vaults In Progress..... 187,260 .............. .............. 187,260
4-4A Canning Expansion.... In Progress..... 1,018,967 988,647 50,526 80,846
---------------------------------------------------------------
Subtotal Sec. & Dist. ................ 65,375,867 54,477,818 281,784 11,179,832
Pipeline.
===============================================================
Water Storage Tank:
5-1 Highmore Tank......... Complete........ 1,433,500 1,433,500 .............. ..............
5-1A 1 Onida Tank......... Complete........ 397,688 397,688 .............. ..............
5-1A 2-4 Oko, Agar & Getty Complete........ 1,526,453 1,526,453 .............. ..............
Tanks.
5-2 1 Mac's Corner Tank... Complete........ 561,101 561,101 .............. ..............
5-2 2-3 Collins Slough & Complete........ 911,720 911,720 .............. ..............
Rezac Tanks.
5-2A 1&3 Ames & Wess. Spr. Complete........ 868,490 868,490 .............. ..............
Tanks.
5-2A 2 Cottonwood Lake Complete........ 695,863 695,863 .............. ..............
Tank.
5-3 Wolsey Tank........... In Progress..... 2,021,414 2,021,414 10,000 10,000
5-3A Staum Dam & Pearl In Progress..... 1,034,764 1,029,724 25,869 30,909
Creek Tanks.
---------------------------------------------------------------
Subtotal Water Storage ................ 9,450,993 9,445,953 35,869 40,909
Tanks.
===============================================================
Other Construction Contracts:
6-1 SCADA................. In Progress..... 1,275,000 1,006,629 23,555 291,926
9-0 OMC Concrete Paving... Complete........ 58,474 58,474 .............. ..............
9-3 OMC Warehouse......... In Progress..... 323,654 247,664 16,905 92,895
6-2 IEEE 519-92 Compliance Not Bid......... 250,000 .............. .............. 250,000
---------------------------------------------------------------
Subtotal Other Contracts ................ 1,907,128 1,312,767 40,460 634,821
===============================================================
TOTAL PROJECT ................ 120,472,638 108,975,189 358,113 11,855,562
CONSTRUCTION COSTS.
===============================================================
Other Costs:
Engineering and Inspection In Progress..... 18,315,224 17,066,159 .............. 1,249,065
USBR Administration....... In Progress..... 2,225,000 1,909,119 .............. 315,881
Administration and Other In Progress..... 11,290,518 10,608,518 .............. 682,000
Costs.
Easement & ROW Costs...... In Progress..... 2,720,771 2,500,000 .............. 220,771
Repay SSNB Loan........... In Progress..... 344,215 .............. .............. 344,215
Repay Orient Loan......... Complete........ 12,874 12,874 .............. ..............
Repay Camelot Loan........ In Progress..... 117,000 .............. .............. 117,000
Huron Water Tower Sharing. In Progress..... 600,000 .............. .............. 600,000
Huron constructed Complete........ 143,000 143,000 .............. ..............
Facilities Reimburse.
Huron Assistance with Complete........ 100,000 100,000 .............. ..............
Facilities Cost.
---------------------------------------------------------------
Subtotal Other Costs.... ................ 35,868,602 32,339,670 .............. 3,528,932
===============================================================
Wetland Component Costs:
USBR Administration....... In Progress..... 325,000 311,445 .............. 13,555
Fund Transfers............ In Progress..... 400,000 397,649 .............. 2,351
Land Purchases............ In Progress..... 2,031,000 1,285,446 .............. 745,554
---------------------------------------------------------------
Subtotal Wetland ................ 2,756,000 1,994,540 .............. 761,460
Component Costs.
===============================================================
TOTAL PROJECT COSTS..... ................ \1\ 159,097,24 143,309,399 358,113 16,145,954
0
----------------------------------------------------------------------------------------------------------------
\1\ Contingency: $1,600,240.

The total authorized indexed cost of the project is approximately
$157,497,000 \1\ all Federal funding considered, the government has
provided all but approximately $5 million of the authorized commitment.
The remaining funds ($5 million) are therefore the basis of Mid-
Dakota's 2006 appropriation request.
---------------------------------------------------------------------------
\1\ The total authorized ceiling amount is a result of informal
conversations and correspondence with the Bureau of Reclamation. The
figure represents a best estimate at the time of writing this
testimony.

SUMMARIZATION OF FEDERAL FUNDING
[In millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total
Mid- Pres. Conf. Bureau Additional Fed.
Fed. Fiscal Year Dakota Budg. House Senate Enacted Award Funds Funds
Request Levels Levels Provided
--------------------------------------------------------------------------------------------------------------------------------------------------------
1994........................................................... 7.991 ......... ......... 2.000 2.000 1.500 .......... 1.500
1995........................................................... 22.367 ......... ......... 8.000 4.000 3.600 .......... 3.600
1996........................................................... 23.394 2.500 12.500 10.500 11.500 10.925 2.323 13.248
1997........................................................... 29.686 2.500 11.500 12.500 10.000 9.429 1.500 10.929
1998........................................................... 29.836 10.000 12.000 13.000 13.000 12.367 1.675 14.042
1999........................................................... 32.150 10.000 10.000 20.000 15.000 14.262 2.000 16.262
2000........................................................... 28.800 5.000 15.000 7.000 14.010 13.400 1.000 14.400
2001........................................................... 24.000 6.040 11.040 6.040 10.040 9.561 .......... 9.561
2002........................................................... 30.684 10.040 15.040 15.540 15.040 13.642 0.861 14.503
2003........................................................... 29.360 10.040 17.040 17.940 17.860 16.149 0.800 16.949
2004........................................................... 23.869 2.040 12.040 15.040 15.040 13.535 0.455 13.990
2005........................................................... 17.015 17.015 17.000 17.000 17.000 15.068 .......... 15.068
2006........................................................... 5.015 0.015 ......... ......... ......... ......... .......... .........
----------------------------------------------------------------------------------------
Totals................................................... ......... 75.190 133.160 144.560 144.490 133.438 10.614 144.052
--------------------------------------------------------------------------------------------------------------------------------------------------------

Additionally, the State of South Dakota has contributed $9.67
million in grants to the Mid-Dakota Project, in previous years. The
State of South Dakota completed its initial authorized financial
obligation to the Mid-Dakota Project in the 1998 Legislative Session.
construction in progress
Mid-Dakota began construction in September of 1994, with the
construction of its Water Intake and Pump Station. Since that eventful
day of first construction start, we have bid, awarded, and completed 23
project components and are into construction on eight other major
Project components. The previous table titled ``Construction Contract
Status and Cash-flow'' provides a synopsis of construction progress.
When considering the essence of a public water supply systems, at
its core are: customers, pipeline and water productions and sales. It's
notable and commendable that Mid-Dakota will complete the authorized
project (approximately $157 million) with a percent or 2 of the
authorized funding ceiling. It's especially note worthy when you
compare the table below demonstrating how much more Project has been
built while staying so close to the original authorized ceiling:

------------------------------------------------------------------------
Completed
Auth. Ceiling Project Percent
------------------------------------------------------------------------
Customers (accounts)........... 2,200 \1\ 4,800 218
Pipeline (miles)............... 2,771 3,800 137
Water Sales (billion gal. per 1.2 1.7 142
year).........................
------------------------------------------------------------------------
\1\ Includes towns as one account each.

closing
Mid-Dakota is aware of the tough funding decisions that face the
Energy and Water Appropriations Subcommittee and we appreciate the
difficult decisions the subcommittee must make. We strongly urge the
subcommittee to look closely at the Mid-Dakota Project and recognize
the need that exists. Consider the exceptionally high level of local
and State support. And finally consider the fact that fully funding the
fiscal year 2006 appropriation request as submitted by the President
and by Mid-Dakota should fully fund the initial authorized components
of the Mid-Dakota Project.
Again, we thank the subcommittee for its strong support, both past
and present.
______

Letter From the State of Wyoming
Cheyenne, WY, February 25, 2005.
The Honorable Pete V. Domenici,
Chairman,
The Honorable Harry Reid,
Ranking Member,
Energy and Water Development Subcommittee, Committee on Appropriations,
United States Senate, 127 Dirksen Senate Office Building,
Washington, DC.
Dear Chairman Domenici and Senator Reid: I write to request your
support for an appropriation in fiscal year 2006 of $2,529,000 to the
Bureau of Reclamation within the budget line item entitled ``Endangered
Species Recovery Implementation Program'' for the Upper Colorado
Region. The President's recommended budget for fiscal year 2006
includes this line-item amount. The funding designation we seek is as
follows: $1,401,000 for construction activities for the Upper Colorado
River Endangered Fish Recovery Program; $572,000 for the San Juan River
Basin Recovery Implementation Program; and $556,000 for Fish and
Wildlife Management and Development.
These highly successful, cooperative programs are ongoing
partnerships among the States of Colorado, New Mexico, Utah and
Wyoming, Indian tribes, Federal agencies and water, power and
environmental interests. The programs' objectives are to recover
endangered fish species while water use and development proceeds in
compliance with the Endangered Species Act. These recovery programs
have become national models for collaboratively working to recover
endangered species while addressing water needs to support growing
western communities in the Upper Colorado River Basin region of the
Intermountain West. Since 1988, these programs have facilitated ESA
Section 7 consultation (without litigation) for over 800 Federal,
tribal, State and privately managed water projects depleting
approximately 2.5 million acre-feet of water per year.
The requested fiscal year 2006 appropriation will allow the Upper
Colorado River Endangered Fish Program to proceed with construction of
additional fish passage structures on the Green and Colorado Rivers to
provide access to historic habitat upstream of existing diversion dams.
The requested funding for the San Juan River Recovery Program will be
used for contracts for construction and cooperative agreements with the
State of New Mexico to provide and protect instream flows, fish
ladders, flooded bottom land restoration, propagation facilities,
stocking efforts, nonnative and sportfish management activities.
The enactment of Public Law 106-392, as amended by Public Law 107-
375, authorized the Federal Government to provide up to $46 million of
cost sharing for these two ongoing recovery programs' remaining capital
construction projects. Raising and stocking of the endangered fish
produced at program hatchery facilities, restoring floodplain habitat
and fish passage, regulating and supplying instream habitat flows,
installing diversion canal screens and controlling nonnative fish
populations are key components of the programs' ongoing capital
construction projects. Subsection 3(c) of Public Law 106-392 authorizes
the Secretary of the Interior to accept up to $17 million of
contributed funds from Colorado, Wyoming, Utah and New Mexico, to
expend such contributed funds as if appropriated for these projects;
and provides for an additional $17 million to be contributed from
revenues derived from the sale of Colorado River Storage Project (CRSP)
hydroelectric power. This substantial non-Federal cost-sharing funding
demonstrates the strong commitment and effective partnerships embodied
in both of these successful programs. The requested Federal
appropriations are critically important to these efforts moving
forward.
The past support and assistance of your subcommittee has greatly
facilitated the success of these multi-State, multi-agency programs. On
behalf of the citizens of Wyoming, I thank you for that support and
request the subcommittee's assistance for fiscal year 2006 funding to
ensure the Bureau of Reclamation's continuing financial participation
in these vitally important programs.
Best Regards,
Dave Freudenthal,
Governor.
______

Letter From the Wyoming Water Association
Cheyenne, WY, March 13, 2005.
The Honorable Pete V. Domenici,
Chairman,
The Honorable Harry Reid,
Ranking Member,
Energy and Water Development Subcommittee, Committee on Appropriations,
United States Senate, 127 Dirksen Senate Office Building,
Washington, DC.
Dear Chairman Domenici and Senator Reid: On behalf of the members
of the Wyoming Water Association, I am writing to request your support
for an appropriation in fiscal year 2006 of $2,529,000 to the Bureau of
Reclamation within the budget line item entitled ``Endangered Species
Recovery Implementation Program'' for the Upper Colorado Region. The
President's recommended budget for fiscal year 2006 has included this
line-item amount. Founded in 1933, the Wyoming Water Association (WWA)
is a Wyoming non-profit corporation and voluntary organization of
private citizens, elected officials, and representatives of business,
government agencies, industry and water user groups and districts. The
Association's objective is to promote the development, conservation,
and utilization of the water resources of Wyoming for the benefit of
Wyoming people. The WWA provides the only statewide uniform voice
representing all types of water users within the State of Wyoming and
encourages citizen participation in decisions relating to multi-purpose
water development, management and use.
Consistent with the requests made by the Governor of Wyoming, the
funding designation the Wyoming Water Association seeks is as follows:
$1,401,000 for construction activities for the Upper Colorado River
Endangered Fish Recovery Program; $572,000 for the San Juan River Basin
Recovery Implementation Program; and $556,000 for Fish and Wildlife
Management and Development.
These highly successful, cooperative programs are ongoing
partnerships among the States of Colorado, New Mexico, Utah and
Wyoming, Indian tribes, Federal agencies and water, power and
environmental interests. The programs' objectives are to recover
endangered fish species while water use and development proceeds in
compliance with the Endangered Species Act. These recovery programs
have become national models for collaboratively working to recover
endangered species while addressing water needs to support growing
western communities in the Upper Colorado River Basin region of the
Intermountain West. Since 1988, these programs have facilitated ESA
Section 7 consultation (without litigation) for over 800 Federal,
tribal, State and privately managed water projects depleting
approximately 2.5 million acre-feet of water per year.
The requested fiscal year 2006 appropriation will allow the Upper
Colorado River Endangered Fish Program to proceed with construction of
additional fish passage structures on the Green and Colorado Rivers to
provide access to historic habitat upstream of existing diversion dams.
The requested funding for the San Juan River Recovery Program will be
used for contracts for construction and cooperative agreements with the
State of New Mexico to provide and protect instream flows, fish
ladders, flooded bottom land restoration, propagation facilities,
stocking efforts, nonnative and sportfish management activities. These
programs' substantial non-Federal cost-sharing funding demonstrates the
strong commitment and effective partnerships embodied in both of these
successful programs. The requested Federal appropriations are
critically important to these efforts moving forward.
The past support and assistance of your subcommittee has greatly
facilitated the success of these multi-State, multi-agency programs. On
behalf of the members of the Wyoming Water Association, I thank you for
that support and request the subcommittee's assistance for fiscal year
2006 funding to ensure the Bureau of Reclamation's continuing financial
participation in these vitally important programs.
Sincerely yours,
John W. Shields,
Executive Secretary.
______

Letter From the Metropolitan Water District of Southern California
Los Angeles, California, March 18, 2005.
The Honorable Pete V. Domenici,
Chairman, Appropriations Subcommittee on Energy and Water Development,
SD-127 Dirksen Senate Office Building, Washington, DC 20510.
Dear Chairman Domenici: The Metropolitan Water District of Southern
California is writing in support of the following Federal programs, in
priority order, under the Bureau of Reclamation and Department of
Energy's budgets that we believe are deserving of your subcommittee's
support during the fiscal year 2006 budget process:
--(1) Colorado River Front Work and Levee System, Water Management
Reservoir Near the All American Canal Subactivity.--$30
million;
--(2) Yuma Area Projects, Excavating Sediments Behind Laguna Dam.--
$7.6 million;
--(3) California Bay-Delta Restoration.--$35 million;
--(4) Lower Colorado River, Water and Energy Management.--$300,000;
--(5) Colorado River Basin Salinity Control--Title II Basin Wide
Program.--$17.5 million; and,
--(6) Atlas Mill Tailings Removal in Moab, Utah.--$28 million.
The Metropolitan Water District of Southern California is a public
agency that was created in 1928 to meet the supplemental water demands
of people living in what is now portions of a six-county region of
southern California. Today, the region served by Metropolitan includes
approximately 18 million people living on the coastal plain between
Ventura and the international boundary with Mexico. It is an area
larger than the State of Connecticut and, if it were a separate nation,
would rank in the top ten economies of the world.
Included in our region are more than 300 cities and unincorporated
areas in the counties of Los Angeles, Orange, San Diego, Riverside, San
Bernardino, and Ventura. We provide over half of the water used in our
5,200-square-mile service area. Metropolitan's water supplies come from
the Colorado River via our Colorado River Aqueduct and from northern
California via the State Water Project's California Aqueduct.
We are sensitive to the magnitude of these program requests during
tight budget times. We are also committed to supporting these Federal
programs as they are critical to meeting the challenges of water
resources management and source water quality protection throughout
California. These programs help to ensure long-term water security and
meet the water quality requirements necessary to provide our member
agencies with a safe, reliable water supply. We strongly urge your
support for these funding requests.
colorado river front work and levee system
Water Management Reservoir Near the All-American Canal Subactivity
Reclamation is completing a multi-phased study quantifying the need
and options for regulatory storage to improve Colorado River management
downstream of Lake Mead. Reclamation has concluded that locating up to
a 10,000 acre-foot capacity water management reservoir near the All-
American Canal, near Drop 2, 15 miles east of the Imperial Valley. The
reservoir's location would be of great benefit to the Colorado River
Basin States. Benefits that include:
--conservation of reservoir system storage;
--improving river regulation and water delivery scheduling;
--providing opportunities for water conservation;
--storage and conjunctive use programs; and,
--setting the stage for new cooperative water supply and water
quality management endeavors with Mexico.
Reclamation funding of $30 million is needed in fiscal year 2006 in
order to obtain permits, acquire land, clear and prepare the site,
design the reservoir and its inlet and outlet canals, and procure
materials for construction.
This is one of four distinct subactivities to be undertaken in 2006
under the Water and Energy Management and Development Activity of the
Colorado River Front Work and Levee System Project.
The President's fiscal year 2006 request for this Activity is
$2.419 million. Metropolitan requests that Reclamation's funding for
the Water Management Reservoir near the All American Canal subactivity
be augmented so as to provide $30 million for this work to progress
sufficiently.
Yuma Area Projects, Excavating Sediments Behind Laguna Dam
While work on a reservoir near the All-American Canal proceeds,
there is an immediate need to restore limited Colorado River regulatory
storage capacity downstream of Parker Dam. This can be partly
accomplished by excavating sediments that have accumulated behind
Laguna Dam since its completion in 1909. Reclamation funding of $7.6
million is needed in fiscal year 2006 to complete environmental
compliance and procurement and begin dredging behind Laguna Dam.
This subactivity under the Yuma Area Projects, Facilities
Maintenance and Rehabilitation activity would restore 1,100 acre-feet
of storage behind Laguna Dam. Not only would this enhance the ability
to regulate flows arriving at Imperial Dam, it would capture and re-
regulate the water periodically released for the proper operation of
Imperial Dam, benefiting both the Colorado River Basin States and
Mexico.
The President's fiscal year 2006 request for the sediment control
subactivity is $2.6 million. Metropolitan requests that Reclamation's
funding for sediment control be augmented so as to provide $7.6 million
for the work to excavate sediments from behind Laguna Dam.
The construction of a new regulating reservoir, and dredging
sediments behind an existing dam will critically improve water delivery
efficiencies and prevent the loss of up to 200,000 acre-feet per year
from Colorado River reservoir storage.
california bay-delta authorization
Metropolitan strongly recommends your support of a Reclamation
fiscal year 2006 budget that includes $74,000,000 in funding for the
CALFED Bay-Delta Program. This includes $35,000,000 in new funding
authorized in Public Law 108-361. Metropolitan also supports the
Association of California Water Agencies additional request of
$28,000,000 for near-term, high priority projects. This Federal funding
is needed to supplement the State's cost share of implementing CALFED-
related programs, including supply reliability, water quality,
ecosystem restoration, water transfers, watershed protection, water use
efficiency, science, and coordination.
lower colorado river, water and energy management
Metropolitan requests that Reclamation receive $300,000 to conduct
a study to identify the concurrent and overlapping government programs
that are aimed at improving resource efficiency, and to create a
strategic map for integrating the individual efforts to realize better
integration and identify cross-program beneficiaries. Through an
assembled taskforce, the study will get agencies to look beyond their
borders and share their strategy and vision, which will reap
significant working benefits in the pursuit of resource efficiency.
colorado river basin salinity control program--title ii
We ask for your support for additional Federal funding for
Reclamation's Colorado River Basin Salinity Control Program (Salinity
Control Program)--Title II. We request that Congress appropriate $17.5
million for implementation of the Title II-Basin Wide Program, an
increase of $7.5 million from the President's request of $10 million,
to ensure water quality protection for this important source of water
supply to Arizona, California, and Nevada through construction of off-
farm measures to control Colorado River salinity. Concentrations of
salts in the river cause hundreds of millions in damage in the United
States.
atlas mine tailings cleanup
In cooperation with the Utah State Environmental Quality
Department, the Metropolitan Water District supports the President's
budget request of $28 million in fiscal year 2006 for the purposes of
moving forward with the clean-up of uranium mine tailings at the Atlas
Site in Moab, Utah. Metropolitan stands firmly behind the Governor of
Utah's position that these mine tailings must be removed from their
dangerously close proximity to the Colorado River, and that by
supporting that position, Metropolitan advocates removal as the only
acceptable solution to this issue.
We look forward to working with your office to further advance
sound water management activities in California. Please contact
Metropolitan's Executive Legislative Representative in Washington, DC,
if we can answer any questions or provide additional information.
Sincerely,
Gilbert F. Ivey,
Interim Chief Executive Officer.
______

Prepared Statement of the New Mexico Interstate Stream Commission
colorado river basin salinity control program, bureau of reclamation
summary
This statement is submitted in support of fiscal year 2006
appropriations for the Colorado River Basin salinity control program of
the Department of the Interior's Bureau of Reclamation. Congress
designated the Bureau of Reclamation to be the lead agency for salinity
control in the Colorado River Basin by the Colorado River Basin
Salinity Control Act of 1974, and reconfirmed the Bureau of
Reclamation's role by passage of Public Law 104-20. A total of $17.5
million is requested for fiscal year 2006 to implement the authorized
Colorado River salinity control program of the Bureau of Reclamation.
The President's appropriation request of $10 million is inadequate
because studies have shown that the implementation of the salinity
control program has fallen behind the pace needed to control damages
from salinity. An appropriation of $17.5 million for Reclamation's
salinity control program is necessary to protect water quality
standards for salinity and to prevent unnecessary levels of economic
damage from increased salinity levels in water delivered to the Lower
Basin States of the Colorado River. In addition, funding for operation
and maintenance of existing projects and sufficient general
investigation funding is required to identify new salinity control
opportunities.
statement
The water quality standards for salinity of the Colorado River must
be protected while the Basin States continue to develop their compact
apportioned waters of the river. The salinity standards for the
Colorado River have been adopted by the seven Basin States and approved
by EPA. While currently the standards have not been exceeded, salinity
control projects must be brought on-line in a timely and cost-effective
manner to prevent future effects that could cause the numeric criteria
to be exceeded, and would result in unnecessary damages from higher
levels of salinity in the water delivered to Lower Basin States of the
Colorado River.
The Colorado River Basin Salinity Control Act was authorized by
Congress and signed into law in 1974. The seven Colorado River Basin
States, in response to the Clean Water Act of 1972, had formed the
Colorado River Basin Salinity Control Forum, a body comprised of
gubernatorial representatives from the seven States. The Forum was
created to provide for interstate cooperation in response to the Clean
Water Act and to provide the States with information necessary to
comply with Sections 303(a) and (b) of the Act. The Forum has become
the primary means for the Basin States to coordinate with Federal
agencies and Congress to support the implementation of the salinity
control program for the Colorado River Basin.
Bureau of Reclamation studies show that damages from the Colorado
River to United States water users are about $300,000,000 per year.
Damages are estimated at $75,000,000 per year for every additional
increase of 30 milligrams per liter in salinity of the Colorado River.
Control of salinity is necessary for the States of the Colorado River
Basin, including New Mexico, to continue to develop their compact-
apportioned waters of the Colorado River.
Timely appropriations for the funding of the salinity control
program are essential to comply with the water quality standards for
salinity, prevent unnecessary economic damages in the United States,
and protect the quality of the water that the United States is
obligated to deliver to Mexico. An appropriation of only the amount
specified in the President's budget request is inadequate to protect
the quality of water in the Colorado River and prevent unnecessary
salinity damages in the States of the Lower Colorado River Basin. The
Basin States and Federal agencies agree that increases in the salinity
of the Colorado River will result in significant increases in damages
to water users in the Lower Colorado River Basin. Although the United
States has always met the water quality standard for salinity of water
delivered to Mexico under Minute No. 242 of the International Boundary
and Water Commission, the United States through the U.S. Section of
IBWC is currently addressing a request by Mexico for better quality
water.
Congress amended the Colorado River Basin Salinity Control Act in
July 1995 (Public Law 104-20). The salinity control program authorized
by Congress by the amendment has proven to be very cost-effective, and
the Basin States are standing ready with up-front cost sharing.
Proposals from public and private sector entities in response to the
Bureau of Reclamation's advertisement have far exceeded available
funding. Basin States cost sharing funds are available for the $17.5
million appropriation request for fiscal year 2006. The Basin States
cost sharing adds 43 cents for each Federal dollar appropriated.
Public Law 106-459 gave the Bureau of Reclamation additional
spending authority for the salinity control program. With the
additional authority in place and significant cost sharing available
from the Basin States, it is essential that the salinity control
program be funded at the level requested by the Forum and Basin States
to protect the water quality of the Colorado River.
Maintenance and operation of the Bureau of Reclamation's salinity
control projects and investigations to identify new cost-effective
salinity control projects are necessary for the success of the salinity
control program. Investigation of new opportunities for salinity
control are critical as the Basin States continue to develop and use
their compact-apportioned waters of the Colorado River. The water
quality standards for salinity and the United States water quality
requirements pursuant to treaty obligations with Mexico are dependent
on timely implementation of salinity control projects, adequate funding
to maintain and operate existing projects, and sufficient general
investigation funding to determine new cost-effective opportunities for
salinity control.
I urge the Congress to appropriate $17.5 million to the Bureau of
Reclamation for the Colorado River Basin salinity control program,
adequate funding for operation and maintenance of existing projects and
adequate funding for general investigations to identify new salinity
control opportunities. Also, I fully support testimony by the Forum's
Executive Director, Jack Barnett, in request of this appropriation, and
the recommendation of an appropriation of the same amount by the
federally chartered Colorado River Basin Salinity Control Advisory
Council.
______

Prepared Statement of the Colorado River Energy Distributors
Association (CREDA)
u.s. bureau of reclamation and western area power administration
programs
The Colorado River Energy Distributors Association (CREDA)
appreciates this opportunity to submit its views on recommendations in
the President's fiscal year 2006 budget proposal that affect Bureau of
Reclamation (Bureau) and Western Area Power Administration (Western)
programs in the Energy and Water Development Act of 2006. Our testimony
will address three issues:
--Our opposition to the proposal to change cost-based rates for power
generated by Federal power marketing administrations (PMAs) to
market rates;
--Our request for the inclusion of clarifying language to fund
additional, post-9/11 security measures at multi-purpose
Federal dams from non-reimbursable appropriations; and
--Our opposition to the proposal to fund the Utah Mitigation and
Conservation fund from reimbursable power revenues.
CREDA is a non-profit, regional organization representing 155
consumer-owned, non-profit municipal and rural electric cooperatives,
political subdivisions, irrigation and electrical districts and tribal
utility authorities that purchase hydropower resources from the
Colorado River Storage Project (CRSP). CRSP is a multi-purpose Federal
project that provides flood control, water storage for irrigation,
municipal and industrial purposes; recreation and environmental
mitigation, in addition to the generation of electricity. CREDA was
established in 1978 and serves as the ``voice'' of CRSP contractor
members in dealing with resource availability and affordability issues.
CREDA represents its members in dealing with the Bureau--as the owner
and operator of the CRSP--and with Western--as the marketing agency for
CRSP hydropower.
CREDA members serve over 4 million electric consumers in six
western States: Arizona, Colorado, Nevada, New Mexico, Utah, and
Wyoming. CREDA's member utilities purchase more than 85 percent of the
power produced by the CRSP.
market-based rates for federal power
The administration's fiscal year 2006 budget includes a
recommendation that rates for hydropower marketed by the four PMAs
(Western Area, Bonneville, Southwestern and Southeastern), which are
currently cost-based, be increased by 20 percent per year until they
reach ``market'' rates.
If implemented, this proposal would increase rates considerably for
customers served by CREDA members and consumers in 27 other States and
have a significant negative impact on the economies of many regions of
the country. CREDA members serve their consumers through a variety of
resource portfolios. Some rely on a combination of the Federal
resource, self-generation, and wholesale market purchases. Many of
these utilities have already experienced significant cost impacts due
to wholesale market conditions and long-term drought, which has reduced
the availability of Federal hydropower and required customers and the
PMAs to replace Federal hydropower purchases with higher cost market
resources. In fact, since 1999, Western's CRSP purchased power costs,
required as a result of drought, extreme market conditions and
environmental experimentation, total $484,466,000.
The budget documents accompanying the market-based rate proposal
indicate that it is based on assertions made in an earlier Government
Accountability Office (GAO) report, which claimed that the PMAs are
subsidized by taxpayers. This claim is not true.
Federal power customers repay 100 percent of the capital costs
associated with the power function of Federal dams, with interest. They
also pay all costs of operation and maintenance of PMA generation and
transmission facilities. In addition, power customers pay the lion's
share of the costs of irrigation facilities--those costs that are
beyond the irrigators' ``ability to pay.''
Further, in the case of CRSP, power revenues have contributed over
$179 million to operations of the Glen Canyon Adaptive Management
Program; approximately $18 million to the Colorado River Salinity
Control Program and over $40 million for the Upper Colorado River Basin
and San Juan Basin Endangered Fish Recovery Programs. CRSP power
customer contributions to these non-power programs total about $20
million per year.
Power marketed by the PMAs is generally low-cost because its fuel
source is falling water. Unlike other conventional power plant
resources--nuclear, coal and gas--hydropower does not have any fuel
costs. This fact and the fact that most of the Federal projects were
built decades ago account for the favorable economics of PMA power.
Private power companies that have hydroelectric resources enjoy the
same favorable economics for those facilities.
It is also important to recognize that PMA generators are not
merchant generators that operate for profit to take advantage of market
conditions. At all Federal multi-purpose projects, power generation is
an incident to the other purposes of the project, such as flood
control, water supply and, at some projects, navigation and treaty
obligations. There is a great deal of law that would have to be
overridden to implement this proposal. This is not a proposal which can
be implemented without substantive legislation.
We urge the subcommittee to ensure that this proposal does not
become law.
costs of increased security at federal multi-purpose projects
Following the attacks of September 11, 2001, the Bureau embarked
upon an aggressive program to enhance the security of Federal dams to
protect the facilities against terrorist attacks. Based on historical
precedent dating to World War II, the Bureau determined in 2002 that
that the costs of increased security measures should remain a non-
reimbursable obligation of the Federal Government.
For fiscal year 2003, the Bureau received $28.4 million in the
Energy and Water Development Appropriations Act (Public Law 108-7) and
an additional $25 million in supplemental appropriations. The Bureau
also received $28.5 million for increased security costs in the Energy
and Water Development Appropriations Act of 2004 (Public Law 108-137).
Due to budget constraints, the President's fiscal year 2005 budget
directed the Bureau to recover $12 million from entities that benefit
from the multi-purpose projects. Of that amount, power customers were
asked to pay an estimated 94 percent. Federal power customers objected,
citing legislative precedent and the fact that the additional security
measures are intended to protect all features of the Federal multi-
purpose projects, not just the power features, from attack and
destruction (Power users agree that costs of pre-9/11 security measures
attributable to the power function should be paid by power customers).
In fact, in the event of a catastrophic failure of these projects, the
power function could most likely be the purpose least impacted.
Further, power users note that the Bureau's decision to allocate a
majority of the reimbursable costs to power users was not based on any
objective or risk analysis of the benefits of the security upgrades.
Congress has spoken annually regarding treatment of these costs. In
report language accompanying the Energy and Water Development
Appropriations Act of 2005 (Public Law 108-447), Congress recognized
the dramatic increase in security needs and corresponding costs at
Bureau facilities following the September 11, 2001 attacks on our
country. Congress also recognized that the Bureau security posture
``will not likely approach pre-September 11, 2001 levels for many
years, if ever.'' The conference committee then underscored its concern
for the reimbursability of security costs by including the following
directive to the Bureau:

``Reclamation shall provide a report to the conference no later
than May 1, 2005, with a breakout of planned reimbursable and non-
reimbursable security costs by project, by region. The conference
directs the Commissioner [of Reclamation] not to begin the
reimbursement process until the Congress provides direct instruction to
do so.''

CREDA believes that the historic rationale established in the 1942
and 1943 Interior Department Appropriation Acts for treating costs of
increased security at multi-purpose Federal projects as non-
reimbursable obligations of the Federal Government is still valid. A
legal analysis outlining this rationale is contained in a February 5,
2002 letter to then-Assistant Secretary of Interior Bennett W. Raley.
We urge Congress to add language to the Energy and Water
Development Appropriations Act of 2006 to clarify that costs of
increased security at dams owned and operated by the Bureau of
Reclamation should continue to be non-reimbursable.
central utah project reclamation mitigation and conservation account
Titles II through VI of the Reclamation Projects Authorization and
Adjustment Act of 1992 (Public Law 102-575), known as the Central Utah
Project Completion Act (CUPCA), establish and define the Utah
Reclamation Mitigation and Conservation Commission (Commission). The
Commission's mission is to develop policies and objectives for the
implementation of fish, wildlife and recreation mitigation and
conservation projects and features associated with the Central Utah
Project (CUP), which is a ``participating project'' of the CRSP.
Sec. 402(b) of the Reclamation Projects Act creates a Utah
Reclamation Mitigation and Conservation Account (Account) in the
Treasury of the United States and provides that contributions to the
Account will include $5 million (cost-indexed) annually by the
Secretary of Energy out of funds appropriated to Western, which will be
considered ``nonreimbursable and nonreturnable.''
During debate on the Reclamation Projects Act, CUPCA Congressional
supporters attempted to add an amendment that would require CRSP power
users to make a $5 million annual contribution to the Account. CRSP
power users refused, arguing that, because there are no power features
associated with the CUP, it would not be equitable to ask power
customers to contribute to mitigation and conservation efforts. Faced
with the potential opposition of the CRSP power customers to the CUPCA,
the title's sponsors reconsidered and ultimately directed that the $5
million/year be contributed by the Department of Energy (DOE) out of
non-reimbursable funds appropriated for Western.
The President's fiscal year 2006 budget recommends that this
section of CUPCA be overturned, by the enactment of the following
language:

``Provided, that notwithstanding section 402(b)(3)(B) of the
Reclamation Projects Authorization and Adjustment Act of 1992, the
fiscal year 2006 contribution of $6,650,000 from the Secretary of
Energy, Western Area Power Administration, to the Utah Reclamation
Mitigation and Conservation Account shall be made from receipts
deposited to the Western Area Power Administration Colorado River Basin
Power Marketing Fund on a reimbursable basis from Colorado River
Storage Project customers.''

Effectively, this means that the administration proposes to shift
the costs of the Utah Mitigation and Conservation Fund from the Federal
Government to power customers in Arizona, New Mexico, Wyoming,
Colorado, Nevada and Utah. This would set an unfortunate and
inappropriate precedent that would allow the Federal Government to
shift other non-power-related Federal costs to power users or other
sets of taxpayers.
In the 107th Congress, Congress amended the CUPCA, through passage
of H.R. 4129 (Public Law 107-366), in part to redirect unexpended
budget authority to provide for prepayment of repayment contracts and
to clarify the treatment of investigation costs. CREDA testified in
support of H.R. 4129 and believes that if Congress had intended a
change to be made to treatment of the Utah Mitigation and Conservation
Fund provision of CUPCA, it would have addressed that provision in
Public Law 107-366.
We urge the subcommittee to oppose this proposal and to insist that
the contribution continue to come from DOE through non-reimbursable,
non-returnable funds appropriated for Western.
______

Prepared Statement of Mni Wiconi Project
fiscal year 2006 construction budget request
The Mni Wiconi Project beneficiaries (as listed below) respectfully
request appropriations and can demonstrate capability for construction
in fiscal year 2006 in the amount of $47,400,000 as follows:

------------------------------------------------------------------------
Amount
------------------------------------------------------------------------
Oglala Sioux Rural Water Supply System:
Core................................................ $10,029,000
Pine Ridge (Distribution)........................... 16,230,000
West River/Lyman Jones Rural Water System............... 11,082,000
Rosebud Rural Water System.............................. 10,059,000
Lower Brule Rural Water System.......................... ( \1\ )
---------------
Total Amount Requested Fiscal Year 2006........... $47,400,000
------------------------------------------------------------------------
\1\ Funding Complete.

Mni Wiconi means, ``water is life'', in the Lakota language, and
Mni Wiconi is a new way of life. The project has provided Indian and
non-Indian people of arid Western South Dakota with a source of clean
drinkable water not available before. With the help of the subcommittee
we have accomplished much; we are dedicated to completing the project
on schedule, a goal that is possible by allocation of funds from
completed projects to Mni Wiconi. Within 3 years it is possible to
conclude our project and then to re-allocate funds to newer projects.
The project sponsors were provided by the 107th Congress (Public
Law 107-367) with all the authority necessary to finish this project at
the level of development originally intended on a schedule through
fiscal year 2008. Completion of the project is now achievable as shown
below:

------------------------------------------------------------------------

------------------------------------------------------------------------
Total Federal Funds Required (October 2004 Dollars)..... $427,849,000
Estimated Federal Funds Spent Through Fiscal Year 2005.. $285,648,000
Percent Spent........................................... 66.76
Amount Remaining........................................ $142,201,000
Years to Complete....................................... 3
Average Amount Required for Fiscal Year 2008 Finish $47,400,000
(Public Law 107-367)...................................
------------------------------------------------------------------------

The administration's budget for this project in fiscal year 2006
($22.447 million for construction) is a welcome improvement from last
year that reflects the need to complete the project. The amount
requested by the administration continues to fall short of the average
amount needed to complete the project in fiscal year 2008. The project
is now over 67 percent complete and can be completed in the next 3
years. The project sponsors strongly urge that the funds previously
allocated to the Mid-Dakota Project be used to supplement and complete
the Mni Wiconi Project. The needs and merits of this project are
considerable as described in Section 2.
The project's operation, maintenance and replacement request from
the sponsors is in addition to the construction request and is
presented in Section 8.
unique needs of this project
This project covers much of the area of western South Dakota that
is the Great Sioux Reservation established by the Treaty of 1868. Since
the separation of the Reservation in 1889 into smaller more isolated
reservations, including Pine Ridge, Rosebud and Lower Brule, tensions
between the Indian population and the non-Indian settlers on Great
Sioux lands have been high with little easing by successive
generations. The Mni Wiconi Project is perhaps the most significant
opportunity in more than a century to bring the sharply diverse
cultures of the two societies together for a common good. Much progress
has been made due to the good faith and genuine efforts of both the
Indian and non-Indian sponsors. The project is an historic basis for
renewed hope and dignity among the Indian people. It is a basis for
substantive improvement in relationships.
Each year our testimony addresses the fact that the project
beneficiaries, particularly the three Indian Reservations, have the
lowest income levels in the Nation. The health risks to our people from
drinking unsafe water are compounded by reductions in health programs.
We respectfully submit that our project is unique and that no other
project in the Nation has greater human needs. Poverty in our service
areas is consistently deeper than elsewhere in the Nation. Health
effects of water borne diseases are consistently more prevalent than
elsewhere in the Nation, due in part to: (1) lack of adequate water in
the home, and (2) poor water quality where water is available. Higher
incidences of impetigo, gastroenteritis, shigellosis, scabies and
hepatitis-A are well documented on the Indian reservations of the Mni
Wiconi Project area.
At the beginning of the third millennium one cannot find a region
in our Nation in which social and economic conditions are as
deplorable. These circumstances are summarized in Table 1. The Mni
Wiconi Project builds the dignity of many, not only through improvement
of drinking water, but also through direct employment and increased
earnings during planning, construction, operation and maintenance and
from economic enterprises supplied with Project water. We urge the
subcommittee to address the need for creating jobs and improving the
quality of life on the Pine Ridge and other Indian reservations of the
project area.

TABLE 1.--PROFILE OF SELECTED ECONOMIC CHARACTERISTICS: 2000
----------------------------------------------------------------------------------------------------------------
Income (Dollars) Families
2000 Change ------------------------ Below Unemployment
Indian Reservation/State Population from 1990 Median Poverty (Percent)
(Percent) Per Capita Household (Percent)
----------------------------------------------------------------------------------------------------------------
Pine Ridge Indian Reservation.... 15,521 27.07 6,143 20,569 46.3 16.9
Rosebud Indian Reservation....... 10,469 7.97 7,279 19,046 45.9 20.1
Lower Brule Indian Reservation... 1,353 20.48 7,020 21,146 45.3 28.1
State of South Dakota............ 754,844 8.45 17,562 35,282 9.3 3.0
Nation........................... 281,421,906 13.15 21,587 41,994 9.2 3.7
----------------------------------------------------------------------------------------------------------------

Employment and earnings among the Indian people of the project area
are expected to positively impact the high costs of health-care borne
by the United States and the Tribes. Our data suggest clear
relationships between income levels and Federal costs for heart
disease, cancer and diabetes. During the life of the Mni Wiconi
Project, mortality rates among the Indian people in the project area
for the three diseases mentioned will cost the United States and the
Tribes more than $1 billion beyond the level incurred for these
diseases among comparable populations in the non-Indian community
within the project area. While this project alone will not raise income
levels to a point where the excessive rates of heart disease, cancer
and diabetes are significantly diminished, the employment and earnings
stemming from the project will, nevertheless, reduce mortality rates
and costs of these diseases. Please note that between 1990 and 2000 per
capita income on Pine Ridge increased from $3,591 to $6,143, and median
household income increased from $11,260 to $20,569, due in large part
to this project, albeit not sufficient to bring a larger percentage of
families out of poverty (Table 1).
Financial support for the Indian membership has already been
subjected to drastic cuts in funding programs through the Bureau of
Indian Affairs. This project is a source of strong hope that helps off-
set the loss of employment and income in other programs and provide for
an improvement in health and welfare. Tribal leaders have seen that
Welfare Reform legislation and other budget cuts nationwide have
created a crisis for tribal government because tribal members have
moved back to the reservations in order to survive. Economic conditions
have resulted in accelerated population growth on the reservations.
The Mni Wiconi Project Act declares that the United States will
work with us under the circumstances because

`` . . . the United States has a trust responsibility to ensure
that adequate and safe water supplies are available to meet the
economic, environmental, water supply and public health needs of the
Pine Ridge, Rosebud and Lower Brule Indian Reservations . . .''.

Indian support for this project has not come easily because the
historical experience of broken commitments to the Indian people by the
Federal Government is difficult to overcome. The argument was that
there is no reason to trust and that the Sioux Tribes are being used to
build the non-Indian segments of the project and the Indian segments
would linger to completion. These arguments have been overcome by
better planning, an amended authorization and hard fought agreements
among the parties. The subcommittee is respectfully requested to take
the steps necessary the complete the critical elements of the project
proposed for fiscal year 2006.
osrwss core pipeline to reach pine ridge indian reservation in fiscal
year 2006
The Pine Ridge Indian Reservation and parts of West River/Lyman
Jones remain without points of interconnection to the OSRWSS core. The
requested funding level for the OSRWSS Kadoka to White River pipeline
will complete the project to the northeast corner of the Pine Ridge
Indian Reservation where, in combination with the western part of West
River/Lyman Jones, the remaining 50 percent of the design population
resides. Funds will also be used by the Oglala Sioux Tribe to build the
North Core westerly toward Hayes in the West River Lyman Jones service
area with the intent to complete the OSRWSS North Core and all other
core facilities in fiscal year 2007. Funding will also be required in
fiscal year 2007 to complete the OSRWSS North Core system to serve the
Reservation.
The 2000 census confirms that the Oglala Sioux population on Pine
Ridge is growing at a rate of 27 percent per decade or 1\1/2\ times
greater than projected from the 1990 census. Delivery of Missouri River
water to this area is urgently needed. Nearly half of the design
population of the project is located on the Pine Ridge Indian
Reservation.
All proposed OSRWSS construction activity will build pipelines that
will provide Missouri River water immediately to beneficiaries. In many
cases, construction of interconnecting pipelines by other sponsors is
ongoing, and fiscal year 2006 funds are required to complete projects
that will connect with the OSRWSS core and begin others.
Funding for OSRWSS core and distribution facilities is necessary to
bring economic development to the Pine Ridge Indian Reservation,
designated as one of five national rural empowerment zones in the late
1990's. The designation serves to underscore the level of need.
Economic development is largely dependent on the timely completion of a
water system, which depends on appropriations for this project.
Finally, the subcommittee is respectfully requested to take notice
of the fact that fiscal year 2006 will significantly advance
construction of facilities that continues our progress toward the end
of the project. The subcommittee's past support has brought the Project
to the point that the end can be seen. Key to the conclusion of the
project in fiscal year 2008 is the completion of the OSRWSS core to the
Pine Ridge Indian Reservation. Toward this end, funds are included in
the fiscal year 2006 budget to build the connecting pipelines between
the northeast corner of the Pine Ridge Indian Reservation and the
central portion of the Reservation near Kyle. Rosebud is engaged in the
construction of major connecting pipelines that will deliver water
southerly to the central portions of the Rosebud Indian Reservation and
to service areas for West River/Lyman Jones.
The following sections describe the construction activity in each
of the rural water systems.
oglala sioux rural water supply system--distribution
With the conclusion of projects under construction in 2002, the
Oglala Sioux Tribe completed all facilities that can be supported from
local groundwater. The Tribe, representing nearly 50 percent of the
project population, will rely on the OSRWSS core to convey Missouri
River water to and throughout the Reservation as a additional water
source. Much pipeline has been constructed, primarily between Kyle,
Wounded Knee and Red Shirt and between Pine Ridge Village and the
communities of Oglala and Slim Buttes.
Of particular importance to the Oglala Sioux Tribe is the
continuation of the main transmission system from the northeast corner
(Highway 73/44 junction) of the Reservation to Kyle in the central part
of the Reservation. The transmission line is needed to interconnect the
OSRWSS core system with the distribution system within the Reservation
in order to deliver Missouri River water to the populous portions of
the Reservation. This critical segment of the project can be continued
in fiscal year 2006 to coincide with the westward construction of the
OSRWSS core to the northeast corner of the Reservation (see section 2).
It will require funds in fiscal year 2006 and fiscal year 2007 to
complete. This component of the Oglala system has been deferred for
several years due to inadequate funding. The component is urgently
needed for the OSRWSS core system to be utilized on the Pine Ridge
Indian Reservation.
west river/lyman jones rural water system--distribution
The requested appropriation is directed to serving members between
Ft. Pierre and Philip. The highest priorities are for the Moenville
Phase II service area and the water supply for the Moenville projects.
These service areas are closest to the Mni Wiconi water treatment plant
and are among the last to be served.
The Kadoka Pump Station will take water from the OST core pipeline
constructed with fiscal year 2005 funding and deliver water to the City
of Kadoka and the West River/Lyman Jones Kadoka service area. The West
River/Lyman Jones members are now being supplied from a groundwater
source at Kadoka that exceeds the SDWA standard for radium. EPA has
allowed the source to remain in service pending availability of Mni
Wiconi project water.
The distribution pipeline system in the Community of Vivian has
long exceeded its service life. Residents in the community have become
members of West River/Lyman Jones. The new distribution system will
eliminate excessive water loss from the antiquated system and minimize
operation and maintenance (O&M) costs.
Continuing drought conditions in the WR/LJ project area has
resulted in the addition of new services within the areas now being
served. The Indefinite Quantities project meets that need. A
significant portion of the non-Federal funds are payment from these
add-on users.
The Federal funds appropriated to date have made possible the
construction of water service to WR/LJ members and contributed greatly
to stability of livestock enterprises in the region. Providing a water
supply that meets SDWA standards to the cities along Interstate Highway
90 has removed health hazards to the traveling public and benefited
tourism in the region. Further Federal appropriations authorized for
the Mni Wiconi Project will extend similar benefits to the total
project area. We sincerely appreciate your support.
rosebud rural water system (sicangu mni wiconi)
In the past year the Rosebud Sioux Rural Water System, or Sicangu
Mni Wiconi, improved the quality of life for many people in south
central South Dakota. The interconnection with the OSRWSS was put into
service in August and surface water was pumped to both Rosebud and WR/
LJ users in Mellette County. The introduction of surface water reduced
the pressure on the limited existing groundwater supply and ``freed
up'' sufficient groundwater to supply the combined WR/LJ and Rosebud
Mellette east service area. This unique project benefited both
sponsors, the Federal Government and exemplifies the new relationships
and spirit of cooperation resulting from this project. Most of all it
benefited the people of Mellette County who have been waiting far too
long for good water.
Many others' lives have been improved by the project as well. Our
transmission mains and distribution lines have brought water to
hundreds of existing and new homes. We have brought water to a college
campus, an alcohol treatment center, new housing areas and economic
development projects as well. We have accomplished a lot, but a lot
remains to be accomplished.
As the end of the construction phase of the project comes into
sight, we hope that completion of the Sicangu Mni Wiconi is not
forgotten or overshadowed by other efforts. It provides people with a
source of clean drinkable water that many have not had before. It
creates infrastructure for the development of the reservation economy.
Mni Wiconi is a promise for a better life on the Rosebud Reservation.
In the coming year we plan to keep that promise by bringing water
to more people through both the construction of new pipelines and
rehabilitation of existing facilities. Most of the effort planned for
2006 will utilize the recently completed transmission and distribution
lines to make service connections in the Mission area and extend
service progressively eastward to the Hidden Timber and rural Okreek
areas. The second portion of the Mission Area improvements, which were
initiated in 2005 will be completed in 2006. The completion of the
Antelope to Okreek transmission main in 2003 alleviated a critical
water shortage in the community and will now be used as a source for
new distribution lines in an area where available water frequently has
high nitrate concentrations.
We have just completed the first phase of upgrades to the water
supply to the community of Rosebud, the center of our tribal
government. In 2006, we plan to replace many of the corroded cast iron
pipelines with modern materials. The older corroded pipe is more prone
to breakage, resulting in loss of service, increased operation and
maintenance costs and health risks.
In 2006, work will also begin on the Mellette West project. This
project is possible because of the recent completion of the Rosebud
Core Pipeline and relies entirely on surface water as a source of
supply. The service area is one of the driest on the Reservation and
the reliable supply of high quality water will now allow people to live
on their land for the first time.
Distribution lines and service connections for rural homes and
livestock will continue to be a priority. A reliable supply of high
quality water allows people to settle on land that was intended for
settlement over 100 years ago. The livestock watering is also critical
after so many years of drought. Emergency connections were initiated in
the past year and this program is necessary to help maintain the
economic viability of Reservation rangeland which provides income and
livelihood to both landowners and ranchers.
The costs of operation and maintenance are a concern. The Rosebud
Sioux Tribe and particularly the Water and Sewer Commission, take pride
in operating an efficient organization that provides high quality
water. As our water system has expanded, the O&M burden has also
increased, unfortunately, funding for O&M has not kept pace with the
needs of the expanding system.
We bring this to the attention of the subcommittee because we fear
that while so much has been accomplished through the construction side
of the project, if the operation and maintenance of the new facilities
is under funded, maintenance will be deferred and the facilities and
our people will suffer.
We also request that you reconsider the application of
underfinancing to our project. We understand that the use of
underfinancing recognizes that, during the course of the year, it is
inevitable that some projects and activities will fall behind schedule
for a wide variety of reasons. While this may have delayed the
expenditure of funds on large irrigation or dam projects, it is not as
applicable to the types and sizes of contracts used in our project. The
loss of funding through underfinancing extends the completion date of
the project even further, which in turn increases the administrative
costs.
The project sponsors have taken numerous measures to use
appropriations efficiently. We have already mentioned the Mellette east
service area where working together, WR/LJ and Rosebud reduced federal
expenditures by over $1 million. In the current fiscal year all the
sponsors have agreed to ``fast track'' the completion of Lower Brule at
a savings of roughly $1.8 million to the project.
We ask that you give our efforts, both in providing water to our
people and in using appropriations wisely, serious consideration this
coming year. We appreciate your past and future efforts.
lower brule rural water system--distribution
The Lower Brule Rural Water System (LBRWS) has gained the support
of the other sponsors to complete its share of the project with funds
appropriated in the fiscal year 2005 budget. This support is not only a
benefit for LBRWS and its users but to the project as a whole. By
funding LBRWS in this manner, a savings of approximately $1.8 million
will be experienced by the project.
With the funds received in fiscal year 2005, LBRWS will complete
the construction of its entire system and provide water to all of the
homes on the Lower Brule Indian Reservation. The fiscal year 2005 funds
will also allow LBRWS to provide water lines and water to pasture taps.
Since the area has been experiencing drought conditions, many of the
dams are dry. The provision of water will allow some pastures to be
utilized that would have otherwise been of no benefit to the ranchers.
In addition, the fiscal year 2005 funds will allow the completion
of a new 400,000 gallon elevated water tank in Lower Brule. The
existing tank is in a location where slides (soil movement) have
occurred. As a result, the stability of the tank's foundation is in
question.
As indicated earlier, the result is that the entire LBRWS has been
completely funded by the funds appropriated in fiscal year 2005 and the
good graces of the other sponsors. The result is a savings to the
project of approximately $1.8 million. This will not end LBRWS's
involvement in the project; however, as LBRWS will continue to work
with and support the other sponsors in seeing the entire project come
to fruition.
operation, maintenance and replacement budget
The sponsors have and will continue to work with Reclamation to
ensure that their budgets are adequate to properly operate, maintain
and replace (OMR) respective portions of the overall system. The
sponsors will also continue to manage OMR expenses in a manner ensuring
that the limited funds can best be balanced between construction and
OMR. In fiscal year 2003, the approved budget for OMR was $8.228
million, which was adequate. Funding was not adequate in fiscal year
2004 and fiscal year 2005 at the $6.254 million level and will not be
adequate at fiscal year 2006 at $7.053 million, albeit a good
improvement.
The project has been treating and delivering more water over the
last 2 years from the OSRWSS Water Treatment Plant near Fort Pierre.
Completion of significant core and distribution pipelines has resulted
in more deliveries to more communities and rural users. The need for
sufficient funds to properly operate and maintain the functioning
system throughout the project has grown. The OMR budget must continue
to be adequate to keep pace with the portion of the system that is
placed in operation.
The Mni Wiconi Project tribal beneficiaries (as listed below)
respectfully request appropriations for OMR fiscal year 2006 in the
amount of $8,276,000 as follows:

------------------------------------------------------------------------
Amount
------------------------------------------------------------------------
Oglala Sioux Rural Water Supply System:
Core Facilities (Pipelines and Pumping Stations).... $1,590,000
Distribution System on Pine Ridge................... 2,851,000
Rosebud Sioux Rural Water System........................ 1,600,000
Lower Brule Sioux Rural Water System.................... 1,104,000
Bureau of Reclamation's internal budget................. 1,131,000
---------------
Total Mni Wiconi Project O&M Request.............. 8,276,000
------------------------------------------------------------------------

Be assured that water conservation is an integral part of the OMR
of the project. Water conservation not only provides immediate savings
from reduced water use and the need for extra production, it also
extends the useful life and capacity of the system. Proposed funding at
the $7.0 million level is not adequate to perform water conservation or
other OMR functions.
______

Prepared Statement of the Lewis and Clark Rural Water System
background
The Lewis and Clark Rural Water System is requesting $35 million
through the Bureau of Reclamation's Water and Related Resources account
for continuing construction activities in 2006. These funds will be
used for construction, acquisition of easements and property,
engineering, and associated legal and professional costs. The project
has completed required planning and environmental reviews, and major
construction began in earnest last year. During the last year Lewis and
Clark has installed the first two segments of the raw water pipeline
(RWP), started construction on the third and final segment of the RWP,
awarded a $9.4 million contract for the first segment of the treated
water pipeline, and has made steady progress on acquiring the necessary
easements and property.
The President's budget requests $15.0 million for Lewis and Clark,
which reflects the commitment he continues to demonstrate to the
project. While this request is a welcome starting point, $35 million is
necessary to fully fund the project this year to ensure construction
activities will continue in 2006. Even though we are in the early
stages of construction, it is important to keep the project on schedule
in order to provide this much-needed water source to area communities
as soon as possible.
The Lewis and Clark Rural Water System Act became law in July 2000
(Public Law 106-246). When complete, the project will provide safe,
reliable drinking water to approximately 200,000 people in South
Dakota, Minnesota, and Iowa. Lewis and Clark represents a unique
regional approach by three States to address common problems with area
water resources in a more effective and cost-efficient way than each
State could do alone. Regional water problems include shallow wells and
aquifers prone to contamination and drought, compliance with new
Federal drinking water standards, and increasing water demand due to
population growth and economic expansion.
The Lewis and Clark project will utilize an aquifer adjacent to the
Missouri River near Vermillion, South Dakota, and will distribute water
to member communities in an area of approximately 5,000 square miles,
roughly the size of Connecticut. When complete, the drinking water will
pass through a well system, water treatment plant, and a non-looped
distribution system. The system also will include water storage tanks
that will provide approximately a 1-day supply. The project will
require an estimated additional 10 years to complete.
plans for construction in 2005 and 2006
Lewis and Clark developed a schedule for construction and related
services to be performed during the next 2 years. The following work is
anticipated in fiscal year 2005 and fiscal year 2006, subject to the
availability of funding.
Projects Planned for Fiscal Year 2005
--Site J Production Pump Test Well.--Lewis & Clark currently plans to
drill another test production well south and west of
Vermillion. The well will be a 105 deep vertical well and
will be sized to be an actual production well for the project.
--Raw Water Pipeline--Segments 2 and 3.--This project is currently
under construction and should be completed in summer 2005. This
project is located near Vermillion, South Dakota.
--Treated Water Pipeline--SD Segment 1.--The Treated Water Pipeline
Segment 1 will involve construction of a pipeline from west of
Sioux Falls to Tea, South Dakota. This project was recently
awarded and construction will begin in late spring 2005. The
project will include construction of the main 48" treated water
transmission pipeline for the Lewis & Clark System.
--Treated Water Pipeline--SD Segments 2 and 3.--The next phase of the
treated water pipeline construction in South Dakota would
include construction 11 miles of the main 48" pipeline from Tea
south to Lennox and Highway 18. The plans for this project are
currently under review. Lewis & Clark plans to bid and award
this project in the summer of 2005.
--Treated Water Pipeline--SD Segment 5.--Segment 5 will continue
construction of the main 48" diameter trunk line south from
Highway 18 to Highway 46. Segment 5 would include approximately
12 miles of pipe. This segment is currently under design. Lewis
& Clark plans to bid and award this project in late summer
2005.
--Water Treatment Plant Final Design.--The pre-design has been
completed and a Value Engineering review was held in early
2005. Lewis & Clark needs to begin final design of the water
treatment shortly in order to start construction of the water
treatment plant in the spring of 2008.
Projects Planned for Fiscal Year 2006
Fiscal year 2006 activities will include a continuation of the
projects listed above for 2005, plus the following additional system
components:
--Treated Water Pipeline--SD Segment 4.--Segment 4 includes
construction of the pipeline to serve water to Sioux Falls and
two other members. Segment 4 includes approximately 6 miles of
36" diameter pipe in the area immediately west of Sioux Falls.
Lewis & Clark would bid and award this project in 2006.
--Treated Water Pipeline--SD Segments 6 through 8.--These segments
complete the main 48" transmission pipeline from Highway 46
south to the water treatment plant site (approximately 22
miles). Design and land acquisition will be initiated on these
segments. If funds are available, Segment 6 would be advertised
for bids in 2006.
--Treated Water Pipeline--SD Segment 9.--The route for Segment 9 is
immediately south of Sioux Falls and is rapidly being
developed. It is imperative for Lewis & Clark to begin design
and start acquisition of easements for this critical project
component. Construction would probably not be commenced until
2007, or later.
--(Under Consideration) Treated Water Pipeline--IA Segment 1 (Iowa
Emergency Connection).--The first phase of the Iowa Emergency
Connection will involve a pipeline from the Sioux Center water
treatment plant to Hull, Iowa. The project will include
construction of the main treated water transmission pipeline
for the Lewis & Clark System and service connection lines for
Sioux Center and Hull. Lewis & Clark will be acquisition of
easements. Currently, no date for construction has been
established.
--(Under Consideration) Treated Water Pipeline--IA Segment 3 (Iowa
Emergency Connection).--The next phase of the Iowa Emergency
Connection may include building a short section of Lewis &
Clark pipeline to connect Sheldon, Iowa to a temporary source
of water. If pursued, Lewis & Clark could bid and award this
project in summer of 2006.
______

Prepared Statement of the Pajaro Valley Water Management Agency (PVWMA)
On behalf of the City of Watsonville and the Pajaro Valley Water
Management Agency (PVWMA), we are submitting this testimony in support
of Federal funding for the Watsonville Area Water Recycling Project.
The project has been targeted to receive $2.5 million as part of the
fiscal year 2003, fiscal year 2004, and 2005 Energy and Water
appropriations bills through the Bureau of Reclamation's Title XVI
program. This year, we respectfully request your support for the
inclusion of $3.0 million in the Bureau of Reclamation's Title XVI
program in the fiscal year 2006 Energy and Water Development
Appropriations bill.
The City of Watsonville and the PVWMA continue to make great
progress on the project. We are working diligently with the Bureau of
Reclamation to develop solutions to the seawater intrusion problem
affecting the water supply of our agricultural and urban water users.
We need not convince you of the vital nature of this project that will
protect the Pajaro Valley's fresh water supply from continued
degradation.
To address the water resource needs of our area, PVWMA is
implementing the Revised Basin Management Plan Project (project).
Capital costs of the project are estimated at $165 million, of which
$80 million is eligible for Federal cost sharing under the Title XVI
program (in 2006 dollars). The Watsonville Area Water Recycling Project
components that have qualified for funding through the Title XVI
program include:
--Recycled Water Treatment Facility;
--Distribution System; and,
--Salinity Control Pipeline.
The next several years will be critical for the project and we
anticipate that construction of the Recycled Water Treatment Facility
and portions of the Distribution System will be completed in fiscal
year 2007 and remaining facilities by fiscal year 2011. The Bureau of
Reclamation certified the Watsonville Area Water Recycling Project
Feasibility Study pursuant to the Bureau's Title XVI program in 2004
and then certified the Record of Decision on the Basin Management Plan
Environmental Impact Statement on September 10, 2004. With the passage
of these two milestones, all necessary Federal approvals for the
project to proceed have been secured.
The following table summarizes projected expenditures for design
and construction of the Title XVI eligible project components.

[In millions of dollars]
------------------------------------------------------------------------
Projected
Fiscal Year Expenditures
------------------------------------------------------------------------
2004.................................................... \1\ $5.4
2005.................................................... 10.1
2006.................................................... 11.9
2007.................................................... 8.5
2008.................................................... 0.1
2009.................................................... 20.2
2010.................................................... 23.8
---------------
Total............................................. 80.0
------------------------------------------------------------------------
\1\ Actual.

We continue to be concerned by the administration's lack of support
for Title XVI projects including the Watsonville Area Water Recycling
Project. The Bureau's fiscal year 2006 budget recently submitted to
Congress includes no funding for our project. We strongly believe that
the Title XVI program in general and the Watsonville Area Water
Recycling Project specifically offer effective solutions to the water
supply crisis in our State. Indeed, without the Title XVI program,
water recycling in our area might not be feasible and would force
increased reliance on an already oversubscribed Central Valley Project.
We question the wisdom of reducing the Bureau's participation in Title
XVI and ask that you work with your colleagues in support of the
program as well as funding for the Watsonville Area Water Recycling
Project.
We are excited to report that the project is moving ahead on
schedule. Approximately $18 million of project components have been
constructed through fiscal year 2004. The accelerated construction of
these project components allows PVWMA to deliver water early and
demonstrate continued progress. In fiscal year 2004, we initiated work
on the final design of the distribution system, the recycled water
facilities, blending facilities and water wells, and salinity control
pipeline. The design for each component will be completed in early
fiscal year 2005 and construction of the projects will commence
immediately thereafter.
Once again, thank you for all of your work thus far. We further
wish to thank you for making your staff available to us to answer
questions and to provide guidance.
Please feel free to contact PVWMA's Washington Representative or us
if you have any questions or require additional information.
______

Prepared Statement of the Red River Valley Association
bureau of reclamation
Mr. Chairman and members of the committee, I am Wayne Dowd, and
pleased to represent the Red River Valley Association as its President.
Our organization was founded in 1925 with the express purpose of
uniting the citizens of Arkansas, Louisiana, Oklahoma and Texas to
develop the land and water resources of the Red River Basin.
The Resolutions contained herein were adopted by the Association
during its 80th Annual Meeting in Bossier City, Louisiana on February
24, 2005, and represent the combined concerns of the citizens of the
Red River Basin Area as they pertain to the goals of the Association.
Our western rivers played a very important part in the development
and economic success of the States west of the Mississippi River. An
agency responsible for the development of those water resources has
been the Bureau of Reclamation. In our four-State region they have been
most active in Oklahoma.
I would like to comment on two specific requests for the future
economic well being of the citizens residing in the Red River Valley
region in Oklahoma. We support the following two studies and request
that the Bureau of Reclamation be funded at their full fiscal year 2006
capability.
North Fork of the Red River, OK, Investigation Study.--The W.C.
Austin (Altus Lake and Dam) Project in southwestern Oklahoma, is
authorized to provide water for irrigation to approximately 48,000
acres of privately owned land in southwestern Oklahoma; control
flooding on the North Fork of the Red River and augment municipal water
supply for the City of Altus. Secondary benefits include fish and
wildlife conservation and recreation opportunities. Project features
include Altus Dam, four canals, a 221-mile lateral distribution system
and 26 miles of drains. The Lugert-Altus Irrigation District (LAID) is
responsible for operation and maintenance of the project.
Water demand in the District and region is growing which, in turn,
is reducing future water availability and economic development
opportunities. This proposed investigation would: (1) develop a
hydrologic model of the NFRR watershed; and (2) evaluate opportunities
for augmenting water availability in the project region.
We support a 3-year comprehensive evaluation of water resources in
the North Fork of the Red River in Oklahoma for a total study cost of
$670,000. We sincerely appreciate your support in past appropriations.
An allocation of $150,000 is requested for the fiscal year 2006
appropriations.
Arbuckle-Simpson Aquifer Study.--The Arbuckle-Simpson Aquifer has
been designated a sole source aquifer by EPA and a large number of
Oklahomans depend on its protection for their health and economic
future. This is an important source of water supply for: the citizens
of Ada, Sulphur, Mill Creek and Roff; the Chickasaw National
Recreational Area; Chickasaw and Choctaw Tribal members; and many
farmers and ranchers owning land overlying the basin. Contributions
from the aquifer also provide the perennial flow for many streams and
natural springs in the area. The Arbuckle-Simpson Aquifer underlines
approximately 500 square miles of south-central Oklahoma.
During recent years, a number of issues have emerged which have
caused concerns about the utilization and continued health of the
aquifer. These concerns include issues over water use, exportation of
water out of the area, impacts of groundwater development on the flows
in the significant springs and rivers, and competition for water and
water quality.
In order to assure the future well-being of the aquifer we support
a 5-year study to include detailed assessments of: the formation's
hydrogeology, water quality and vulnerability; groundwater-surface
water interactions; land use changes and related impacts; Tribal-State
water rights; and overall management of the resources. The initial
estimates put the total study cost at $2.7 million; however, due to its
complexity and new issues concerning Chickasaw and Choctaw Tribal
interest, a better cost estimate will be known after the second year of
the study. We appreciate your support of this study by funding the
first 2 years of the study.
We request $1,500,000 be appropriated for fiscal year 2006 and
support that the study be cost shared, 90 percent Federal and 10
percent State/local funds.
The Red River Valley Association understands these are difficult
times with our Nation's budget, so we appreciate your support for these
studies in fiscal year 2005. We feel they are extremely important to
the welfare of the citizens in Oklahoma and request that you again
support these studies in fiscal year 2006.
We are always available to provide additional information and
answer whatever questions you may have. All comments should be directed
to our Executive Director.
______

Prepared Statement of the Deschutes River Conservancy
As Chairman of the Deschutes River Conservancy (DRC) it is my
pleasure to convey to the subcommittee the DRC Board's strong support
for the $2 million funding request for fiscal year 2006 for the
Deschutes Ecosystem Restoration Project (under the Bureau of
Reclamation), sponsored by Congressman Walden. The Deschutes River
Conservancy (DRC), is a non-profit, private corporation established in
Oregon in 1996. In September 1996, Congress enacted and the President
signed Public Law 104-208, which included S. 1662, the Oregon Resources
Conservation Act establishing the DRC (then known as the Deschutes
Basin Working Group under Section 301(h) (Division B, Title III)). In
2000 Congress reauthorized the DRC through Public Law 106-270, the
Deschutes Resources Conservancy Reauthorization Act of 2000 which
authorized $2.0 million per year on a matching basis through fiscal
year 2006. The DRC is limited to spending 5 percent of any
appropriation on administration.
needs and accomplishments
In fiscal year 2005, Congress appropriated $443,000 to the Bureau
of Reclamation to support the DRC. These funds (as well as past
appropriations) have enabled the DRC to make great strides in pursuing
its mission of improving the quantity and quality of stream flows in
the Deschutes Basin (see Appendix 1 for background on the DRC). Federal
and matching funds have resulted in the following accomplishments:
Water Quality
--108,518 trees planted in riparian areas
--16.1 miles of streambank planted
--38.6 miles of riparian fencing
--8 push-up dam removals
--47 off-site watering facilities
--7,450 feet of channel restored
--4.5 acres of new wetlands
--14,535 feet of terracing
--55 sediment control basins
--23,283 acres of no-till farming
Water Quantity
--5,892 acre-feet (13.9 cfs) of conserved water pending transfer
--1 point of diversion switch (1 cfs)
--2 direct acquisitions (2.81 cfs)
--82,909 feet of canal piping
--1,460 feet of ditch piping
These projects have helped the DRC to attain significant
improvements in streamflow and water quality in key basin streams. This
past August, below irrigation district diversions Squaw Creek flowed at
5 cubic feet per second (cfs) and Tumalo Creek at 10 cfs--where in
years past before the DRC took up its collaborative approach with water
users these creeks would have run dry in the summer months. In Squaw
Creek our pending canal piping projects will yield an additional 4.5
cfs. In other words, in our two highest priority reaches the DRC has
already reached halfway to flow restoration targets of 20 cfs. Our
planning efforts in Squaw Creek project that in another 5 years we can
reach our goal--provided we can leverage the $5 million in funds
required to do the job.
In the Middle Deschutes the DRC has a much larger task--with a flow
target of 250 cfs estimated to cost $80 million over 20 years--but we
are making great headway. This past summer flows in the Middle
Deschutes were 60 cfs due to our leasing program, effectively doubling
flows over the 30 cfs voluntarily provided by local irrigation
districts. As it was the 1913 reservation of water rights by the
Federal Government (which later went to the Bureau's Deschutes Project)
that led to the overallocation of natural flow in the Deschutes and the
low flows in the winter in the Upper Deschutes (for project storage)
and in the summer in the Middle Deschutes (for irrigation withdrawals).
The DRC is a unique experiment in fostering a cooperative approach
to the past history of water resource development in the West and
avoiding the conflict usually associated with endangered species
recovery and water quality problems. In an editorial published recently
our local newspaper the Bend Bulletin suggested that our progress to
date in accomplishing our mission is akin to ``magic'' given its
difficult nature and the obstacles that we must overcome. However, we
believe that our mission is achievable. By acting as a catalyst and
bringing together interested partners the DRC is helping build a shared
vision for basin-wide restoration that is responsive to economic and
social needs of local communities.
The strong foundation for collaborative work in the Deschutes Basin
creates a unique opportunity to demonstrate on-the-ground results from
innovative voluntary, market-based water resources management. A key
strength of this endeavor is the high degree of cost-sharing between
interested parties. As shown below past Bureau funds appropriated for
the Deschutes Ecosystem Restoration Project have been leveraged over
three-to-one with non-Federal and in-kind contributions. The DRC has,
and will continue to, make every effort to access local and State
funding sources. Given the magnitude of the task, however, we very much
rely on our Federal appropriations as the core of our support base. Nor
are our needs diminishing. Rather as we move forward, the projects and
funding needs grow in size as our partners grow increasingly
comfortable and confident about tackling larger projects with us. Short
summaries of specific projects proposed to our Congressional delegation
for funding in fiscal year 2005 are included in Appendix 2.

In sum, our past accomplishments and current and future projects
are critical to ensuring a healthy future for the Deschutes watershed.
Appropriations are critical to underpin DRC efforts to demonstrate that
a pro-active, cooperative approach to meeting agricultural, municipal
and instream water needs can succeed in the American West.
Appendix 1.--Background on the DRC
The DRC is a partnership initiated by the Environmental Defense
Fund (EDF), the Confederated Tribes of the Warm Springs Reservation and
local irrigation districts. DRC founders recognized the need for a
private organization with ecosystem-determined goals and methods based
on positive incentives, consensus, and local governance. Since
approximately half of the Basin's land area is managed by Federal
agencies it was clear that such a private organization would need the
capacity to partner on projects with the Federal agencies to be truly
ecosystem and basin-wide in scope. In March, 1996, Senator Hatfield
introduced S. 1662 authorizing Federal agencies to work with this
private organization, known as the Deschutes Basin Working Group. Title
III of the Oregon Resource Conservation Act of 1996, signed by the
President in September, 1996, authorizes the following:
--Federal agencies to work with the private Deschutes Basin Working
Group, dba Deschutes River Conservancy (DRC);
--Secretaries of Interior & Agriculture to appoint DRC board members
for 3 year terms;
--Federal participation with DRC in ecological restoration projects
on Federal and non-Federal land and water with 50-50 cost
share; and,
--Emphasize voluntary market-based economic incentives.
The DRC mission is to restore streamflow and improve water quality
in the basin through on-the-ground projects that enhance the quality of
the region's natural resources and add value to its economy.
The DRC board consists of nine members from the Basin's private
sector; hydropower, livestock grazing, recreation/tourism, timber, land
development, irrigation (two), environmental (two), and two members
from the Confederated Tribes of the Warm Springs Reservation. In
addition to the private board members there are two board members
appointed from the Departments of Interior and Agriculture, two board
members representing the State of Oregon, and four members representing
local governments within the Deschutes Basin.
Appendix 2.--Fiscal Year 2005 Project Summaries
riparian restoration program
Tailwater Wetlands Program.--$100,000
DRC will help the North Unit Irrigation District develop a
tailwater wetlands management program to treat potentially nutrient
rich tailwater flows before they return to local tributaries in
Jefferson County. These tributaries suffer from a host of water quality
issues including high stream temperatures, elevated nutrient levels,
and low dissolved oxygen. Total costs of developing and initiating the
program will be $200,000 with half coming from DRC Federal funds.
Stream Restoration in Partnership with Working Ranches.--$125,000
The DRC will work with local watershed councils and soil and water
conservation districts to provide technical and financial assistance to
private landowners who wish to restore their lands. Restoration
activities will include the implementation of grazing best management
practices, streambank rehabilitation, stream channel restoration, and
wetland restoration. Total costs of the restoration activities will be
$250,000 with half coming from DRC Federal funds.
Riparian Revegetation Program.--$140,000
The DRC will continue its work with riparian landowners on
revegetation of streamside areas with native species in order to
provide shade, buffering and other water quality benefits. Enrolling
350 acres in the program will cost $280,000 with half coming from DRC
Federal funds.
Deschutes Wetlands Initiative.--$150,000
DRC will work with the Deschutes Basin Land Trust and other local
partners to acquire and restore significant wetland habitats. Wetlands
are rare in the Deschutes Basin but play an important role in naturally
regulating streamflow, maintaining water quality, and providing
important fish and wildlife habitat. Total costs of developing and
initiating the program will be $300,000 with half coming from DRC
Federal funds.
water acquisitions program
Deschutes Water Alliance (DWA) Revolving Conservation Fund.--$320,000
The DRC is initiating a revolving fund for financing of small- to
medium-sized water conservation projects as part of the DWA. In fiscal
year 2006 projects include the piping of a number of laterals in the
Central Oregon, Swalley and Tumalo irrigation districts. These projects
will return 3 cfs to the Middle Deschutes and Tumalo Creek. Initial
capitalization of the fund is set at $700,000. The DRC Federal funds
contribution in fiscal year 2006 is $320,000.
District Main Canal Piping and Lining Partnerships.--$1,000,000
Irrigation districts in the Deschutes Basin manage 95 percent of
water diverted from streams and rivers and with the help of DRC are
willing to aggressively pursue large water conservation projects on
their main canals such as lining and piping. The DRC is working with
the North Unit Irrigation District (Main Canal Lining), Central Oregon
Irrigation District (Pilot Butte Main Canal Piping), Swalley Irrigation
District (Main Canal Piping), and Tumalo Irrigation District (Tumalo
Feed Canal Piping) and Three Sisters Irrigation District (McKenzie and
Main Canal Piping) to establish a prioritized list of large, phased
conservation projects that will make significant improvements to
irrigation district management of water and restore streamflows in the
Deschutes River and its tributaries. With over $50 million in projects
already identified the DRC is targeting $4 million in investments in
fiscal year 2006 with $1 million coming from DRC Federal funds.
Water Leasing Program.--$50,000
The DRC's highly successful water leasing program is projected to
return 100 cfs instream in fiscal year 2006, representing a 10 percent
gain over fiscal year 2005. The leasing program provides an inexpensive
and flexible way to rapidly improve instream flows and educate the
public and water right holders about flow restoration. The DRC-BOR
contribution will be $75,000 of a $150,000 cash project that also
features a considerable in-kind contribution by water rightholders.
DWA Water Reserves and Transfers Program.--$300,000
Working with Swalley and Central Oregon Irrigation District, and
the City of Bend, the DRC is building agricultural reserves and
acquiring surplus water rights for instream protection. In fiscal year
2006, the second year of the program, outputs are expected to grow by
50 percent as the Alliance acquires 300 acres of reserves from
urbanizing areas in Deschutes County. Total costs of the program are
$900,000 with $300,000 coming from DRC Federal funds.
Three Sisters Irrigation District Water Exchange.--$50,000
The DRC is partnering with the Three Sisters Irrigation District on
an innovative surface to ground water switch through Oregon's water
exchange provision. Temporary seasonal substitution of groundwater in
place of diverted surface water will allow the DRC and TSID to keep
Squaw Creek flowing at its State-mandated minimum of 20 cfs throughout
the critical summer months, representing a gain of up to 15 cfs and
helping irrigators to avoid future regulation as ESA listed steelhead
trout are reintroduced to the creek, which originally provided the
majority of steelhead habitat in the Upper Deschutes Basin. A project
of between $400,000 and $600,000 is expected depending on the length of
the operational contract and the resulting energy costs. Of this total
$50,000 is expected from DRC Federal funds.
Instream Flow Acquisitions.--$250,000
DRC will work on a number of high priority water transactions that
will help address water quality and streamflow deficiencies in critical
stream reaches for the recovery of listed species (steelhead and bull
trout). The DRC is working with individual water right holders in Squaw
Creek, and owners of urbanizing land and districts that are downsizing
in the Middle Deschutes to find willing sellers. The total cost of the
acquisitions is $500,000 with the DRC Federal funds covering half of
this amount.
The Non-Federal to Federal match on these projects is estimated at
over 2:1.
______

Prepared Statement of Denver Water
I am requesting your support and assistance in insuring continued
funding for the Upper Colorado River Endangered Fish Recovery Program
and the San Juan River Basin Recovery Implementation Program. These
ongoing cooperative programs have the dual objectives of recovering
four species of endangered fish while water use continues and water
development proceeds in compliance with the Endangered Species Act of
1973, State law, and interstate compacts. Partners in the two programs
are the States of New Mexico, Colorado, Utah and Wyoming, Indian
tribes, Federal agencies and water, power and environmental interests.
I respectfully request support and action by the subcommittee that will
provide the following:
--An increase of $691,000 in the fiscal year 2006 Recovery Element
budget (Resource Management Appropriation; Ecological Services
Activity; Endangered Species Subactivity; Recovery Element)
allocated to ``Colorado River fish recovery project'' to allow
U.S. Fish and Wildlife Service (FWS) Region 6 to meet its
funding commitment to the Upper Colorado River Endangered Fish
Recovery Program. This is the level of funding appropriated in
fiscal years 2003, 2004 and 2005 for this program. These funds
are needed for FWS direct participation in managing and
implementing the Upper Colorado Program's actions, monitoring
achievement of recovery goals, managing data associated with
fish population abundance and sampling, evaluating stocking,
and monitoring fish and habitat response to recovery actions.
--The appropriation of $437,000 in operation and maintenance funds
(Resource Management Appropriation; Fisheries Activity;
Hatchery Operations & Maintenance Subactivity, Hatchery
Operations Project) to support the ongoing operation of the
FWS' Ouray National Fish Hatchery in Utah during fiscal year
2006.
--An increase of $211,000 in the ``Resource Management Appropriation;
Ecological Services Activity; Endangered Species Subactivity;
Recovery Element'' budget allocated to the ``San Juan River
Recovery Implementation Program''. These funds are needed to
support the FWS Recovery Program Coordinator and staff who are
responsible for program management and support of all Recovery
Program activities.
The enactment of Public Law 106-392, as amended by Public Law 107-
375, authorized the Federal Government to provide up to $46 million of
cost sharing for these two ongoing recovery programs' remaining capital
construction projects. Raising and stocking of the endangered fish
produced at program hatchery facilities, restoring floodplain habitat
and fish passage, regulating and supplying instream habitat flows,
installing diversion canal screens and controlling nonnative fish
populations are key components of the programs' ongoing capital
construction projects. Subsection 3(c) of Public Law 106-392 authorizes
the Secretary of the Interior to accept up to $17 million of
contributed funds from Colorado, Wyoming, Utah and New Mexico, and to
expend such contributed funds as if appropriated for these projects;
and provides for an additional $17 million to be contributed from
revenues derived from the sale of Colorado River Storage Project (CRSP)
hydroelectric power. This substantial non-Federal cost-sharing funding
demonstrates the strong commitment and effective partnerships embodied
in both of these successful programs. The requested Federal
appropriations are critically important to these efforts moving
forward.
The support of your subcommittee in past years is greatly
appreciated--and has been a major factor in the success of these multi-
State, multi-agency programs as they have progressed forward towards
delisting the endangered fish species in the Upper Colorado and San
Juan River Basins while necessary water use and development activities
are occurring. I request the subcommittee's assistance to ensure that
the FWS is provided with adequate funding for these vitally important
programs.
______

Prepared Statement of the Upper Gunnison River Water Conservancy
District
I am requesting your support for an appropriation in fiscal year
2006 of $2,529,000 to the Bureau of Reclamation within the budget line
item entitled ``Endangered Species Recovery Implementation Program''
for the Upper Colorado Region. The President's recommended budget for
fiscal year 2006 includes this line-item amount. The funding
designation we seek is as follows: $1,401,000 for construction
activities for the Upper Colorado River Endangered Fish Recovery
Program; $572,000 for the San Juan River Basin Recovery Implementation
Program and $556,000 for Fish and Wildlife Management and Development.
These highly successful, cooperative programs are ongoing
partnerships among the States of New Mexico, Colorado, Utah and
Wyoming, Indian tribes, Federal agencies and water, power and
environmental interests. The programs' objectives are to recover
endangered fish species while water use and development proceeds in
compliance with the Endangered Species Act. These recovery programs
have become national models for collaboratively working to recover
endangered species while addressing water needs to support growing
western communities in the Upper Colorado River Basin region of the
Intermountain West. Since 1988, these programs have facilitated ESA
Section 7 consultation (without litigation) for over 800 Federal,
tribal, State and privately managed water projects depleting
approximately 2.5 million acre-feet of water per year.
The requested fiscal year 2006 appropriation will allow the Upper
Colorado River Endangered Fish Program to proceed with construction of
additional fish passage structures on the Green and Colorado Rivers to
provide access to historic habitat upstream of existing diversion dams.
The requested funding for the San Juan River Recovery Program will be
used for contracts for construction and cooperative agreements with the
State of New Mexico to provide and protect instream flows, fish
ladders, flooded bottom land restoration, propagation facilities,
stocking efforts, nonnative and sportfish management activities.
The enactment of Public Law 106-392, as amended by Public Law 107-
375, authorized the Federal Government to provide up to $46 million of
cost sharing for these two ongoing recovery programs' remaining capital
construction projects. Raising and stocking of the endangered fish
produced at program hatchery facilities, restoring floodplain habitat
and fish passage, regulating and supplying instream habitat flows,
installing diversion canal screens and controlling nonnative fish
populations are key components of the programs' ongoing capital
construction projects. Subsection 3(c) of Public Law 106-392 authorizes
the Secretary of the Interior to accept up to $17 million of
contributed funds from Colorado, Wyoming, Utah and New Mexico, to
expend such contributed funds as if appropriated for these projects;
and provides for an additional $17 million to be contributed from
revenues derived from the sale of Colorado River Storage Project (CRSP)
hydroelectric power. This substantial non-Federal cost-sharing funding
demonstrates the strong commitment and effective partnerships embodied
in both of these successful programs. The requested Federal
appropriations are critically important to these efforts moving
forward.
The past support and assistance of your subcommittee has greatly
facilitated the success of these multi-State, multi-agency programs. I
thank you for that support and request the subcommittee's assistance
for fiscal year 2006 funding to ensure the Bureau of Reclamation's
continuing financial participation in these vitally important programs.
______

Prepared Statement of the Grand Valley Water Users Association
I am requesting your support for an appropriation in fiscal year
2006 of $2,529,000 to the Bureau of Reclamation within the budget line
item entitled ``Endangered Species Recovery Implementation Program''
for the Upper Colorado Region. The President's recommended budget for
fiscal year 2006 includes this line-item amount. The funding
designation we seek is as follows: $1,401,000 for construction
activities for the Upper Colorado River Endangered Fish Recovery
Program; $572,000 for the San Juan River Basin Recovery Implementation
Program and $556,000 for Fish and Wildlife Management and Development.
These highly successful, cooperative programs are ongoing
partnerships among the States of New Mexico, Colorado, Utah and
Wyoming, Indian tribes, Federal agencies and water, power and
environmental interests. The programs' objectives are to recover
endangered fish species while water use and development proceeds in
compliance with the Endangered Species Act. These recovery programs
have become national models for collaboratively working to recover
endangered species while addressing water needs to support growing
western communities in the Upper Colorado River Basin region of the
Intermountain West. Since 1988, these programs have facilitated ESA
Section 7 consultation (without litigation) for over 800 Federal,
tribal, State and privately managed water projects depleting
approximately 2.5 million acre-feet of water per year.
The requested fiscal year 2006 appropriation will allow the Upper
Colorado River Endangered Fish Program to proceed with construction of
additional fish passage structures on the Green and Colorado Rivers to
provide access to historic habitat upstream of existing diversion dams.
The requested funding for the San Juan River Recovery Program will be
used for contracts for construction and cooperative agreements with the
State of New Mexico to provide and protect instream flows, fish
ladders, flooded bottom land restoration, propagation facilities,
stocking efforts, nonnative and sportfish management activities.
The enactment of Public Law 106-392, as amended by Public Law 107-
375, authorized the Federal Government to provide up to $46 million of
cost sharing for these two ongoing recovery programs' remaining capital
construction projects. Raising and stocking of the endangered fish
produced at program hatchery facilities, restoring floodplain habitat
and fish passage, regulating and supplying instream habitat flows,
installing diversion canal screens and controlling nonnative fish
populations are key components of the programs' ongoing capital
construction projects. Subsection 3(c) of Public Law 106-392 authorizes
the Secretary of the Interior to accept up to $17 million of
contributed funds from Colorado, Wyoming, Utah and New Mexico, to
expend such contributed funds as if appropriated for these projects;
and provides for an additional $17 million to be contributed from
revenues derived from the sale of Colorado River Storage Project (CRSP)
hydroelectric power. This substantial non-Federal cost-sharing funding
demonstrates the strong commitment and effective partnerships embodied
in both of these successful programs. The requested Federal
appropriations are critically important to these efforts moving
forward.
The past support and assistance of your subcommittee has greatly
facilitated the success of these multi-State, multi-agency programs. I
thank you for that support and request the subcommittee's assistance
for fiscal year 2006 funding to ensure the Bureau of Reclamation's
continuing financial participation in these vitally important programs.
______

Prepared Statement of Four Corners Power Plant
I am requesting your support for an appropriation in fiscal year
2006 of $2,529,000 to the Bureau of Reclamation within the budget line
item entitled ``Endangered Species Recovery Implementation Program''
for the Upper Colorado Region. The President's recommended budget for
fiscal year 2006 includes this line-item amount. The funding
designation we seek is as follows: $1,401,000 for construction
activities for the Upper Colorado River Endangered Fish Recovery
Program; $572,000 for the San Juan River Basin Recovery Implementation
Program and $556,000 for Fish and Wildlife Management and Development.
These highly successful, cooperative programs are ongoing
partnerships among the States of New Mexico, Colorado, Utah and
Wyoming, Indian tribes, Federal agencies and water, power and
environmental interests. The programs' objectives are to recover
endangered fish species while water use and development proceeds in
compliance with the Endangered Species Act. These recovery programs
have become national models for collaboratively working to recover
endangered species while addressing water needs to support growing
western communities in the Upper Colorado River Basin region of the
Intermountain West. Since 1988, these programs have facilitated ESA
Section 7 consultation (without litigation) for over 800 Federal,
tribal, State and privately managed water projects depleting
approximately 2.5 million acre-feet of water per year.
The requested fiscal year 2006 appropriation will allow the Upper
Colorado River Endangered Fish Program to proceed with construction of
additional fish passage structures on the Green and Colorado Rivers to
provide access to historic habitat upstream of existing diversion dams.
The requested funding for the San Juan River Recovery Program will be
used for contracts for construction and cooperative agreements with the
State of New Mexico to provide and protect instream flows, fish
ladders, flooded bottom land restoration, propagation facilities,
stocking efforts, nonnative and sportfish management activities.
The enactment of Public Law 106-392, as amended by Public Law 107-
375, authorized the Federal Government to provide up to $46 million of
cost sharing for these two ongoing recovery programs' remaining capital
construction projects. Raising and stocking of the endangered fish
produced at program hatchery facilities, restoring floodplain habitat
and fish passage, regulating and supplying instream habitat flows,
installing diversion canal screens and controlling nonnative fish
populations are key components of the programs' ongoing capital
construction projects. Subsection 3(c) of Public Law 106-392 authorizes
the Secretary of the Interior to accept up to $17 million of
contributed funds from Colorado, Wyoming, Utah and New Mexico, to
expend such contributed funds as if appropriated for these projects;
and provides for an additional $17 million to be contributed from
revenues derived from the sale of Colorado River Storage Project (CRSP)
hydroelectric power. This substantial non-Federal cost-sharing funding
demonstrates the strong commitment and effective partnerships embodied
in both of these successful programs. The requested Federal
appropriations are critically important to these efforts moving
forward.
The past support and assistance of your subcommittee has greatly
facilitated the success of these multi-State, multi-agency programs. I
thank you for that support and request the subcommittee's assistance
for fiscal year 2006 funding to ensure the Bureau of Reclamation's
continuing financial participation in these vitally important programs.
______

Prepared Statement of the Northern Colorado Water Conservancy District
I am requesting your support for an appropriation in fiscal year
2006 of $2,529,000 to the U.S. Bureau of Reclamation within the budget
line item entitled ``Endangered Species Recovery Implementation
Program'' for the Upper Colorado Region. The President's recommended
budget for fiscal year 2006 includes this line-item amount. The funding
designation we seek is as follows: $1,401,000 for construction
activities for the Upper Colorado River Endangered Fish Recovery
Program; $572,000 for the San Juan River Basin Recovery Implementation
Program; and $556,000 for Fish and Wildlife Management and Development.
These highly successful, cooperative programs are ongoing
partnerships among the States of New Mexico, Colorado, Utah and
Wyoming, Indian tribes, Federal agencies, and water, power and
environmental interests. The programs' objectives are to recover
endangered fish species while water use and development proceeds in
compliance with the Endangered Species Act. These recovery programs
have become national models for collaboratively working to recover
endangered species while addressing water needs to support growing
western communities in the Upper Colorado River Basin region of the
Intermountain West. Since 1988, these programs have facilitated ESA
Section 7 consultation (without litigation) for over 800 Federal,
tribal, State and privately managed water projects depleting
approximately 2.5 million acre feet of water per year.
The requested fiscal year 2006 appropriation will allow the Upper
Colorado River Endangered Fish Program to proceed with construction of
additional fish passage structures on the Green and Colorado Rivers to
provide access to historic habitat upstream of existing diversion dams.
The requested funding for the San Juan River Recovery Program will be
used for contracts for construction and cooperative agreements with the
State of New Mexico to provide and protect instream flows, fish
ladders, flooded bottom land restoration, propagation facilities,
stocking efforts, non-native, and sportfish management activities.
The enactment of Public Law 106-392, as amended by Public Law 107-
375, authorized the Federal Government to provide up to $46 million of
cost sharing for these two ongoing recovery programs' remaining capital
construction projects. Raising and stocking of the endangered fish
produced at program hatchery facilities, restoring floodplain habitat
and fish passage, regulating and supplying instream habitat flows,
installing diversion canal screens, and controlling non-native fish
populations are key components of the programs' ongoing capital
construction projects. Subsection 3(c) of Public Law 106-392 authorizes
the Secretary of the Interior to accept up to $17 million of
contributed funds from Colorado, Wyoming, Utah, and New Mexico to
expend such contributed funds as if appropriated for these projects;
and provides for an additional $17 million to be contributed from
revenues derived from the sale of Colorado River Storage Project (CRSP)
hydroelectric power. This substantial, non-Federal cost-sharing funding
demonstrates the strong commitment and effective partnerships embodied
in both of these successful programs. The requested Federal
appropriations are critically important to these efforts.
The past support and assistance of your subcommittee has greatly
facilitated the success of these multi-State, multi-agency programs. I
thank you for that support and request the subcommittee's assistance
for fiscal year 2006 funding to ensure the U.S. Bureau of Reclamation's
continuing financial participation in these vitally important programs.
______

Prepared Statement of the Metropolitan Water District of Southern
California
The Metropolitan Water District of Southern California supports the
efforts of the Central Arizona Water Conservation District whose
leaders have been working with the Bureau of Reclamation to re-instate
the operation of the Yuma Desalting Plant in Arizona, as authorized
under Title I of the 1974 Salinity Control Act.
As you are keenly aware, the western portion of the United States
has been experiencing record drought conditions for more than 5 years.
The drought has forced water managers to explore new ways of making
existing supplies go further. However, efforts to ready the Yuma
Desalting Plant for operations have not received sufficient attention.
In the Conference Report accompanying the fiscal year 2004 Energy and
Water Development Appropriations bill, Congress expressed its concern
regarding excess water releases from storage in Colorado River
reservoirs as they relate to the desalting plant and to meeting water
delivery requirements under a 1944 treaty with Mexico. Part of the
solution to meeting the treaty responsibilities was the construction
and operation of a desalting plant near Yuma, Arizona to treat drainage
flows before returning them to Mexico.
Yet, the plant has never been fully operational, and since the mid-
1990's, has been essentially idle receiving only minimal standby
maintenance in contravention of the clear directions of Congress to
maintain the plant in a condition that would allow operation at one-
third capacity within 1 year. It is estimated that operation of the
Yuma Desalting Plant would conserve an estimated 100,000 acre-feet of
Colorado River water annually. This is enough water to provide for the
annual needs of more than half a million people.
We believe that putting the Yuma Desalter into operational status
would be consistent with other efforts now being pursued by all seven
basin States to find ways to conserve water delivered by the Colorado
River. The Yuma Desalter can also be operated in conjunction or in
coordination with other water supply and river management programs to
provide additional water supply and environment benefits. Accordingly,
Metropolitan supports the Arizona Congressional Delegation request to
have the Bureau of Reclamation begin the process of bringing the Yuma
Desalting Plant back into operation as contemplated. This would help
recapture a significant amount of water that is now otherwise lost
annually. We request that language be included in the fiscal year 2005
Energy and Water Development Appropriation bill directing Reclamation
to take the necessary steps to bring the Yuma Desalting Plant into
operation at no less than one-third capacity by the end of fiscal year
2006. We believe that Reclamation's budget is sufficient to accomplish
this goal.
We at Metropolitan look forward to working constructively with your
committee to address drought in the West. If you need any additional
information, or if we can answer any questions, I hope you will feel
free to contact me personally or through Metropolitan's Washington, DC
Representative.
______

Prepared Statement of the Santa Clara Valley Water District
calfed bay-delta program, santa clara county, california
summary
This statement urges the committee's support of the administration
budget request of $35 million and an appropriation add-on of $65
million, for a total of $100 million for California Bay-Delta
Restoration.
statement of support
calfed bay-delta program
Background.--In an average year, half of Santa Clara County's water
supply is imported from the San Francisco Bay/Sacramento-San Joaquin
Delta estuary (Bay-Delta) watersheds through three water projects: The
State Water Project, the Federal Central Valley Project, and San
Francisco's Hetch Hetchy Project. In conjunction with locally developed
water, this water supply supports more than 1.7 million residents in
Santa Clara County and the most important high-tech center in the
world. In average to wet years, there is enough water to meet the
county's long-term needs. In dry years, however, the county could face
a water supply shortage of as much as 100,000 acre-feet per year, or
roughly 20 percent of the expected demand. In addition to shortages due
to hydrologic variations, the county's imported supplies have been
reduced due to regulatory restrictions placed on the operation of the
State and Federal water projects.
There are also water quality problems associated with using Bay-
Delta water as a drinking water supply. Organic materials and
pollutants discharged into the Delta, together with salt water mixing
in from San Francisco Bay, have the potential to create disinfection by
products that are carcinogenic and pose reproductive health concerns.
Santa Clara County's imported supplies are also vulnerable to
extended outages due to catastrophic failures such as major earthquakes
and flooding.
Project Synopsis.--The CALFED Bay-Delta Program is an
unprecedented, cooperative effort among Federal, State, and local
agencies to restore the Bay-Delta. With input from urban, agricultural,
environmental, fishing, and business interests, and the general public,
CALFED has developed a comprehensive, long-term plan to address
ecosystem and water management issues in the Bay-Delta.
Restoring the Bay-Delta ecosystem is important not only because of
its significance as an environmental resource, but also because failing
to do so will stall efforts to improve water supply reliability and
water quality for millions of Californians and the State's trillion
dollar economy and job base.
The recent passage of H.R. 2828 reauthorizes Federal participation
in the CALFED Bay-Delta Program and provides $389 in new and expanded
funding authority for selected projects, including the San Luis
Reservoir Low Point Improvement Project. The San Luis Project is one of
six new projects, studies or water management actions authorized to
receive a share of up to $184 million authorized under the conveyance
section of the bill. It is critical that Federal funding be provided to
implement the actions authorized in the bill in the coming years.
Fiscal Year 2005 Funding.--$7.5 million was appropriated for CALFED
activities under the various units of the Central Valley Project in
fiscal year 2005.
Fiscal Year 2006 Funding Recommendation.--It is requested that the
committee support an appropriation add-on of $65 million, in addition
to the $35 million in the administration's fiscal year 2006 budget
request, for a total of $100 million for California Bay-Delta
Restoration.
san jose area water reclamation and reuse program (south bay water
recycling program), santa clara county, california
summary
This statement urges the committee's support for an administration
budget request of $300,000 and an appropriation add-on of $2.7 million,
for a total of $3 million to fund the program's work.
statement of support
san jose area water reclamation and reuse program (south bay water
recycling program)
Background.--The San Jose Area Water Reclamation and Reuse Program,
also known as the South Bay Water Recycling Program, will allow the
City of San Jose and its tributary agencies of the San Jose/Santa Clara
Water Pollution Control Plant to protect endangered species habitat,
meet receiving water quality standards, supplement Santa Clara County
water supplies, and comply with a mandate from the U.S. Environmental
Protection Agency and the California Water Resources Control Board to
reduce wastewater discharges into San Francisco Bay.
The Santa Clara Valley Water District (District) collaborated with
the City of San Jose to build the first phase of the recycled water
system by providing financial support and technical assistance, as well
as coordination with local water retailers. The design, construction,
construction administration, and inspection of the program's
transmission pipeline and Milpitas 1A Pipeline was performed by the
District under contract to the City of San Jose.
Status.--The City of San Jose is the program sponsor for Phase 1,
consisting of almost 60 miles of transmission and distribution
pipelines, pump stations, and reservoirs. Completed at a cost of $140
million, Phase 1 began partial operation in October 1997. Summertime
2004 deliveries averaged 10.6 million gallons per day of recycled
water. The system now serves over 470 customers and delivers over 7,200
acre-feet of recycled water per year.
Phase 2 is now underway. In June 2001, San Jose approved an $82.5
million expansion of the program. The expansion includes additional
pipeline extensions into the cities of Santa Clara and Milpitas, a
major pipeline extension into Coyote Valley in south San Jose, and
reliability improvements of added reservoirs and pump stations. The
District and the City of San Jose executed an agreement in February
2002 to cost share on the pipeline into Coyote Valley and discuss a
long-term partnership agreement on the entire system. Phase 2's near-
term objective is to increase deliveries by the year 2010 to 15,000
acre-feet per year.
Funding.--In 1992, Public Law 102-575 authorized the Bureau of
Reclamation to work with the City of San Jose and the District to plan,
design, and build demonstration and permanent facilities for reclaiming
and reusing water in the San Jose metropolitan service area. The City
of San Jose reached an agreement with the Bureau of Reclamation to
cover 25 percent of Phase 1's costs, or approximately $35 million;
however, Federal appropriations have not reached the authorized amount.
To date, the program has received $28.25 million of the $35 million
authorization.
Fiscal Year 2005 Funding.--$1.75 million was appropriated in fiscal
year 2005.
Fiscal Year 2006 Funding Recommendation.--It is requested that the
congressional committee support an appropriation add-on of $2.7
million, in addition to the $300,000 in the administration's fiscal
year 2006 budget request, for a total of $3 million to fund the
Program's work.
san luis reservoir low point improvement project, santa clara county,
california
summary
This statement urges the committee's support an appropriation of
$10 million to initiate the studies. This request is included in the
$100 million CALFED Bay-Delta Program appropriation request.
statement of support
san luis reservoir low point improvement project
Background.--San Luis Reservoir is one of the largest reservoirs in
California, and is the largest ``off-stream'' water storage facility in
the world. The Reservoir has a water storage capacity of more than 2
million acre-feet and is a key component of the water supply system
serving the Federal Central Valley Project (CVP) and California's State
Water Project. San Luis is used for seasonal storage of Sacramento-San
Joaquin delta water that is delivered to the reservoir via the
California Aqueduct and Delta-Mendota Canal. The San Luis Reservoir is
jointly owned and operated by the U.S. Bureau of Reclamation and the
California Department of Water Resources.
The San Luis Reservoir provides the sole source of CVP water supply
for the San Felipe Division contractors--Santa Clara Valley Water
District (District), San Benito County Water District and, in the
future, Pajaro Valley Water Management Agency. When water levels in San
Luis Reservoir are drawn down in the spring and summer, high water
temperatures result in algae blooms at the reservoir's water surface.
This condition degrades water quality, making the water difficult or
impractical to treat and can preclude deliveries of water from San Luis
Reservoir to San Felipe Division contractors. In order to avoid the low
point problem, the reservoir has been operated to maintain water levels
above the critical low elevation--the ``low point''--resulting in
approximately 200,000 acre-feet of undelivered water to south of the
Delta State and Federal water users.
Project Goals and Status.--The goal of the project is to increase
the operational flexibility of storage in San Luis Reservoir and ensure
a high quality, reliable water supply for San Felipe Division
contractors. The specific project objectives are to:
--Increase the operational flexibility of San Luis Reservoir by
increasing the effective storage.
--Ensure that San Felipe Division contractors are able to manage
their annual Central Valley Project contract allocation to meet
their water supply and water quality commitments.
--Provide opportunities for project-related environmental
improvements.
--Provide opportunities for other project-related improvements.
Preliminary studies by the District have identified six potential
alternatives to solve the problem. More funding is needed to fully
explore these alternatives.
The recent passage of H.R. 2828 reauthorizes Federal participation
in the CALFED Bay-Delta Program. The San Luis Reservoir Low Point
Improvement Project is one of six new projects, studies or water
management actions authorized in the bill to receive a share of up to
$184 million authorized under the conveyance section of the bill.
Fiscal Year 2005 Funding.--No appropriation was requested in fiscal
year 2005.
Fiscal Year 2006 Funding Recommendation.--It is requested that the
committee support an appropriation of $10 million for the San Luis
Reservoir Low Point Improvement Project. The San Luis request is
included in the $100 million CALFED Bay-Delta appropriation request.
______

Prepared Statement of the Colorado River Commission of Nevada
Subject.--Support for Fiscal Year 2006 Federal Funding of $17.5
million for the Department of the Interior--Bureau of Reclamation's
Basinwide Salinity Control Program.
As a Nevada representative of the Colorado River Basin Salinity
Control Forum, the Colorado River Commission of Nevada has adopted a
position supporting funding the fiscal year 2006 budget request for
$17,500,000 for the Bureau of Reclamation's Colorado River Basin
Salinity Control Program.
Salinity remains one of the major problems in the Colorado River.
Congress has recognized the need to confront this problem with its
passage of Public Law 93-320 and Public Law 98-569. Your support of the
Forum's current funding recommendations for the Colorado River Basin
Salinity Control Program is essential to move the program forward so
that the congressionally directed salinity objectives embodied in
Public Law 93-320 and Public Law 98-569 are achieved.
______

Prepared Statement of the Colorado River Water Conservation District
I respectfully request your support for an appropriation in fiscal
year 2006 of $2,529,000 to the Bureau of Reclamation within the budget
line item entitled ``Endangered Species Recovery Implementation
Program'' for the Upper Colorado Region. The President's recommended
budget for fiscal year 2006 includes this line-item amount.
The funding designation we seek is as follows:
--$1,401,000 for construction activities for the Upper Colorado River
Endangered Fish Recovery Program;
--$572,000 for the San Juan River Basin Recovery Implementation
Program; and,
--$556,000 for Fish and Wildlife Management and Development.
These highly successful, cooperative programs are ongoing
partnerships among the States of New Mexico, Colorado, Utah and
Wyoming, Indian tribes, Federal agencies and water, power and
environmental interests. The programs' objectives are to recover
endangered fish species while water use and development proceeds in
compliance with the Endangered Species Act. These recovery programs
have become national models for collaboratively working to recover
endangered species while addressing water needs to support growing
western communities in the Upper Colorado River Basin region of the
Intermountain West. Since 1988, these programs have facilitated ESA
Section 7 consultation (without litigation) for over 800 Federal,
tribal, State and privately managed water projects depleting
approximately 2.5 million acre-feet of water per year.
The requested fiscal year 2006 appropriation will allow the Upper
Colorado River Endangered Fish Program to proceed with construction of
additional fish passage structures on the Green and Colorado Rivers to
provide access to historic habitat upstream of existing diversion dams.
The requested funding for the San Juan River Recovery Program will be
used for contracts for construction and cooperative agreements with the
State of New Mexico to provide and protect instream flows, fish
ladders, flooded bottom land restoration, propagation facilities,
stocking efforts, nonnative and sportfish management activities.
The enactment of Public Law 106-392, as amended by Public Law 107-
375, authorized the Federal Government to provide up to $46 million of
cost sharing for these two ongoing recovery programs' remaining capital
construction projects. Raising and stocking of the endangered fish
produced at program hatchery facilities, restoring floodplain habitat
and fish passage, regulating and supplying instream habitat flows,
installing diversion canal screens and controlling nonnative fish
populations are key components of the programs' ongoing capital
construction projects. Subsection 3(c) of Public Law 106-392 authorizes
the Secretary of the Interior to accept up to $17 million of
contributed funds from Colorado, Wyoming, Utah and New Mexico, to
expend such contributed funds as if appropriated for these projects;
and provides for an additional $17 million to be contributed from
revenues derived from the sale of Colorado River Storage Project (CRSP)
hydroelectric power. This substantial non-Federal cost-sharing funding
demonstrates the strong commitment and effective partnerships embodied
in both of these successful programs. The requested Federal
appropriations are critically important to these efforts moving
forward.
The past support and assistance of your subcommittee has greatly
facilitated the success of these multi-State, multi-agency programs. I
thank you for that support and request the subcommittee's assistance
for fiscal year 2006 funding to ensure the Bureau of Reclamation's
continuing financial participation in these vitally important programs.
______

Prepared Statement of the Oregon Water Resources Congress
I am Anita Winkler, Executive Director, Oregon Water Resources
Congress. This testimony is submitted to the United States Senate
Appropriations Committee, Energy and Water Subcommittee, regarding the
fiscal year 2006 Budget for the Bureau of Reclamation and Oregon
Projects. The Oregon Water Resources Congress (OWRC) was established in
1912 as a trade association to support member needs to protect water
rights and encourage conservation and water management State-wide. OWRC
represents non-potable agriculture water suppliers in Oregon, primarily
irrigation districts, as well as member ports, other special districts
and local governments. The association represents the entities that
operate water management systems, including water supply reservoirs,
canals, pipeline and hydropower production.
bureau of reclamation
OWRC continues to support an increase in funding for the Bureau of
Reclamation's Water and Related Resources program above the
administration's proposed fiscal year 2006 Budget request for the
Bureau of Reclamation's programs West-wide. The administration's
current budget proposal is approximately $200 million less than what we
in the water community feel is necessary to carryout an effective 21st
Century water program for the West.
With many Western States confronting significant budget deficits,
increased emphasis is being placed on targeted Federal aid. In
addition, we continue to be confronted by looming shortages associated
with the on-going drought in the West. This is why we support the
Western Water Initiative of the Bureau of Reclamation and the $30
million request for the Water 2025 program, an important program to
assist during this time of crises.
oregon needs
Conservation Implementation
The largest need for funding for OWRC's members is to implement
water conservation projects. Irrigation districts in Oregon continue to
line and pipe open waterways to enhance both water supply and water
quality. But the ability to continue this work depends on some public
investment in return for the public benefits. Districts have conserved
water and provided some of the saved or conserved water to benefit the
fishery in-stream while also building reservoir supplies.
Oregon districts hope to continue this work through enhanced
conservation, but to do that the districts need support to implement
effective alternative programs such as pilot water banking projects
(Klamath Basin and the Deschutes Basin), energy reduction programs,
additional measurement and telemetry monitoring, etc.
While some of these districts will continue to benefit from the
funding requested in the fiscal year 2006, others are going through a
reauthorization process or new authorizations for projects in their
districts that will continue this conservation ethic.
rogue river basin
Medford Irrigation District
Rogue River Valley Irrigation District
Talent Irrigation District
Grants Pass Irrigation District
Three contiguous districts in the Rogue Project (Medford, Rogue
River and Talent irrigation districts) are requesting $1 million to
fund the Bear Creek and Little Butte Optimization Study by the Bureau
of Reclamation. That study will propose a plan to conserve water
throughout the basin by lining and piping canals within the districts,
considering the potential for raising Howard Prairie Dam and the
feasibility of other conservation options.
The Grants Pass Irrigation District (GPID) continues to address the
eventual removal of the Savage Rapids Dam. The $1 million in the fiscal
year 2006 Budget is an important continuation of the effort to address
the agreements made in this area. However, that request is not adequate
for the work schedule. OWRC supports the GPID request for $8 million in
fiscal year 2006 for the Bureau of Reclamation to complete design,
engineering, and installation of electric pumps to replace the Savage
Rapids Dam.
deschutes basin
Tumalo Irrigation District
Deschutes River Conservancy
Ochoco Irrigation District
The Tumalo Irrigation District is currently working on new program
and project authorizations and does not have a funding request at this
time.
The Deschutes River Conservancy is also currently working on new
program and project authorizations and is seeking an appropriation of
$2 million dollars for fiscal year 2006.
The Ochoco Irrigation District (Prineville, Oregon) has worked with
the Bureau of Reclamation, along with the North Unit Irrigation
District (Madras, Oregon) for the better part of a decade to determine
the use of unallocated water in the district's reservoir. Approximately
$200,000 in additional dollars is required to finish the project.
Reclamation earlier invested $500,000 in the process, which has not
been completed.
umatilla/columbia basins
Stanfield Irrigation District
Westland Irrigation District
Hermiston Irrigation District
West Extension Irrigation District
East Valley Water District
East Fork Irrigation District
The Umatilla districts draw their water supply from the Umatilla
and Columbia Rivers. The districts have been in the process of
exchanging Umatilla River water for Columbia River water to benefit
fisheries resources. Phase III is the final component of the Project
and will have the largest impact to the basin. The districts recognize
the need to move forward with Phase III of the project and support the
$200,000 in the fiscal year 2006 Budget.
OWRC supports the fiscal year 2006 request of $250,000 by the East
Valley Water District for an evaluation of the potential to deliver
irrigation water to lands within the district so as to relieve pressure
on local groundwater supplies.
OWRC also supports the funding request of $500,000 by the East Fork
Irrigation District for their Central Canal Upgrade/Neal Creek Inverted
Siphon so the District can restore upstream and downstream passage of
juvenile and adult anadromous and resident fish in Neal Creek,
including threatened steelhead; and end the transport of glacial silt
into Neal Creek and the District's canal system and reduce long-term
O&M costs.
eastern basins
Burnt, Malheur, Owyhee and Powder River Basins Water Optimization Study
The irrigation districts in these basins continue to seek support
for this optimization study to seek alternatives for more effective
water management through conservation projects and enhancement of water
supply. This project has been identified by the Bureau of Reclamation
as a regional need.
OWRC supports the fiscal year 2006 Oregon Investigations program
request that contains $450,000 to continue studies for these basins as
well as several other basins in the State.
klamath basin
The Klamath Project districts continue to require support of their
Water Resource Initiatives, Water Conservation Plan work and ongoing
operations planning and other projects within Reclamation's budget for
the Mid-Pacific Division. We continue to encourage the administration
and in particular, the various Department of the Interior Agencies, to
work closely with the districts in the project area on the overall
funding and planning necessary for ongoing solutions.
oregon water supply investigations
In addition, we support the State of Oregon request for an
additional $450,000 for Water Supply Investigations in the State. As
districts and the State continue their efforts at better planning,
there is a fundamental need for better information. This request would
help with assessing existing and future water needs in Oregon,
completing a comprehensive inventory of above and below ground storage
and quantify surplus winter water.
Thank you for the opportunity to provide testimony regarding the
fiscal year 2006 Federal budget. While we support existing proposals,
we feel that given the record-setting droughts we have suffered in the
past few years and in anticipation of another drought this year, we
need to support an increased budget to stabilize the Nation's water
supply for the many needs it must meet. Providing a stable water supply
feeds the economy locally and at the national level.
______

Prepared Statement of the Western Coalition of Arid States (WESTCAS)
The Western Coalition of Arid States (WESTCAS) is submitting this
testimony to the United States Senate Appropriations Committee, Energy
and Water Subcommittee regarding the Bureau of Reclamation's (BOR)
fiscal year 2006 Federal budget. BOR's budget is of particular concern
for our members since its mission regarding water directly affects the
members of our organization.
WESTCAS is an organization created in 1992 with coalition
membership of approximately 125 water and wastewater districts, cities
and towns, and professional associates focused on water quality issues
in many western States.
WESTCAS is concerned about the overall budget reduction for BOR and
its affect on certain programs. The President's fiscal year 2006
request for the Bureau of Reclamation at $946.7 million is $18.2
million less than the fiscal year 2005 enacted level of $964.9 million.
Of greatest concern is the $50 million in the water and related
resources (construction) account of the Bureau. The greatest reductions
were seen in the Middle Rio Grande, Central Arizona and Title XVI
projects.
This is despite sizable increases in the Safety of Dams, Site
Security, Water 2025 and the newly reauthorized Bay-Delta Eco-System
Restoration programs. WESTCAS appreciates the sizable increases, and
would ask the committee to provide even greater funding in this
account.
Our organization believes the Title XVI program warrants higher
appropriations. There is approximately $600,000,000 in backlogged
projects for Title XVI at this time. These projects are one of the most
cost effective ways of developing and providing water in the West. We
believe that a minimum annual appropriation of $50,000,000 for Title
XVI should ensue beginning in fiscal year 2006.
WESTCAS believes that some consideration should be given to an
annual authorization for appropriations similar to the Corps of
Engineers 1135 program, where funds are authorized every fiscal year in
a set amount and project sponsors are eligible to get an appropriation
from that authorized amount of money. This would serve to reduce the
number of congressional ``write-ins'' which reflect negatively on the
Title XVI program. To facilitate that authorization program, WESTCAS
requests the committee ask the Secretary of Interior to look into the
possibility of restructuring Title XVI.
The Lower Colorado River is in need of additional off-stream
storage below Hoover Dam to respond to the ongoing drought. A letter
recently sent from the governors' representatives of the seven Colorado
River Basin States to the region's 14 Senators urged their support for
$30 million in fiscal year 2006 for regulatory storage and an
additional $7.6 million for sediment removal to improve the capacity at
Laguna Dam, in order to save up to 200,000 acre-feet of water annually.
These projects will better enable the Colorado River managers to
regulate flows, and also will promote enhanced conservation, storage,
delivery, and water quality. This funding for increased Lower Colorado
River Regulatory Storage should not adversely affect funding for any of
the Bureau of Reclamation's authorized projects or funding for
Reclamation's water operations, environmental, endangered species
recovery, and salinity control programs. WESTCAS supports the Seven
Basin States' fiscal year 2006 requests (totaling $37.6 million) for
Lower Colorado River storage improvements.
WESTCAS supports the continued funding of the Federal portions of
the Colorado River Salinity Control Program. Since the Colorado River
is a major source of water supply in the arid West, maintaining the
salinity in the river at acceptable levels is critical for the
economic, recreational, and environmental uses of the river. WESTCAS
urges the committee to continue to fund this vital program.
We thank you for the opportunity to provide this statement for the
hearing record.
______

Prepared Statement of the Public Service Company of New Mexico
I am requesting your support for an appropriation in fiscal year
2006 of $2,529,000 to the Bureau of Reclamation within the budget line
item entitled ``Endangered Species Recovery Implementation Program''
for the Upper Colorado Region. The President's recommended budget for
fiscal year 2006 includes this line-item amount. The funding
designation we seek is as follows: $1,401,000 for construction
activities for the Upper Colorado River Endangered Fish Recovery
Program; $572,000 for the San Juan River Basin Recovery Implementation
Program and $556,000 for Fish and Wildlife Management and Development.
These highly successful, cooperative programs are ongoing
partnerships among the States of New Mexico, Colorado, Utah and
Wyoming, Indian tribes, Federal agencies and water, power and
environmental interest. The programs' objectives are to recover
endangered fish species while water use and development proceeds in
compliance with the Endangered Species Act. These recovery programs
have become national models for collaboratively working to recover
endangered species while addressing water needs to support growing
western communities in the Upper Colorado River Basin region of the
Intermountain West. Since 1988, these programs have facilitated ESA
Section 7 consultation (without litigation) for over 800 Federal,
tribal, State and privately managed water projects depleting
approximately 2.5 million acre-feet of water per year.
The requested fiscal year 2006 appropriation will allow the Upper
Colorado River Endangered Fish Program to proceed with construction of
additional fish passage structures on the Green and Colorado Rivers to
provide access to historic habitat upstream of existing diversion dams.
The requested funding for the San Juan River Recovery Program will be
used for contracts for construction and cooperative agreements with the
State of New Mexico to provide and protect instream flows, fish
ladders, flooded bottom land restoration, propagation facilities,
stocking efforts, normative and sportfish management activities.
The enactment of Public Law 106-392, as amended by Public Law 107-
375, authorized the Federal Government to provide up to $46 million of
cost sharing for these two ongoing recovery programs' remaining capital
construction projects. Raising and stocking of the endangered fish
produced at program hatchery facilities, restoring floodplain habitat
and fish passage, regulating and supplying instream habitat flows,
installing diversion canal screens and controlling nonnative fish
populations are key components of the programs' ongoing capital
construction projects. Subsection 3(c) of Public Law 106-392 authorizes
the Secretary of the Interior to accept up to $17 million of
contributed funds from Colorado, Wyoming, Utah and New Mexico, to
expend such contributed funds as if appropriated for these projects;
and provides for an additional $17 million to be contributed from
revenues derived from the sale of Colorado River Storage Project (CRSP)
hydroelectric power. This substantial non-Federal cost-sharing funding
demonstrates the strong commitment and effective partnerships embodied
in both of these successful programs. The requested Federal
appropriations are critically important to these efforts moving
forward.
The past support and assistance of your subcommittee has greatly
facilitated the success of these multi-State, multi-agency programs. I
thank you for that support and request the subcommittee's assistance
for fiscal year 2006 funding to ensure the Bureau of Reclamation's
continuing financial participation in these vitally important programs.
______

Prepared Statement of the Irrigation & Electrical Districts'
Association of Arizona
We are pleased to present this written testimony on the fiscal year
2006 budget proposals for the U.S. Bureau of Reclamation and the
Western Area Power Administration. Our Association consists of 25
entities in Arizona which serve water and power from the Colorado River
and other sources to rural and urban Arizona communities, farms and
businesses.
bureau of reclamation
While we generally support the proposed Reclamation budget, and
indeed think it is too small, the following are specific items of
concern that we urge the subcommittee to consider.
Use of Receipts.--The budget proposes to allow Reclamation to
capture power receipts from the Western Area Power Administration and
use those for operation, maintenance, and research and development
activities without having to come to Congress for appropriation of such
monies. In the Colorado River Basin, power customers and water
customers have a series of arrangements for customer involvement in
reviewing spending proposals before they reach Congress. This funding
shift would emasculate those relationships and make the oversight
Congress rightly provides for these activities significantly more
difficult. Congress has previously rejected similar proposals. Because
of the lack of accountability that this proposal engenders, we do not
believe that Congress should consider authorizing this monetary
shortcut.
Glen Canyon Dam.--In the 1992 Grand Canyon Protection Act, Congress
gave specific direction to the Secretary of the Interior concerning
assessing the impacts of the specific power operation criteria used at
Glen Canyon Dam on the downstream environment in Marble Canyon and the
Grand Canyon. Studies had already been underway on that subject for a
decade by the time Congress acted. Some 23 years into this program,
there are still no definitive answers. Nevertheless, Reclamation
proposes to build temperature control devices into the outlet works at
Glen Canyon Dam, impelled by an 11-year-old Final Biological Opinion
under the Endangered Species Act. The budget proposal and its
supporting documentation admit that no one knows whether this will have
any beneficial effect on the downstream endangered fish, the humpback
chub. Indeed, it could be harmful. Congress should withhold funds for
construction of these temperature control devices until sound science
shows that a beneficial effect will result. Congress should also direct
Reclamation to provide a report on the impacts of the five power
operating criteria at Glen Canyon Dam. Certainly 23 years of study has
produced some answers.
Security Costs.--We oppose the shift of $18 million to $20 million
of currently non-reimbursable costs associated with increased security
measures after 9/11 to power users. It is simply unfair to single out
hydropower facilities to bear these increased costs when airports,
train stations, etc., are receiving ongoing non-reimbursable
appropriations many times larger than this. Shortly after 9/11,
Reclamation established a non-reimbursable cost policy for increased
security costs and Congress has since then consistently approved that
policy and directed Reclamation to continue it. Indeed, in the Omnibus
Appropriation Bill for fiscal year 2005, Congress specifically directed
Reclamation to continue that policy, and to report back to Congress by
May 1 of this year. Congress further directed Reclamation not to alter
that policy without specific direction from Congress. Now Reclamation
has dug itself into a financial hole by treating a large portion of
these monies as reimbursable and not requesting appropriations for
them. The sound public policy that engendered Reclamation's original
position and approval of it by Congress should be continued.
Public Law 108-451.--The President signed this bill, the Arizona
Water Settlements Act, on December 10, 2004. While Reclamation's
proposed budget mentions the passage of the Act, the only impact
discernible in the budget request is a significant decrease in funding
for CAP Indian distribution systems. We are concerned that the
settlement that is embodied in the Act contains funding obligations to
which the United States agreed which are not being reflected in this
budget request.
western area power administration
We have three specific comments on Western's proposed budget.
Average Market Rates.--The fiscal year 2006 budget proposes that
the Power Marketing Administrations, including Western, raise rates by
20 percent per year until achieving prices constituting something
labeled ``average market rates''. This proposal is nothing short of
asinine. Throughout the entire history of Federal power generation
programs, Congress has directed that Federal power resources be sold to
consumers at prices that will recover costs and, based on applicable
Federal law, interest on the reimbursable portions of these severally
authorized projects. Until recently, federally-regulated electric
utilities and most State-regulated utilities were held to the same
conceptual yardstick: cost-based rates. Recent studies have shown that
allowing federally-regulated private electric utilities to venture into
``market based rates'' has done nothing to lower power costs to
consumers. Moreover, this massive public policy shift would require
overriding the provisions of numerous major acts and Congressionally-
authorized projects and programs. The Congressionally-mandated
yardstick for pricing Federal power has always been ``lowest possible
cost consistent with sound business principles''. Since the record is
devoid of evidence that the use of market rates by private utilities
has benefited electric consumers, surely the government should not
venture into this philosophical quagmire. Current Federal pricing
policy is sound and in the best interests of electric consumers. We
strongly oppose this misguided initiative.
Use of Receipts.--We continue to oppose what is becoming a
perennial suggestion that the PMA's, including Western, be authorized
to use power receipts for operation and maintenance costs associated
with their programs. Like the similar proposal for Reclamation, this
proposal would destabilize existing agency/customer consultation
arrangements, reduce Congressional oversight and provide a hugely
expanded level of agency autonomy. The lack of checks and balances in
this proposal renders it fatally flawed. Instead, Congress should
direct the PMA's, including Western, to initiate and/or improve
customer consultation and concurrence mechanisms. This would encourage
customers to work with these agencies to ensure that truly needed
funding for projects and programs was available.
Parker-Davis Project.--Last year, the fiscal year 2005 Omnibus
Appropriation Bill provided $6 million to replace one of two parallel
transmission lines running from Topock Substation in western Arizona to
Davis Dam and on to the Mead Substation near Hoover Dam in Nevada. The
funds were deemed non-reimbursable. Since the funds then had to be
taken out of available funds, this earmark made a significant dent in
the construction funding for Western for fiscal year 2005 and caused a
number of projects to be postponed. This conductor replacement was
supposed to be an experiment and funded outside Western's budget. That
didn't happen. Just as importantly, the administration is not proposing
to continue funding for this ``experiment''. We heartily support the
administration's decision and vigorously oppose any earmarking of funds
within Western's budget for it. The proposed use of composite cable is
extraordinarily expensive compared to traditional cable. The path being
proposed to be upgraded is contractually constrained, not physically
constrained, and there are substantially cheaper alternatives for
improving transmission in northwestern Arizona. In short, it is a waste
of money.
In closing, we wish to inform the subcommittee that we endorse and
support the testimony filed by the Colorado River Energy Distributors'
Association, a regional association of which our Association is a
member. We also endorse and support the testimony filed by the Central
Arizona Water Conservation District, one of our members.
We appreciate the opportunity to share the Association's positions
with you and would be happy to respond to any requests for information
or clarification.
______

Prepared Statement of Colorado Springs Utilities
I am requesting your support for an appropriation in fiscal year
2006 of $2,529,000 to the Bureau of Reclamation within the budget line
item entitled ``Endangered Species Recovery Implementation Program''
for the Upper Colorado Region. The President's recommended budget for
fiscal year 2006 includes this line-item amount. The funding
designation we seek is as follows: $1,401,000 for construction
activities for the Upper Colorado River Endangered Fish Recovery
Program; $572,000 for the San Juan River Basin Recovery Implementation
Program and $556,000 for Fish and Wildlife Management and Development.
These highly successful, cooperative programs are ongoing
partnerships among the States of New Mexico, Colorado, Utah and
Wyoming, Indian tribes, Federal agencies and water, power and
environmental interests. The programs' objectives are to recover
endangered fish species while water use and development proceeds in
compliance with the Endangered Species Act. These recovery programs
have become national models for collaboratively working to recover
endangered species while addressing water needs to support growing
western communities in the Upper Colorado River Basin region of the
Intermountain West. Since 1988, these programs have facilitated ESA
Section 7 consultation (without litigation) for over 800 Federal,
tribal, State and privately managed water projects depleting
approximately 2.5 million acre-feet of water per year.
The requested fiscal year 2006 appropriation will allow the Upper
Colorado River Endangered Fish Program to proceed with construction of
additional fish passage structures on the Green and Colorado Rivers to
provide access to historic habitat upstream of existing diversion dams.
The requested funding for the San Juan River Recovery Program will be
used for contracts for construction and cooperative agreements with the
State of New Mexico to provide and protect instream flows, fish
ladders, flooded bottom land restoration, propagation facilities,
stocking efforts, nonnative and sportfish management activities.
The enactment of Public Law 106-392, as amended by Public Law 107-
375, authorized the Federal Government to provide up to $46 million of
cost sharing for these two ongoing recovery programs' remaining capital
construction projects. Raising and stocking of the endangered fish
produced at program hatchery facilities, restoring floodplain habitat
and fish passage, regulating and supplying instream habitat flows,
installing diversion canal screens and controlling nonnative fish
populations are key components of the programs' ongoing capital
construction projects. Subsection 3(c) of Public Law 106-392 authorizes
the Secretary of the Interior to accept up to $17 million of
contributed funds from Colorado, Wyoming, Utah and New Mexico, to
expend such contributed funds as if appropriated for these projects;
and provides for an additional $17 million to be contributed from
revenues derived from the sale of Colorado River Storage Project (CRSP)
hydroelectric power. This substantial non-Federal cost-sharing funding
demonstrates the strong commitment and effective partnerships embodied
in both of these successful programs. The requested Federal
appropriations are critically important to these efforts moving
forward.
The past support and assistance of your subcommittee has greatly
facilitated the success of these multi-State, multi-agency programs. I
thank you for that support and request the subcommittee's assistance
for fiscal year 2006 funding to ensure the Bureau of Reclamation's
continuing financial participation in these vitally important programs.
______

Prepared Statement of the Colorado River Board of California
Your support and leadership are needed in securing adequate fiscal
year 2006 funding for the Department of the Interior with respect to
the Federal/State Colorado River Basin Salinity Control Program.
Congress has designated the Department of the Interior, Bureau of
Reclamation (Reclamation) to be the lead agency for salinity control in
the Colorado River Basin. This successful and cost effective program is
carried out pursuant to the Colorado River Basin Salinity Control Act
and the Clean Water Act. California's Colorado River water users are
presently suffering economic damages in the hundreds of million of
dollars per year due to the River's salinity.
The Colorado River Board of California (Colorado River Board) is
the State agency charged with protecting California's interests and
rights in the water and power resources of the Colorado River System.
In this capacity, California along with the other six Basin States
through the Colorado River Basin Salinity Control Forum (Forum), the
interstate organization responsible for coordinating the Basin States'
salinity control efforts, established numeric criteria in June 1975,
for salinity concentrations in the River. These criteria were
established to lessen the future damages in the Lower Basin States, as
well as, assist the United States in delivering water of adequate
quality to Mexico in accordance with Minute 242 of the International
Boundary and Water Commission.
The goal of the Colorado River Basin Salinity Control Program is to
offset the effects of water resource development in the Colorado River
Basin after 1972 rather than to reduce the salinity of the River below
levels that were caused by natural variations in river flows or human
activities prior to 1972. To maintain these levels, the salinity
control program must remove 1,800,000 tons of salt loading from the
River by the year 2020.
In the Forum's last report entitled 2002 Review, Water Quality
Standards for Salinity, Colorado River System (2002 Review) released in
October 2002, the Forum found that additional salinity control measures
that remove salt from the River in the order of 1,000,000 tons are
needed to meet the implementation plan. The plan for water quality
control of the River has been adopted by the States and approved by the
Environmental Protection Agency. To date, Reclamation has been
successful in implementing projects for preventing salt from entering
the River system; however, many more potential projects for salt
reduction have been identified that can be controlled with
Reclamation's Basin-wide Salinity Control Program. The Forum has
presented testimony to Congress in which it has stated that the rate of
implementation of the program beyond that which has been funded in the
past is necessary.
In 2000, Congress reviewed the salinity control program as
authorized in 1995. Following hearings, and with the administration's
support, the Congress passed legislation that increased the ceiling
authorization for this program by $100 million. Reclamation has
received proposals to move the program ahead and the seven Basin States
have agreed to up-front cost sharing on an annual basis, which adds 43
cents for every Federal dollar appropriated.
In previous years, the President has supported, and Congress has
funded, the Bureau of Reclamation's Basin-wide Salinity Control Program
at about $12 million. The Forum has indicated that the President's
request for funding for fiscal year 2006 in the amount of $10,000,000
is inappropriately low. The Forum has requested a total of $17.5
million for fiscal year 2006 to implement the needed and authorized
program. The Colorado River Board supports the Forum's recommendation
and believes that failure to appropriate these funds may result in
significant economic damages in the United States and Mexico. Water
quality commitments to downstream U.S. and Mexican users must be
honored while the Basin States continue to develop their Compact
apportioned waters from the Colorado River. For every 30 mg/L increase
in salinity concentration in the River, there is $75 million in
additional damages annually in the United States.
Based upon past appropriations, implementation of salinity control
measures has fallen behind the needed pace to prevent salinity
concentration levels from exceeding the numeric criteria adopted by the
Forum and approved by the EPA. The seven Colorado River Basin States
have carefully evaluated the Federal funding needs of the program and
have concluded that an adequate budget is needed for the plan of
implementation to maintain the salinity standards for the River. With
the newly authorized USDA EQIP program, more on-farm funds are
available and adequate funds for Reclamation are needed to maximize
Reclamation's effectiveness. The Forum, at its meeting in San Diego,
California, in October 2002, recommended a funding level of $17,500,000
for Reclamation's Basin-wide Salinity Control Program to continue
implementation of needed projects and begin to reduce the ``backlog''
of projects.
In addition, the Colorado River Board recognizes that the Federal
Government has made significant commitments to the Republic of Mexico
and to the seven Colorado River Basin States with regard to the
delivery of quality water to Mexico. In order for those commitments to
be honored, it is essential that in fiscal year 2006, and in future
fiscal years, that Congress provide funds to the Bureau of Reclamation
for the continued operation of completed projects.
The Colorado River is, and will continue to be, a major and vital
water resource to the 17 million residents of southern California.
Preservation of its water quality through an effective salinity control
program will avoid the additional economic damages to users in
California.
The Colorado River Board greatly appreciates your support of the
Federal/State Colorado River Basin Salinity Control Program and again
asks for your assistance and leadership in securing adequate funding
for this program.
______

DEPARTMENT OF ENERGY

Prepared Statement of the DOE University Research Program in Robotics
(URPR)
The U.S. Department of Energy (DOE) has provided support to the DOE
University Research Program in Robotics to pursue long range research
leading to the: ``development and deployment of advanced robotic
systems capable of reducing human exposure to hazardous environments,
and of performing a broad spectrum of tasks more safely and effectively
than utilizing humans.''
The DOE University Research Program in Robotics (URPR) has proven
highly effective in technology innovation, education, and DOE mission
support. The URPR has incorporated mission-oriented university research
into DOE, and, through close collaboration with the DOE sites, provides
an avenue for developing creative solutions to problems of vital
importance to DOE.
The URPR would like to thank the committee members for their
historically strong support of this successful program. Recognizing the
shift in national priorities post-9/11/01, the URPR has begun to
include new applications as the target for its technology development.
Request for the Committee
The University Research Program in Robotics (URPR) is included in
the President's budget at its traditional level of $4.5 million (fiscal
year 2002-2005). To accelerate technology development and deployment
within the DOE complex, we suggest an additional $1.5 million be added
to the URPR while a separate allocation of $2.0 million be provided to
participating NNSA laboratories and sites.
developing advanced robotics for doe and the nation
Robotic Solutions for Work in Potentially Hazardous Environments
The goal of this program is to invent and utilize state-of-the-art
robotic technology in order to remove humans from potentially hazardous
environments and expedite remediation efforts considered essential.
Established by DOE in fiscal year 1987 to support advanced nuclear
reactor concepts, the project was moved to EM to support the higher
priority needs in environmental restoration. Reflecting the change in
national priorities post-9/11, the URPR began supporting NNSA
applications during fiscal year 2004. Because of the sensitive nature
of some potential applications, this transition is proceeding smoothly
but gradually as the new DOE participants begin to grasp the
applicability of this technology to their future world, and the URPR
participants obtain information regarding technology problems and
potential applications.
The URPR represents a DOE-sponsored consortium of five research
universities (Florida, Michigan, New Mexico, Tennessee, and Texas) of
long standing, working on the science of remote systems technologies to
advance their effectiveness in performing physical tasks in hazardous
environments associated with the DOE nuclear sites. The work of these
universities is now widely recognized as some of the best in the field
(the creation of spin-off companies, deployment requests from FEMA at
Ground Zero, wins in national technology competitions, archival journal
articles, etc.). Some of the focus technologies include innovative
mobile platforms and their semi-autonomous navigation, kinesthetic
input to teleoperation systems, simulation-based design and control,
manipulation of unwieldy objects, machine vision and scene assessment
for world modeling, improved radiation hardening of electronic
components, and integration technology to assist in the assessment and
deployment of complete solutions in the field. In addition to DOE
specific applications, the team is increasingly able to deploy their
technology for DOD applications (aircraft carrier weapon's elevator,
anti-terrorism systems, submarine operations, etc.), for Homeland
Security applications (surveillance and monitoring), for commercial
applications (manufacturing, building construction, space) and for
human augmentation and training (micro-surgery, rehabilitation of
humans, reduction of drudgery). We constantly seek to explore strategic
partnerships and utilize existing deployment resources to more rapidly
export this technology to the DOE sites that could most benefit from
this new technology.
Robotics and Automation for NNSA
NNSA recognizes the need to develop advanced automation and
robotics capabilities, as expressed in the NNSA Technology Roadmap for
the modernized nuclear weapon complex. The report notes ``Perhaps the
most significant transformation of the NWS complex will be the
replacement of manually intensive production systems with automated,
intelligent process and equipment.'' The URPR program provides
capabilities that will improve ability and agility in responding to
programmatic needs, and enhance personal safety, security, efficiency,
and efficacy of weapons related activities within the complex through
the application of intelligent automation. It supports the DOD research
programs priorities of promoting scientific and engineering leadership,
and vitality and workforce renewal, providing agile responses to future
requirements, and offering assessment and implementation of new
technology options during the planning and execution of major capital
projects.
The nuclear weapons complex represents one of our Nation's most
vital pieces of defense infrastructure and warrants the country's
finest technologies to accomplish its mission. In the commercial
sector, advanced automation and robotic technologies have demonstrated
the ability to increase security, personnel safety, precision and
reproducibility, and productivity for tasks that are hazardous,
routine, or require exceptional precision.
Advances in robotic mobility, mapping, handling, simulation, safety
and integration technology will minimize the risks to human operators
and maximize the productivity of DOE sites. URPR will provide
fundamental, long-range robotics and integration technologies that can
be validated and systematically inserted into DOE sites. These world-
class technologies will support applications in the Stockpile
Stewardship Program and other DOE programs. The specialized needs
associated with the complex make many existing technologies
inappropriate, unsuitable, or requiring significant further development
or modification. Where new automation and robotics technologies will
benefit the DOE mission, the URPR program seeks to meet that need.
The current plans for the URPR transition into the NNSA
organization call for the university consortium to interact through
Sandia National Laboratory (SNL) to the project manager at DOE
headquarters. SNL has been strongly supportive of the URPR mission, but
lacks funds to participate materially in this program. At the top
levels of NNSA, the URPR funds are being drawn from multiple campaigns
since the benefits of this technology can impact many NNSA
applications. URPR ties to specific sites having applications needing
robotic technologies have begun.
Making the Nation Safer
In the aftermath of the 9/11 tragedy, our Nation has engaged in a
long-term war to counter terrorism. The National Research Council
[2002] published a thorough study of the role of science and technology
in countering terrorism entitled Making the Nation Safer. This book
represents the collective thoughts of 164 top scientists and engineers
focusing on homeland security of the United States. It represents the
combined output of the National Academy of Sciences, the National
Academy of Engineering, the Institute of Medicine, and the National
Research Council. It identifies urgent research opportunities. Of the
seven crosscutting technology challenges identified by the committee,
autonomous mobile robotic technologies were highlighted. ``Continued
development and use of robotic platforms will enable the deployment of
mobile sensor networks for threat detection and intelligence
collection. Robotic technologies can also assist humans and such
activities as ordinance disposal, decontamination, debris removal, and
firefighting.'' Robotic technologies, cited as a ``critical long-term
research need,'' are featured throughout the individual chapters that
address ways for mitigating our society's vulnerabilities to terrorism
and responding to an attack. In addition, the report identifies the
need to sustain the Nation's scientific and engineering talent base and
recommends [Rec. 13.4] a human resource development program to increase
training in those fields consistent with the government's long-term
priorities for homeland security research. The report exhorts that
``expanding the number of American scientists and engineers is
particularly important.''
In summary, the University Research Program in Robotics is a key
player in executing the recommendations for making the Nation safer. We
believe that the progress being demonstrated by the URPR will also be
heralded by DHS as they develop a clearer vision of their needs.
Innovation, Education, and DOE Mission Support
The URPR's strategic mission is to make significant advances in our
Nation's robotic and manufacturing technology base while emphasizing:
education, technology innovation through basic R&D, and DOE mission
support. The URPR has demonstrated that the advantages of operating as
a consortium are significant. The institutions of the URPR partition
the technical development into manageable sections which allow each
university to concentrate within their area of expertise (efficiently
maintaining world-class levels of excellence) while relying on their
partners to supply supporting concentrations. With full support of the
host universities, this effort naturally generated the in-depth human
and equipment capital required by the DOE community. Practically, the
long-term distributed interaction and planning among these universities
in concert with the DOE labs and associated industry allows for
effective technology development (with software and equipment
compatibility and portability), for a vigorous and full response to
application requirements (component technologies, system technologies,
deployment issues, etc.), and for the supported application of the
technology. Considering the remarkable achievements of URPR over its
history, the URPR is in the ideal position to execute its prominent
role in education, technology innovation, and DOE mission support.
The project has produced an impressive array of technological
innovations, which have been incorporated into robotic solutions being
employed across Federal and commercial sectors. This successful program
demonstrates efficient technology innovation while educating tomorrow's
technologists, inventing our country's intelligent machine systems
technology of the next century, bolstering our manufacturing-related
industries, and meeting tomorrow's applied research needs for DOE.
DOE Mission Contribution--Robotic Technologies
Since its inception, DOE has promoted robotics as a necessary
enabling technology to accomplish its mission. The motives for
undertaking a comprehensive R&D effort in the application of advanced
robotics to tasks in hazardous environments reflect economic
considerations, efficiency, and health and safety concerns. The URPR is
DOE's only needs-driven research program to develop new remote systems
technologies to support the DOE thrust areas. In contrast, DOD, NIH,
and NASA continue to prove the benefits of much larger mission-oriented
robotics programs.
The URPR's level of funding has been constant since fiscal year
2002 and remains adequate for continuing basic research and development
of this technology. However, the URPR participants are concerned about
ensuring their technology provides direct benefit to NNSA applications.
We are already aware of several applications in which robotics and
automation should be employed to enhance safety, security, and
productivity. Key Senate staff have recommended to augment the URPR
funding and provide direct funding to NNSA sites in order to stimulate
technology development and deployment for these and future applications
(e.g., LANL TA-55, Y-12).
Request for the Committee
We request the committee include the following language in the
fiscal year 2006 Energy and Water Appropriations Bill: ``From within
funds provided for the engineering campaigns, the Committee recommends
that $6,000,000 be provided to continue the University Research Program
in Robotics (URPR) for the development of advanced robotic technologies
for strategic national applications. Also from within funds provided
for the engineering campaigns, the Committee recommends that $2,000,000
be provided to NNSA laboratories and sites to transfer, integrate and
deploy robotics technology developed by the URPR.''
______

Prepared Statement of Cummins Inc.
Cummins Inc. is pleased to provide the following statement for the
record regarding the Department of Energy's fiscal year 2006 budget for
Energy Efficiency and Renewable Energy and Fossil Energy programs.
Cummins Inc., headquartered in Columbus, Indiana, is a corporation of
complementary business units that design, manufacture, distribute and
service engines and related technologies, including fuel systems,
controls, air handling, filtration, emission solutions and electrical
power generation systems. The funding requests outlined below are
critically important to Cummins' research and development efforts, and
would also represent a sound Federal investment towards a cleaner
environment and improved energy efficiency for our nation. We request
that the committee fund the programs as identified below.
energy efficiency and renewable energy
Office of FreedomCAR and Vehicle Technologies (FCVT)
Vehicle Technologies
Advanced Combustion Engine R&D--Heavy Truck Engine.--This program
supports R&D activities to increase heavy truck engine fuel efficiency
while meeting EPA emissions regulations in 2007 and 2010. Modern heavy
duty diesel engines convert approximately 41 percent of fuel energy
into useful work. Technologies required to achieve EPA's 2007 and 2010
emissions regulations will negatively impact engine efficiency (EPA
regulations call for 90 percent emissions reductions by 2010). The
objective of this program is to reach a 50 percent engine efficiency
level under the new standards. A 45 percent efficiency level has been
demonstrated at 2007 conditions in the laboratory. To further mitigate
fuel efficiency penalties, additional research efforts are needed in
advanced combustion and NOX and PM reduction. Heat rejection
challenges and aftertreatment systems, including active particulate
filters and NOX reduction technologies (adsorbers and SCR),
will be addressed by the program in fiscal year 2006. Other areas of
work include modeling and simulation techniques, system level controls,
vehicle system integration and advanced lubricants. This program is
critical to the success of engine manufacturers in meeting EPA's strict
2007 and 2010 emissions regulations. Cummins urges that $20 million be
appropriated for the program for fiscal year 2006.
Advanced Combustion Engine R&D--Off-Highway Heavy Vehicle Engine
R&D.--Technologies needed to meet EPA's strict Tier IV emissions
regulations for off-road vehicles will result in significant fuel
economy penalties. This program supports R&D efforts to help meet
future emissions requirements while maintaining Tier II/Tier III fuel
consumption. Off-highway vehicles and machines operate under severe
environmental conditions, including high dust, debris, a wide range of
altitudes, temperatures and vibration. Off-road engines are applied to
hundreds of different types of equipment in a wide range of industries,
such as agriculture, construction and mining. Manufacturers face unique
challenges in meeting emissions regulations for off-highway vehicles.
These markets are very sensitive to installed cost for engine
components, and the lack of ram air and limited space for accessories
and engine components significantly limits emissions compliance
strategies. Progress has been made in recent years in combustion models
to facilitate in-cylinder emissions solutions, meeting Tier III
emissions levels with fuel economy levels close to Tier II engine
designs. Level funding for the Off-Highway program in fiscal year 2006
will allow continued research on improving combustion models for
complex combustion systems, transient operations and validation of Tier
IV technologies on single and multi-cylinder engines. Cummins urges
that $3.5 million be appropriated for this program for fiscal year
2006.
Advanced Combustion Engine R&D--Combustion and Emission Control
R&D.--In this program, the emphasis is on research in advanced
combustion regimes that would achieve FreedomCAR and 21st Century Truck
Partnership efficiency goals for personal and commercial diesel
vehicles while maintaining near zero emissions. The light duty segment,
less than 8,500 lb. GVW, is where most transportation fuel is currently
used and where virtually all of the growth in transportation fuel use
will occur. The ability to meet Tier II, Bin 5 emissions targets with
light duty diesel engines has been demonstrated through the program
with aftertreatment subsystems and controls. However, critical
technology hurdles remain in the areas of lowering engine out
emissions, improving aftertreatment system durability, engine managed
regeneration and effective operation during transient and low
temperature operations, on-board diagnostics, minimizing fuel economy
penalties due to use of reductant and engine back pressure effects.
Funding under the 21st Century Truck Partnership supports CRADA
activities at the Department of Energy's national laboratories for
broad research and development of advanced combustion systems to
improved engine-out emissions and fuel efficiency. Recent DOE contract
awards for research on High Efficiency Clean Combustion are funded
under this program. Cummins urges that $28.5 million be appropriated
for this program in fiscal year 2006. A funding split under the program
between the 21 Century Truck Partnership (21CTP) and the FreedomCAR
Partnership is recommended as follows: 21CTP--$7.7 million and
FreedomCAR--$20.8 million (as requested by DOE).
Advanced Combustion Engine R&D--Waste Heat Recovery.--This DOE
program supports broader energy efficiency and emissions goals for
diesel engines by funding technology development for waste heat
recovery and boosting technologies. Over 50 percent of the fuel energy
is lost in diesel engines through wasted heat in exhaust, lubricants or
coolants. This program is focused on identifying and developing
innovative energy recovery technologies, such as thermoelectric and
turbo-compounding technologies, which are showing promise for
recovering wasted energy by converting it to electrical energy. Planned
activities for the program in fiscal year 2006 include design &
development of components, subsystems and associated electronic
controls, integration with engine controls and development of
thermoelectric generator technologies. Cummins urges that $4 million be
appropriated for this program in fiscal year 2006.
Advanced Combustion Engines--Health Impacts.--The goal of this
program is to evaluate health implications from new engine technologies
being developed to meet energy efficiency goals. The Advanced
Collaborative Emissions Study (ACES) is funded under this program. ACES
is a cooperative effort between government (DOE, EPA) and industry
(EMA, MECA, API, etc. . . . ) to assess health effects of emissions
from heavy-duty engines equipped with new emissions control
technologies. The ACES program will include emissions characterization,
chronic exposure animal bioassays, and identification of any
unanticipated emissions or health effects from new engine technologies.
Cummins urges that $2.5 million be appropriated for this program in
fiscal year 2006.
Fuels Technologies
Non-Petroleum Based Fuels & Lubes: Heavy and Medium Duty Truck
Programs (Natural Gas Vehicle).--This program funds development efforts
for natural gas engines for medium and heavy trucks. Current natural
gas engines sacrifice fuel efficiency compared to diesels in similar
applications. However, next generation natural gas combustion
technologies offer the potential to meet 2010 emissions with simpler
more durable systems and reduce or eliminate fuel efficiency losses.
Natural gas engines are practical in urban applications including
school and city buses, pick up and delivery trucks. The exhaust
emissions signature of engines using natural gas and hydrogen mixture
combustion has demonstrated potential for even lower emissions. Natural
gas combustion, storage and infrastructure development also offers a
bridge to the hydrogen economy. Cummins urges that $2 million be
appropriated for this program in fiscal year 2006.
Advanced Petroleum Based Fuels (APBF).--This important program
supports activities to enable post-2010 combustion regime and emissions
control systems to be as efficient as possible and ongoing study of
sulfur effects on aftertreatment systems for heavy duty engines.
Aftertreatment technologies required to meet new emissions regulations
are new and relatively undeveloped. Engine companies are required to
prove out emissions compliance for over 435,000 miles of useful life.
The goal of this program is to study the impacts of sulfur content in
fuel on durability and reliability of aftertreatment systems. Cummins
urges that $8.5 million be appropriated for this program in fiscal year
2006.
Materials Technologies
Propulsion Materials Technology--Heavy Vehicle Propulsion Materials
Program.--This program supports research and development of next
generation materials to enable improvements in diesel engine efficiency
and reduce aftertreatment system costs. Technologies for NOX
adsorbers and particulate filters are not yet fully developed. A better
understanding of NOX adsorber systems, filtration media
modeling and substrate degradation mechanisms is required. In addition,
traditional heavy duty diesel engine materials may not be adequate for
next generation combustion concepts, such as Homogeneous Charge
Compression Ignition (HCCI) technologies. Lighter weight and higher
strength materials are needed to obtain lighter, more robust and higher
cylinder pressure engine systems. Reductions in engine weight yield
significant improvements in fuel consumption and emissions. Increased
funding for the program will support studies on a range of advanced
materials technologies, including sulfur removal from NOX
adsorber catalysts/soot oxidation, filtration media modeling, nano-
fiber filter technologies, and understanding lightweight/high strength
material engine components. Cummins urges that $6.9 million be
appropriated for this program in fiscal year 2006.
Distributed Energy Resources
Distributed Generation Technology Development--Advanced
Reciprocating Engine Systems (ARES).--The goal of this multi-year
program is to develop high efficiency, low emissions and cost effective
technologies for stationary natural gas systems between 500-6,500 kW by
the year 2010. Natural gas-fueled reciprocating engine power plants are
preferred for reliability, low operating costs, high up-time, and
unattended operations. However, these engines have not kept pace with
the fuel efficiency of their diesel engine counterparts. Traditional
natural gas engines are approximately 32-37 percent efficient.
Technologies sponsored by the ARES program have demonstrated a 19
percent efficiency improvement compared to baseline engines and a 19
percent reduction in CO2 emissions. These systems are being
ramped up for field evaluations, and fiscal year 2006 is a critical
year for the program. Future technology challenges include analytical
model development, combustion development, air handling optimization,
hardware durability, ignition system life and advanced controls. The
development of distributed power generation supports national energy
security needs, improved protection of critical infrastructure to
address homeland security concerns, less dependence on the national
electrical grid system and point of use energy production. Cummins
urges that $17 million be appropriated for this program in fiscal year
2006.
fossil energy
Office of Fossil Energy/Coal and Other Power Systems/Distributed
Generation Systems
Fuel Cells
Innovative Concepts--Solid State Energy Conversion Alliance
(SECA).--The goal of the Solid State Energy Conversion Alliance (SECA)
project is the development of a commercially viable 3-10 kW solid oxide
fuel cell module that can be mass-produced in modular form for RV,
commercial mobile, and telecommunications markets. The program is also
investigating products that can be used in auxiliary power units on
long haul trucks to reduce idling. Solid oxide fuel cells can play a
key role in securing the Nation's energy future by providing efficient,
environmentally sound electrical energy. Fuel cell systems provide
highly reliable power, with significantly lower noise, fuel consumption
and exhaust emissions compared to existing fossil fuel technologies.
Federal funding is critical to support research needed to keep this
technology moving from the laboratory to commercial viability. Progress
on Phase 1 of the program has been positive. In 2004, a 1 kW-scale
prototype was constructed and tested. A 5 kW prototype is being
constructed for evaluation in the fall of 2005. The program is moving
forward toward production development beginning in calendar 2007,
leading to possible commercial production in 2010. This is a 10-year
program that combines the efforts of the DOE national laboratories,
private industry, universities, and other research organizations.
Cummins urges that the DOE request of $65 million be appropriated for
this program in fiscal year 2006.
Thank you for this opportunity to present our views on these
programs which we believe are of great importance to the U.S. economy
through viable transportation and power generation.
______

Prepared Statement of the University of Oklahoma
The University of Oklahoma (OU) respectfully requests appropriation
of $1 million in fiscal year 2006 to initiate research in high-priority
and near-term applications of single-walled carbon nanotubes (SWNT).
This work will be performed through a newly formed Center for
Applications of Single-Walled Carbon Nanotubes.
statement of national interest
Nanotechnology will undoubtedly play a central role in the future
of energy. Lighter, stronger, more efficient nano-structured materials
will result in superior utilization, transportation, and storage of
energy. Within the realm of nanotechnology, single-walled carbon
nanotubes (SWNT, also known as ``buckytubes'') play a crucial role.
SWNT will function as arms, wires, pipes, circuit devices and nano-
scale transport devices that will make the nanotechnological revolution
possible. SWNT serve as true ballistic conductors, molecular wires, and
single-molecule transistors. In the next few decades we will see the
silicon-based microelectronics of today rivaled or perhaps supplanted
by carbon-based nanoelectronics technology that is much faster, smaller
and energy-efficient. In the field of materials, nanotubes might
represent in the 21st century what polymers did in the 20th century: a
revolutionary material that changes the lives of everyone. The
combination of extraordinary electrical properties, extremely high
thermal conductivity, very large length-to-diameter ratio (typical of a
polymer), and extreme stiffness (typical of a ceramic) means that a
material unlike any other has been created. SWNT are 200 times stronger
than steel at one-sixth the weight, and conduct heat more efficiently
than any other material.
The path to large-scale application of SWNT has been hampered by
the high cost and low availability of these unique materials. SWNT
synthesis methods are currently presumed to be impure and non-scalable,
unable to operate under severe conditions, and demanding of high
capital and operating costs. However, a new nanotube synthesis process
developed at OU and known as CoMoCAT^TM (Resasco et al.), is
a catalytic method of synthesis that has proven advantageous over all
existing methods and can be scaled up to produce large amounts of high
quality SWNT. Significantly, many of the proposed applications of SWNTs
are likely to require quantities of nanotubes with high structural
integrity, rather than nanotube mixtures and low-purity materials.
Based on the novel CoMoCAT^TM technology, an OU startup
company (South-West Nanotechnologies, SWeNT) is developing a large-
scale process that will position OU in the unique and enviable position
of having available abundant amounts of SWNT of the highest quality for
development of revolutionary products. The uniformity of nanotube
structure and their easier dispersability are the world-wide recognized
properties of our nanotube product. However, long-term economic
competitive advantage will mostly be in the development and manufacture
of products based on the SWNT produced in Oklahoma. This challenge will
be the main focus of the funded program.
mission and approach
Researches at OU and SWeNT have developed unique methods to handle
the nanotubes in different forms (freeze dried nanotube webs, viscous
gels, and stable nanotube suspensions). Each of these forms is suitable
for specific applications and is customized for each potential user.
The research lines that will be either expanded from existing groups at
OU or developed around the proposed initiative will take advantage of
the large-scale availability of high-quality nanotubes produced by
SWeNT. The advantages of SWeNT nanotube material are described below in
the section entitled Statement of Unique Technology. The research
described herein will take our technological lead in production of
carbon nanotubes, and turn it into an economic lead in products useful
in the following applications of great impact in the Energy sector,
such as:
--Fuel cells;
--Energy Storage;
--Photovoltaic cells; and,
--Lightweight strong composites.
Their incomparable aspect ratio and high surface area, coupled with
their extraordinary mechanical, electrical, and gas transport
properties make SWNT excellent support elements for nanostructured fuel
cell electrodes and essential components of supercapacitors and
conducting coatings. The properties of our SWNT show great potential
for improvement of fuel cell electrodes' performances. We have
demonstrated that the nanotubes can stabilize high Pt dispersions,
increase electronic conductivity in the electrodes, improve gas
transport in the electrodes' reactive layers, and decrease peroxides'
attack of the proton-transfer membrane. In addition, SWNT can be
structured on the surface of the membrane at the nanometer level, thus
offering the opportunity for maximizing utilization of Pt, a major
driver of the fuel cell cost. All these advantages make SWNT excellent
candidates as fuel cell electrodes.
Also, within the scope of the research program on nanotube
applications is the utilization of the remarkable ability of SWNT for
gas adsorption and as a filler in polymer composites with unique
strength, light weight, thermal and electrical conductivity. In
particular, we plan to develop nanotube-based fire-resistant polymer
composites, electrical and thermally conducting composites, as well as
high-strength fibers. In confined areas, e.g. ships and airplanes, a
very important safety hazard is melted plastic, e.g., plastic used as
insulation for wires. Nanotubes entangle with the polymer and prevent
the polymer from dripping when melted, thus averting severe injury to
passengers, crew and safety personnel fighting the fire. Applications
for high thermal conductivity materials include microelectronics; heat
dissipation is one of the most important problems in making electronic
components smaller and smaller.
The use of high thermal conductivity materials will lead to even
smaller and more powerful microelectronic components. Addition of SWNT
to polymers results in electrical conductivity increases of many orders
of magnitude. These electrically conductive composites can be designed
with a wide range of conductivities for a variety of applications that
include antistatic materials, electrostatic dissipation, and EMI/RFI
shielding.
Soft body armor materials made from polymers, (Kevlar and Spectra
Shield) are lightweight and flexible; however the stopping power is
significantly inferior to hard armor made from heavy, inflexible
ceramics. SWNTs have polymer-like and ceramic-like qualities, and hence
the possibility of making a material that has the flexibility and
weight of soft-body armor and the stopping power of hard body armor.
Better armor will improve survivability and mobility of our military
and law enforcement personnel.
Other promising SWNT applications include field emitters for flat
panel displays, nanosensors, nanotransistors, nanostructured coatings,
and molecular delivery of biomolecules.
statement of unique technology
Our process is based on a formulation of solid catalyst that
inhibits the formation of undesired forms of carbon and minimizes the
residual catalyst left on the product; it can be readily scaled-up and
may result in lower production costs. This method is based on the
controlled reaction of carbon monoxide (CO) on a solid catalyst, under
conditions that result in high yield and selectivity towards SWNT as
opposed to other less desired forms of carbon, such as graphite
nanofibers. Most importantly, this process can be operated in a
continuous mode and be scaled-up while keeping high selectivity. These
are significant elements for a cost-effective production system. Each
of the known competitive processes lacks at least one or more of the
key success factors of cost, selectivity, and consistent quality.
Because the electronic and optical properties of SWNT depend upon
sensitively of tube structure, a major goal in nanotube production is
to control the distribution of nanotube diameters and chiralities in
the product. For methods in which nanotubes are grown from gaseous
precursors on metallic catalyst particles, the size distribution of the
catalyst particles strongly influences the product composition. For
example, dozens of distinct nanotube structures are formed in the well-
known HiPCO^TM process, developed at Rice University. By
contrast, with the unique catalyst formulation developed by OU, the
product composition depends on catalyst design and parameters that
precede the reaction process and nanotube growth. Adjustment of these
parameters allows fine control over the specific catalyst activity and,
therefore, of the nanotube structures.
In our method, nanotubes are grown by CO disproportionation
(decomposition into C and CO2) at 700-950C in flow of pure
CO at a total pressure that typically ranges from 1 to 10 atm. This
process is able to grow a significant amount of SWNT in several
minutes, keeping selectivity towards SWNT of better than 90 percent.
The difference of this technology compared to other catalytic
decomposition methods is based on the stabilization of highly dispersed
Co species on a solid substrate. The effect of having Co stabilized is
dramatic. It avoids the formation of large metallic aggregates. These
large metallic aggregates, present in all of the competing methods have
the disadvantage of getting encapsulated in graphite layers, which
remain in the product and are extremely difficult to remove. By
contrast, in our process, Co atoms are initially in the form of cobalt
molybdate and only begin to agglomerate under the reaction conditions
and their growth is hindered by the interaction with the substrate.
This process has the intrinsic ability to produce SWNT of different
diameters, because by varying the operating temperature or the gas
composition the distribution of diameters can be reproducibly varied.
During the last 2 years, the process has been scaled up by a factor of
20 without any change in the structural characteristics of the product.
In addition to the better scalability of our process, the product
itself exhibits uniquely superior features. Among several advantages,
the uniformity of nanotube structure and their easier dispersability
due to their thinner bundle size are perhaps the most remarkable.
For many applications in nanoelectronics and nanosensors it is
essential to have a nanotube material with specific electronic
properties. The characteristics of nanotubes are directly related to
their diameter and chirality. Therefore, a process that allows
controlling in a reproducible way the structure of nanotubes has a
remarkable edge over non-selective processes. The nanotubes produced by
our process exhibit a uniquely narrow distribution of diameters, which
can be controlled by adjusting the process parameters. This
characteristic of the product has been confirmed by photoluminescence
analysis performed in collaboration with scientists at Rice University.
For instance, as demonstrated in a recent publication, the selectivity
distribution of different semiconducting carbon nanotubes produced by
our method is superior compared to that obtained in the competing
processes. It can be observed that only two types of nanotubes
represent the majority of the semiconducting nanotubes present in our
samples. By contrast, a similar analysis of the competing material
displays a much broader distribution of both diameters. The two types
of nanotubes observed in our samples are the (6,5) and (7,5), whose
diameters are 0.75 nm and 0.82 nm, respectively. This result is in
perfect agreement with the 0.8 nm average diameter measured by Raman
spectroscopy, TEM, and STM. The distribution of chiralities is also
very narrow. Both, the (6,5) and (7,5) nanotubes have a chiral angle
near 27 degrees. By contrast, competing materials exhibit a much
broader distribution of chiralities.
Due to the presence of the solid silica substrate that separates
the growing nanotubes during the synthesis, the resulting bundles of
SWNT are significantly thinner than those typically obtained with
methods in which the catalyst is in the vapor phase. While each of the
bundles produced by these other methods contain 50 to 100 nanotubes,
those obtained in our process only contain 10 to 20 nanotubes. A sample
with thinner bundles has several important advantages over one with
thicker bundles. For example, for applications in flat panel displays
(field emission), thinner bundles result in much lower voltage
requirements for a given operating emission current. Lower onset
voltages in field emission have a great impact on the cost and
viability of flat panel displays. Similarly, in the area of polymer
composites, thinner bundles can produce conducting composites with
lower nanotube loadings, increasing the transparency of the material
and reducing the cost.
Tests conducted by companies who collaborate with OU and SWeNT,
such as Applied Nanotechnologies Inc, Austin, TX; Zyvex, Dallas, TX;
and Nomadics, Stillwater, OK confirm the higher dispersability in
polymer matrices of our SWNT material compared to nanotubes produced by
other methods. In addition to the photoluminescence analysis conducted
at Rice, several reputed laboratories around the world have confirmed
the quality and uniqueness of the SWNT produced by our method. For
example, high-resolution STM images have been obtained at Harvard
University in the group of Prof. Charles Lieber. The STM images reveal
nanotubes of high quality and uniquely uniform diameter, in complete
agreement with the photoluminescence results. Similarly, Dr. Ming Zheng
at Dupont, working with our material and employing a separation method
involving interaction of DNA of specific sequencing with the nanotubes,
has been able to produce monodispersed samples of (6,5) nanotubes. This
is the first time that a sizeable sample of only one type of nanotube
is separated. This remarkable accomplishment can only be realized with
the narrow distribution of our sample material. In addition to those
mentioned above, our samples have been tested and analyzed by several
other academic laboratories around the world (Prof. Manfred Kappes,
Karlsruhe University, Germany; Prof. Hongjie Dai, Stanford; Prof.
Michael Strano, Illinois; Prof. Antonio Monzon, Zaragoza, Spain) as
well as industrial laboratories (Dupont, Zyvex, Eikos, ChevronPhillips,
Dow) and Federal agencies (NASA). In all cases, the analyses have
indicated that the material is of high quality and uniquely uniform.
______

Prepared Statement of the Detroit Diesel Corporation
Detroit Diesel Corporation (DDC), a DaimlerChrysler Company,
provides this statement for the record addressing the administration's
fiscal year 2006 budget request for the Department of Energy's Office
of FreedomCAR and Vehicle Technologies (OFCVT). Specifically, the
following line items and recommendations are addressed in this
statement:
--Heavy Truck Engine.--$20.0 million funding recommended;
--Combustion and Emission Control (21CT).--$7.735 million funding
recommended;
--Advanced Petroleum Based Fuels (21CT).--$5.5 million funding
recommended.
We generally support the administration's budget request for OFCVT,
but we respectfully urge the committee to consider further enhancements
to critical key line items that require prompt and immediate attention
to reduce the U.S. demand for petroleum. These key line items will have
immediate near-term impact on energy security, will decrease emissions
of criteria air pollutants and greenhouse gases, and will enable the
U.S. transportation industry to sustain a strong and competitive
position in the domestic and world markets. Specific relevant OFCVT R&D
programs enjoy substantial industry cost share demonstrating a matched
commitment by the U.S. industry. In order to bring the intended results
to fruition, these programs require sustained or increased levels of
funding.
DDC's world headquarters and its main manufacturing plant are
located in Detroit, Michigan. DDC employs over 4,000 persons who
design, manufacture, sell and service engines for the transportation
and power markets. Our products cater to heavy-duty trucks, coach and
bus, automobiles, construction, mining, marine, industrial, power
generation and the military. DDC has operations and manufacturing
centers in various regions of the United States, along with a network
of over 100 distributors and 2,700 dealers throughout the United States
and worldwide. The DDC Series 60 engine has revolutionized truck engine
technology, consistently setting new global performance, fuel economy
and life cycle cost standards. It has been the most popular heavy-duty
truck engine in the United States for the past 14 years.
Detroit Diesel recognizes the administration's FreedomCAR agenda,
and its attention to both near-term and long-term energy sufficiency.
The long-term vision focuses on potential emerging technologies, such
as fuel cells and hydrogen-based transportation energy. However, it is
not anticipated that these technologies will be viable for heavy-duty
applications in the foreseeable future. Therefore, we believe that it
is equally important to further develop fuel-efficient clean diesel
technologies. With appropriate government support, these technologies
will have a significant impact on surface transportation fuel use. In
this regard, our comments will focus on the program line items that
provide substantial potential payback for this important area of
national interest.
We generally support the administration's budget request, while
respectfully urging the committee to consider further enhancements to
the following two line items under the proposed fiscal year 2006
Advanced Combustion Engine R&D program element: Heavy Truck Engine and
Combustion and Emission Control, as well as one line item under the
proposed fiscal year 2006 Fuels Technology program element: Advanced
Petroleum Based Fuels.
The Heavy Truck Engine has a fiscal year 2006 request of $12.148
million, less than the enacted budget in fiscal year 2005. The 2007 and
2010 Federal emissions mandates require an extremely aggressive R&D
development plan to identify and implement new technologies. Recent
specific findings suggest that EPA's initial projections have
underestimated the negative economic impact of the U.S. 2004
regulations by an order of magnitude. The 2007/2010 mandates will
further reduce both NOX and particulate emissions by an
additional 90 percent from the 2004 levels. The technological
complexities of meeting highly stringent emissions reduction while
maintaining and ultimately improving the fuel economy within an
extremely short time frame is the toughest challenge ever faced by the
U.S. heavy-duty transportation industry. We believe this provides the
strongest rationale for significant increases in government support to
these competitively bid, collaborative, 50-50 cost-shared R&D programs.
DDC is investigating advanced combustion systems, alternative emissions
reduction technologies including engine and exhaust after-treatment
systems, and smart control strategies within an integrated powertrain.
Fiscal year 2005 funding appropriation was $13.8 million. We urge the
committee to consider increasing the Heavy Truck Engine line item by an
additional $7.9 million above the fiscal year 2006 budget request
(Total=$20 million) to assert and support the urgency of accelerated
development of these related high risk emerging technologies.
The Combustion and Emission Control activity focuses on the
development of advanced emission control technologies for clean diesel
engines for U.S. personal transportation vehicle applications as well
as a heavy truck component supporting the goals of the 21st Century
Truck Partnership. For decades to come, clean diesel engines are the
most relevant solution simultaneously offering significant fuel economy
savings, reduced exposure to climate change issues and a cleaner
environment. Initial developments show potential for lower emissions
meeting the mandated 2007/2010 levels while maintaining the diesel
engine's inherently superior fuel efficiency. The initial performance
results are compelling, but many questions remain unanswered regarding
emerging technologies for after-treatment and integration of a total
technically viable system. The administration's $3.375 million request
for the 21CT portion of this budget line item is significantly lower
than the historical level of the last few years. We suggest enhancing
this by an additional $4 million (Total=$7.375 million) to handle the
urgent technical issues of the relevant emerging technologies.
The Fuels Technology is a separate OFCVT program element that
includes Advanced Petroleum Based Fuels line item request of $3.5
million for the 21CT portion. It has been demonstrated by the National
Labs that combustion efficiency of heavy duty diesel engines can be
improved via tailoring certain properties of fuels. In fiscal year
2006, new programs with industry-led teams will attempt to advance this
research into the next stage of applied R&D. Therefore, we recommend
enhancing the 21CT portion of this line item by an additional $2
million (Total=$5.5 million) to enable the investigation of this
additional path for improved fuel efficiency.
We take this opportunity to affirm our strong endorsement to the
proposed Department of Energy's fiscal year 2006 referenced budget
requests with the stated specific enhancements. The trend setting
partnership between the U.S. Government and a key industrial base
addresses this country's and the world's needs in critical areas of
transportation, energy security, economy and environment. The exemplary
track record through competitive leveraging of government funding by
substantial industry cost share and the emerging high potential results
of these partnerships warrant strong Congressional endorsement. This
affords a unique opportunity for a justifiable and a highly effective
return on investment of the U.S. taxpayers' money.
______

Prepared Statement of the Consortium for Fossil Fuel Science,
University of Kentucky
Member institutions of CFFS: University of Kentucky, University of
Pittsburgh, West Virginia University, University of Utah, and Auburn
University.
production of hydrogen from fossil fuels using c1 chemistry: overview
and funding request
The ``hydrogen economy'' envisions a quantum leap in the
improvement of air quality through the utilization of hydrogen as a
fuel for a new generation of vehicles powered by fuel cells
(``FreedomCar'') and for the production of electrical power
(``FutureGen''). This document briefly outlines a hydrogen research
program being conducted by research faculty and graduate students from
the five universities (Kentucky, West Virginia, Pittsburgh, Auburn, and
Utah) that comprise the Consortium for Fossil Fuel Science (CFFS). The
primary goal of the research is to develop novel, improved methods of
producing hydrogen from coal-derived syngas, hydrocarbon gases and
liquids produced from syngas, coalbed methane, and natural gas using C1
chemistry, an area in which the CFFS has significant expertise and
experience. The development of novel hydrogen storage materials is also
being investigated. A 3-year contract to conduct this research was
initiated with the CFFS by the U.S. Department of Energy, Office of
Fossil Energy, (DOE-FE) in 2005. The CFFS is requesting $2 million from
DOE-FE in fiscal year 2006 to continue this research program. The five
CFFS universities will provide $0.25 of cost-sharing for each Federal
$1.00, for a total cost-share of $500,000 in fiscal year 2006.
The overall goals of the program are to:
--Develop non-traditional approaches for producing high purity
hydrogen from gaseous, liquid, and solid hydrocarbons that are
more efficient than those currently used.
--Develop improved catalysts and reaction sequences for producing
hydrogen from coal-derived syngas via the water-gas shift (WGS)
reaction.
--Develop improved methods for low-temperature reforming of alcohols
derived from coal.
--Develop novel solid materials that have high capacity for safe
hydrogen storage.
research program
The CFFS research program on hydrogen has been formulated through
consultation and discussions with program managers at the DOE-FE
National Energy Technology Laboratory (NETL) and with the members of
the CFFS Industrial Advisory Board (Chevron-Texaco, Eastman Chemical,
Conoco-Phillips, Air Force Research Laboratory, U.S. Army National
Automotive Center-Tank & Automotive Command (TACOM), and Tier
Associates). A brief summary of the research topics being addressed in
this program is given below.
non-traditional approaches for the production of hydrogen
--Catalytic dehydrogenation of gaseous hydrocarbons has been shown by
the CFFS to be a simpler one-step method of producing hydrogen
than the traditional multiple step method. Future research will
focus on applying this approach to producing hydrogen from
liquid and solid hydrocarbons, including coal, diesel fuel, and
waste plastic.
--Hydrogen production from C1 fuels by reforming in
supercritical water looks promising because of its ability to
act both as a solvent and a reactant.
--Electrochemical production of pure hydrogen from fine coal slurries
may occur at lower potentials with less energy consumption than
direct electrolysis of water because coal supplies additional
electrons for the process.
--Autothermal reforming of hydrocarbon fuels will be investigated
using novel iron-based catalysts with ceria supports.
--Photocatalytic decomposition of water using photocatalysts
consisting of metal-doped titanium oxide aerogels will be
investigated. Metal nanoparticles will be incorporated into the
aerogels from volatile metal complexes.
hydrogen production using the water-gas shift (wgs) reaction
--A low temperature reaction sequence to produce hydrogen from coal-
derived syngas using a potassium catalyst will be investigated.
--Development of very high surface area WGS catalysts supported on
ceria aerogels should improve the yields and kinetics of that
process.
--Identification of active sites and secondary metal promoters should
lead to more active iron-based WGS catalysts.
low temperature reforming of alcohols
--Several companies favor steam reforming of alcohols as an approach
for producing hydrogen for vehicles and distributed power
generation. Three CFFS research projects will employ novel
approaches and catalysts for reforming readily available
alcohols such as methanol, ethanol, and ethylene glycol (anti-
freeze).
novel hydrogen storage materials
Novel materials that are being developed and investigated for
hydrogen storage by the CFFS are listed below:
--Chemical hydrides containing catalysts to improve hydrogen storage
and release.
--Activated glassy carbons and stacked-cone carbon nanotubes.
--Silica nano-balloons.
--Metal nanoparticles on high surface area silica aerogels.
--Hydrogen-carrier liquid hydrocarbons.
summary
The Consortium for Fossil Fuel Science is requesting $2 million in
fiscal year 2006 to continue an integrated 3-year research program
initiated in fiscal year 2005 on the production and storage of hydrogen
from coal using C1 chemistry. Achievement of the program goals will
accelerate the development of a hydrogen economy. Producing the
hydrogen from coal, our greatest domestic resource, could generate many
new jobs in both the mining industry and in hydrogen production plants.
Additionally, development of technology to produce hydrogen from coal
should help to decrease petroleum imports, now surpassing $150 billion
per year, and improve the U.S. balance of trade.
The Consortium for Fossil Fuel Science is eager to continue its
role in these exciting technical developments. The principal contacts
for the CFFS at each of our five universities are: Gerald P. Huffman,
Director, Consortium for Fossil Fuel Science, University of Kentucky;
Christopher B. Roberts, Chair, Department of Chemical Engineering,
Auburn University; Irving Wender, Distinguished Research Professor,
Department of Chemical & Petroleum Engineering, University of
Pittsburgh; Richard A. Bajura, Director, National Research Center for
Coal and Energy, West Virginia University; and Ronald J. Pugmire,
Associate Vice President for Research, University of Utah.
______

Prepared Statement of the Biomass Energy Research Association
biomass research
This testimony pertains to the fiscal year 2006 appropriations for
biomass energy research, development, and deployment (RD&D) conducted
by the Department of Energy's (DOE) Office of Energy Efficiency and
Renewable Energy (EERE). This mission-oriented biomass RD&D is funded
by the Energy and Water Development Bill, and is performed under the
headings Energy Conservation, which was formerly funded under
Industrial Technology by the Interior and Related Agencies Bill, Energy
Supply, and Hydrogen, for which BERA's recommendations are limited to
biomass-based hydrogen research.
BERA recommends a total appropriation of $88,000,000 in fiscal year
2006 under Biomass and Biorefinery Systems R&D (Energy Supply and
Energy Conservation), and $7,000,000 under biomass-related Hydrogen
Technology, for a total of $95,000,000.
--$1,000,000 for Feedstock Infrastructure.
--$29,500,000 for Platforms R&D: Thermochemical Platform
($17,000,000) and Bioconversion Platform for Sugars
($12,500,000).
--$24,500,000 for Utilization of Platform Outputs: Integration of
Biorefinery Technologies, Thermochemical Conversion
($14,500,000) and Bioconversion ($10,000,000).
--$33,000,000 for Utilization of Platform Outputs R&D: Core
Technologies for Chemicals ($12,000,000), Biorefinery Systems
Development ($16,500,000), State & Regional Partnerships
($4,500,000).
--$7,000,000 for biomass-related projects under Hydrogen Technology.
On behalf of BERA's members, I would like to thank you, Mr.
Chairman, for the opportunity to present the recommendations of BERA's
Board of Directors for the high-priority projects and programs that we
strongly urge be continued or started. BERA is a non-profit association
based in Washington, DC. It was founded in 1982 by researchers and
private organizations that are conducting biomass research. Our
objectives are to promote education and research on the production of
energy and fuels from virgin and waste biomass that can be economically
utilized by the public, and to serve as a source of information on
biomass RD&D policies and programs. BERA does not solicit or accept
Federal funding for its efforts.
The level of earmarks in the last few years has resulted in
premature reductions of scheduled programs by EERE. BERA respectfully
asks the subcommittee to carefully consider the impacts of all earmarks
on EERE's biomass energy RD&D. If they are for projects that are not
included in DOE's formal funding request, BERA urges that they be add-
ons to the baseline funds rather than deductions.
For fiscal year 2006, EERE has again prioritized sugar over
thermochemical platform RD&D. BERA urges that this condition be
eliminated as soon as possible because both platforms are equally
important, particularly for large-scale, virgin biomass growth and
waste biomass acquisition integrated with biorefineries. These are the
systems that will permit biomass to have a major role in displacing
petroleum and natural gas usage.
The original goal of the Biomass and Bioproducts Initiative (BBI)
created as a result of ``The Biomass Research and Development Act of
2000'' and Title IX of the Farm Bill was to triple the usage of
bioenergy and biobased products. Congress has provided annual funding
for the BBI since fiscal year 2000. A strategic plan was developed by
the multi-agency Biomass Research and Development Board (BRDB), co-
chaired by the Secretaries of Energy and Agriculture, to achieve this
goal. Its achievement is necessary because of environmental and energy
security and supply issues, and our increasing dependence on imported
oil. We must determine whether practical biomass systems capable of
displacing much larger amounts of fossil fuels can be developed. BERA
strongly urges that the BBI be continued in fiscal year 2006 at the
funding levels recommended by BERA for the cost-shared demonstration
projects shown in the table on page 3. The highest priority should be
given to this program component.
program integration, coordination, and management
For several years, BERA has urged that all biomass-related research
funded by DOE should be coordinated and managed at DOE Headquarters so
that the program managers are heavily involved in this activity. We are
pleased to note that this process, which began in fiscal year 2002, has
been implemented and is in a constant state of improvement. BERA
congratulates DOE on the progress made in restructuring the program and
its management. BERA also congratulates DOE and USDA for the
cooperation and joint coordination of the programs of each department
to increase the usage of agricultural and forestry biomass for the
production of much larger amounts of affordable fuels, electricity, and
biomass-derived products than have been realized in the past. These
efforts are expected to help facilitate the transformation of biomass
into a major source of renewable energy, fuels, and chemicals.
However, without full incorporation of the BBI into DOE's and
USDA's biomass research programs, the time table for this transition
will be stretched out for several decades and possibly never happen
except to a very limited extent for niche markets. Large, strategically
located, energy plantations are ultimately envisaged in which waste
biomass acquisition and virgin biomass production systems are
integrated with biorefineries and operated as analogs of petroleum
refineries to afford flexible slates of multiple products from multiple
feedstocks. Unfortunately, relatively large amounts of capital and
inducements are required to convince the private sector to get involved
in developing even modest size projects in the field. So to help
implement this essential program, BERA includes the BBI as a line-item
in its annual testimony.
BERA also continues to recommend that implementation of the BBI
should include identification of each Federal agency that provides
funding related to biomass energy development and each agency's
programs and expenditures, as is done today by the DOE and USDA. This
is an on-going activity that should be expanded to include other
agencies and departments to help fine-tune the critical pathways to
program goals. Continuous analysis of the information compiled should
enable the coordination of all federally funded biomass energy programs
through the BRDB to facilitate new starts focused on high priority
targets, and help to avoid duplication of efforts, unnecessary
expenditures, and continuation of projects that have been completed or
that do not target program goals. Full implementation of the BBI will
enhance the value of the Federal expenditures on biomass research to
the country in many different ways.
bera recommendations
BERA's recommendations have always consisted of a balanced program
of mission-oriented RD&D. Advanced thermochemical and microbial
conversion processes and power generation technologies, alternative
liquid transportation fuels, and hydrogen-from-biomass processes are
currently emphasized. Biomass production RD&D for energy uses is
expected to be done by the USDA.
BERA continues to recommend that at least 50 percent of the Federal
funds appropriated for biomass research, excluding the funds for scale-
up projects, are used to sustain a national biomass science and
technology base via sub-contracts for industry and universities. While
it is desirable for the national laboratories to coordinate this
research, increased support for U.S. scientists and engineers in
industry, academe, and research institutes that are unable to fund
biomass research will encourage commercialization of emerging
technologies and serious consideration of new ideas. It will also help
to expand the professional development and expertise of researchers
committed to the advancement of biomass technologies.
Although progress has been made, EERE has terminated research in
several critical thermochemical areas. BERA believes that a balanced
program of high-priority research should be sustained and protected, so
we continue to recommend both a diversified portfolio of research and
an appropriate amount of funding for scale-up without diminishing
either EERE's R&D or scale-up programs. BERA's specific dollar
allocations are listed in the accompanying table. Additional commentary
on each program area is presented on pages 3, 4 and 5. DOE's basic
research on biomass energy performed by the Office of Science, which is
not shown in the table, should be designed to complement EERE's
mission-oriented biomass RD&D. All of DOE's biomass research should
have the ultimate goal of commercialization by the private sector and
fossil fuel conservation and displacement.
allocation of appropriations recommended by bera for fiscal year 2006
BERA recommends that the appropriations for biomass RD&D in fiscal
year 2006 be allocated as shown in the table. Our recommendations are
generally listed in the same order as the funding requests under EERE's
headings and program area titles except several program areas are
included that are either new or that BERA recommends be restored to
maintain a balanced program. Note that the recommended budgets for the
demonstration projects do not include industry cost-sharing, which is
required to be a minimum of 50 percent of each project cost. BERA
recommends that funds for the BBI be used for these scale-up projects
after evaluating the projected contribution of each project to the
BBI's goals.

----------------------------------------------------------------------------------------------------------------
Recommended Budget for
Office of Energy Efficiency and Program Area -------------------------------
Renewable Energy Research Scale-Up
----------------------------------------------------------------------------------------------------------------
Biomass & Biorefinery Systems R&D
(Energy Supply):
Feedstock Infrastructure......... Harvesting Equipment/Storage/Logistics... $1,000,000 ..............
Platforms R&D.................... Thermochemical Platform R&D:
Advanced Combustion & Controls......... 2,000,000 ..............
Advanced Gasification Technologies..... 4,000,000 ..............
Oxygenates from Syngas................. 4,000,000 ..............
Liquid Fuels from Pyrolysis............ 3,000,000 ..............
Chemicals from Syngas & Pyrolysis...... 4,000,000 ..............
Bioconversion Platform R&D:
Pretreatment and Hydrolysis............ 5,000,000 ..............
Organisms and Enzymes.................. 4,000,000 ..............
Fermentation (Ethanol)................. 3,000,000 ..............
Fermentation (Methane)................. 500,000 ..............
Utilization of Platform Outputs.. Integration of Biorefinery Technologies:
Thermochemical Conversion:
Small Modular Power Generation \2\... .............. $2,000,000
Biomass Cofiring Power Generation \2\ .............. 3,000,000
Oxygenates and Mixed Alcohols \2\.... .............. 9,500,000
Bioconversion:
Ethanol from Cellulosics \2\......... .............. 10,000,000
Biomass & Biorefinery Systems R&D
(Energy Conservation, Formerly Part
of Industrial Technology):
Utilization of Platform Outputs.. Core Tech., Building Block Chemicals \3\. \3\ 5,000,000 ..............
R&D.............................. ......................................... .............. \3\ 7,000,000
Biorefinery Systems Development: \3\
Design Optimization, Efficiencies...... \3\ 2,500,000 ..............
Product Slates, Economics, Markets..... \3\ 1,000,000 ..............
Siting, Acquisition, Construction \3\ 2,000,000 \3\ 11,000,000
Starts.
State & Regional Partnerships............ .............. 4,500,000
-------------------------------
Biomass Subtotal............... ......................................... 88,000,000
-------------------------------
Hydrogen Technology \1\.............. Thermal Processes (Reforming) \3\........ .............. 2,000,000
Photolytic Processes (Algae)............. 1,000,000 ..............
Innovative Conversion Processes.......... 4,000,000 ..............
-------------------------------
Biomass-Related Hydrogen ......................................... 7,000,000
Subtotal.
-------------------------------
Grand Total.................... ......................................... 95,000,000
----------------------------------------------------------------------------------------------------------------
\1\ BERA's recommendations pertain only to the biomass-based portion of Hydrogen Technology.
\2\ BERA's recommendations should be used for scale-up at the PDU and pilot-plant scales, preferably with
industry cost-sharing.
\3\ All demonstration projects should be cost-shared with industry and State participation.

biomass & biorefinery systems r&d (energy supply)
Feedstock Infrastructure, Harvesting Equipment, Storage, and
Logistics.--EERE terminated biomass production research a few years ago
and is now concentrating on infrastructure development, including novel
systems for collecting agricultural residues. In fiscal year 2006, EERE
plans to focus on single-pass harvester development for wheat straw and
corn stover.
Platforms R&D, Thermochemical Conversion.--In fiscal year 2006,
EERE will continue to develop technologies for the production and
conditioning of biomass syngas and pyrolysis oils suitable for the
manufacture of fuels, chemicals, and hydrogen. Unfortunately, much of
this research has been phased out. Continuation of advanced biomass
combustion and gasification methods could have environmental and
economic benefits that can lead to significant growth in power
generation from waste biomass and combined energy recovery-disposal
methods for certain kinds of high-moisture waste biomass such as
biosolids (municipal sewage), MSW, agricultural residues, and wood
wastes. BERA recommends continuation of this R&D to develop the next
generation of advanced combustion and gasification processes for power
generation. Also, the development of medium-Btu biomass gasification
provides one of the most promising routes for production of liquid
fuels, chemicals, and hydrogen from a broad range of biomass feedstocks
including cellulosics and residual materials. Gasification can be the
cornerstone of EERE's programs. Investigation into the refinement of
gas cleanup technology and other supporting unit operations such as
biomass feeding and downstream catalytic operations should be expanded.
BERA has also recommended that EERE support thermochemical liquefaction
processes such as pyrolysis. It has been a minimally funded R&D effort,
particularly when compared with the effort expended on other conversion
methods.
BERA urges that thermochemical conversion R&D for biomass
combustion, gasification, and liquefaction be restored, expanded, and
given a higher priority by EERE.
Platforms R&D, Bioconversion.--Although technology for fermentation
of the five sugars in cellulosics is available, the cost of releasing
them from recalcitrant biomass is still high. EERE has focused the R&D
effort to reduce this cost on three major elements: advanced
pretreatment, enzymatic hydrolysis, and process integration. Dilute
acid pretreatment is also being studied. In fiscal year 2006, pilot-
scale work will be initiated on more chemistries and configurations for
thermochemical pretreatment, and a solicitation is planned to address
and optimize cellulase activity under these pretreatment regimes.
Methane fermentation (anaerobic digestion) is unique in that it
produces methane, the major component in natural gas, at high
concentrations in the medium-Btu product gas from a full range of
virgin and waste biomass. EERE has terminated most of this research,
which can lead to advanced waste disposal-energy recovery processes as
well as the alleviation of numerous environmental problems encountered
during waste treatment in urban communities and agricultural
facilities. This research should be restored.
Bioconversion is useful for converting a variety of biomass and
derivatives to a wide range of commodity chemicals or high-value
organic chemicals and polymers. The use of selected microbial
populations is in fact the only practical route to certain types of
chemicals and polymers. An exploratory program to advance this
technology is a natural adjunct to EERE's on-going Bioconversion R&D.
BERA recommends that part of this research effort should focus on this
field.
Utilization of Platform Outputs, Integration of Biorefinery
Technologies, Thermochemical Conversion and Bioconversion.--In fiscal
year 2006, EERE reports that it will continue to integrate and test the
handling, pretreatment, hydrolysis, and fermentation operations to
allow for evaluation of the performance and costs of converting biomass
to fuels at the bench- and/or pilot-scale to assist in the development
of commercialization plans. This implies that thermochemical conversion
will not be examined in EERE's program and that it will be limited to
microbial systems. BERA strongly recommends that this effort not be
limited to bioconversion because there are many thermochemical options
that can be applied to design and operate integrated, multiple-product
biorefineries. This is much preferred to a technology-limited plant and
can often be changed with market conditions to maximize ROIs. Also,
projects such as those conducted at the PDU and pilot-plant scales can
more readily focus on efficient development of the critical data needed
to overcome or eliminate existing scale-up barriers. It is essential
that integrated feedstock acquisition-biorefinery systems be designed
and built using this information for demonstration in the field on a
sustainable basis. The pathways to successful development of these
systems are in hand now.
Additional commentary on the value of PDU and pilot-scale R&D is in
order. For example, several projects performed at semi-commercial plant
scales or that involved modules of commercial plants have been funded
and carried out to develop processes for converting low-cost cellulosic
feedstocks to fermentation ethanol. Unfortunately, the results of this
effort have not led to operating systems despite the excessive time and
relatively large budgets that have been provided to conduct the work.
It is apparent that although the processes are feasible, the scale-up
projects have not yet been successful. But it is still important to
commercialize this technology; smaller scale PDU- and pilot-scale work
will facilitate this transition.
biomass & biorefinery systems r&d (energy conservation, formerly part
of industrial technology)
Utilization of Platform Outputs R&D, Core Technologies,
Chemicals.--For fiscal year 2006, EERE reports that this R&D effort
will continue the competitive selection of R&D projects aimed at core
technology development to enable a broad suite of products. Core
technology was defined via an analytical effort that resulted in the
selection of the top 12 building block chemicals that can be produced
from sugar intermediates via biological or chemical conversions. These
12 chemicals can subsequently be converted to a number of high-value
biobased chemicals or materials.
BERA urges that this effort focus on commodity organic chemicals,
which have established markets, rather than high-value chemicals, which
are normally either new products without established markets or
specialty chemicals with limited markets. On commercialization, this
will have a greater probability of reducing petroleum and natural gas
consumption. In fiscal year 1999 when this program was started under
EERE's Industrial Technology program, the goal was to displace 10
percent of the fossil feedstocks with biomass for the production of
commodity organic chemicals. BERA estimated that when process energy is
also included, this could save a total of about 0.6 quad annually in
oil and gas consumption. BERA also urges that this effort not be
limited to sugar intermediates; it should include direct conversion of
other intermediates and biomass to commodity organic chemicals.
Biorefinery Systems Development.--The recommended budget in Table 3
is much smaller than actually needed, but will permit this program to
be started. BERA has long believed that the highest priority should be
given to this program component. Its objective should be the sustained
operation of biorefineries integrated with biomass acquisition in
relatively large demonstration facilities (energy plantations). This
effort should address siting, plant design, financing, permitting,
construction, environmental controls, waste processing and disposal,
and sustained operations; feedstock acquisition, transport, storage,
and delivery; all waste disposal and emissions issues; and storage and
delivery of salable products to market.
BERA recommends that industrial partners and States should be
carefully selected for participation in this cost-shared program. Long-
range planning is essential to ensure that each project has a high
probability of success and lays the groundwork for continued
installation of similar systems by the private sector. Since only a
minimal effort has been conducted to date in the United States on this
type of program, BERA recommends that the first demonstration facility
target the acquisition of waste and/or virgin biomass feedstocks for
conversion into electricity, liquid and gaseous fuels, and chemicals.
Existing moderate- and large-scale facilities from terminated and
continuing EERE projects, such as biomass cofiring, gasification,
liquefaction, and fermentation, should be carefully examined to
determine whether one or more are suitable for these projects. The
partnerships should be in place at the start of each demonstration
project.
State and Regional Partnerships (Formerly Regional Biomass Energy
Program).--The Regional Biomass Energy Program (RBEP), which covered
all States divided into five regions, has been a model outreach program
for more than 20 years. The State & Regional Partnerships (SRP) was
created last year to succeed the RBEP. Since its creation, the SRP has
established and strengthened the regional government councils in each
of the five regions, developed a methodology to document the
effectiveness of the SRP, collaborated with several States to address
market barriers, State policies and programs, initiated work to update
State biomass resource assessments, conducted feasibility studies for
specific projects, and continued development of guidebooks and software
to allow biomass project developers to self-assess project feasibility.
BERA strongly urges that the SRP be continued in fiscal year 2006.
Hydrogen Technology.--Research on the thermal reforming of biomass
and on splitting water with algae should be continued. In addition,
innovative conversion methods such as the use of anaerobic digestion
under ambient conditions and catalytic and non-catalytic thermochemical
gasification under certain operating conditions that minimize methane
formation while maximizing hydrogen formation should be studied. These
technologies may lead to low-cost hydrogen production methods.
______

Prepared Statement of the State Teachers' Retirement System, State of
California
Department of Energy--Elk Hills School Lands Fund.--$48 million for
fiscal year 2006 installment of Elk Hills compensation.
congress should appropriate the funds necessary to fulfill the federal
government's settlement obligation to provide compensation for the
state of california's interest in the elk hills naval petroleum reserve
summary
Acting pursuant to Congressional mandate, and in order to maximize
the revenues for the Federal taxpayer from the sale of the Elk Hills
Naval Petroleum Reserve by removing the cloud of the State of
California's claims, the Federal Government reached a settlement with
the State in advance of the sale. The State waived its rights to the
Reserve in exchange for fair compensation in installments stretched out
over an extended period of time.
Following the settlement, the sale of the Elk Hills Reserve went
forward without the cloud of the State's claims and produced a winning
bid of $3.65 billion, far beyond most expectations. Under the terms of
the Settlement Agreement between the Federal Government and the State,
the State is to receive a 9 percent share of the sales proceeds as
compensation for its claims, to be paid in annual installments over 7
years without interest. Each annual installment of compensation is
subject to a Congressional appropriation. In each of the past 7 fiscal
years (fiscal years 1999-2005), Congress has appropriated a $36 million
installment of Elk Hills compensation for the State.
The President's Budget for fiscal year 2006 requests an
appropriation of $48 million of Elk Hills compensation for the State,
in order to meet the Federal Government's obligations to the State
under the Settlement Agreement. The State respectfully requests an
appropriation of at least $48 million in the subcommittee's bill for
fiscal year 2006.
The Elk Hills appropriation has the broad bipartisan support of the
California House and Senate delegation.
background
Upon admission to the Union, States beginning with Ohio and those
westward were granted by Congress certain sections of public land
located within the State's borders. This was done to compensate these
States having large amounts of public lands within their borders for
revenues lost from the inability to tax public lands as well as to
support public education. Two of the tracts of State school lands
granted by Congress to California at the time of its admission to the
Union were located in what later became the Elk Hills Naval Petroleum
Reserve.
The State of California applies the revenues from its State school
lands to assist retired teachers whose pensions have been most
seriously eroded by inflation. California teachers are ineligible for
Social Security and often must rely on this State pension as the
principal source of retirement income. Typically the retirees receiving
these State school lands revenues are single women more than 75 years
old whose relatively modest pensions have lost as much as half or more
of their original value to inflation.
congressional direction to settle the state's claims
In the National Defense Authorization Act for fiscal year 1996
(Public Law 104-106) that mandated the sale of the Elk Hills Reserve to
private industry, Congress reserved 9 percent of the net sales proceeds
in an escrow fund to provide compensation to California for its claims
to the State school lands located in the Reserve.
In addition, in the Act Congress directed the Secretary of Energy
on behalf of the Federal Government to ``offer to settle all claims of
the State of California . . . in order to provide proper compensation
for the State's claims.'' (Public Law 104-106, 3415). The Secretary
was required by Congress to ``base the amount of the offered settlement
payment from the contingent fund on the fair value for the State's
claims, including the mineral estate, not to exceed the amount reserved
in the contingent fund.'' (Id.)
settlement reached that is fair to both sides
Over the course of the year that followed enactment of the Defense
Authorization Act mandating the sale of Elk Hills, the Federal
Government and the State engaged in vigorous and extended negotiations
over a possible settlement. Finally, on October 10, 1996 a settlement
was reached, and a written Settlement Agreement was entered into
between the United States and the State, signed by the Secretary of
Energy and the Governor of California.
The Settlement Agreement is fair to both sides, providing proper
compensation to the State and its teachers for their State school lands
and enabling the Federal Government to maximize the sales revenues
realized for the Federal taxpayer by removing the threat of the State's
claims in advance of the sale.
federal revenues maximized by removing cloud of state's claim in
advance of the sale
The State entered into a binding waiver of rights against the
purchaser in advance of the bidding for Elk Hills by private
purchasers, thereby removing the cloud over title being offered to the
purchaser, prohibiting the State from enjoining or otherwise
interfering with the sale, and removing the purchaser's exposure to
treble damages for conversion under State law. In addition, the State
waived equitable claims to revenues from production for periods prior
to the sale.
The Reserve thereafter was sold for a winning bid of $3.65 billion
in cash, a sales price that substantially exceeded earlier estimates.
proper compensation for the state's claims as congress directed
In exchange for the State's waiver of rights to Elk Hills to permit
the sale to proceed, the Settlement Agreement provides the State and
its teachers with proper compensation for the fair value of the State's
claims, as Congress had directed in the Defense Authorization Act.
While the Federal Government received the Elk Hills sales proceeds
in a cash lump sum at closing of the sale in February, 1998, the State
agreed to accept compensation in installments stretched out over an
extended period of 7 years without interest. This represented a
substantial concession by the State. Congress had reserved 9 percent of
sales proceeds for compensating the State. The school lands owned by
the State had been estimated by the Federal Government to constitute
8.2 to 9.2 percent of the total value of the Reserve. By comparison,
the present value of the stretched out compensation payments to the
State has been determined by the Federal Government to represent only
6.4 percent of the sales proceeds, since the State agreed to defer
receipt of the compensation so that it was payable over a 7-year period
and will receive no interest on the deferred payments.
Accordingly, under the Settlement Agreement the Federal Government
is obligated to pay to the State as compensation, subject to an
appropriation, annual installments of $36 million in each of the first
5 years (fiscal years 1999-2003) and the balance of the amount due
split evenly between years 6 and 7 (fiscal year 2004-2005). Under the
Settlement Agreement, if any installment is not fully paid, the balance
rolls over and becomes payable in the following year.
the money is there to pay the state
The funds necessary to compensate the State have been collected
from the sales proceeds remitted by the private purchaser of Elk Hills
and are now being held in the Elk Hills School Lands Fund for the
express purpose of compensating the State.
For each of the last 7 fiscal years, Congress has appropriated a
$36 million installment of Elk Hills compensation to the State, leaving
a balance of at least $66 million owing to the State.
congress should appropriate $48 million for the fiscal year 2006
installment of elk hills compensation, as requested by the president's
budget
The House Report on the fiscal year 2005 Interior Appropriations
measure makes clear that Elk Hills compensation payments to the State
should continue: ``[T]he payments to date were based on an estimate of
the amount that would be required to pay the State of California 9
percent of the net sales proceeds. The final amount due will be based
on the resolution of equity determinations and is expected to be more
than the amount made available in these seven payments.'' (House Report
No. 108-542 ((Department of the Interior and Related Agencies
Appropriations Bill, 2005), at 121).
The administration has now requested appropriation of a $48
million payment from the balance owed to the State for Elk Hills
compensation: ``In keeping with the revised equity finalization
schedule, the 2006 Budget requests $48 million in new budget authority
. . .''. (Budget of the U.S. Government--Fiscal Year 2006, Appendix, at
408).
conclusion
The State respectfully requests the appropriation of at least $48
million for Elk Hills compensation in the subcommittee's bill for
fiscal year 2006 installment of compensation, as called for by the
President's Budget in order to meet the Federal Government's
obligations to the State under the Settlement Agreement.

______

Prepared Statement of The Society of Nuclear Medicine
The Society of Nuclear Medicine (SNM) appreciates the opportunity
to submit written comments for the record regarding funding in fiscal
year 2006 at the Department of Energy (DOE). SNM is an international
scientific and professional organization with over 16,000 members
dedicated to promoting the science, technology and practical
application of nuclear medicine. To that end, SNM advocates the
restoration of funding to $37 million for the Medical Applications and
Measurement Science Program at the DOE as well as $6.3 million for the
creation of a National Radionuclide Enhancement Production (NRPE)
program at the DOE in fiscal year 2006. The Society stands ready to
work with policymakers at the local, State, and Federal levels to
advance policies and programs that will that our Nation have a steady
supply of radionuclides for the advancement of nuclear medicine
research.
what is nuclear medicine?
Nuclear Medicine is an established specialty that performs non-
invasive molecular imaging procedures to diagnose and treat diseases
and to determine the effectiveness of therapeutic treatments--whether
surgical, chemical, or radiation. It contributes extensively to the
management of patients with cancers of the brain, breast, blood, bone,
bone marrow, liver, lungs, pancreas, thyroid, ovaries, and prostate,
and serious disorders of the heart, brain, and kidneys, to name a few.
In fact, recent advances in the diagnosis of Alzheimer's Disease can be
attributed to Nuclear Medicine imaging procedures.
Annually, more than 16 million men, women and children need
noninvasive molecular/nuclear medicine procedures. These safe, cost-
effective, procedures include positron emission tomography (PET) scans
to diagnose and monitor treatment in cancer, cardiac stress tests to
analyze heart function, bone scans for orthopedic injuries and lung
scans for blood clots. Patients undergo procedures to diagnose liver
and gall bladder functional abnormalities and to diagnose and treat
hyperthyroidism and thyroid cancer.
funding cuts at doe threaten nuclear medicine
The mission of the Medical Applications and Measurement Science
Program at the DOE is to deliver relevant scientific knowledge that
will lead to innovative diagnostic and treatment technologies for human
health. The modern era of nuclear medicine is an outgrowth of the
original charge of the Atomic Energy Commission (AEC), ``to exploit
nuclear energy to promote human health.'' This program supports
directed nuclear medicine research through radiopharmaceutical
development and molecular nuclear medicine activities to study uses of
radionuclides for non-invasive diagnosis and targeted, internal
molecular radiotherapy.
Over the years, the DOE Medical Applications and Measurement
Science Program has generated advances in the field of molecular/
nuclear medicine. For example, DOE funding provided the resources
necessary for molecular/nuclear medicine professionals to develop PET
scanners to diagnose and monitor treatment in cancer. PET scans offer
significant advantages over CT and MRI scans in diagnosing disease and
are more effective in identifying whether cancer is present or not, if
it has spread, if it is responding to treatment and if a person is
cancer free after treatment. In fact, the DOE has even stated that this
program supports ``research in universities and in the National
Laboratories, occupies a critical and unique niche in the field of
radiopharmaceutical research. The NIH relies on our basic research to
enable them to initiate clinical trials.''
The majority of the advances in molecular/nuclear medicine have
been sponsored by the DOE, including:
--development of PET at Washington University, UCLA, Lawrence
Berkeley Laboratory and the University of Pennsylvania (as well
as the development of small animal imaging systems that was
pioneered at UCLA, with advances also made at the University of
Pennsylvania and University of California, Davis);
--use of PET to carry out accurate treatment planning prior to
therapy with radionuclides (at many DOE-funded sites);
--development of the molybdenum-99m technetium-99m generator, the
mainstay of nuclear medicine studies today, at Brookhaven
National Laboratory, as well as radionuclide thallium-201,
which is used in cardiac viability studies in the majority of
hospitals throughout the world;
--development of NeutroSpec (recently approved by the FDA) for
imaging infection at Thomas Jefferson University;
--synthesis of fluorine-18 labeled fluorodeoxyglucose at Brookhaven
National Laboratory (this agent is utilized in more than 95
percent of all PET scans carried out today);
--the first imaging of tumor receptors (estrogen receptors were
imaged through a collaboration of the University of Illinois
and Washington University, St. Louis);
--development of a whole series of ligands to study brain function at
many DOE-sponsored sites, and development of agents to study
tumor and other organ hypoxia at Washington University, St.
Louis;
--pioneering work in the study of brain function (both in normal
brains and in the understanding of addiction), carried out
largely at UCLA and Brookhaven National Laboratory;
--advances in the application of alpha-particle emitters for therapy
(at Duke University and MSKCC); and,
--development of the Anger camera at Berkeley Lawrence Laboratory.
With DOE funding, essential molecular/nuclear medicine research
continues at universities, research institutions, national laboratories
and small businesses as well as the continuation of research with
radiochemistry, genomic sciences and structural biology to usher in a
new era of mapping the human brain and using specific radiotracers and
instruments to more precisely diagnose neuropsychiatric illnesses and
cancer. The future of life-saving therapies and cutting-edge research
in molecular/nuclear medicine and imaging depends on funding for the
DOE Medical Applications and Measurement Science Program. Without
funding for this program, future innovations in nuclear medicine
research will never be developed, and millions of patients with heart,
cancer and brain diseases will potentially be adversely affected.
Therefore, SNM recommends that funding for the DOE Medical Applications
and Measurement Science Program be restored to the fiscal year 2005
funding level of $37 million.
creation of a national radionuclide production enhancement (nrpe)
program
The Nation needs a consistent, reliable supply of radionuclides for
medical, security, space power, and research uses. Today, new
radionuclides for diagnostic and therapeutic uses are not being
developed, critical radionuclides for national security are in short
supply, and demand for radionuclides critical to homeland security
exceeds supply. New science, such as molecular nuclear medicine, is
emerging that will require reliable supplies of radionuclides. The
majority of radionuclides used in daily applications today are imported
on a daily basis and those required for innovative research are either
available sporadically and only in limited quantities or not at all.
The demand for radionuclides is rising rapidly due to the blossoming
therapeutic and diagnostic applications of nuclear medicine. The future
of life-saving therapies and cutting edge research in nuclear medicine
and molecular imaging depends on a reliable and reasonably priced
supply of radionuclides. The challenge for our Nation is to secure a
reliable and enhanced domestic radionuclide supply for the growing
medical need of our patients and for research.
Our Nation has only one research reactor, the University of
Missouri Research Reactor) (MURR) that provides reactor-produced
radionuclides for therapeutic applications. However it has a low power
(10MW) that enables it to produce only relatively small quantities of
radionuclides at a low specific activity (a few radioactive atoms and a
much greater number of non-radioactive atoms) that limit their use. In
addition, the United States has no functional accelerator that can
provide cyclotron-produced radionuclides needed for specific diagnostic
and therapeutic applications or creative research initiatives.
Commercial or university based small and large accelerators exist but
they produce only limited quantities of a small number of
radionuclides, primarily for routine, approved uses. The resulting
crisis in the availability of radionuclides will constrain existing
nuclear medicine procedures and will have a chilling effect on research
into new procedures to diagnose and treat serious and life-threatening
diseases, such as cancer.
Congress should realign current radionuclide resources to create a
National Radionuclide Production Enhancement (NRPE) Program to improve
the production of radionuclides in the United States so as to assure
our Nation of a consistent and reliable supply of necessary
radionuclides for research, diagnosis and therapeutic purposes.
Major components of the NRPE Program include:
--To establish a national program to meet the national need for
radionuclides. This program should develop the capability to
produce large quantities of radionuclides to maintain existing
technologies and to stimulate future growth in the biomedical
sciences. The overall production capacity must be sufficient to
insure a diverse supply of radionuclides for medical use in
quantities required to support research and clinical
activities. Radionuclides for clinical and research
applications should be supplied reliably and with diversity in
adequate quantity and quality;
--Collaborate with medical, and industrial users to assess
radionuclide needs and transfer technologies to accelerate
applications;
--To facilitate the transfer of commercially viable radionuclides
programs to the private sector;
--To invest in research and development to improve radionuclide
production, processing, and utilization;
--To monitor continuously the radionuclide needs of researchers and
clinicians;
--To establish an education program to ensure that the next
generation of nuclear and radiochemists are trained and
available to support the Nation's needs. (Note.--No funds are
requested for this goal but the NRPE will provide the
infrastructure, personnel and environment, to support an
education program.); and
--To upgrade the capability at the University of Missouri research
reactor and other existing facilities that produce
radioradionuclides and stable radionuclides required for their
production.
A National Radionuclide Production Enhancement (NRPE) Program will
continue innovation in nuclear medicine to meet the health care needs
of the Nation. To that end, SNM advocates the allocation of $6.3
million in fiscal year 2006 for the creation of the National Isotope
Program and the upgrade of the capability of the University of Missouri
research reactor and other existing facilities.
conclusion
The Society of Nuclear Medicine once again stands ready to work
with policymakers to advance nuclear medicine research and innovation
as well as ensure that our Nation has a steady supply of radionuclides.
Again, we thank you for the opportunity to present our views on funding
for these initiatives at the DOE and stand ready to answer any
questions you may have.
______

Prepared Statement of Geophysical Survey Systems, Inc.
It is my understanding that testimony is being solicited in support
of the Department of Energy, Office of Fossil Fuels, National
Technology Laboratory program.
We just finished a 2-year project with 50 percent collaborative
support from the NETL's Office of Fossil Fuels and consider the program
to be a vital resource in helping us develop new products. This
cooperative agreement finished last year, and since we no longer have
any financial interest in the program, I feel I can speak my unbiased
support and indeed gratefulness for the role NETL has played in helping
us develop a completely new kind of Ground Penetrating Radar.
Since it is only a working prototype, I would be unable to put hard
dollar figures on the benefits it will bring to the Gas Industry. Still
it is my opinion that this new portable radar system will be an
important addition to the arsenal of pipe location and gas leak
detection tools. Especially so since the majority of gas distribution
lines are plastic, with no other method of location than a fading
reliance on corroded tracer wires. This new tool will soon become very
necessary. There have been several collateral benefits as well. It has
allowed us to take some of the ideas developed under the program and
spin them off into several other new projects.
One thing is clear. Without competitively winning NETL's
assistance, we would not have taken the risk, and this great new tool
would have remained on the back burner for years. As a small company,
with fewer than 50 employees, we rely heavily on cooperative agreements
to help leverage our limited resources in directions that would
otherwise be unattainable.
Thank you for considering these thoughts; I hope they help you make
a more informed decision.
Please feel free to contact me with any questions.
______

Prepared Statement of Steve Loya, Costa Mesa, California
oil & gas programs
I am writing to voice my displeasure to learn that the above
program to develop new drill pipe for the oil and gas industry has been
selected for cancellation.
With the rapid increase in gasoline and growing demand for oil, I
see this action as short sighted and unwise. In fact, the facts speak
for itself, we need to spend research money to develop new technologies
to recover oil from existing sources.
I ask your reconsideration of this action and to support this
program and reinstate it in the next Federal budget.
______

Prepared Statement of IBACOS, Inc.
IBACOS (Integrated Building And Construction Solutions) urges the
Subcommittee on Energy and Water to provide $20 million for the
Department of Energy's (DOE) fiscal year 2006 Residential Buildings
Research Program (formally Building America.) We further urge that at
least 60 percent of appropriated funding be directed towards the
industry-led core Building America Teams to develop cost effective,
production ready systems in five major climate zones that result in
houses that produce as much energy as they use on an annual basis.
IBACOS, through DOE, has significantly improved the efficiency and
livability of U.S. homes.--IBACOS is a founding team in DOE's Building
America Program, which consists of five industry consortiums (teams).
The IBACOS Building America Team is made up of more than 30 leading
companies from the home building industry, including equipment
manufacturers, builders, design firms, and other parties interested in
improving the overall quality, affordability, and efficiency of our
Nation's homes and communities. Although we are located in Pittsburgh,
PA, our team members come from across the country. Our associated
building product manufacturers and trade associations include: North
American Insulation Manufacturers Association (NAIMA) of Washington,
DC; Dupont of Wilmington, DE; Carrier Corporation of Indianapolis, IN;
Whirlpool of Benton Harbor, MI; USG Corporation of Chicago, IL;
Lithonia of Georgia; and Owens Corning of Toledo, OH. Our builder
partners includes such large builders and developers as Pulte Homes of
Bloomfield Hills, MI; Tindall Homes of Trenton, NJ; Aspen Homes of
Denver, CO; Hedgewood Homes of Atlanta, GA; Summerset Development
Partners of Pittsburgh, PA; Noisette Development Partners of North
Charleston, South Carolina; Civano Development Partners of Tucson, AZ;
Washington Homes (a division of K. Hovnanian) of VA; and John Laing
Homes of Denver, CO. Other builders and developers in CA, CO, GA, IN,
NC, NJ, NY, NV, SC and TX also participate.
Through these and other partners, Building America has had direct
influence in increasing the efficiency of nearly 25,000 homes to date.
All of these homes use at least 30 percent less energy than a code
compliant home, and many exceed 50 percent in savings.
We have been working with DOE's Residential Buildings Program since
the start of the Building America Program in 1993. Along with the four
other teams, we represent more than 200 residential builders,
developers, designers, equipment suppliers, and community planners. All
Building America partners have a common interest in improving the
energy efficiency and livability of America's housing stock, while
minimizing any increase in home costs. Many of the products used
actually result in a lower cost, while others experience only marginal
increases in first cost and absolute reductions in cash flow. In
pursuit of this common interest, the five Building America teams pursue
common activities that will ultimately assist all homebuilders and
benefit the Nations' homebuyers.
Building America teams, such as IBACOS, have the ability to
research and develop new technologies and processes, as well as
demonstrate and diffuse information throughout the building
community.--We are working to significantly expand the active team
participation in Building America, but, perhaps more importantly, we
are finding innovative new ways to increase the energy efficiency of
the Nation's housing stock, and are encouraging the diffusion of
information to hundreds of builders through participation in research
partnerships, national conferences, technical committees and the
Internet. In fact, in working with Owens Corning, we helped introduce a
market based program, System Thinking, in which Owens Corning is
applying lessons from Building America to more than 100 builders in all
regions of the country.
DOE helps develop and implement widespread innovation in the
fragmented residential construction industry.--The new residential
construction industry accounts for the production of 1.6 million
single-family homes per year (over $70 billion in revenue) and
approximately 20 percent of total energy use in the United States.
Despite its size and impact, the industry is exceptionally
fragmented. It comprises nearly 100,000 builders, many building only a
few homes per year, others as many as 35,000. A multitude of
residential product manufacturers, architects, trades, and developers
further compound the problem of an industry in which it is very
difficult to implement widespread technological innovation. Building
America acts as an aggregator for identifying and pursuing research
needs and consolidating relationships between the industry and National
Labs.
Additionally, there has been little incentive for builders to
improve on energy efficiency for a number of reasons. First, energy and
resource efficiency does not necessarily contribute to the bottom line
of the builder; instead, it benefits the homeowner and the Nation.
Second, because builders cannot directly recoup costs for up front
investments through energy savings (since they do not own the homes),
they have little reason to spend more initially. Third, adopting new
technologies and training staff and trades to properly install new
systems and products is costly and problem-ridden. Fourth, builders are
not good at sharing knowledge among competitors, so DOE's role is
critical to expanding the practices beyond the first builders in.
For these reasons, we are working to create higher performance,
quality homes for no incremental costs, along with associated training,
management, and technology transfer methodologies. We believe that
because of this work, energy and resource efficiency, durability, and
affordability will eventually be commonplace in the home building
industry.
DOE plays a critical role in bringing this research, development,
and outreach agenda to the marketplace.
Current research activities include:
--Systems integration, technology and process research and
development to improve energy efficiency;
--Indoor air quality;
--Safety, health, and durability of housing;
--Thermal distribution efficiency;
--Incorporation of passive and active solar techniques;
--Techniques that increase builder productivity and product quality;
--Reduction of material waste at building sites;
--Use of recycled and recyclable materials;
--Building materials improvements;
--Envelope load reduction and durability; and,
--Mechanical systems efficiencies and appropriate sizing.
Through DOE, significant energy saving results have been achieved
in residential construction, and encouraging research results on
systems integration have helped to increase overall energy
efficiency.--Results of the experience gained by the Building America
teams has been reflected in both DOE and HUD roadmapping sessions,
development of research priorities for National Labs, and cooperation
on programs within DOE/BTS. For example, the Building America Program
is working cooperatively with the Windows program at BTS to ensure that
advanced window products are incorporated into high efficiency
residential housing. Additionally, collaborative research activities
with the National Labs, including NREL, ORNL, and LBNL have resulted in
the sharing of knowledge and resources that bridges the gap between
Federal research programs and the industry.
The Residential Buildings Program improves the affordability of
homes by reduced energy use, and results in better use of capital and
natural resources. The scale of impact is exemplified by the 50 percent
savings in the average new home built today--the equivalent of the
energy used by a sports utility vehicle for 1 year. And, the home will
have a useful life of 100 years.
Investing in residential construction technology makes economic and
market sense. By using improved materials and techniques, the
Residential Buildings partners promote wiser use of resources and
reduce the amount of waste produced in the construction process.
Because of the homes' improved efficiency, emissions from electrical
power will be reduced, potentially eliminating 1.4 million tons of
carbon from the atmosphere over the next 10 years. DOE's residential
programs will also save consumers more than $500 million each year
through reduced energy bills. These savings are permanent and
significant.
IBACOS supports efforts across the government to integrate
activities in the residential building area. This includes work with
the Partnership for Advancing Technologies in Housing (PATH), the
National Institute of Standards and Technology, the Housing and Urban
Development, and the Environmental Protection Agency. We at IBACOS are
working with PATH communities as a part of Building America. One of the
PATH communities is in Tucson, AZ. IBACOS, through the Building America
Program, is working with the developer and builders on a 2,600-home
sustainable new town called Civano. Through detailed monitoring, the
homes in this community are proving to be at least 50 percent more
efficient than comparable homes. Many of these homes are being heated
and cooled for less than $1 a day. Other communities in which Building
America is serving as a partner with developers, builders, and PATH are
Village Green in CA, Summerset at Frick Park in PA, and emerging
communities in Denver, CO, North Charleston, SC, and in Florida.
Communities are now under construction that will yield upwards of
80,000 units over the next 7 years. All of these units will result in
savings between 30 percent and 50 percent of their energy cost and
serve to create market momentum, influencing many other local builders.
The Building America Program is also partnering in the Zero Energy
Buildings (ZEB) effort.--ZEB activities develop strategies to
effectively integrate renewable energy technologies into energy
efficient buildings. We feel strongly that renewable energy
technologies need to be incorporated into Building America research and
development activities in an integrated fashion via the existing teams,
which have already begun to include renewable energy technologies and
on-site energy into some projects. In truth, additional funding is
needed for the Building America Program's new program requirements
including increased energy efficiency goals, increased demand from lead
builders, contractors and suppliers for direct participation in the
program, expansion of applications in existing building stock, and
design for integration of on-site power generation. Increased funding
will also augment Building America team activities to more quickly
achieve program milestones. Additionally, funding is needed to ensure
more effective outreach and communications support to the Building
America teams to transfer knowledge gained in research activities
directly to the market.
Over the past couple years, the mission and requirements of the
Building America Program have grown. Three years ago, we began being
responsible not only for R&D and builder education in new home
construction but also, the teams were asked to take on the renovation
market. Existing home renovation is very different from new home
construction and, without the additional funding, these activities will
continue to be very limited. Additionally, efficiency targets for the
Building America Teams have been increased from 30 percent minimum to
50 percent minimum by 2010 and a 70 percent efficiency increase by
2020. The Teams are also now responsible for onsite power goals of 10
percent by 2010 and 30 percent by 2020. All of these new requirements
are dependent on requisite funding.
We look forward to continuing to work with DOE to research and
develop the technology and process necessary to deliver higher
performance homes to the U.S. market, as well build markets for more
efficient equipment and technologies.
IBACOS (Integrated Building And Construction Solutions) urges the
Subcommittee on Energy and Water to provide $20 million for the
Department of Energy's (DOE) fiscal year 2006 Residential Buildings
Research Program (formally Building America.) We further urge that at
least 60 percent of appropriated funding be directed towards the
industry-led core Building America Teams to develop cost effective,
production ready systems in five major climate zones that result in
houses that produce as much energy as they use on an annual basis.
Along with the industry cost share in the program of at least 100
percent, this program has and will continue to significantly catalyze
improvements in what has traditionally been a very fragmented industry.
______

Prepared Statement of SAGE Electrochromics, Inc.
SAGE Electrochromics, Inc., located in Faribault, Minnesota, is a
developer of energy saving electrochromic (EC) window products and is
working in partnership with the U.S. Department of Energy (DOE). We at
SAGE urge you to recommend a budget level of $7,500,000 for the Windows
Technologies Program at the DOE including $1,500,000 million for a
competitive electrochromics industry R&D, engineering and systems
integration program in fiscal year 2006 Energy and Water
Appropriations.
description of electrochromics
An electrochromic window (door or skylight) is a solar control
device that regulates the flow of light and heat with the push of a
button. The window tint can be varied from fully colored to completely
clear or anywhere in between. The EC properties are achieved through
thin metal oxide layers on one of the glass surfaces, otherwise the
construction is similar to the standard insulating glass unit (IGU)
used in millions of homes and office buildings.
the unique benefits of electrochromics
Industrial and government partners in the DOE EC program are
performing cost shared research and development that will lead to
significant energy and cost savings by fundamentally changing the
nature and function of window products for tomorrow's buildings.
Significant savings in the cooling and lighting loads can be achieved
while reducing peak electricity demand. Just as important is the
ability of EC technologies to improve visual and thermal comfort and
thereby increase worker productivity and the aesthetics of the home or
office space.
Traditionally, adding windows to a building envelope has meant
reducing energy efficiency because the other materials in the structure
are much more energy efficient. However, with EC technology, windows
will become multifunctional energy saving appliances in the home or
office space and thereby will allow increased use of windows for
aesthetic reasons. The Lawrence Berkeley National Laboratories (LBNL)
estimated that the use of EC in average size windows in commercial
buildings will reduce cooling electricity consumption by up to 28
percent, lower peak electrical power demand by 6 percent and decrease
lighting costs by up to 19 percent for the entire building perimeter
zone.
In the residential sector, use of electrochromic windows could lead
to a 65 percent reduction in cooling over the existing installed base
and a 47 percent reduction in cooling over the best performing glass
used today--spectrally selective low-E. Heating savings compared to the
installed base and that used in new construction today are 61 percent
and 31 percent respectively. This will be even more important for the
customer's bottom line as the cost of energy becomes increasingly
market driven.
National energy savings are also impressive. The calculated
national total energy savings for all market segments due to EC glazing
adoptions show energy savings of 0.71 quads across all market sectors,
which translates into total annual national energy cost savings of
$11.5 billion. These estimates are based on current EC technology,
which is expected to improve during the marketing period. Additionally,
the LBNL estimates do not include the use of occupancy sensors, which
could substantially reduce cooling costs in the summer and heating
costs in the winter simply by switching the EC glass to the completely
darkened or clear states at the appropriate time.
Although energy and energy-related costs savings are significant,
additional benefits accrue from using EC technology and may even be
more important. Reduced fading of fabrics has significant cost impacts
in many installations. Glare control and greater thermal comfort, as
well as the ability for full daylighting have been shown to increase
worker productivity and reduce absenteeism. Ability to change building
design to take advantage of more window space is a significant
architectural benefit and may result in additional energy savings. It
is estimated that EC windows for architectural applications could
easily grow to be a $15 billion industry in the United States alone--
with another $12 billion in military, specialty and transportation
sectors.
additional work to be done requires further investment
DOE has supported this research and development for the past few
years, but insufficient funding has been split among a number of
players in the Electrochromics industry. Traditionally, funding has
focused on technical support for development of durable electrochromic
materials for building applications. Over those years, it has become
clear that the electrochromic industry needs expanded, cost-shared,
precompetitive research in three areas. First, continued materials and
basic processing research for electrochromic windows. Second,
technology and engineering activities focused on large area
manufacturing, improved productivity, and high yields. And third,
systems engineering and applications research focused on design,
specifications, installation and reliability of EC windows in
buildings.
In Materials and Processing Research and Development, near term
activities must focus on continued optimization of the device and the
individual thin film layers. Improved optical performance is needed to
ensure user satisfaction and broad adoption of this energy saving
technology. Advanced materials for better dynamic range will result in
maximum daylighting for building occupants yet still eliminate glare
from computer display terminals when direct sunlight impinges on the
workspace. Nanocomposite materials must be incorporated to achieve a
more neutral color with enhanced fracture toughness of critical films.
Low cost materials will be introduced along with rapid processing
technologies (e.g. total in-line, high throughput vacuum deposition of
all coatings). Additionally, the EC device electrical properties must
be adjusted to enable reproducible switching to any transmission state
without complex control hardware that adds cost and degrades
reliability.
With respect to Large Area Manufacturing Technology and
Engineering, future activities should include development of rapid,
large area inspection tools to reduce defects for higher yields. Also,
advanced manufacturing technologies such as laser patterning and bar
coding will be implemented for flexible manufacturing with reduced
costs for tooling and product changeovers. High volume production of
large area EC glazings will require the implementation of in-situ
diagnostics for real-time automatic control of thin film uniformity.
Additionally, consensus electrochromic window performance requirements
must be developed together with standards setting organizations and
will entail significant testing in the initial stage to establish the
technical basis for performance requirements.
In Systems Engineering and Application, the DOE program must
include extensive field trials of electrochromic windows in buildings.
Occupant feedback on performance, comfort level and other parameters
will be solicited and utilized to design ergonomic control algorithms
and hardware. Multiple window control should also be demonstrated so we
can learn how to tie the adjacent windows together for solar management
of the overall space. Long term testing of switchable window systems
over the full range of outdoor climatic conditions is required to
assess product reliability.
An important DOE goal is the attainment of zero energy buildings
(ZEB). This requires highly insulated dynamic control windows.
Switchable smart windows will be combined with high R-value
technologies (e.g. aerogels) to develop the type of ``superwindow''
needed for maximum energy savings. Partnerships must be established
among advanced technology organizations, major window companies, and
the DOE to fabricate, install and test these next generation window
systems.
______

Prepared Statement of the Coalition of Northeastern Governors
state energy program, weatherization assistance program, northeast home
heating oil reserve, and state and regional biomass partnership
The Coalition of Northeastern Governors (CONEG) is pleased to
provide this testimony to the Senate Subcommittee on Energy and Water
Development regarding fiscal year 2006 appropriations for Energy
Conservation and Renewable Energy programs of the U.S. Department of
Energy. The Governors recognize the difficult funding decisions which
confront the subcommittee this year and appreciate the subcommittee's
support for these programs.
At a time of rising energy prices and heightened attention to the
security, reliability and efficiency of the Nation's energy systems, we
believe that modest Federal investment in these programs provides
substantial energy, economic and environmental returns to the Nation.
In recognition of the contribution which energy efficiency and
conservation programs make to cost-effective energy strategies, the
CONEG Governors request that funding for the State Energy Program be
increased to $50 million, and that funding for the Weatherization
Assistance Program be increased to $250 million in fiscal year 2006.
The Governors support the President's request that funding for the
Northeast Home Heating Oil Reserve be provided at a level of $7 million
in fiscal year 2006. The Governors also request that the subcommittee
provide $5 million to continue the State and Regional Biomass
Partnership that addresses outreach, education and deployment of
renewable energy technologies.
The Department of Energy's State Energy Program and Weatherization
Assistance Program provide valuable opportunities for the States,
industry, national laboratories and the U.S. Department of Energy to
collaborate in moving energy efficiency and renewable energy research,
technologies, practices and information to the public and into the
marketplace. Administered by the 50 States, District of Columbia and
territories, these programs are an efficient way to achieve national
energy goals, as they tailor energy projects to specific community
needs, economic and climate conditions.
State Energy Program.--The State Energy Program (SEP) is the major
State-Federal partnership program for energy. It provides a vitally
important part of total energy funding to State energy offices,
allowing them to tailor the energy activities to fit the particular
energy priorities and needs of each State. As the Nation moves to
enhance the security of its energy infrastructure, the energy emergency
preparedness activities long provided by State energy offices take on
heightened significance.
Increased SEP funding in fiscal year 2006 will ensure that States
can continue to rely upon State energy offices to serve as their
essential energy emergency preparedness officials in providing this
vital public security and safety function. As part of the Nation's
strategy for a balanced, reliable energy system, SEP also helps move
energy efficiency and renewable energy technology into the marketplace.
Through the SEP, States also assist schools, municipalities,
businesses, residential customers and others in both the private and
public sectors to incorporate the practices and technologies which help
them manage their energy use wisely.
The modest Federal funds provided to the SEP are an efficient
Federal investment, as they are leveraged by non-Federal public and
private sources. According to a study of the SEP done by the Oak Ridge
National Laboratory at the request of U.S. Department of Energy, every
dollar in SEP funding yields $3.54 in ``leveraged'' funding from the
State and private sectors, and results in $7.23 in annual energy cost
savings. This adds up to over $256 million in annual energy costs
savings. These savings estimates do not capture the valuable public
benefits, such as energy emergency planning and preparedness, provided
by SEP. In short, the Oak Ridge report concludes that the SEP, with its
impressive savings and emissions reductions, ratios of savings to
funding and payback periods, offers effective operations and a
substantial positive impact on the Nation's energy situation.
Weatherization Assistance Program.--The Weatherization Assistance
Program (WAP) helps low-income households better manage their ongoing
energy use, thereby reducing the heating and cooling bills of the
Nation's most vulnerable citizens. According to the U.S. Department of
Energy, low-income households spend 14 percent of their annual income
on energy, compared to 3.5 percent for other households. The
Weatherization Assistance Program strives to reduce the energy burden
of low-income residents through such energy saving measures as the
installation of insulation and energy-efficient lighting, and heating
and cooling system tune-ups. These measures can result in energy
savings as high as 30 percent.
Northeast Home Heating Oil Reserve.--The Nation's heightened
emphasis on energy security places renewed importance on the Northeast
Home Heating Oil Reserve. The Northeast, with its reliance upon
imported fuels for both residential and commercial heating, is
particularly vulnerable to the effects of supply disruptions and price
volatility. The Reserve provides an important buffer to ensure that the
States will have prompt access to immediate supplies in the event of a
supply emergency.
State and Regional Biomass Partnership.--Renewable energy plays an
increasingly vital role in a strategy to meet the Nation's near and
longer-term energy needs. Some of the most promising renewable
technologies use biomass to help lessen the Nation's dependence on
imported fossil fuels. The State and Regional Biomass Partnership
(Partnership) is a primary link among State, private, and Federal
biomass activities, to provide outreach and education on biomass. It
has been instrumental in building support for bioenergy project
development and State support for biofuels and biobased products. For
example, a recent study conducted for the U.S. Department of Energy
showed that the Partnership has been directly responsible for $25
million in private investment in biomass projects in the Northeast
region in 2004. It is a recognized source of objective and reliable
information on biomass. In 2004, over 130,000 hours of education
representing 2,500 individuals was carried out by the Partnership in
the Northeast alone. The Partnership played a key role in a seamless
transition to ethanol following the phase-out in New York and
Connecticut of MTBE in gasoline. It is also a valued resource for
States in their efforts to expand the use of biodiesel in
transportation and heating oil and in promoting appropriate use of
biomass for expanded electric power and combined heat and power
applications. These biomass applications are important to the
Northeast's near term goals to increase renewable energy use and in
voluntary programs to reduce greenhouse gases.
In conclusion, we request that the subcommittee increase funding
for the State Energy Program to $50 million and for the Weatherization
Assistance Program to $250 million; that it provide funding at the
President's requested level of $7 million for the Northeast Home
Heating Oil Reserve, and that it provide $5 million for the State and
Regional Biomass Partnership in fiscal year 2006. These programs have
demonstrated their effectiveness in contributing to the Nation's goals
of environmentally sound energy management and improved economic
productivity and energy security.
We thank the subcommittee for this opportunity to share the views
of the Coalition of Northeastern Governors, and we stand ready to
provide you with any additional information on the importance of these
programs to the Northeast.
______

Prepared Statement of the Southwest Research Institute
doe budget for 2006--natural gas infrastructure and gas (methane)
hydrates supply
Southwest Research Institute (SwRI) is a major provider of R&D to
all sectors of the energy industry. After reviewing the newly released
DOE Budget for 2006, we are deeply concerned about two Fossil Energy
(FE) R&D programs that are critical to the United States' energy
security.
The DOE should support a portfolio of fossil and renewable energy
technologies that can provide clean, affordable and reliable energy to
the U.S. consumer and ensure U.S. energy security by emphasizing
adequate supplies of domestic energy.
The DOE Natural Gas Technologies' Natural Gas Infrastructure and
Gas Hydrates Programs are vital to this objective, and no funds were
requested for these programs in the administration's request for 2006.
Both of these programs are key to the future adequate supply and
delivery of domestic natural gas, and should be supported at increased
levels over 2005.
The Natural Gas Infrastructure Program is needed to ensure that gas
reaches expanding markets throughout the United States. We strongly
support this program and request a 2006 funding level of $25 million as
necessary to continue the activities funded in 2005, and to accelerate
the development and implementation of technologies critical to
infrastructure needs. The Gas Hydrates Program is needed to provide
future adequate supplies of domestic natural gas for traditional uses
of heating and electric power production. We strongly support this
program and request a 2006 funding level of $35 million as necessary to
accelerate the development and production of the tremendous U.S. gas
hydrate reserves.
Natural Gas will continue to be a major source of worldwide energy
as energy usage increases by 50 percent over the next 25 years. The
majority of this increase will be provided by fossil fuels with natural
gas's share increasing because of its worldwide availability and clean
combustion characteristics. Currently, the U.S. domestic production of
natural gas accounts for over 90 percent of our needs whereas we import
65 percent of our oil needs. Maintaining the country's natural gas
independence is vital to our security and will allow the United States
to continue to provide world leadership in the development and
application of new natural gas technologies. Significant economic
benefits to the United States will accrue from maintaining this
leadership position, and the Natural Gas Infrastructure and Hydrates
Supply Programs are fundamental to this objective.
Natural Gas Infrastructure ($25 million in fiscal year 2006).--We
recommend a restoration of the Natural Gas Infrastructure 2006 budget
line to $25 million.
If the United States is to realize the significant economic,
environmental, and energy security benefits that will accrue from an
increased use of natural gas, numerous technological advancements will
be required to address gas pipeline infrastructure needs.
The projected 50 percent increase in gas usage in the 2015-2025
time frame cannot be realized without significant new pipeline
construction, and improved reliability and deliverability from the
existing 275,000 mile gas transmission/storage network, much of which
is over 40 years old. All segments of the gas delivery system are
important, and the interstate pipelines are crucial to the movement of
gas from the producing States to new and expanding markets throughout
the United States. Technology developments are needed to:
--Improve the reliability and extend the life of existing pipelines,
and reduce the cost of new construction;
--Improve compressor station and pipeline system operations
(reliability, efficiency, emissions and rangeability); and
--Improve the effectiveness of gas storage system design and
operation.
All of these contribute to public benefits in terms of additional
domestic energy supply, increased safety and reliability, lower cost to
consumers, and improved environmental performance.
The benefits that will result from technology developments leading
to a 30-35 TCF gas economy are significant in both qualitative and
quantitative terms. Potential benefits, based in part, on gas
transmission pipeline operational data supplied to FERC include a
potential $5 billion savings in construction cost and a $185 million
per year savings in reduced fuel and O&M costs for interstate pipelines
only. The value of these quantified benefits will be greater when
related gas production, gathering, intrastate and distribution pipeline
savings are included.
This program, initiated in fiscal year 2001 with an appropriation
of $4.9 million, has been met by tremendous enthusiasm and project cost
sharing within the natural gas industry. Over 100 proposals, totaling
in excess of $75 million, were submitted by industry partners in
response to prior DOE funding. These proposals exceeded the available
dollars by a 9:1 margin and met or exceeded DOE's 35 percent cost-
sharing requirement. This is not the time to eliminate a highly
important and successful program, thus losing the investment and
support of many ongoing activities vital to our delivery needs.
Congress appropriated $8.5 million for fiscal year 2005 and all
indications are that industry partners will respond at least as
enthusiastically as last year. Given the need to revitalize the
Nation's aging natural infrastructure with new technologies and
materials, given the heightened importance of safeguarding that
infrastructure, and given the overwhelming response of the natural gas
industry to partnering with the government to achieve these objectives,
a continuation and expansion of this program to $25 million in fiscal
year 2006 is warranted.
Currently, the Office of Pipeline Safety (OPS) in DOT conducts
limited infrastructure-related work focusing on near term safety,
security and damage prevention projects, and codes and standards
development. DOE focuses on the long term energy delivery issues
related to natural gas infrastructure. Although, both departments are
involved in R&D, the departments have different missions and their R&D
programs reflect it.
Meeting a large increase in gas demand in a manner that is in the
best interest of the American public will require continued cooperation
between DOE, DOT, and the natural gas industry to develop the necessary
research tools.
Immediate and substantial investment in research supporting natural
gas infrastructure is essential to ensuring energy reliability and
security in our Nation. The DOE infrastructure program is critical to
this objective because it addresses needs not covered in the DOT
Program.
Gas (Methane) Hydrates Supply ($35 million in fiscal year 2006).--
It is our recommendation that the Gas Hydrates budget be increased to
the $35 million level for 2006. Methane hydrates are naturally
occurring deposits that reside beneath the ocean floor throughout the
world. They represent a future significant source for gas supply.
Today, methane hydrates have been detected around most continental
margins. Around the United States, large deposits have been identified
and studied in Alaska, the West Coast, the East Coast, and in the Gulf
of Mexico.
The U.S. Geological Survey (USGS) in a detailed assessment of U.S.
gas hydrate resources, estimates the in-place gas resource within the
gas hydrates of the United States to be 200,000 to 300,000 trillion
cubic feet of gas, dwarfing the estimated 1,400 trillion cubic feet of
conventional recovered gas resources and reserves in the United States.
Worldwide, estimates of the natural gas potential of methane hydrates
approach 400 million trillion cubic feet; compared to the 5,000
trillion cubic feet that make-up the world's currently known gas
reserves.
This huge potential, alone, warrants a new look at advanced
technologies that might one day, reliably and cost-effectively detect
and produce natural gas from methane hydrates. If only 1 percent of the
methane hydrate resource could be made technically and economically
recoverable, the United States could more than double its domestic
natural gas resource base.
The United States will consume increasing volumes of natural gas
well into the 21st Century as U.S. gas consumption is expected to
increase from almost 23 trillion cubic feet in 1996 to more than 35
trillion cubic feet in 2020-2025--a projected increase of 50 percent.
Natural gas is expected to take on a greater role in power
generation, largely because of increasing pressure for clean fuels and
the relatively low capital costs of building new natural gas-fired
power equipment. Also, gas demand is expected to grow because of its
expanded use as a transportation fuel and potentially, in the longer-
term, as a source of alternative liquid fuels (gas-to-liquids
conversion) and hydrogen for fuel cells. Given the growing demand for
natural gas, the development of new, cost-effective supplies can play a
major role in moderating price increases and assuring consumer
confidence in the long-term availability of reliable, affordable fuel.
Yet, today, the potential to extract commercially-relevant quantities
of natural gas from hydrates is speculative at best. With no immediate
economic payoff, the private sector is not vigorously pursuing research
that could make methane hydrates technically and economically viable.
Therefore, Federal R&D is the primary way the United States can begin
exploring the future viability of a high-risk resource whose long-range
possibilities might one day dramatically change the world's energy
portfolio.
closure
Continuing technology development for the U.S. natural gas industry
is essential not only for growth, but also for maintaining our present
competitive position in an expanding and technology oriented worldwide
energy market. New technology to insure that gas is a major energy
resource to serve the United States' 21st Century growing need for low-
cost, environmentally friendly, energy has broad near-term and long-
term strategic benefits that serve the public interest.
However, today's competitive environment within the U.S. natural
gas industry has resulted in an emphasis on short-term profitability
and cost control. This emphasis has, in turn, compromised the gas
industry's ability to invest in long-range public benefit programs
involving the environment, energy efficiency, and economic growth. The
recognized need for urgency in dealing with these longer term issues
and objectives can best be achieved with government support of
cooperative RD&D with the gas industry in supply and infrastructure,
and areas that produce benefits to the gas and power industry, its
customers, the U.S. economy, and the public in general. The U.S.
Department of Energy, through its Natural Gas RD&D programs, in the
Office of Fossil Energy (FE) is the appropriate agency to address this
need to ensure the public continues to benefit from reasonable gas
costs with its energy efficiency, clean air, and economic and job
growth advantages. These advantages can be realized by insuring that
sufficient supplies and infrastructure are in place for the next 20
years, supported by joint industry/government RD&D.
We thank you for your consideration of these funding increases in
the FE budget as needed to provide a better balance of the DOE energy
R&D portfolio that will best serve the public and national interest.
______

Prepared Statement of Advanced Composite Products and Technology, Inc.
The National Energy Technology Laboratory, U.S. Department of
Energy has been supporting Cooperative Agreement DE-FC26-99FT40262
titled ``Development and Manufacture of Cost Effective Composite Drill
Pipe'' since October of 1999. This program is funded through June 2005
at which time the composite pipe design will be qualified for actual
field use and demonstration. The program needs an additional $2.0
million (estimated) through fiscal year 2007 to complete the field
demonstration testing and readiness for commercialization. The
composite drill pipe, once commercialized, has the potential to
generate $100 million in manufacturing sales revenue and create nearly
1,000 new jobs. Short-Radius and Extended Reach applications do not
compete with current steel drill pipe products, so no current
applications will be displaced or replaced by the new composite
technology.
Much of our remaining oil and gas is locked away in geologically
complex formations that necessitate deeper drilling, directional
drilling, slim hole drilling, and multilateral drilling. The
development and use of drill pipe manufactured from advanced composite
materials will greatly improve capabilities in these areas and can
substantially reduce the cost of many drilling operations. The
composite drill pipe program is an enabling technology that may be
considered a national strategic issue. The United States oil and gas
industry will be able to reach oil and gas reserves previously thought
impossible. This can help reduce the dependence on foreign sources of
energy and strengthen the U.S. economy in the process.
The current program is in its final development stages. Current
funding allows for the completion of laboratory testing, finalizing the
design. However, it will not enable a downhole field evaluation that
must be completed before the composite drill pipe can be used in actual
production situations. This program is viable! A smaller version of the
deep water/extended reach composite pipe is currently being
successfully used to revitalize once thought to be depleted oil and gas
fields. This short-radius composite drill pipe utilizes the superior
fatigue resistance of composites to accomplish drilling that metal
drill pipe could not.
The program addresses three primary areas of interest as follows:
Extended Reach Horizontal Drilling.--Composite material is
lightweight and can be designed into structures with high specific
stiffness and strength. By using this material, it is estimated that
the horizontal reach distance of a drill pipe can be increased 40
percent from 25,000 to 35,000 feet over the conventional steel
counterpart. Torque and drag are critical drilling parameters that are
directly related to the weight per foot of a drill string. In offshore
E&P operations, drill platforms are very expensive, and often, marginal
oil reserves will not be developed until the economical justification
can be improved. In the current world climate of the absence of large
fields, it is very important that extended reach capability can be
developed. More oil and gas reserves can be reached from one single
drill platform.
At a cost of $100 million to $300 million per drilling platform,
substantial savings can be realized from fewer, smaller and lighter
structures. More importantly, this new product will enable the
development of many new reservoirs to be tapped from existing
structures, which otherwise probably would not be developed. This
enabling capability is basically priceless.
Logging-While-Drilling (LWD) and Measurement-While-Drilling
(MWD).--Real time monitoring of logging while drilling (LWD), and
measurement while drilling (MWD), is limited by the rate of
transmission of signals to the surface. Current technology utilizing
pressure pulses in the mud stream is limited to about 10 pulses per
second. Replacing the steel drill pipe with Smart composite drill pipe
would permit the deployment of advanced electromagnetic transmission
systems, and could potentially increase the transmission rate to
megabytes per second allowing for real time logging and measurement.
While it is difficult to put a monetary value on the availability of
logging information while drilling, it is extremely valuable for a
driller to have real time downhole data to make a decision on drilling
ahead. This has the potential to save drillers hundreds of thousands of
dollars by eliminating the need to trip the drill string in and out of
the well and reducing the time it takes to drill a well.
Deep Water Drilling.--Platform weight is a major design factor in
deepwater operations, where often, deepwater and ultra-deep wells are
testing the limits of conventional steel drill pipe. Current steel
drill pipes developed to operate for deepwater drill platforms are used
to run long, heavy casing and casing liner strings in deepwater wells.
The added weight to support the drilling system will therefore be a
cost to the offshore structure, and occupies valuable space on the
platform. The composite drill pipe is lighter; it may also eliminate
the need for a separate landing string. Substantial platform weight can
be saved.
Because of economic factors, it is extremely important in deepwater
operations that a lightweight composite drill pipe be developed. It is
commonly estimated that a savings of $5-$8 per pound of weight
reduction can be realized in deepwater platform design depending on the
water depth. Considering a typical 35,000-feet, 5\1/2\-inch OD steel
drill string, the drill pipe weight is approximately 28 pounds per
foot, 50 percent of that weight, or 480,000 pounds, can be reduced by
the use of a composite drill string. Approximately, a $2.5 million
savings is calculated based on the weight of drill string alone.
The Federal Government has not footed the entire bill nor do we
expect the Federal Government to fund 100 percent of the remaining
work. This program is a cooperative agreement between U.S. DOE and
ACPT, Inc. along with other industry partners such as Chevron/Texaco,
OMSCO, Zoltek, Shell and others. As lead contactor, ACPT, Inc., a small
business enterprise, has contributed over $250,000 to this program. The
industry partners have contributed over $1.7 million, a confirmation of
the industry need and interest in this enabling technology.
This program has been ongoing for about 5 years and is close to
completion. Between the government and industry partners, almost $6
million will have been spent to develop this technology. It would be a
tragedy to fail from lack of support after being so close to the finish
line. This project is on the verge of increasing our Nation's strength
with respect to our own national resources.
The oil and gas industry is understandably reluctant to take
financial risks in utilizing new technology until it has been proven in
the field. While the finances required to prove this technology are not
large in terms of the Federal budget, or in terms of dollars already
spent on the project, the cost is prohibitive to a company the size of
ACPT without the type of assistance provided by the DOE-NETL thus far.
A successful field demonstration will generate sufficient world-wide
industry interest that further Federal assistance will not be necessary
to complete the commercialization of this technology. We are asking
that you please find a way to fund this program through the final phase
of development.
______

Prepared Statement of the American Public Power Association
The American Public Power Association (APPA) is the national
service organization representing the interests of over 2,000 municipal
and other State and locally owned utilities throughout the United
States (all but Hawaii). Collectively, public power utilities deliver
electricity to one of every seven electric consumers (approximately 43
million people), serving some of the Nation's largest cities. However,
the vast majority of APPA's members serve communities with populations
of 10,000 people or less. We appreciate the opportunity to submit this
statement outlining our fiscal year 2006 funding priorities within the
Energy and Water Development and Related Agencies Subcommittee's
jurisdiction.
federal power marketing administrations (pmas)
Market-based Rates for Federal Power
The administration's fiscal year 2006 budget includes a
recommendation that rates for hydropower marketed by the four PMAs
(Western Area, Bonneville, Southwestern and Southeastern), which are
currently cost-based, be increased by 20 percent per year until they
reach ``market'' rates. The proposal to raise the rates PMAs charge for
power generated at Federal hydropower facilities is simply a hidden tax
on a select group of electricity consumers. The assumptions
underpinning this proposal, including the assumption that these rates
are subsidized by taxpayers, are false. The rates paid by customers of
the PMAs not only cover all of the costs of generating this power,
including repayment of the Federal debt, with interest, in many cases
they also cover much of the costs associated with other purposes of
these projects including recreation, navigation, and irrigation. The
House budget resolution appropriately excluded this proposal, and we
urge the subcommittee to do the same in the context of its fiscal year
2006 bill.
Purchase Power and Wheeling
We urge the subcommittee to authorize appropriate levels for use of
receipts so that the Western Area Power Administration (WAPA), the
Southeastern Power Administration (SEPA), and the Southwestern Power
Administration (SWPA) can continue to purchase and wheel electric power
to their municipal and rural electric cooperative customers. Although
appropriations are no longer needed to initiate the purchase power and
wheeling (PP&W) process, the subcommittee continues to establish
ceilings on the use of receipts for this important function. The PP&W
arrangement is effective, has no impact on the Federal budget, and is
supported by the PMA customers who pay the costs. Therefore, we request
that the subcommittee authorize the use of receipts in fiscal year 2006
as follows:
--Western Area Power Administration (WAPA).--$279 million
authorization needed in the fiscal year 2006 bill ($130.5
million more than the administration's request because of the
severe drought conditions in the West that have greatly
diminished the availability of the hydropower resource over the
last 5 years).
--Southeastern Power Administration (SEPA).--$32.7 million
authorization needed in the fiscal year 2006 bill (the amount
requested by the administration).
--Southwestern Power Administration (SWPA).--$12.4 million and of
that, $3 million would come from customer receipts (the
administration's budget request recommends a total of $10.6
million and of that, only $1.2 million from receipts).
Costs of Increased Security at Federal Multi-Purpose Projects
Following the attacks of September 11, 2001, the Bureau of
Reclamation (Bureau) embarked upon an aggressive program to enhance the
security of Federal dams to protect the facilities against terrorist
attacks. Based on historical precedent dating to World War II, the
Bureau determined in 2002 that protecting these multi-purpose water
projects was a national responsibility and that the costs of increased
security measures should remain a non-reimbursable obligation of the
Federal Government. We urge Congress to add language to its fiscal year
2006 bill to clarify that costs of increased security at dams owned and
operated by the Bureau of Reclamation should continue to be non-
reimbursable.
In report language accompanying the Energy and Water Development
Appropriations Act of 2005, Congress recognized the dramatic increase
in security needs and corresponding costs at Reclamation facilities
following the September 11, 2001, attacks on our country. The
conference committee then underscored its concern for the
reimbursability of security costs by including the following directive
to the Bureau: ``Reclamation shall provide a report to the conference
no later than May 1, 2005, with a breakout of planned reimbursable and
non-reimbursable security costs by project, by region. The conference
directs the Commissioner [of Reclamation] not to begin the
reimbursement process until the Congress provides direct instruction to
do so.''
central utah project reclamation mitigation and conservation account
The President's fiscal year 2006 budget recommends that a portion
of the Central Utah Project Completion Act (CUPCA) be overturned in
order to shift the costs of the Utah Mitigation and Conservation Fund
from the Federal Government to power customers in Arizona, New Mexico,
Wyoming, Colorado, Nevada and Utah. This would set an unfortunate and
inappropriate precedent that would allow the Federal Government to
shift other non-power-related Federal costs to power users or other
sets of taxpayers. We urge the subcommittee to oppose this proposal and
to insist that the contribution continue to come from the Department of
Energy through non-reimbursable, non-returnable funds appropriated for
the Western Area Power Administration.
renewable energy production incentive (repi) and renewable energy
programs
The Department of Energy's REPI program was created in 1992's
Energy Policy Act (EPAct) as a counterpart to the renewable energy
production tax credits made available to for-profit utilities. EPAct
authorizes DOE to make direct payments to not-for-profit public power
systems and rural electric cooperatives at the rate of 1.5 cents per
kWh (1.8 cents when adjusted for inflation) from electricity generated
from solar, wind, geothermal and biomass projects. According to DOE
sources, in order to fully fund all past and current REPI applicants,
$80 million would be needed for fiscal year 2006. Despite the
demonstrated need, however, DOE has asked for only $5 million for
fiscal year 2006, citing budgetary constraints. We greatly appreciate
the subcommittee's interest in this small but important program as
evidenced by its support of funding for the program over and above the
administration's budget requests in the last few years despite the
tight budgetary environment. We urge the subcommittee to continue its
support with an even greater increase.
As is demonstrated by our strong support for REPI, APPA believes
that investing in energy efficiency and renewable energy programs is
critical. We urge the subcommittee to support adequate funding to
ensure that renewable energy usage continues to increase as part of the
portfolio of fuel options available to our Nation's electric utilities.
energy information administration
The Energy Information Administration (EIA) has extensive
legislative authority to collect data needed to answer a broad range of
energy policy questions. In order to fulfill this responsibility in
regard to the electric power industry, EIA has had to revise and expand
its data collection to include new participants. EIA now collects
information from all sectors of the power industry: investor-owned
utilities, rural electric cooperatives, public power systems and
Federal utilities, as well as power marketers and non-utility
generators.
Most EIA data forms are filled out by all industry sectors.
However, the Federal Energy Regulatory Commission (FERC) collects data
from its jurisdictional utilities (investor-owned utilities) and the
Department of Agriculture's Rural Utilities Service (RUS) collects
information from its utility borrowers (rural electric cooperatives).
EIA does not duplicate electricity data collected by these Federal
agencies. Thus EIA uses a small number of forms to collect comparable
information from electric industry sectors not subject to the FERC or
RUS reporting requirements. EIA-412 is one of these forms.
Funding for the distribution, collection and analysis of EIA-412
was eliminated by EIA in fiscal year 2005, but EIA has not yet
abandoned the program. We urge the subcommittee to encourage the EIA to
provide funding for this form in fiscal year 2006 within the context of
its overall appropriation. The elimination of form EIA-412 will leave a
gap in the electricity industry's data coverage.
storage for high-level nuclear waste
We support the administration's efforts to finalize the location of
a permanent storage site at Yucca Mountain, Nevada. The President
requested $651 million for fiscal year 2006 for the nuclear waste
repository at Yucca Mountain. While somewhat less than we would like,
we appreciate the fact that this year's budget does not assume that a
portion of the request would be taken ``off-budget'' through
authorizing legislation.
advanced hydropower turbine program
APPA is disappointed with the administration's proposal to sharply
cut funding from the $5 million it requested and received in fiscal
year 2005 to a request of just $500,000 for fiscal year 2006 for the
Advanced Hydropower Turbine Program. DOE has indicated its intention to
phase out this important program that is a joint industry-government
cost-share effort to develop a hydroelectric turbine that will protect
fish and other aquatic habitats while continuing to allow for the
production of emissions-free hydroelectric power. We urge the
subcommittee to consider providing additional funding for this
important initiative.
energy conservation
APPA appreciates the subcommittee's interest in energy conservation
and efficiency programs at DOE and we hope that the subcommittee will
once again allocate a funding level over and above the administration's
request for fiscal year 2006.
weatherization and intergovernmental activities
APPA supports the administration's request of $[sic] million for
fiscal year 2006 for helping to increase the efficiency of commercial
and residential buildings, including weatherization assistance, the
State and community energy conservation programs.
coal research initiative and clean coal power initiative
APPA supports the administration's request of $286 million for
fiscal year 2006 for the Coal Research Initiative. APPA also strongly
urges the subcommittee to support the administration's request of $68
million for fiscal year 2006 for the Clean Coal Power Initiative. This
initiative makes possible joint government-industry research,
development and demonstration of new technologies to enhance the
reliability and environmental performance of coal-fired generators.
distributed generation fuel cells
APPA supports the administration's request of $84 million for
fiscal year 2006 for distributed generation fuel cell research and
development.
hydrogen research
APPA supports the administration's efforts to improve the
feasibility of making available low-cost hydrogen-powered fuel cell
vehicles, and support its request of $260 million for hydrogen research
in fiscal year 2006.
navajo electrification demonstration program
APPA supports full funding for the Navajo Electrification
Demonstration Program at its $15 million authorized funding level for
fiscal year 2006. The purpose of the program is to provide electric
power to the estimated 18,000 occupied structures in the Navajo Nation
that lack electric power.
national climate change technology initiative
APPA supports the administration's efforts to promote greenhouse
gas reductions through voluntary programs and investments in new
technologies. We are therefore disappointed that the administration has
failed to request funding through the National Climate Change
Technology Initiative to spur innovation of technologies that will
reduce, avoid, or capture greenhouse gas emissions, and encourage the
subcommittee to consider allocating funds for this important research.
federal energy regulatory commission (ferc)
The Federal Energy Regulatory Commission (FERC) has requested
$220.4 million for fiscal year 2006 for its overall operations. APPA
supports this request.
______

Prepared Statement of MASI Technologies, LLC
Agency.--Department of Energy, Office of Fossil Energy.
Program.--Gas/Oil--Drilling, Completion and Stimulation.
Project.--``Enhanced Wellbore Stabilization and Reservoir
Productivity with Aphron Drilling Fluid Technology,'' Award Number DE-
FC26-03NT42000.
Award.--$1.11 million for 2 years.
This project was initiated to evaluate how aphron drilling fluids
decrease fluid invasion in mature gas and oil reservoirs. The novelty
of aphron technology necessitates ``proof'' of its capabilities in
order to increase its acceptance by the U.S. drilling industry.
Although use of aphron drilling fluids is expected to decrease drilling
costs significantly and reduce the cost of gas and oil to American
consumers, unfortunately operators and service companies do not have
the wherewithal to carry out this kind of study. Consequently, this
important work would not be done without the financial assistance
provided by DOE.
As world energy consumption grows at an increasing rate, the United
States' reliance on foreign sources is also growing. This is happening
at a time when oil production may be nearing a peak and inevitable
decline. Oil prices are spiking as a consequence, putting pressure on
the world's economies. This ``perfect storm'' clearly demonstrates the
necessity of finding and producing new reserves while working to
develop alternative renewable energy sources. Just as important,
though, is the ability to maximize production of existing reserves as
the energy backbone while these longer term objectives are in progress.
Many of the fields in the United States have been producing for
many years and, although there is still significant oil and gas in
place, the difficulty of exploiting these fields is increasing. For
example, the dynamics of these depleted fields change when the pressure
of the producing zones is reduced through years of production. The
remaining production must be accessed by remediation, secondary
recovery, and infill drilling. All these methods require working in
conditions made much more difficult by the depletion of the pressures
in the payzone. The industry is making tremendous progress in the
development of new tools and techniques to explore and drill more
challenging wells. This level of progress is necessary to help in
maximizing production of the existing reserves to help fill the gap of
current demand.
Because of the level of difficulty due to the severe depletion,
many wells are now left undrilled or not remediated. They either cannot
be drilled or would be so expensive that they have become uneconomical.
Aphron drilling fluid technology was developed to provide a new way to
address this problem by changing the way the drilling and workover
fluid works. This technology has allowed the drilling of many of these
wells without problems and with demonstrated protection of the
producing zones. Even though they are severely depleted, these zones
were drilled or remediated and are now producing. Most of these early
aphron-drilled wells were in depleted sands which were the first zones
of interest to be exploited by the industry. More difficult to drill
and remediate are fractured zones, which are now being drilled as
prolific producers especially when horizontal drilling techniques are
employed.
Because of the increased understanding of aphron drilling fluid
technology that has been made through this grant from the Department of
Energy, the depleted sands are now being drilled more effectively. Even
more significant is the progress made through this research to increase
the efficiency of drilling these fractured reserves. This is proving
effective in extending the development of these difficult reserves and
enhancing the effectiveness of horizontal drilling techniques in this
effort to enhance production. Even though we have made much progress, a
great deal of benefit to our domestic, and indeed global production,
will be realized by continued support from the Department of Energy for
these R&D efforts.
background and impetus for the project
Many oil and gas reservoirs in the United States are mature and are
becoming increasingly depleted of hydrocarbons, which makes for ever
more costly drilling. While the formations above and below these
producing zones typically have much higher pore pressures and require
high fluid density to stabilize them, exposure of a depleted zone to
this high-density fluid can result in significant loss of whole
drilling fluid and differential sticking. Both of these events are
extremely expensive to correct.
Uncontrollable drilling fluid losses are at times unavoidable in
the often large fractures characteristic of these formations.
Furthermore, pressured shales are often found interbedded with depleted
sands, thus requiring stabilization of multiple pressured sequences
with a single drilling fluid. Drilling such zones safely and
inexpensively is very difficult with conventional rig equipment. A
popular solution is to drill such wells with fluids of density that is
low enough to balance the pore pressure in the depleted zone. However,
this action results in drilling the zones above and below the depleted
zone ``underbalanced,'' a condition that risks wellbore collapse and
blow-outs. A new drilling fluid technology was developed recently that
does not entail drilling underbalanced, yet is designed to mitigate
loss of fluid and differential sticking. This novel technology is based
on the use of uniquely structured micro-bubbles of air called
``aphrons.''
Aphron drilling fluids have been used successfully to drill
depleted reservoirs and other low-pressure formations in a large number
of wells in North and South America. However, as the name ``aphron''
implies, a key component of these fluids is the introduction of air
into the fluid. Air in a drilling fluid is generally considered
detrimental, for the oxygen in the air causes corrosion, and the air
may create variable pressures and well control issues.
Aphrons are composed of two fundamental elements: (1) a core that
is usually fluid and which, as applied here, typically is air; and (2)
a protective shell. This shell is considerably different from a
conventional air bubble, which is stabilized in a liquid medium only by
a thin surfactant film. Aphrons possess two additional layers outside
of that inner surfactant layer: a sheath of viscosified water overlays
the inner surfactant film, and outside of that is a bi-layer of
surfactants that ultimately renders the aphron hydrophilic and,
therefore, compatible with the continuous aqueous phase. However, the
outermost surfactant layer in the bi-layer is thought to be only weakly
associated with the rest of the aphron and can be shed by shear or when
aphrons are compressed together. Thus, when aphrons are forced together
in a pore throat, they may acquire sufficient hydrophobic character
that they can agglomerate and help seal off the pore.
Much of the scenario described above about the role of aphrons in
reducing fluid losses down hole is conjecture that has not been
confirmed under stringent laboratory conditions. Furthermore, the
overall manner in which the drilling fluid is able reduce fluid losses
down hole has been brought into question. Consequently, some operators
have shown considerable resistance to acceptance of aphron drilling
fluid technology.
how the project will advance drilling technology
Lost circulation is one of the most vexing and costly problems of
many drilling operations. This is particularly true when drilling into
depleted oil and gas reservoirs. Preventive measures currently focus on
underbalanced drilling or use of a low concentration of a plugging
agent in the entire circulating system. Remediation is the most common
alternative. This entails periodic injection down hole of a pill--a 50-
bbl to 100-bbl slug of fluid--that contains a high concentration of a
plugging agent or a settable/cross-linkable fluid. Underbalanced
drilling is hazardous and costly, while the plugging materials are not
only damaging to producing formations, they also are not always
effective. Aphron drilling fluids use a combination of very high low-
shear rheology to slow the progress of fluids through loss zones and
specially constructed micro-bubbles (aphrons) to reversibly plug the
loss zones. But little is known about the details of these processes in
porous/fractured media at the elevated pressures encountered down hole.
Developing some understanding of the physicochemical properties of
aphron drilling fluids--and aphrons in particular--under down hole
conditions would help greatly to elucidate the roles played by the
various components of the drilling fluids and provide guidance for
optimization of the system.
key discoveries during the first phase of the project
In contrast to conventional bubbles, which do not survive long past
a few hundred psi, aphrons have been found to survive compression to at
least 27.3 MPa (4,000 psi) long enough to enable them to act as a
separate phase. When a fluid containing bubbles is subjected to a
sudden increase in pressure above a few hundred psi, the bubbles
initially shrink in accordance with the modified Ideal Gas Law.
However, conventional bubbles begin to lose air rapidly and, in
seconds, they disappear. Aphrons lose air, too, but they do so very
slowly, shrinking at a rate that depends on fluid composition, bubble
size, and rate of pressurization and depressurization. Air is lost via
slow diffusion through the aphron shell and dissolution in the aqueous
medium. Less important is loss of oxygen by chemical reaction with
various components in the fluid, a process that usually takes minutes
and results in nitrogen-filled aphrons. Thus, corrosion of tubulars by
aphrons is negligible.
When aphrons reach a critical minimum size--either as a result of
compression or slow diffusion of air--they undergo a structural change
that leads to their rapid demise, and the expelled air dissolves in the
fluid. However, decompression to a sufficiently low pressure results in
supersaturation of the aqueous medium, whereupon the air is released;
most of the expelled air goes into existing aphrons, though it may also
create new aphrons.
The base fluid in aphron drilling fluids was shown to yield a
significantly larger pressure loss (or, for a fixed pressure drop,
lower flow rate) in long conduits than any conventional high-viscosity
drilling fluid. Similarly, if flow is restricted or stopped, aphron
drilling fluids (at a fixed wellbore pressure) generate significantly
lower downstream pressures than do other drilling fluids. The same
phenomena are evident in permeable sands. Furthermore, in permeable
sands of moderate permeability (up to at least 8 darcy), aphrons
themselves slow the rate of fluid invasion and increase the pressure
drop across the sands. Lastly, and most importantly, aphrons were shown
to move more rapidly through the sands than the base fluid. This
phenomenon, called ``bubbly flow,'' appears to follow conventional
Navier-Stokes theory, which has been used successfully in the past to
describe transport of both low-density and high-density internal
phases. This theory appears to be as applicable to bubbly flow in a
conduit or in a permeable medium (flow in opposition to a pressure
differential) as it is to buoyancy (upward flow of bubbles in
opposition to gravity). For a rigid sphere in a fluid under the
influence of a one-dimensional pressure gradient, DP/L, the relative
velocity of the bubble in an infinitely wide conduit is

V=0.23r\2\/m*DP/L

where r is the bubble radius and m is the fluid viscosity.
Qualitative tests indicated that aphrons have very little affinity
for each other or for the mineral surfaces in rock formations
encountered during drilling. This lack of affinity does not result from
shedding surfactant layers, as was thought before, but is an intrinsic
characteristic of the whole aphron structure. Thus, aphrons resist
agglomeration and coalescence and can be pushed back out of a permeable
formation easily by reversing the pressure differential, thus
minimizing formation damage.
Finally, leak-off tests demonstrated that the base fluid in aphron
drilling fluids is primarily responsible for sealing permeable zones
and is capable of sealing rock as permeable as 80 darcies. Properly
designed aphrons can reduce these losses even further. It was learned
from flow visualization tests that, although the amount of air in a
typical aphron drilling fluid is very small (15 vol percent air at
ambient temperature and pressure amounts to only 0.02 wt percent),
bubbly flow can cause the aphrons to move at a velocity greater than
the liquid phase, thus accumulating at the fluid front and inhibiting
movement of the liquid.
potential spinoffs
Conventional surfactant-stabilized bubbles are not strong enough or
impermeable enough to withstand pressures of just a few hundred psi.
Compression itself will reduce a bubble of 100 mm diameter at
atmospheric pressure to 38 mm when subjected to a pressure of 250 psi,
and 19 mm at 2,500 psi. But the biggest effect of pressure by far on
the fate of a bubble is increased gas solubility. When a fluid
containing 15 percent v/v entrained air at ambient pressure is
compressed to just 250 psi, all of the air becomes soluble. If the
stabilizing membrane in an aphron is permeable, the air will diffuse
into the surrounding medium and go into solution. This is indeed what
happens with ordinary bubbles, and it occurs within a matter of seconds
after compression. Aphrons do not lose their air as readily; indeed,
even at 250 psi, the aphrons are stable indefinitely. Understanding
this phenomenon has wide implications, inasmuch as this behaviour has
only been observed previously with thick hollow plastic or glass beads.
Such technology might be used to encapsulate many different materials
in drilling and completion fluids.
______

Prepared Statement of U.S. Petroleum Engineering Department Heads
On behalf of the Heads of Petroleum Engineering Departments in the
United States, whose names are attached to this letter, we would like
to submit the following written testimony relating to the proposed DOE
budget recommendations for fiscal year 2006.
In the administration's recently proposed budget recommendations
for fiscal year 2006, the Department of Energy's (DOE) Oil & Natural
Gas Technology Programs have been zeroed out. These proposed cuts are
intended to terminate all programs that address research and technology
development in the domestic oil and gas sector. We, the undersigned,
want to bring to your attention the significant negative impact that
these cuts would have on domestic oil and gas production and on our
efforts to reduce dependence on foreign oil.
The elimination of DOE funding for research related to oil and gas
will have three major negative consequences for the domestic energy
industry and for our national energy security:
--We will be unable to train sufficient numbers of Petroleum
Engineering undergraduate and graduate students for the
domestic industry.
--It will significantly curtail our ability to develop new
technologies so as to continue to make the United States the
world leader in technological innovation in the oil and gas
sector and to effectively develop our domestic oil and gas
resources.
--Our ability to build bridges with energy producers around the world
through educational and technological exchange will be
significantly impaired.
Each one of these items is discussed in further detail and specific
data are provided below.
impact on the domestic workforce in the oil and gas sector
Since 1982, the number of B.S. programs in Petroleum Engineering
has decreased from 34 to 19, a 44 percent decrease. Concurrently, the
B.S. Petroleum Engineering enrollment in the United States has
decreased from 9,492 in 1982 to 1,845 in 2004, an 80 percent decrease.
The number of B.S. degrees granted in Petroleum Engineering has
decreased from 1,280 in 1982 to 272 in 2004, a 78 percent decrease.
Studies conducted by independent organizations, such as the
American Petroleum Institute and the Department of Labor, have shown
that we have a significant shortfall in the available talent pool in
Petroleum Engineering. The average age of the engineers and
geoscientists in the oil and gas sector in the United States is now 54
and climbing. Within 5 to 7 years more than half of the engineers in
the industry will be eligible to retire. With the small number of
graduates emerging from Petroleum Engineering schools, the large number
of expected retirements and demographics in the oil and gas sector, a
workforce crisis is looming. It is, therefore, vital to support
programs that train Petroleum Engineers and geoscientists for the
domestic oil and gas industry.
The DOE budget for oil and gas research in the United States has a
huge impact on our ability to train qualified people for the domestic
oil and gas sector. The DOE Oil & Gas Program provides vital support to
Petroleum Engineering Departments cross the country. Through this
support, faculty is able to interact with oil and gas operators within
the United States and develop a better understanding of the problems
faced by the industry. This knowledge is transmitted to students in
classrooms and through opportunities to work in these research
projects, enhancing their understanding and appreciation of the
domestic industry. Our ability to retain the best faculty who are
needed to train Petroleum Engineers, for the coming decades largely
depends entirely on our being able to provide research funding to our
faculty to work on domestic oil and gas issues. Lacking this
opportunity, there will not be many viable Petroleum Engineering
programs left in the United States.
impact of budget cut on development of domestic oil and gas resources
The United States has traditionally been a leader in oil and gas
research and technology development. We have held this position
primarily through cutting edge technology development both at oil and
gas companies and at universities across the country. With the
globalization of research and technology, this position can no longer
be taken for granted. Failing to have technological leadership in this
vital energy sector can have profound implications for the United
States both in terms of our ability to develop domestic resources and
in terms of our dealings with oil and gas producing countries.
A vast majority of our domestic resources are in mature fields that
require the use of novel technologies to produce hydrocarbons. Good
examples of technology plays are the development of unconventional gas
resources (such as the Barnett shale) in many U.S. basins. These energy
resources that constitute an ever-increasing proportion of our domestic
energy supply would not have emerged as technologically and
commercially viable energy sources without the application of new
technologies. There are many such examples. DOE oil and gas research
programs provided vital support for the development of these
technologies.
impact of budget cut on our ability to build bridges with energy
producers worldwide
The United States has successfully built bridges with energy
producing countries around the world through exchange of technology and
educational partnerships for many decades. Indeed, some of the world's
largest oil and gas producers are lead by graduates of American
universities. The shrinking and possible elimination of Petroleum
Engineering programs in the United States will have a devastating
effect on our ability to continue this tradition. Over the long run
this will have a significant negative impact on our ability to partner
with and work with many of these oil and gas producing nations in the
future. Maintaining healthy and vital centers of higher education in
the oil and gas sector should be a priority for the United States
because they provide a training ground for engineers and geoscientists
not only for the domestic oil and gas industry but also for technology
and business leaders in oil and gas producing countries in other parts
of the world. This allows significant long-term global partnerships for
the U.S. domestic oil and gas industry and has in the past been very
successful in facilitating partnerships with these oil and gas rich
nations.
summary
We, the undersigned, would like to request, that the oil and gas
budget for DOE Fossil Energy be restored to fiscal year 2005 levels
($78 million). This amount constitutes a very small portion of the
overall DOE budget. In our opinion, this budget needs to grow and
expand much beyond where it currently stands. Its elimination will most
certainly have a devastating effect on the domestic oil and gas
industry and educational infrastructure.
Thank you,
Mukul M. Sharma,
The University of Texas at Austin
S. Ameri,
West Virginia University
Roland Horne,
Stanford University
Julius Langlinais,
Louisiana State University
Turgay Ertekin,
Penn State University
Mohan Kelkar,
The University of Tulsa
Steve Holditch,
Texas A&M University
Iraj Ershaghi,
University of Southern California
Dr. Robert W. Chase,
Marietta College
Santanu Khatanier,
University of Alaska, Fairbanks
Dean S. Oliver,
The University of Oklahoma
Thomas W. Engler, Ph.D, P.E.,
New Mexico Tech
Ali Pilehvari,
Texas A&M University
Craig W. Van Kirk,
Colorado School of Mines
Lawrence R. Weatherly,
University of Kansas
Ali Ghalambor,
University of Louisiana at Lafayette
Jalal Torabzadeh,
California State University
Shari Dunn-Norman,
University of Missouri--Rolla.
______

Prepared Statement of the Commission on Marginally Producing Oil and
Gas Wells
The United States contains 654,026 marginal oil and gas wells that
contribute 30 percent of the oil production and 10 percent of the gas
production on shore. These wells, although insignificant by themselves,
together represent a major force in domestic oil and gas production.
Not only for the resources they produce, but for the economic impact
they have on their local communities.
Specifically, marginal well production in Oklahoma represents 70
percent of the oil production in this State and 10 percent of the gas
production. The operators who produce these wells are 3,000 strong in
number, operate an average of 17 wells, are an average age of 55, and
derive roughly 39 percent of their income from oil and gas production.
The total economic impact of the oil and gas industry in Oklahoma is
over $7 billion per year, contributes 7 percent of the gross State
product compared to 5 percent of the GSP coming from agriculture,
farming and agricultural services, and directly employs 57,000 people
with an additional 77,000 people impacted or supported by the industry.
Of the 57,000 people, 53 percent of them are self-employed.
The marginal well operators in Oklahoma as well as in the rest of
the country depend on the Department of Energy Research and Development
Programs to bring new technology to their industry. None of these
operators have the resources to fund their own research and development
department and the major companies who do have the budget for these
departments do not develop technology appropriate for marginal wells.
The marginal well sector of our industry is an area where the
Department of Energy Research and Development Programs have had a
significant impact. Without the technology being developed by these
programs, more and more marginal wells will be plugged and abandoned,
their resources lost forever. Once a well has been plugged, it is not
economically or technically feasible for it to be re-opened. We not
only lose domestic production that is desperately needed, but jobs and
income are lost in our communities.
Funding for grant programs through the National Energy Technology
Laboratory and specifically through programs such as the Stripper Well
Consortium are invaluable in keeping marginal production a viable
industry in this Nation. Over the last 4 years, the Stripper Well
Consortium has developed new technologies which will help the small
producers across the Nation keep their marginal wells producing. The
consortium also provides a national venue for operators to discuss
problems and solutions in their regions of the country, which in turn
helps the industry avoid duplication of effort in solving problems.
The failure by the U.S. Department of Energy to continue to fund
programs that directly benefit the marginal well industry will cripple
this industry and be seen as a rejection of the continuation of
domestic production. If we are to retard the growth of the percentage
of foreign production imported in to this country, we must promote the
growth of domestic production. This can only be done through the
continued funding of DOE research and development programs.
______

Prepared Statement of the American Geological Institute
Thank you for this opportunity to provide the American Geological
Institute's perspective on fiscal year 2006 appropriations for
geoscience programs within the subcommittee's jurisdiction. The
president's budget requests significant cuts in the Department of
Energy (DOE). In particular, the president's request would eliminate
the Office of Fossil Energy oil and natural gas research programs, and
we ask for restoration of those to their fiscal year 2003 levels.
Additionally, as the largest supporter of physical science research in
the United States, DOE's Office of Science deserves the subcommittee's
full support and restoration of the proposed budget cut.
AGI is a nonprofit federation of 42 geoscientific and professional
associations that represent more than 100,000 geologists,
geophysicists, and other earth scientists. The institute serves as a
voice for shared interests in our profession, plays a major role in
strengthening geoscience education, and strives to increase public
awareness of the vital role that the geosciences play in society's use
of resources and interaction with the environment.
doe fossil energy research and development
AGI urges you to take a critical look at the Department of Energy's
Fossil Energy Research and Development (R&D), Natural Gas Technology
R&D and Oil Technology R&D accounts as you prepare to craft the fiscal
year 2006 Energy and Water Appropriations bill. Over the past 4 years,
members of Congress have strongly emphasized the need for a
responsible, comprehensive energy policy for the country. The growing
global competition for fossil fuels has led to a repeated and concerted
request by Congress to ensure the Nation's energy independence. The
President's proposal that these programs be eliminated is short-sighted
and will not allow us to achieve energy independence.
The research dollars spent by these programs go largely to
universities, State geological surveys and research consortia to
address critical issues like enhanced recovery from known fields and
unconventional sources that are the future of our natural gas supply.
This money does not go into corporate coffers, but it helps American
businesses remain competitive by giving them a technological edge over
foreign companies. All major advances in oil and gas production can be
tied to research and technology. AGI strongly encourages the conferees
to restore these funds and bring these programs back to at least fiscal
year 2003 levels.
Today's domestic industry has independent producers at its core.
With fewer and fewer major producing companies and their concentration
on adding more expensive reserves from outside of the contiguous United
States, it is the smaller independent producers who are developing new
technologies concentrated on our domestic resources. However, without
Federal monetary contributions to basic research that drives
innovation, small producers cannot develop new technologies as fast, or
as well, as they do today. The program has produced many key successes
among the typical short-term (1 to 5 years) projects usually chosen by
the DOE for support. And even failed projects have proven beneficial,
because they've often resulted in redirection of effort toward more
practical exploration and production (E&P) solutions. Ideally, DOE and
private sector participants share the programs R&D funding on a 50-50
basis, with the government contributing actual dollars and the company
contributing dollars or ``in kind'' products and services. To justify
the use of public funds, new technology developed from such projects is
made available to the industry.
In 2003, at the request of the Interior Appropriations
Subcommittee, the National Academies of Science released a report
entitled ``Energy Research at DOE: Was It Worth It? Energy Efficiency
and Fossil Energy Research 1978 to 2000''. This report found that
Fossil Energy R&D was beneficial because the industry snapped up the
new technologies created by the R&D program, developed other
technologies that were waiting for market forces to bring about
conditions favorable to commercializing them and otherwise made new
discoveries. In real dollars from 1986-2000 the government invested
$4.5 billion into Fossil Energy R&D. During that time, realized
economic benefits totaled $7.4 billion. This program is not only paying
for itself, it has brought in $2.9 billion in revenue. Why not continue
to fund oil and gas R&D so we can attain the energy independence we
need for stable and continued economic growth?
The Federal investment in energy R&D is particularly important when
it comes to longer-range research with diversified benefits. In today's
competitive markets, the private sector focuses dwindling research
dollars on shorter-term results in highly applied areas such as
technical services. In this context, DOE's support of fossil energy
research, where the focus is truly on research, is very significant
both in magnitude and impact compared to that done in the private
sector, where the focus is mainly on development. Without more emphasis
on research, we risk losing our technological edge in this global and
increasingly more expensive commodity.
As we pursue the goal of reducing America's dependence on unstable
and expensive foreign sources of oil, we must continue to increase
recovery efficiency in the development of existing domestic oilfields,
conserving the remaining in-place resources. Since the 1980's, 80
percent of new oil reserves in this country have come from additional
discoveries in old fields, largely based on re-examination of
previously collected geoscience data. These data will become even more
important in the future with development of new recovery technologies.
The research funded by DOE leads to new technologies that improve
the efficiency and productivity of the domestic energy industry.
Continued research on fossil energy is critical to America's future and
should be a key component of any national energy strategy. The societal
benefits of fossil energy R&D extend to such areas as economic and
national security, job creation, capital investment, and reduction of
the trade deficit. The Nation will remain dependent on petroleum as its
principal transportation fuel for the foreseeable future and natural
gas is growing in importance. It is critical that domestic production
not be allowed to prematurely decline at a time when tremendous
advances are being made in improving the technology with which these
resources are extracted. The recent spike in both oil and natural gas
prices is a reminder of the need to retain a vibrant domestic industry
in the face of uncertain sources overseas. Technological advances are
necessary to maintaining our resource base and ensuring this country's
future energy security.
doe office of science
The DOE Office of Science is the single largest supporter of basic
research in the physical sciences in the United States, providing more
than 40 percent of total funding for this vital area of national
importance. The Office of Science manages fundamental research programs
in basic energy sciences, biological and environmental sciences, and
computational science and, under the president's budget request, would
be cut by 3.8 percent from about $3.6 billion last year to $3.5
billion. AGI asks that you restore this cut.
Within the Office of Science, the Basic Energy Sciences (BES)
program supports fundamental research in focused areas of the natural
sciences in order to expand the scientific foundations for new and
improved energy technologies and for understanding and mitigating the
environmental impacts of energy use. BES also discovers knowledge and
develops tools to strengthen national security.
While the Basic Energy Sciences account is slated for an increase,
the entire increase would be devoted to Materials Sciences and
Engineering (MES) and the Chemical Sciences, Geosciences and Energy
Biosciences (CSGEB) account would decline by 7.4 percent. The
geosciences activity within CSGEB supports mineral-fluid interactions;
rock, fluid, and fracture physical properties; and new methods and
techniques for geosciences imaging from the atomic scale to the
kilometer scale. The activity contributes to the solution of problems
in multiple DOE mission areas, including reactive fluid flow studies to
understand contaminant remediation; seismic imaging for reservoir
definition; and coupled hydrologic-thermal-mechanical-reactive
transport modeling to predict repository performance. In short, this
account deserves your full support and well-rounded funding.
Thank you for the opportunity to present this testimony to the
subcommittee. If you would like any additional information for the
record, please contact me.
______

Prepared Statement of the American Forest & Paper Association
fiscal year 2006 appropriations for federal energy efficiency and
renewable energy r&d programs
The American Forest & Paper Association (AF&PA) welcomes this
opportunity to present its views on the need for sustained and adequate
funding of public-private partnerships through the Federal Energy
Efficiency and Renewable Energy (EERE) research and development
programs. Keeping these partnerships strong and effective is vital to
providing a research foundation for the forest products industry to
meet competitive challenges, while contributing to strategic national
needs associated with energy efficiency, energy security, diversified
energy supply, and environmental performance. Therefore, we are writing
to strongly recommend funding for the following EERE programs at the
Department of Energy: $10.5 million for forest products industry
(consistent with the priorities of the current forest products industry
technology roadmap) in the Industrial Technologies Program; and
designation of $15 million in the Office of Biomass Programs
specifically for competitive research for both sugars and
thermochemicals technologies and products related to the forest
biorefinery. This includes $5 million for pre-digester and $10 million
for post-digester activity, including black liquor gasification,
leading to the industrial size forest biorefinery demonstration.
AF&PA is the national trade association of the forest and paper
industry and represents more than 200 member companies and related
associations that engage in or represent the manufacturers of pulp,
paper, paperboard and wood products. The forest products industry
accounts for approximately 7 percent of total U.S. manufacturing
output, employs 1.3 million people, and ranks among the top 10
manufacturing employers in 42 States with an estimated payroll of $50
billion.
Through Agenda 2020, AF&PA members develop and implement our
industry's technology vision via collaborative research. Established in
1994 in partnership with the U.S. Department of Energy (DOE), Agenda
2020 has achieved a decade of tangible results by leveraging
partnerships with government and universities to develop technologies
that hold the promise of reinventing our industry, while providing real
solutions for national issues. Agenda 2020's world-class research is
designed to address key breakthrough technical hurdles that no one
company can accomplish on its own, while meeting technical and economic
performance criteria that are consistent with national goals.
The current technology portfolio of the DOE/Agenda 2020 partnership
in the Industrial Technologies Program (ITP), if fully funded and
developed, can help our industry cut energy use by 25 trillion British
Thermal Units (TBTUs) per year by 2010. Additionally, these
technologies can help to significantly reduce natural gas use, and cut
emissions of NOX, SOX, and Carbon Dioxide and
volatile organic compounds (VOCs). With adequate funding, Agenda 2020's
partnership with the DOE Office of Biomass Programs (OBP) can
significantly advance the vision of the Integrated Forest Products
Biorefinery (IFPB). The IFPB would evolve existing pulp mills into
geographically distributed production centers of renewable, sustainable
power, fuels, and chemicals--all while preserving existing
infrastructure and core business, creating higher skilled and better
paying jobs, strengthening rural communities, and opening new domestic
and international markets for American forest products companies. The
IFPB would contribute substantially to DOE strategic goals to
dramatically reduce dependence on foreign oil, to create new domestic
bioindustry, and to improve industrial energy efficiency by reducing
fossil energy consumption by over 250 TBTUs/yr, with an additional
benefit of cutting approximately 40 million tons of carbon emissions
annually.
Agenda 2020's partnerships with Federal agencies are a necessary
cornerstone for improving our competitive advantage, and for creating
and capturing value through innovation in processes, materials, and
markets. The partnerships accelerate our industry's adoption of
innovative technologies, its effective use of capital, and its ability
to attract the best and brightest people. They allow us to develop more
energy efficient and environmentally friendly technologies to benefit
both societal and industry needs and avoids forcing our industry to
make unproductive investments in aging and inefficient technologies.
The Federal partnerships also help our industry continue to provide the
world with essential, innovative and environmentally compatible
products from abundant, sustainable and reusable biological raw
materials.
DOE is Agenda 2020's primary Federal partner in a portfolio of
projects that leverages both industry and government investment. In
2004, the Agenda 2020 portfolio included a total shared DOE and
industry investment of almost $48 million, with nearly 55 percent
coming from direct project cost shares by industry. This is a
remarkable leveraging of Federal investment, given that our industry
faces considerable market pressures that hinder new investments of any
kind. Agenda 2020's overall Federal partnerships include projects with
the U.S. Forest Service, CSREES (Cooperative State Research, Education
and Extension Service) program of the U.S. Department of Agriculture
and the National Science Foundation.
As is the case with many U.S. manufacturing industries, we face
serious domestic and international challenges. Since 1997, 101 pulp and
paper mills have closed in the United States, resulting in a loss of
70,000 jobs, or 32 percent of our workforce. An additional 67,000 jobs
have been lost in the wood products industry since 1997. New capacity
growth is now taking place in other countries, where forestry, labor,
and environmental practices may not be as responsible as those in the
United States. In addition, globalization, aging process
infrastructure, few technology breakthroughs, as well as recent
financial performance and environmental concerns, hinder the ability of
U.S. companies to make new investments. Each year without new
investments, new technologies and new revenue streams, we lose ground
to our overseas competitors.
This situation has underlined the importance of a meaningful
industry-government partnership to leverage industry RD&D funding,
achieve shared industry and national goals, and bring technology risk
down to acceptable levels. To capture the full range of value and
benefits that can be derived from our wood-based raw materials,
multidisciplinary research is increasingly required in emerging
technologies, such as biotechnology and nanotechnology, coupled with
breakthrough advances in process and conversion technologies.
Addressing the associated technical barriers requires sophisticated
collaborations bringing together those who conduct and fund research
with those who can best translate its results into applications that
have economic and social value. In today's world, the complex processes
of technology development and product commercialization are
inextricably intertwined with government policy and market
interactions. It is not possible for the private sector to develop and
deploy technology without collaboration with the marketplace and
consideration of public policy.
The erosion of DOE support for forest products industry research
over the past 4 years has had severe implications for our industry. The
ITP has been cut by nearly 40 percent since fiscal year 2002,
undermining our progress in achieving crucial energy efficiency and
environmental benefits. Fiscal year 2006 proposed ITP funding for
forest products research ($3 million) would result in a further 52
percent reduction. Fiscal year 2006 proposed OBP will require complete
elimination of most, if not all, basic research and technology
development for forest biorefineries.
Fiscal year 2006 proposed funding for ITP will not be sufficient
even to sustain our industry's ongoing collaborative projects. Many
will have to be halted before they are complete, and no new research
could be funded. This comes at a crucial time when the forest products
industry, like many energy-intensive industries, is facing
unprecedented pressures due to the rising costs of energy, in
particular natural gas. Although we are nearly 60 percent self-
sufficient (using biomass), current natural gas prices translate into
an additional cost to the industry of more than $2 billion annually--
and places us at a significant disadvantage compared with our
international competitors. Thus we are in great need than ever for the
technology-based energy efficiency solutions that could be provided
through our partnership with ITP. AF&PA's recommended ITP funding for
forest products research ($10.5 million) would ensure these vital
research needs are met.
The proposed fiscal year 2006 budget virtually eliminates funding
for research associated with the IFPB. The IFPB vision includes
opportunities to produce high value, renewable bio-based fuels and
energy at several points during the traditional manufacturing process.
At the ``pre-digester'' stage, before the wood is pulped, the
hemicelluloses can be extracted and converted to fuels and/or
chemicals. After the wood has been pulped, or ``post-digester'', the
residual pulping liquors (also known as ``black liquor'') can be
gasified and the resulting synthetic gas converted into power, liquid
fuels, and/or chemicals. The IFPB could help make the forest products
industry even more energy self-sufficient, which serves the DOE
strategic goal of reduced energy intensity in industry by reducing
fossil energy consumption. In addition, the IFPB would permit the
industry to become a producer of renewable, carbon-positive bioenergy
and biofuels, which contributes to the DOE strategic goals to
dramatically reduce dependence on foreign oil and to create new
domestic bioindustry.
In partnership with DOE/OBP, the national labs, and universities,
Agenda 2020 has been pursuing vital research in a number of core
technologies to enable the IFPB and its products. The shared objective
has been to have in place before 2010 one or more facilities that
demonstrate the large-scale production of power, chemicals and fuels.
The IFPB demonstration is needed to assess technical and economic
viability in meeting both industry and national performance criteria,
and contribute to national needs for new, renewable fuel supplies.
A core technology for the IFPB is black liquor gasification (BLG).
Agenda 2020 is engaged in the sixth year of pre-competitive BLG
research to convert the by-product of the chemical pulping process into
a synthetic gas. The synthetic gas can subsequently be burned to
directly produce clean, efficient energy, or converted to other fuels
such as hydrogen, renewable transportation fuels, and/or other high
value chemicals. If fully developed and commercialized, these
technologies could produce enormous energy and environmental benefits
for the industry and the Nation. This new technology provides the
research foundation for the potential to produce a net 22 gigawatts of
power from a renewable fuel source, displacing as much as 100 million
barrels of oil per year. This translates into displacement of 900 BCF
of natural gas consumption for power generation by the year 2020,
assuming that BLG is placed in service by 2010.
The fiscal year 2006 proposed budget eliminates nearly all funding
for IFPB research (and its impacts on and integration with energy
efficiency in the core manufacturing process), just as it is advancing
to a stage where there can be a full assessment of its technical and
economic feasibility. There is no funding for BLG. Even though IFPB-
related research has been identified as priority by OBP, it would
receive no support because of lack of sufficient funding in the
proposed budget. Those research areas include: integrated biorefinery
support for thermochemical biorefineries, forest biorefineries, and an
fiscal year 2008 industrial size demonstration solicitation; products
core R&D in chemicals and fuels from syngas; thermochemical platform
core R&D in BLG and syngas cleanup; sugar platform core R&D in
optimization of lignin utilization and processes linking pretreatment
and enzymes; and feedstock interface core R&D in energy crops. AF&PA is
recommending that funding ($15 million) be designated within the OBP
budget for competitive research in these critical areas and to complete
BLG core research and projects that are underway. This funding will
provide the groundwork needed for next vital steps leading to for the
large-scale demonstration of biofuels and biochemicals production in
association with the industry's dominant Kraft pulping process.
We appreciate the committee's interest in ensuring sustained and
adequate funding for RD&D partnerships and look forward to working with
you to advance industry and national interests.
______

Prepared Statement of the National Association for State Community
Services Programs
As Chair of the Board of Directors for the National Association for
State Community Services Programs (NASCSP), I am pleased to submit
testimony in support of the Department of Energy's (DOE) Weatherization
Assistance Program (WAP) and in support of DOE State Energy Programs
(SEP). We are seeking a fiscal year 2006 appropriations level of $250
million for the WAP and $50 million for SEP. NASCSP believes these
funding levels are essential in continuing and improving the
outstanding results of these State grant programs for our citizens.
NASCSP is the member organization representing the States on issues
related to the WAP and the Community Services Block Grant. The State
offices represented by our organization would like to thank this
committee for its continued support of the WAP and SEP through the
years. The $228.2 million in WAP funds provided by the committee in
2005 is expected to result in:
--An additional 94,000 homes occupied by low-income families
receiving energy efficiency services, thereby reducing the
energy use and associated energy bills; and
--Greenhouse gases and environmental pollutants being significantly
reduced due to the decrease in energy use by these newly
weatherized homes; and
--Nearly 16,000 full time, highly skilled, jobs being supported
within the service delivery network and in related
manufacturing and supplier businesses.
The WAP is the largest residential energy conservation program in
the Nation and serves a vital function in helping low-income families
reduce their energy use. Developed as a pilot project in 1975, the WAP
was institutionalized in 1979 within DOE and is operated in all 50
States, the District of Columbia, and on several Native American
reservations. The WAP funds are used to improve the energy efficiency
of low-income dwellings using the most advanced technologies and
testing protocols available in the housing industry. The energy use
reduction resulting from these efforts helps our country reduce its
dependency on foreign oil and decreases the cost of energy for families
in need. With lower energy bills, these families can increase their
usable income and buy other essentials like food, shelter, clothing,
medicine, and health care.
The WAP provides an energy audit for each home to identify the most
cost-effective measures, which typically include adding insulation,
reducing air infiltration, servicing the heating and cooling systems,
and providing health and safety diagnostic services. According to the
Energy Information Administration's (EIA) Annual Energy Outlook, 2005
projected first-year energy savings for households weatherized during
this year are estimated to be $274, reflecting revised assumptions
about future natural gas prices. For every dollar spent, the WAP
returns $2.96 in energy and non-energy benefits over the life of the
weatherized home, based on these same EIA long-term energy prices
outlook and studies conducted by the Oak Ridge National Laboratory.
These savings occur for several years into the future. Since the
program's inception, more than 5.4 million homes have been weatherized
using Federal, State, utility and other monies.
As we all know, these are troubling times facing our Nation--war,
budget deficits, homeland security needs, and a slowed economic
recovery. These times create added financial burdens for all Americans,
but especially for those who live at or below the poverty line. Low-
income families have always spent a disproportionate share of their
income for energy needs than their middle-income counterparts. For
example, a typical middle class family pays about 3 to 7 percent of
their annual income for energy costs (heat, lights, air conditioning,
appliances and hot water). Low-income families pay nearly the same
dollar amount each year for energy but this amount represents a
significantly higher percentage of their total household income (14 to
20 percent). In times of energy shortages and escalating energy costs,
the energy burden for these families can reach 25 to 40 percent or more
of their available income.
When energy costs rise, like they have during the 2004-2005 heating
season, even a nominal increase can have a dramatic negative impact on
low-income families. The expected increase in this year's energy costs
may amount to an additional $500 or more for most families. For middle-
income families, this increase will amount to less than one-quarter of
1 percent of the total household income. For many low-income families;
however, this increase will result in a 3 to 5 percent reduction in
their expendable income and will cause families to go without other
important essentials like food, medicine, or clothing to meet this
higher financial demand.
These families need long-term solutions to help them reduce their
energy use both now and in the future--resulting in lower energy bills.
That is the primary mission of the Weatherization Assistance Program--
``To reduce heating and cooling costs for low-income families,
particularly for the elderly, people with disabilities, and children,
by improving the energy efficiency of their homes while ensuring their
health and safety.''
The Oak Ridge National Laboratory reports entitled ``State Level
Evaluations of the Weatherization Program Conducted From 1990-2001''
found that the WAP significantly improved its energy savings results
during those years. In 1996, the Program showed savings of 33.5 percent
of gas used for space heating--up from 18.3 percent savings in 1989.
The increase in savings was based in large part on the introduction and
use of more sophisticated diagnostic tools and audits. Families
receiving weatherization services can reduce their heating energy use
by an average of 22 percent, making the cost for heating their homes
more affordable. The Evaluation report also concluded that the WAP
possessed a favorable cost-benefit ratio. Simply stated, the Federal
funds provided to support the Program have a 140 percent return on
investment, or nearly $2.83 in benefits for every dollar invested.
Meta-evaluations in 1999 and 2001 confirmed the high level of energy
saving potential for the WAP.
The WAP has always served as a testing ground and provides a
fertile field for the deployment of research conducted by national
laboratories. For example, the Oak Ridge National Laboratory developed
the National Energy Audit (NEAT) for use by local agencies in assessing
cost effectiveness of service delivery. Oak Ridge is currently
investigating the cost effectiveness of including certain base load
measures (water heater replacement, lighting, motor efficiency) into
the Program and continues to test other protocols and material
installation techniques to help State and local agencies improve their
field operations. The Florida Solar Energy Center and the State of
Hawaii are working on the development of cost effective solar hot water
heaters. The State of New York, working in concert with the local
utility companies and the State Energy Research Development Authority,
has implemented a refrigerator replacement program to test the impact
of providing base-load services to conserve energy and reduce costs.
One of the major outcomes of WAP field deployment is that the
private sector eventually adopts these new technologies. This pattern
has been established through several advancements including blower
door-directed air infiltration, duct system testing and sealing,
furnace efficiency standards, and insulation and ventilation protocols.
The acceptance of these standards and protocols by the private sector
is enormously important as builders attempt to construct new properties
or rehabilitate existing ones using a renewed energy efficiency
philosophy.
Of equal importance to the technological and programmatic
foundation are the WAP contributions in achieving overall national
energy policies and social strategies. Some examples of how the Program
helps achieve these goals include:
--Reducing harmful greenhouse gas through reduced CO2
emissions by avoiding energy production. Each time a house is
weatherized, the reduction in energy needs reduces the
environmental impact associated with creating that energy
reduction of sulfur dioxide, carbon, and other pollutants
spilled into the atmosphere from the burning of fossil fuels
like oil, coal, kerosene, wood, gas, and propane.
--Increasing jobs in communities throughout the country. For every $1
million invested in the WAP, more than 40 full time jobs are
created and supported in the States. Another 20 jobs are
created in companies who provide goods and services to the
Program.
--Investing money into communities through job creation, local
purchasing of goods and services, and tax revenues. These
investments result in many secondary benefits. These residual
benefits, known as ``economic benefit multipliers,'' are
applied to local community investment to value the real worth
of money used locally. This multiplier is 3.5 to 4 times the
actual investment. This means that an investment of $250
million in the WAP could yield nearly $1.0 billion in economic
benefits to local communities.
--Reducing consumption of imported fuels by reducing residential
energy consumption. Our country currently imports nearly 60
percent of its oil from foreign countries. This figure is
higher than the import percentage in the 1970's, when the oil
embargo threatened our ability to operate as a Nation. The
conservation efforts of the WAP network will help reduce our
country's dependency on foreign oil, thereby strengthening our
country's national security.
In 2001, the administration earmarked the WAP as a ``Presidential
Priority'' in its National Energy Policy Plan. President Bush committed
$1.4 billion to be added to WAP over a 10-year period to help thousands
of low-income families meet their energy needs while reducing their
energy burden. Each year since then, the administration has asked for
higher appropriations levels in their budgets submitted to Congress. In
response to these higher budget requests, Congress voted to fund the
WAP in 2005 at $228.2 million--$63 million less than the President's
request. Again in 2006, the President has maintained his commitment to
WAP as a ``priority'' within his energy strategy and has asked Congress
to appropriate sufficient resources to the Program. Our organization
strongly supports the President's commitment and respectfully requests
this committee to provide the funding at the $250 million level to meet
the President's priority status for the WAP.
In addition to the State grant funds included in this year's
request, the States are also supporting an initiative by the Office of
Management and Budget and the Department of Energy to conduct an
overall evaluation of the WAP to re-establish its cost effectiveness as
a Federal investment. The last in-depth evaluation of the WAP occurred
in 1989, with various meta-evaluations being conducted in subsequent
years. This new evaluation initiative will help solidify the Program's
claim of outstanding energy conservation and long-term assistance to
low-income families in need. The evaluation will take approximately 3
years to complete. NASCSP respectfully requests that a line item in the
appropriations bill be created this year to set-aside these funds from
the traditional State formula grant activity and that the Department of
Energy be given the decision-making authority for how these funds will
be set-aside to complete the project.
NASCSP is also concerned about the low level of funding proposed
for the State Energy Programs (SEP) in 2006. SEP enjoys a broad
constituency, supporting State energy efficiency programs that include
energy generation, fuels diversity, energy use in economic development,
and promoting more efficient uses of traditional energy resources. SEP
funding has fallen steadily from a recent high in 1995 of $53 million
to its fiscal year 2005 level of $44 million. The State energy offices
are the crucial centers for organizing energy emergency preparedness.
They have been asked to do much new work in the sensitive area of
infrastructure security. Taking into consideration this growing burden,
the increasing difficulty of managing energy resources, together with
increasing opportunities for States to implement cost-saving measures,
we are supporting their request of $50 million for fiscal year 2006.
This level would restore the program's recent funding cuts, enhance
their ability to address energy emergency preparedness, and allow for
inflationary impacts since 1995.
By the evidence provided herein, this committee can be assured that
the increase in WAP and SEP funding will provide essential services to
thousands of low-income families, resulting in greater energy savings,
more economic investments, increased leveraging of other funds, and
less reliance on high-cost, foreign oil--outcomes that will benefit the
Nation. NASCSP looks forward to working with committee members in the
future as we attempt to create energy self-sufficiency for millions of
American families through these invaluable national programs.
______

Prepared Statement of the National Hydrogen Association
funding for the u.s. department of energy hydrogen initiative for
fiscal year 2006
Chairman Domenici, Senator Reid and honorable members of the
committee, the Members of the National Hydrogen Association thank you
for the opportunity to present testimony for the record to the Energy
and Water Subcommittee and mark this occasion to recognize the recent
change in jurisdictional authority of all U.S. Department of Energy
programs to your subcommittee. The membership of the National Hydrogen
Association (NHA), which represent all facets of the existing and
emerging hydrogen technology industries, request full support of the
President's Hydrogen Initiative of $259,544,000 for fiscal year 2006.
It is further requested that the committee not jeopardize the viability
of this initiative by reassigning spending priorities through
congressionally directed projects.
The Presidential Hydrogen Initiative managed by the Department of
Energy achieved results this past year:
--The Secretary of Energy announced over $500 million in project
awards including $190 million over 5 years for the controlled
hydrogen and fleet technology validation demonstrations.
--Under the DOE hydrogen program, three new hydrogen fueling
demonstration stations opened in the United States.
--Successful R&D in fuel cells will bring the production cost target
of $50/kW for fuel cells in transportation closer to reality.
--Successful R&D in hydrogen production will drop the cost of
hydrogen from $5.00/gallon to $3.60/gallon, making the goal of
$1.50/gallon more achievable.
--Codes were developed to enable the storage of hydrogen in fueling
stations, and additional safety codes are under development.
--Fire marshals, code officials, State energy officials and emergency
responders received information and training in hydrogen safety
in approximately 17 cities and towns.
--Critical R&D areas like storage, production from renewable
resources, nuclear energy, and how to make coal a zero emission
source of energy continue. Sharing the results at conferences,
program review meetings and elsewhere enable a broad
information exchange so efforts within the government and
private sector are not duplicated.
--International dialogue continues on many levels on ways nations can
collaborate in areas of hydrogen technology policy, trade and
R&D. For example, discussions at the ministerial level through
the International Partnership for the Hydrogen Economy are
focused on collaborative agreements between nations which could
help pave the way for sharing R&D results, manufacturing and
trade. At the policy and regulatory level, international
discussions and negotiations are ongoing on the topics of
standards, codes and regulation enforcement. At the research
level, attempts are being made to collect, quantify and share
information and lessons learned from international
demonstration projects and R&D programs.
This committee's investment in hydrogen is a wise use of resources.
Members of Congress and the public are concerned with dependence on
foreign supply. Hydrogen provides a clean and secure option. Added
value was achieved by the committee-imposed requirement to have Federal
dollars cost-shared with the private sector. Members of the National
Hydrogen Association are involved in all of the hydrogen technology
projects with the Federal Government and are the industries, small
businesses, State agencies and universities providing the partnership
dollars.
The value of enabling successful demonstrations through public-
private partnerships is exemplified by the goals of the ``Controlled
Hydrogen and Fleet Infrastructure Demonstration and Validation
Project'' managed by the Hydrogen and Fuel Cell Infrastructure
Technologies Program within the U.S. Department of Energy. The
Technology Validation Project is an unprecedented collaboration of auto
companies and energy companies working together toward a common goal.
The Department's request for fiscal year 2006 of $14.9 million for
infrastructure and $29 million for autos is part of a competitively bid
and cost-shared program. It is important to note that added value is
provided by the requirement for data collection and sharing among the
teams. The lessons learned will be shared with the community at large,
a critical step in the commercialization of hydrogen and fuel cell
technologies. This project will provide real world experience and
results for program prioritization and decision-making which will help
move the technology forward. This learning demonstration project is one
of the standard bearing projects of the President's Hydrogen Initiative
and should be fully funded.
As the development and implementation of hydrogen and fuel cell
technology continues, new opportunities for collaboration will emerge.
Consistent execution of a unified and structured Federal strategic plan
for R&D is vital to ensuring the commitment required to establish and
sustain these critical, public-private partnerships.
In the fiscal year 2005 Omnibus Appropriations Bill, the committee
stated education in hydrogen was ``too premature,'' and the budget was
cut to zero. The NHA membership disagrees with the committee's view. In
fact, the need for education has been identified as one of the top
three barriers to commercialization for hydrogen technologies.
Education and training of code officials, fire marshals and other
emergency responders is a critically important and immediate need.
Corporate resources have handled some of the early education needs,
like cost-sharing in some of the cities mentioned above but the demand
for education materials and opportunities is growing faster than
corporate resources alone can accommodate. The new hydrogen energy
technologies are being implemented across the breadth of the entire
U.S. energy infrastructure. Ensuring the coherent, timely education of
officials can best be assured through a neutral, government-funded
activity to create and deliver education materials.
The fiscal year 2006 budget request includes support for two
important categories of the hydrogen program: $1.8 million for training
and education and $6 million for codes and standards development. The
members of the National Hydrogen Association acknowledge the budget
request for these important topics is inadequate and would request
additional funding but we recognize the fiscal constraints of this
committee under current national priorities.
On behalf of the 110 members of the National Hydrogen Association,
we appreciate the opportunity to submit testimony for the record. We
urge the subcommittee to fully fund the President's Hydrogen Initiative
through the Department of Energy and to be extremely judicious and
limit designating special projects which we believe undermine the
capability of the DOE Hydrogen Program to develop this technology.
______

Prepared Statement of SoftSwitching Technologies Corporation
This testimony is submitted by SoftSwitching Technologies, Inc.,
(SoftSwitching) for the information of the committee during its
consideration of the Department of Energy's (DOE) fiscal year 2006
budget requests for the Office of Electricity and Energy Assurance.
SoftSwitching is a leading provider of power quality, power
reliability and power monitoring systems, including the Dynamic Sag
Corrector (DySC) and the innovative I-Grid web-based power
monitoring system. The I-Grid is a grid monitoring system with over
1,000 power monitors deployed throughout the United States.
Approximately 200 monitors deployed at industrial, utility, commercial,
and residential locations in the Midwest and Northeastern States
provided a near real-time record of the August 2003 blackout. Data from
the SoftSwitching I-Grid data system subsequently was utilized by the
joint U.S.-Canadian task force that investigated the blackout.
funding for gridworks
SoftSwitching supports DOE's request for $5 million for the
GridWorks program in fiscal year 2006. The GridWorks program has a
vital role to play in accelerating the development of new technologies
to modernize and expand the electric grid, and in so doing, reducing
the likelihood of costly blackouts and power interruptions.\1\ The
focus of GridWorks is on key grid components, including substations and
protective systems, power electronics, and cables and conductors. In
the area of substations and protective systems, an important emphasis
is on the development of next generation components and subsystems,
addressing the need to move from today's primarily mechanical system to
one that relies on solid state devices capable of rapid reactions. The
GridWorks program also recognizes that the use of the existing grid may
be maximized through improved operational and diagnostic tools that
will enable faster identification of problems and responses. GridWorks
will be coordinated with the other OEAA research initiatives, including
transmission reliability R&D and the GridWise program, which
concentrates on software-based solutions to grid modernization.
---------------------------------------------------------------------------
\1\ A recent study from the Lawrence Berkeley National Laboratory
placed the annual cost to the U.S. economy from power interruptions--
including momentary interruptions as well as longer power outages--at
approximately $80 billion. See Kristina LaCommare and Joseph Eto,
``Understanding the Cost of Power Interruptions to U.S. Electricity
Consumers, Lawrence Berkeley National Laboratory'', September 2004 at
xiv.
---------------------------------------------------------------------------
Adequate funding is needed for the core GridWorks program to permit
continuing progress on implementation of the GridWorks Multi-Year Plan,
which was released on March 8. The GridWorks Plan was developed through
extensive consultation with industry on how best to modernize the
electric grid through both near-term and longer term activities. It
should guide DOE's allocation of research and development funding.
challenges in modernizing the grid
There is general agreement that the electric transmission grid is
under great stress today. The North American bulk power grid was
constructed largely from the 1960's through the 1980's. With the
opening of wholesale electricity markets, and retail markets in some
States, the grid has come to be used in ways for which it was not
designed. Grid stress manifests itself not only in occasional, highly
visible outages such as the August 2003 blackout that affected 50
million people in the United States and Canada, but also in more subtle
ways, such as increasing transmission line congestion, reductions in
power quality, and electricity prices that are higher than they should
be.
Investment in the transmission system has not kept pace with the
growth in demand for electricity. The list of reasons why investment is
not made in transmission is lengthy. It begins with the inherent
difficulty in siting new transmission. Even if siting difficulties can
be overcome, proponents of new transmission face an uncertain
regulatory path to recovery of costs. There are also the uncertainties
attributable to the changing structure of the electricity industry,
with regional transmission organizations in some regions, but not
others, and with open markets in some, but not all, States. The result
is that progress in upgrading aging transmission infrastructure often
is contentious, incremental and slow.
Resolving the uncertainty over recovery and allocation of
transmission upgrade costs and simplifying the rules for siting of new
transmission lines are important long-term public policy objectives
that must be achieved in order to ensure a robust, reliable
transmission system. The Federal Energy Regulatory Commission, the
States and Congress have an important role here. But while these
difficult issues are being addressed, opportunities to optimize the
existing grid through the deployment of new technologies should be
pursued.
technology for a smarter grid
For all of its technological sophistication, the interconnected
interstate AC transmission system is essentially a reactive system that
is not easily controlled. Today's grid relies on relatively slow
electro-mechanical switches (essentially 1950's technology) and
imperfect information. Power flows according to Ohm's law (the path of
least resistance), not necessarily to where it is wanted or needed. AC
transmission system operators have little ability to control where
power flows, except by ramping power generators up and down at various
points on the system. The system is subject to unexpected (and usually
uncompensated) ``loop flows'' that cause congestion, impair scheduled
transactions and threaten reliability. In addition, adequate real time
information regarding the operation of the grid is not always
available.
To meet the needs of our highly electricity-dependent economy, the
grid must evolve into a real-time, digital electronically controlled
``smart'' system that is self-healing, more controllable, more fault
tolerant and less reliant on error prone human beings. Such a ``smart''
grid might not have been susceptible to some of the failures that
caused the August 2003 blackout.
Breakthrough technologies in the area of digital control of the
power delivery network are a building block of a truly 21st Century
electricity grid. Such a ``smart'' power delivery system would link
information technology and energy delivery using automated capabilities
to optimize the performance and resiliency of the grid, recognize and
respond to grid disturbances and restore stability to the system after
a disturbance. The basic building blocks for this system would include
advanced sensors, data-processing and pattern-recognition software, and
solid-state power flow controllers, including flexible AC transmission
system (FACTS) and new distributed controllers now in testing. Many of
these technologies offer relatively lower cost alternatives to
expansion of the transmission system. By making more efficient use of
existing rights of way, in some areas of the country, new technologies
such as FACTS devices may eliminate altogether the need to expand the
existing system by adding new, difficult to site, lines.
While FACTS technology has been commercially available for more
than 10 years, still relatively few installations have been purchased
by utilities. This is due to a number of factors. Deploying a large
number of FACTS systems across the grid would be extremely expensive,
due in part to the need for a specially skilled work force to maintain
and operate the system. There are certain technical issues regarding
insulation requirements and fault currents that stress the power
electronics system and make implementation of FACTs systems costly and
difficult. Moreover, in today's electricity market, it is hard to value
the benefits--decreasing congestion, increasing system capacity or even
increasing reliability--that use of FACTs technology would produce.
Active power flow control remains difficult to implement. But the
ability to control power flows on a more active basis by effectively
changing the line reactance would provide substantial benefits.
Technology to control power flows would allow full utilization of line
capacity while meeting contingency operating requirements, thereby
enabling the transmission system to be operated closer to its thermal
limits. Further, the ability to control power flows could reduce line
congestion or overloading by diverting current to other lines. The
problem of loop flows, which exacts operational and economic costs,
could be minimized, allowing power to actually flow along contract
paths.
``smart wires''
SoftSwitching is pioneering a new approach for enhancing
transmission system reliability and controllability through the use of
a massively distributed FACTS approach, known as ``Smart Wires.'' Smart
Wires features the deployment of many modules of a Distributed Static
Series Compensator (DSSC) device, which can be clamped onto existing
power lines. The DSSC devices then can be operated to control the
impedance of the conductor, and thereby control the power flow on the
line.
The DSSC modules consist of a small rated single phase inverter and
a single turn transformer, along with associated controls, power supply
circuits and built-in communications capability. The two parts of the
module can be physically clamped around a transmission conductor. The
weight and size of the DSSC module is low, allowing the unit to be
suspended mechanically from the power line. The unit normally sits in
bypass mode until the inverter is activated. Once the inverter is
turned on, the DSSC module can inject voltage or reactive impedance in
series with the line. The DSCC module can increase line impedance and
thereby ``push'' current into other parts of the network, or it can
reduce line impedance and ``pull'' current in from other parts of the
network.
The overall system control function is achieved by using a large
number of modules coordinated through communications and smart
controls. An additional advantage of the Smart Wires system is that
modules would also contain appropriate sensors to monitor the condition
of the line on a distributed basis so that the line can be fully
utilized.
A distributed, technology oriented ``smarter grid'' solution cannot
be expected to solve all problems associated with our stressed
transmission system, but it is an important start. Technology offers
transmission owners an opportunity to more efficiently operate their
systems to effectively increase useable transfer capacity. Distributed
solutions, phased into operation, also offer improved return on capital
employed; improved system reliability; reduced possibility of cascading
outages; reduced delays in expanding system capacity; reduced
environmental impact; and the ability to defer the purchase of over-
sized assets until required by demand. Massively distributed advanced
transmission technologies also may offer a way out of the regulatory
gridlock which stymies many needed transmission investments.
conclusion
Public-private partnership will be necessary to take full advantage
of opportunities that new technologies present to optimize the existing
grid. Continued commitment by government to research and development of
``smart grid'' technologies, as well as programs to assist in
integrating many of the promising technologies being developed today
into the grid, would be a wise use of Federal resources. The DOE
GridWorks and GridWise initiatives are important first steps.
Smart Wires offers a new approach for realizing a smart, fault
tolerant, controllable and asset efficient power grid. A massively
dispersed deployment of the Smart Wires system promises much needed
system-wide benefits: increased transmission line and overall grid
capacity; increased grid reliability and improved operation under
contingency situations; greater information about the grid operating
conditions; and reduced environmental impacts. DOE's OEAA programs
should foster the continued development and deployment of this
promising new technology solution.
______

Prepared Statement of the Coal Utilization Research Council (CURC) \1\
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\1\ The CURC is an ad-hoc group of electric utilities, coal
producers, equipment suppliers, State government agencies, and
universities. CURC members work together to promote coal utilization
research and development and to commercialize new coal technologies.
Our 50+ members share a common vision of the strategic importance for
this country's continued utilization of coal in a cost-effective and
environmentally acceptable manner.
---------------------------------------------------------------------------
Synopsis of CURC Testimony.--This testimony focuses upon the
following three topics: (1) the adequacy of funding to achieve the
goals of the DOE/CURC/EPRI technology roadmap; (2) total recommended
funding increase of $90.7 million for selected, critical DOE coal R&D
and demonstration programs; and (3) continued support for funding of
the FutureGen project and CCPI program.
introduction
Members of CURC believe that use of coal will be assured through
the aggressive development of technologies, which improve the cost
competitiveness of coal, enhance the efficiency and reliability by
which coal is converted to useful energy, and minimize the
environmental impacts of coal use through the development of near zero
emissions coal-based power plants. A long-term, sustained public and
private investment is required if we are to achieve these goals.
the clean coal technology roadmap
The CURC, the Department of Energy (DOE), and the Electric Power
Research Institute (EPRI) have developed a clean coal technology
roadmap (see CURC website at www.coal.org). The roadmap identifies a
variety of research, development and demonstration priorities that, if
pursued, could lead to the successful development of a set of coal-
based technologies that will be cost effective, highly efficient and
achieve greater control of air and water emissions compared to
currently available technology. The roadmap outlines the technology
steps necessary in order to achieve these goals. In addition, the
roadmap includes a technology development program for carbon
management, defined as the capture and sequestration of carbon dioxide.
In the event public policy requires CO2 management at some
future time, cost effective technologies will then already be under
development or developed. Importantly, the roadmap identifies several
technology development ``pathways'' that should be pursued concurrently
to achieve the roadmap goals. It is desirable, and CURC recommends,
that the Nation's coal R&D program include a variety of technology
options for power generation. As an example, the roadmap recommends
pursuing both gasification and combustion-based technology paths
forward.
Using the roadmap as a tool to guide our Nation's coal research and
development (R&D) efforts, CURC has examined the fiscal year 2006
budget request for coal. Our specific inquiry is to judge whether DOE's
coal program will result in the timely achievement of the agreed upon
roadmap goals. While the roadmap identifies the need for significantly
larger annual budgets than have been requested in the past several
budget cycles, the Department of Energy is to be commended for the
fiscal year 2006 budget request which strongly evidences this
administration's commitment to the development of technologies that
will facilitate the use of coal. However, it is important to note, even
during a period of increasing budget constraints, fully funding the
coal R&D program at the levels suggested in the roadmap would best
insure achievement of the goals established in the roadmap; reduced
government and industry investments will postpone or may deny our
ability to develop these important clean coal technologies.
Advanced Combustion Systems.--CURC recommends that $5.0 million be
provided to an Advanced Combustion program. A modest level of funding
needs to be directed to an advanced combustion program that supports
industry initiatives examining novel methods to improve the efficiency
of direct combustion systems as well as promising methods to cost-
effectively capture carbon dioxide. Specifically, the recommended level
of funding ($5.0 million) should be used to support the following R&D:
(1) chemical looping technology development of highly efficient,
innovative power generation plants with CO2 capture and
hydrogen generation capability; (2) ultra-supercritical steam cycles
for advanced boiler and steam turbine development; and (3) systems
analysis and component development including integration with, and for
CO2 capture.
Advanced Research.--The advanced research program includes the
ultra supercritical materials program, aimed at the development of
advanced materials for steam power generation applications at ultra
supercritical modes. This program/consortium is particularly important
as these materials can be used in broad applications, including for use
in FutureGen and gasification applications, as well as in combustion
technologies. Funding for this activity has been reduced from about
$4.8 million in fiscal year 2005 to $3.3 million in fiscal year 2006,
and CURC recommends that this program be funded at $4 million. CURC
also recommends that DOE focus in the advanced research program upon
development of instruments, sensors and materials for advanced
diagnostics and controls for coal-based systems. Additional funding in
these research areas will reduce the technical risk of advanced power
generation technologies, such as gasification, that are dependent on
sensors and controls.
Advanced Turbines.--The latest generation of advanced gas turbines
(the ``G'' and ``H'' class of turbines) is not ready to meet the
demands of the administration's proposed advanced coal-based power
plant cycles (e.g., ITM based IGCC cycles with or without
CO2 capture), or the FutureGen project. CURC believes that a
broad based turbine technology development and verification program
similar to the Advanced Turbine Program which focused on natural gas
applications may be appropriate with respect to coal based applications
and in order to support FutureGen and other proposed advanced, electric
utility-scale, coal utilization cycles. Four key areas need increased
support: (1) additional development of fuel flexible low emissions
combustion systems; (2) development of syngas and H2
tolerant materials and coating systems; (3) development of sensors and
monitors for syngas and H2 gas turbines; and (4) continued
support of the University Gas Turbine Research Program. Emphasis upon
these four areas would provide added support for the development of
advanced gas turbines to meet the requirements of the FutureGen project
as well as other advanced coal-based power plant cycles. The fiscal
year 2006 advanced turbines program anticipates support for the
development of smaller scale turbines (e.g. 1 megawatt size). While
laudable and perhaps worthy of support, the limited budgets strongly
suggest that such funding would be more effectively used (and funding
is needed) in support of turbines that will be used in utility-scale
applications. Successful development of these large-scale turbines will
enhance the success of large-scale IGCC systems.
Carbon Sequestration.--CURC believes that the fiscal year 2006
budget request of $67.2 million for the carbon sequestration program is
adequate. The fiscal year 2006 funding request will support an
expansion of the on-going carbon sequestration projects (i.e. the
Regional Carbon Sequestration Partnerships) as that program moves into
the pilot-scale testing phase. Within the program, however, CURC
recommends that more emphasis needs to be placed on carbon capture
technology development (in addition to carbon sequestration). The
development of technologies to reduce costs for capturing carbon
dioxide is critical to enabling practicable sequestration. This applies
both to the existing fleet, which consists of essentially all
combustion plants, and to new power plant options, such as IGCCs,
hybrids, and advanced combustion plants. CURC also recommends increased
focus upon measurement, monitoring and verification of sequestered
CO2. To the extent that the subcommittee is not able to
increase funding in other important research and development programs
(at outlined in this statement) due to budget constraints, then it is
recommended that funding be taken from this program perhaps by delaying
or not embarking upon the pilot scale tests in all of the regional
partnerships.
Coal Derived Fuels And Liquids.--Additional funding in this area
would provide support to coal-to-liquids plants that would enable such
plants to compete with traditional petroleum fuels at today's prices.
Laboratory and pilot-scale experimental research and testing in reactor
design, catalyst life, membranes, process development, and system
performance under cycling loads must be continued to prove the economic
viability of such plants. Secondly, we recommend added focus on
computer simulations and computational process modeling of
polygeneration systems for fuels and chemicals designed to reduce the
cost and financial risks in constructing polygeneration plants. CURC
recommends the addition of $1 million for work in each of these two
areas ($2 million total).
IGCC/Gasification.--The scope of activities to be undertaken with
the proposed fiscal year 2006 budget suggests that the program will be
directed almost exclusively at technologies that will not become
available until the 2015 and 2020 timeframe and/or for use in FutureGen
applications. It appears that little work will be directed at
technology development to support the cost-effective installation of
commercially offered gasification systems which are expected to be
implemented in the next 5-7 years. A portion of the proposed fiscal
year 2006 funding should be directed towards refractory research, field
testing and analysis that will assist in improving the availability and
on-stream factor of existing gasification systems that will result in a
reduction in the cost of these systems by minimizing redundancy
requirements. CURC also recommends that funding be provided to continue
research, development and field testing of high temperature, slagging
atmosphere temperature measurement devices, which are currently being
developed in DOE technology R&D programs, but have not yet been
implemented in existing systems.
Innovations For Existing Plants.--The EPA CAIR rules have been
issued and will be in force at the end of 2007 and the EPA Clean Air
Mercury Rule has been issued and will be in force in 2010. Because of
these regulations, CURC strongly recommends an additional $3.0 million
be added to the Fine Particulate Control/Air Toxics subprogram to
support a number of additional mercury emission control field tests.
The President's fiscal year 2006 request increases funding above the
fiscal year 2005 enacted levels in order to accelerate planned mercury
control demonstration tests. This increase is welcomed and much needed.
However, the additional funds recommended by CURC would permit several
additional field tests to establish the annual average mercury removal
and validate that mercury reduction technologies can be applied to the
very wide range of power-plant types and wide range of coals fueling
those plants. Since the recently proposed utility mercury rule
establishes an annual mercury emission limit, it must be established
that the mercury co-benefits and new mercury control technologies can
achieve the long-term performance targets. Currently, EPA has based the
co-benefits analysis on short-term (2 to 4 hour) tests. Results from
these field tests will provide increased confidence that the methods/
technologies used can assist industry in complying with the new rules.
In addition, CURC believes that a modest amount of additional funds
should be made available to undertake a study and industry workshop
that surveys what should be done (by way of an R&D program) to address
the rising problem with SO3 (sulfuric acid) plumes, for
which there is currently no program or funding.
FutureGen/Clean Coal Power Initiative (CCPI).--Commercial scale
demonstrations of complete systems are essential in determining whether
or not components can be successfully and cost-effectively integrated
into a full-scale power generation system. CURC supports funding for
the coal demonstration projects anticipated through the CCPI and the
FutureGen projects. The DOE fiscal year 2006 budget requests $18
million to fund FutureGen and $50 million to fund the CCPI program.
CURC recommends that the Congress consider the following:
--CURC supports the recommendation to fund FutureGen at $18 million
in fiscal year 2006. Congress must provide assurance to the
private sector participants that the government is committed to
the project. The DOE has proposed holding $257.0 million of
previously appropriated clean coal technology program funds in
an account for future use in FutureGen. This action, along with
a clearly articulated plan for providing the additional
government funds needed to support the project (beyond the
previously appropriated clean coal technology funds), is
essential in order to assure potential State and industry
participants that FutureGen is worthy of substantial non-
Federal cost-share.
--For the CCPI program to be successful, a budget request of $50
million to support the second solicitation is not adequate. For
DOE to conduct a robust and meaningful solicitation, it would
be necessary to have approximately $300 million available in
order to award multiple projects of the size and magnitude
necessary to demonstrate full scale, commercial applications.
CURC recommends that this program be increased by at least $80
million in 2006 to a total of at least $130 million. This
action would send industry (potential applicants for CCPI
demonstration funds) a clear signal that Congress and the
administration intend to conduct a third CCPI solicitation in
the fiscal year 2007-2008 timeframe.
CURC continues to support the FutureGen project. But, as noted in
previous testimony, this support cannot be given if the DOE's base R&D
programs are cut back in order to provide funding for the project. The
same is true of funding for the Clean Coal Power Initiative. The
administration is to be commended for the fiscal year 2006 coal R&D
budget request made to Congress, which evidences a concurrent
commitment to the base R&D program. A similar commitment must be made
to the on-going CCPI program.
conclusion
Success in advanced clean coal technology development promises to
preserve the coal option for fuel diversity and assures that continued
growth in the use of coal will be accompanied with low costs to
consumers, minimal impacts upon the environment, and guaranteed energy
security for our Nation now and well into the future. DOE/CURC/EPRI
roadmap identifies a variety of advanced coal-based energy systems to
achieve those goals. To ensure that these technologies will be
developed the government's long-term commitment must be assured with
continued and focused funding for these programs.
______

Prepared Statement of Direct Drive Systems, Inc.
I am writing to request support for specific funding for the DOE
National Energy Technology Laboratory, Office of Natural Gas' programs
for Transmission, Distribution and Storage of natural gas. I apologize,
but I am new to the appropriations process, and the DOE personnel with
whom I spoke could only suggest writing to this email address. I do
know that there are probably specific program lines and numbers that I
should be referencing, but unfortunately, I do not know how to identify
them. Also, there is probably a desired format for my submission, but
the U.S. Senate Committee on Appropriations press release dated March
8, 2005 announcing a due date of April 30, 2005 for outside witness
testimony to the Energy and Water Subcommittee did not provide any
specifics. I beg your indulgence on these issues.
I am writing specifically to ask that funding be included in the
budget to demonstrate an advanced technology permanent-magnet, high-
speed, direct-drive, variable-speed electric motor drive system for
natural gas and liquefied natural gas (LNG) compression and pipeline
transportation. I realize that this is a confusing series of
adjectives, but they accurately describe the product. To elaborate, the
product is a variable-speed electric motor that operates at high
speeds, which makes it suitable for driving certain applications, such
as compressors, directly without a gearbox. The use of permanent magnet
technology and the absence of a gearbox make the motor-drive smaller,
lower cost, and more efficient, especially under partial-load
conditions.
The DOE National Energy Technology Laboratory funded a portion of
such an effort in 2003 and 2004 through the IEMDC Totally Enclosed In-
Line Electric Motor Driven Compressor Program, DE-FC26-02NT41643. This
program advanced the preliminary design of an electric gas compressor
that can be inserted directly in-line with the gas pipeline to the
point that detailed design of manufacturing drawings could begin.
Unfortunately, this program did not use permanent magnet technology,
instead choosing less flexible conventional induction motor technology.
As a result, the resulting product design was not as small, light, or
efficient at partial loads as it might have been. Also, the project was
a design effort only and did not result in an actual product.
The technology exists today to build small, reliable, efficient,
and inexpensive permanent magnet, variable-speed motor-drives to
improve the throughput of the Nation's gas pipeline systems, increase
energy efficiency, reduce energy consumption and reduce air pollution
emissions. The same motor-drives can also reduce noise emissions, and
visual pollution due to their smaller size and quieter operation. This
is especially important in urban areas, where natural gas consumption
is highest, and the obstacles to building new pipelines the greatest.
A recognized need exists within the gas transmission industry for a
new generation of centrifugal compressors. Unfortunately, given the
critical demands placed on the gas transmission and distribution
infrastructure, utilities and operators are not able to adopt new
technologies, even if they offer considerable cost and environmental
benefits, without government support. The technology risks, even if
minimal, are simply too great for the ``high-reliability'' industry to
undertake. So, introducing new technology to the industry requires
government sponsorship. I propose that DOE be funded to conduct an
actual demonstration of a permanent magnet, high-speed, direct-drive
natural gas pipeline compressor to meet industry standards, not just
conduct a study. The characteristics of the required new compression
system include minimal maintenance, capability of starting and stopping
several times per day, easy installation, low total life-cycle cost,
and minimal environmental impacts. Such a system would answer the
evolving requirements driven by the increasing demand for natural gas,
more stringent environmental regulations, the high operating and
maintenance costs of mechanical (engine-driven) gas compressors, and
the advanced age of much of America's pipeline infrastructure.
Considering the current configurations of commercially available
pipeline compressor systems, an alternative system designed for
increased throughput to meet the growing demands on an aging pipeline
infrastructure would provide an attractive solution to the challenges
facing the gas industry. This system would need to be capable of
readily replacing older compressors, re-powering existing compressor
stations, and forming the basis of easily installed new compressor
stations for expansion. Currently, there is an aging fleet of 20-year-
old to 50-year-old, gas-driven, compressors on pipelines. Maintaining
this aging fleet of compression equipment can be a daunting task for
pipeline operators due to on-site gas leakage, emissions that cause air
pollution, availability and cost of spare parts, system monitoring
requirements, and noise. Most of this old compression equipment uses
gas-fired gas turbines or reciprocating engines, otherwise known as
mechanical drives. Mechanical drives lack operating flexibility, are
inefficient relative to electric drives, and have especially poor part-
load efficiency. Gas turbines have much higher capital costs than
electrical drives, and gas turbines have much higher operating and
maintenance costs. Gas turbines consume the expensive fuel that they
transport, and they require periodic minor overhauls at least annually
and major overhauls every 4-6 years that can cost as much as 25 percent
to 50 percent of their capital cost. Electric drives are essentially
maintenance-free over their 15-20 year service life. If magnetic
bearings are used and gearboxes are eliminated by using direct-drive
systems, oil can be removed from the system completely, further
lowering maintenance costs and eliminating the potential for
environmentally damaging oil spills.
It is important to note in today's era of high energy costs that
more than 4 percent of the total natural gas consumed in the United
States is used by gas turbines and engines operated to compress and
move natural gas through pipeline systems. Given the elasticity of the
natural gas price curve, one can only be amazed at the potential impact
that an additional 4 percent of supply could have on the market, and on
the Nation's natural gas energy costs. Also, gas turbines and
reciprocating engines in compression service are rarely more than about
30 percent efficient, where as the electrical supply grid that is
available to power an electric compressor is usually 40 percent
efficient or more. Switching to electrically-drive compressors could
cut the total energy used to move natural gas by a third or more,
reducing total energy consumption and greenhouse gas emissions. Also,
compressor mechanical drives usually operate without air pollutions
emissions controls, or with minimal emissions controls at best. The
emissions from the large power plants that run the electrical grid can
be more easily monitored and abated. Re-powering existing mechanical
gas compressors with variable-speed, permanent-magnet, direct-drive
electric motors makes tremendous economic and environmental sense.
I request that funding be provided to DOE to demonstrate just such
a program and that the funding be earmarked for and existing, proven
supplier of permanent-magnet, high-speed, variable-speed, direct-drive
electrical motor drives. The motor-drive should be a multi-megawatt
sized machine in the 8-12 MW range. Approximately $7.5 million should
be set aside to complete the program, including the production of the
first 8-12 MW motor drive unit and the associated power electronics and
the completion of the gas compression testing and demonstration
program, including sufficient support for DOE.
Thank you for your consideration. I would be pleased to provide
additional information, to answer questions or to provide other
assistance as may be required.
______

Prepared Statement of Bob Barnett
My name is Bob Barnett. I am a retired petroleum engineer with over
50 years of experience in the oil and gas industry, both domestic and
international. I am writing in support of continued Department of
Energy (DOE) funding for the Oil and Natural Gas Technology Programs. I
have participated in a partially DOE-funded field demonstration project
and have first-hand knowledge of the process and its effectiveness. The
project was accomplished with the able assistance of the National
Energy Technology Laboratory (NETL), The Petroleum Technology Transfer
Council (PTTC), and the Tertiary Oil Recovery Program (TORP) at Kansas
University. These entities depend on the DOE for a portion of their
support. All of the people involved in these programs demonstrate the
highest standards of knowledge, ability, and professionalism.
There are many reasons for continuing the DOE funding for Oil and
Natural Gas Technology and Regulatory Evaluation Programs. These
programs are absolutely essential to maintaining a viable domestic
energy industry. A strong domestic oil and gas industry is crucial not
only to our national security but to our economy and our trade and
budget deficits. It makes little sense to be the world's largest oil
and natural gas consumer with declining production, when we have the
power to change our predicament. A vital oil and gas industry also
yields a much better negotiating position, and partnering opportunity,
with global energy producers and consumers. The national security
aspect is even more important now with the political turmoil in many of
the producing countries on whom we depend for our shortfall.
That we are starving for energy is most evident. We will probably
never be self-sufficient in hydrocarbons again, but we can and must
change our dilemma. This can only be done by improving production of
our domestic resources. Accomplishing this will allow our economy and
way of life to be sustained while providing time for the development of
alternative energy sources.
Alternative energy sources should be pursued. Our government
already spends billions on their development and will spend billions
more before they become commercially available. Most of the energy
sources being touted by Congress are years away from being able to
supply a significant portion of our needs.
The principal avenue for improving domestic production is through
the aggressive application of Research and Development (R&D) and new
technology. This is best accomplished by our independent oil and gas
producers who now drill 85 percent of the wells and provide a major and
ever increasing portion of our energy.
These independent producers have neither the resources nor the
technical personnel to accomplish the R&D and technology development.
This situation does not change because of high oil and gas prices. They
simply cannot develop and maintain R&D personnel and capability. This
is the precise reason that our government, through the DOE, must remain
involved in R&D and technology development for fossil energy.
The major oil companies, who had all the R&D capability, are no
longer interested in the mature fields of the United States. They have
shifted their resources to the higher potential and return afforded by
the international marketplace. The service companies have added some
R&D but it is targeted to the major company customers and their
international operations.
The greatest potential for improving our energy plight lies in
increasing the productivity of the mature oil fields within our
borders. Of all the oil that has even been discovered in the United
States, about two-thirds of it remains in the ground. This amounts to
more than 400 billion barrels!! Are we to write off this resource
simply because the major oil companies are no longer interested? More
production of this oil only awaits the application of new technology
and improved techniques.
In addition to the obvious security and trade balance benefits, a
concerted effort to produce the known energy resources within our own
country would create an unprecedented economic impact. It would create
many thousands of jobs and require billions in services, supplies,
materials of all kinds, equipment, pipe, chemicals, etc.
Many of the programs and demonstration projects partially funded by
DOE have been inordinately successful in spite of negative reports from
the Budget Office. These programs are very frugal and are well managed
by entities such as the NETL in Tulsa, Oklahoma. The resulting
technology and field results are effectively disseminated by the PTTC.
In addition to promulgating critical technology throughout the
petroleum industry, PTTC also maintains crucial data bases at
universities throughout the country. These are called Regional Lead
organizations. The PTTC makes effective use of volunteers in much of
its operation. It is a non-profit organization which is doing an
outstanding job.
DOE funding is also vital to continuing oil and gas research
programs at our universities. These programs are our only avenue for
training future petroleum professionals. The average age of our
technical force in the petroleum industry is 54 and many will be
retiring before they can be replaced. Without funding for university
research, we will be unable to train the required petroleum engineers
and geologists. We cannot continue to develop the needed technology and
maintain our technical edge without the funding.
It should be mentioned that the R&D funding for field research
projects is only partially provided by DOE. Cost-sharing is provided by
industry, States, and academia. This greatly compounds the
effectiveness of the DOE contribution.
Our technology and our petroleum geoscientists are the envy of the
world. Representatives of the NETL and other professionals are in great
demand for conferences, symposia, and technical exhibitions throughout
the petroleum universe. This has provided us the best possible
opportunity for educational sharing and development, technology
exchange, gaining understanding and trust, and building bridges with
foreign energy producers. In an energy starved world it would be a real
tragedy to sacrifice this crucial position for the lack of DOE funding
of the Oil and Natural Gas Technology Programs.
______

Prepared Statement of Mid-West Electric Consumers Association, Inc.
The Mid-West Electric Consumers Association (``Mid-West'')
represents over 300 rural electric cooperatives, municipally-owned
utilities, and public power districts in the nine States of the
Missouri River Basin: Colorado, Iowa, Kansas, Minnesota, Montana,
Nebraska, North Dakota, South Dakota and Wyoming. Mid-West's members
serve over 3 million consumers in the region. Mid-West supports the
fiscal year 2006 budget request of $186.8 million for operations,
maintenance and program direction utilizing the ``net-zero'' approach
proposed by the administration. Mid-West also requests a higher funding
level of $279 million in fiscal year 2006 for the Western Area Power
Administration's (``Western'') Purchase Power and Wheeling (``PP&W'')
program that more accurately reflects the current reservoir conditions
in the Pick-Sloan Missouri Basin Program.
The administration's budget request has several proposals that
address some of the issues attendant to the Federal transmission
system. Mid-West and its members have a vital interest in maintaining
the efficiency and reliability of the Federal power program. Electric
utilities throughout the region rely upon the more than 8,000 miles of
Federal high-voltage transmission operated by Western for delivery of
power.
1. Mid-West supports the fiscal year 2006 budget request of $186.8
million for operations, maintenance and program direction utilizing the
``net-zero'' approach proposed by the administration.--A net-zero
approach that recognizes the nature of Western's annual expenses will
enable Western to continue timely operations and maintenance
activities. To make this approach truly effective, however, receipts
used to pay down the appropriations should be reclassified from
``mandatory'' to ``discretionary.''
2. Mid-West also requests a higher funding level of $279 million in
fiscal year 2006 for Western's PP&W program that more accurately
reflects the current reservoir conditions in the Pick-Sloan Missouri
Basin Program.--Also, The language in previous appropriations acts
should be retained so that Western can continue to utilize customer-
generated receipts to help fund PP&W costs.
3. Mid-West supports the concept, but not the form proposed by the
administration, of access to receipts for the hydropower operations and
maintenance activities of the Federal generating agencies (U.S. Army
Corps of Engineers and the U.S. Bureau of Reclamation).
4. Mid-West opposes the administration's proposal to arbitrarily
raise the rates charged for Federal firm power sales to ``market''
levels.
5. Mid-West encourages the committee to consider increasing
Western's appropriations in an amount equivalent to any funds
``earmarked'' for special activities.
``net zero'' appropriations for federal pmas
Adequate and timely funding is critical to maintaining efficient
and reliable operation of the Federal transmission system that is so
vital to Western's customers.
Budget deficits present Congress with a daunting task in funding
Federal programs. The annual costs of Western are currently included in
the budget ``scoring'' that Congress uses to help keep control of
Federal spending. However, those annual costs are returned to the U.S.
Treasury every year, and so really are not an outlay by the Treasury.
The administration's fiscal year 2006 budget request proposes a
``net-zero'' funding approach for operations, maintenance and program
direction. The ``net-zero'' proposal recognizes that certain Federal
outlays for a given fiscal year will be returned to the Treasury in
that same fiscal year. This approach is not ground-breaking, because it
is already used to fund other Federal energy agencies. The Power
Marketing Administration's (``PMAs'') budgets cover all the costs of
their operations. This $186.8 million budget request, in concert with
the ``net-zero'' approach, is supported by Mid-West. However, a budget
scoring adjustment is required to make this approach truly effective.
Receipts collected by Western to repay program direction and operation
and maintenance expenditures should be reclassified from ``mandatory''
to ``discretionary.''
purchase power and wheeling
Mid-West believes that the administration's budget request of
$148.5 million for PP&W funding is based on unrealistic assumptions and
is inadequate. Western and the other PMAs are contractually committed
to deliver hydropower generated at Federal dams to eligible consumer-
owned utilities on a firm basis. The persistent drought in the Missouri
River Basin means that the 2005 generation estimated by the Corps of
Engineers will be 58 percent of normal. Present projections might
reduce hydropower generation in 2006 to 46 percent of normal. In light
of the record low reservoir levels and resulting severely reduced
generation, Western must purchase much more replacement power to
fulfill their firm contract obligations. These increased purchases at
soaring energy costs dictate that a higher level of funding is required
for PP&W. To insure adequate funding in fiscal year 2006, Western will
need access to receipts for $279 million to cover PP&W costs.
The language in the fiscal year 2002-2004 appropriations bills
should be retained so that the PMAs can continue to utilize customer-
generated receipts to help fund their PP&W costs. Otherwise, small
utilities, such as rural electric cooperatives, municipally-owned
utilities, Native American tribes, irrigation and public power
districts, would have to develop their own transmission and power
firming agreements which would increase their costs. Accordingly, Mid-
West requests that the following language be included in the fiscal
year 2006 Energy and Water Development Appropriations Act:

``Provided, that up to $279,000,000 collected by the Western Area
Power Administration pursuant to the Flood Control Act of 1944 and the
Reclamation Project Act of 1939 to recover purchase power and wheeling
expenses shall be credited to this account as offsetting collections,
to remain available until expended for the sole purpose of making
purchase power and wheeling expenditures.''
corps of engineers and bureau of reclamation access to power receipts
Mid-West finds some merit in the administration's proposal in the
fiscal year 2006 budget request to permit the Bureau of Reclamation
access to receipts to fund hydropower operations, maintenance and other
activities. However, without specific safeguards and focus, we cannot
support the specific proposal. These specific additional provisions are
as follows: (1) Congress must set the specific amount of receipts to be
provided to the Bureau from Western's receipts; (2) The Western
Administrator, after specific consultation with the Bureau and the
affected Federal power customers, will determine the amount of receipts
to be transferred; (3) The only type of operations and maintenance
activity which would be eligible would be annual activities allocated
exclusively to the power function; (4) No inclusion of hydropower's
share of joint use operation and maintenance; (5) No inclusion of small
capital expenditures; (6) Western receipts to the Bureau must be spent
in the year those receipts are provided; and (7) No funding for the
Bureau's Science and Technology program should be provided from
Western's receipts. We are very concerned that without these safeguards
Western's customers will be providing an ``open checkbook'' with no
protection from cash flow issues and funding unrelated purposes. With
respect to the Science and Technology program, the customers have never
participated in this program and the administration even proposed
eliminating funding for the Department of Energy's Hydropower Research
program because it ``has advanced to the point that it can now be
conducted by industry.''
The administration has also proposed that the Corps of Engineers
fund its hydropower operating and maintenance expenses utilizing
receipts of the PMAs. Again, Mid-West finds some merit in the concept,
but cannot support this provision without modifications to protect both
customer and Congressional oversight to ensure only funding of
appropriate activities while recognizing the need for rate stability.
In addition to the points noted above, Midwest believes that this
program cannot go forward without the following safeguards: (1) There
is no clear definition of what constitutes hydropower operation and
maintenance costs--we are concerned that unrelated costs would be
charged to the PMAs and our members; (2) Customer participation and
oversight of the operation and maintenance activities is necessary; (3)
The appropriate PMA Administrator, rather than the Corps, must make the
determination on funding levels to ensure all appropriate costs are
covered; (4) Only annual operations and maintenance expenses allocated
exclusively to hydropower should be permitted; (5) Joint customer, PMA,
Corps planning, in advance, of proposed expenditures should be
required; (6) Congressional oversight, including audits of
expenditures, on a regular basis should be established; (7) PMA
revenues provided to the Corps should specifically remain with the
marketing area of that PMA and be dedicated to the intended purpose--
Mid-West is concerned that this funding mechanism would be utilized to
offset a lack of funding in non-hydropower operation and maintenance
activities; (8) No reprogramming of dollars provided by the affected
PMA to the Corps should be permitted without the explicit approval of
the customers and the affected PMA Administrator; (9) PMA revenues
could only be utilized with the agreement of the PMA Administrator;
(10) Unused dollars in any fiscal year would be returned to the
affected PMA; and (11) A procedure to address cost overruns and
priority of use and shortfalls would need to be established in advance.
federal power program and cost-based rates
Mid-West opposes the administration's proposal to require the PMAs
to sell power at market-based rates. This would dramatically increase
electric rates and have a crippling economic impact on communities
served by 1,200 consumer-owned utilities in 33 States, and especially
in the Missouri River Basin. This proposal is nothing more than a tax
increase on the consumers in our region. Federal hydropower has always
been sold at cost through consumer-owned utilities. Charging market
rates would devastate farmers, homeowners, business and industry. These
proposed 20 percent per year increases, in addition to increases
already being imposed because of the longstanding drought, fly in the
face of sound, longstanding policy and law. It was contained in the
Flood Control Act of 1944 (Section 5) and reaffirmed in Section 505 of
the 1992 Energy and Water Development Appropriations Act (105 Stat.
536).
Again, to be clear, these cost-based rates are not subsidized by
the U.S. Treasury. The PMA's rates are set to recover the costs of the
Federal investment, plus interest, in the hydropower and transmission
facilities. Raising PMA rates will take millions of dollars out of
fragile local economies.
earmarking of expenditures within western's appropriations
Congressional ``earmarks'' in the fiscal year 2005 Appropriations
Act have severely disrupted Western's planned construction activities.
In Pick-Sloan, without additional appropriations to cover the increased
expenditures, construction budgets were slashed by 90 percent,
resulting in deferrals of needed construction activities. Mid-West
certainly recognizes Congress' prerogative in earmarking funds, but is
concerned that, without additional funding to cover increased costs,
earmarking seriously disrupts the orderly planning and timely execution
of Western's construction program.
conclusion
Thank you for the opportunity to provide written testimony to the
subcommittee on these important issues. We stand ready to respond to
any questions.
______

Letter From Virtual Engineering Solutions, Inc.
Melrose, Florida, April 26, 2005.
Senate Committee on Appropriations,
Subcommittee on Energy and Water Development.
subject: u.s. doe fossil energy program funding restoration
Dear Congressman Domenici: Mr. Chairman, thank you for the
opportunity to provide written comments on the proposed fiscal year
2006 budget. I am writing this letter on behalf of the State oil and
gas regulatory agencies nationwide to encourage you to restore
Congressional appropriations of $100,000,000 for the Department of
Energy's (U.S. DOE's) Office of Fossil Energy Oil and Natural Gas
Supply Research and Development (R&D) program. I can offer you five
reasons for why the research and technical assistance this U.S. DOE
program is providing is vitally important to the health and security of
the United States: (1) Improved environmental protection; (2)
Streamlined enforcement of State environmental regulations; (3) Reduced
regulatory and compliance costs for producers; (4) A demonstrated
increase in exploration activity by small and independent operators;
and (5) Increased domestic oil and gas production.
improved environmental protection
This DOE Fossil Energy Program provides valuable research and
technical assistance that benefits all of the citizens of the United
States through increased environmental protection made possible through
continued monies generated by oil and natural gas production.
An example of these cost-effective research programs is the Risk
Based Data Management System (RBDMS). State oil and gas regulatory
agencies in partnership with the Ground Water Protection Council (GWPC)
are responsible for the development and operation of this information
system in 23 oil and natural gas producing States. This project is an
example of how Federal/State partnerships can really work. Your home
State of Ohio has contributed almost $600,000 in State capital
improvement and $400,000 of operations funding to implement RBDMS.
California has matched $500,000 of Federal money with $1,500,000 in
State funds. Every State now using the system also has contributed to
building the system. Through the GWPC, the oil- and natural gas-
producing States are working together to protect ground water
resources, hold down the cost of environmental compliance, and provide
improved access to essential data for new oil and gas exploration.
streamlined enforcement of state environmental regulations
Funding from the DOE has given the States the opportunity to
develop additional software and information management tools that
enable both State and Federal agencies to share data and facilitate
electronic commerce via the Internet. The States in turn share that
information with the public and companies we regulate, many of which
are small businesses that would not otherwise have the ability to
access such accurate information. We are learning that electronic
commerce mutually saves time and money for both the oil and gas
industry and the regulatory agencies. The Federal share of cost for
this program was $1.15 million in fiscal year 2004. States collectively
contributed over $4 million this fiscal year.
As another example, online permitting and reporting has been
targeted as a way to save industry time and money. One California
operator estimated that an automated permitting system for new drills
and reworks could increase production from one of its larger oil and
gas fields by 500,000 barrels per year. Therefore, any delay in issuing
a permit caused by the inefficiencies of manual processes and analyses
can have a significant impact on production.
Continued funding from U.S. DOE will provide the smaller,
independent oil and gas producers access to this environmental data
management system. Smaller producers are often the most in need of such
systems because high compliance costs hit them the hardest. Without
this funding, many of these development efforts would have to be
abandoned.
increased exploration activity by small, independent operators
At this time, small, independent oil and gas companies produce the
vast majority of oil and natural gas in this country. These companies
are efficient in their operations, but lack the necessary research
programs needed to fully exploit our domestic resources. This research
is a role for the Federal Government. We view this program as vital to
the health and security of the United States.
The process of planning a drilling program and scheduling equipment
use can be easier and less expensive as a result of Internet
information lookup. The ability to receive immediate approval of a well
recompletion or workover permit allows the operator the opportunity to
perform the work the same day the well went down or that a rig becomes
available. Therefore, the operator can move a rig from a low-rate well
or less important workover to a higher-rate well, thereby producing
more oil.
increased domestic oil and gas production
The largest reserves of oil and natural gas exist in currently
operated oil and gas fields. By increasing our recoverable reserves by
only 5 percent, the United States would produce billions of barrels of
additional domestic oil. Conversely, failure to use new technologies to
fully recover these proven reserves would result in the loss of
billions of dollars of revenues for this country because the money
would instead be sent overseas for oil imports.
The agencies who use RBDMS nationwide have documented that the
information access afforded by the DOE-funded research and investment
in RBDMS also has helped industry maximize the recovery of oil and gas
from marginal wells. Nationwide, many marginal wells are being reworked
and brought back online at a significant cost savings through new
technology, redrilling, or horizontal drilling. For example, in North
Dakota, more than 250 wells over the last 5 years have been re-entered
and drilled horizontally. Before well information was readily available
through RBDMS and associated e-commerce initiatives, many of these
wells would have been plugged or shut in. The cost savings to drill a
well horizontally from an existing well rather than grass-roots well is
estimated to be at least $300,000. By keeping these wells available,
industry has saved in excess of $75,000,000 in North Dakota alone.
RBDMS is one of the best examples we have seen of how the States,
working with the Federal Government and the private sector, can improve
both industry production and environmental protection at the same time.
Continuing to fund the U.S. DOE's Office of Fossil Energy Oil and
Natural Gas Technologies R&D program in this manner allows us to tailor
our regulatory program needs to the industry which operate in our
respective States. There is no Federal alternative, or ``one size fits
all'' national approach that would work as efficiently as this
cooperative multi-State effort.
summary
DOE Fossil Energy program funding is a sound investment in domestic
energy production and environmental protection.--The DOE Fossil Energy
program office funds research projects like RBDMS that are leveling the
playing field by encouraging small- and medium-sized industry operators
to expand into previously cost-prohibitive areas. The better access to
information afforded by these projects is increasing industry's ability
to make more knowledgeable decisions about resource deployment,
exploration, and well management and is reducing overhead costs
associated with regulatory compliance. Moreover, reducing obstacles to
permitting and reporting requirements through streamlined data
management in the agencies is beginning to reduce industry's
administrative burdens and ease compliance requirements across
regulatory jurisdictions. Finally, the regulatory compliance tracking
accomplished through these programs offers enhanced protection of water
resources.
I submit to you that this combination of factors makes the
restoration of funding for the DOE Fossil Energy Program an urgent
priority for smart development of domestic oil and gas and sustained
environmental protection. I ask for your support. Thank you.
Sincerely,
Deborah Gillespie,
Technical Communicator.
______

Prepared Statement of the Ecotoxicology and Water Quality Research
Laboratory, Department of Zoology, Oklahoma State University
fiscal year 2006 budget and doe r&d program
In 2004, I received a research grant through the Department of
Energy's Research and Development Program. The $183,827 that was
awarded over a 3-year period is providing full support for a graduate
student (at the doctoral level) in addition to providing important data
on the potential to reuse the produced water that is generated during
the process of drilling and pumping oil and gas (please see the project
description below). Studies such as these will actually enhance the
cost effectiveness of oil and gas production, but the administration's
fiscal year 2006 budget proposes phasing out the DOE program that
supports this work. These cuts would not only put a graduate student
out of work, but will cut short a research project that is providing
useful data in its first year of existence.
Simply put, the type of research supported by DOE has consistently
been focused on applied issues that will enhance our Nation's oil and
gas production capabilities. As such, I respectfully request that the
committee supports re-establishing the funds for DOE's R&D program--the
return from the money that is spent is very well worth the cost.
Project Overview.--Project No. DE-FC26-04NT15544
Significant quantities of produced water are generated by inland
oil and gas facilities in areas where beneficial reuse would provide a
cost effective method of disposal. The quality of produced water, its
potential for reuse and its need for treatment prior to reuse will
ultimately be determined by State water quality standards for
individual chemical constituents and freshwater toxicity bioassays as
mandated by Federal and associated State requirements for effluent
discharges. While toxicity testing plays an important role in
environmental protection and regulation of wastewater discharges, it is
important to understand how well the results of laboratory evaluations
actually represent the behavior and potential effects of aqueous wastes
in the field. A very limited number of freshwater laboratory bioassays
have been conducted on produced water, and practically no field
assessments have investigated its influence on freshwater communities.
The application of test methods that overestimate impacts may limit the
potential for reuse by indicating the need for costly treatment that is
actually unnecessary. Given the growing interest in reuse of produced
water and the associated increase in toxicity assessments that will
accompany its release, it is imperative to generate field data that
will evaluate how well laboratory bioassays of produced water represent
the true potential for environmental effects and whether existing
discharge standards are appropriate. The proposed study will help to
fill this critical data gap by comparing the results of standard
laboratory bioassays of produced water with field evaluations in a
system subject to produced water input. An understanding of how
standard indicators of produced water quality relate to true effects in
the environment will ultimately lead to better decision making with
regard to produced water reuse and surface discharge, will help to
optimize methods for both treatment and assessment of produced water
quality, and will help avoid over-regulation in cases where predicted
environmental effects are not realized in the receiving system.
______

Prepared Statement of APS Technology, Inc.\1\
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\1\ 800 Corporate Row, Cromwell, CT 06416.
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Mr. Chairman and Honorable Senators, I wish to address two related
expenditure components of the Department of Energy (DOE) budget
proposed for fiscal year 2006.\2\ The first item is the ``orderly
termination of activities'' for Oil & Gas Research & Development within
the DOE,\3\ for which a total of $20 million has been allocated.\4\ The
other item is the apparent zeroing out of both the Small Business
Innovation Research (SBIR) and Small Business Technology Transfer
(STTR) programs.\5\ I believe strongly that these proposed terminations
are not in the best interest of the United States, its energy
independence or its technological leadership.
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\2\ Fiscal year 2006 Budget Appendix, pp. 395-411, ``Energy
Programs''.
\3\ Ibid, p. 401.
\4\ Ibid., p. 400, Identification Code: 89-0213-0-1-271 00.03. This
compares with $77 million (actual) and $83 million (estimated) in 2004
and 2005, respectively.
\5\ Ibid., p. 395, Identification Codes: 89-0222-0-1-251 00.18 &
00.19, Since these funds represent a fixed fraction of departmental
research budget, I assume that they will be cut as well.
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Before stating my arguments, I wish to make perfectly clear that my
company has benefited, and continues to benefit, from these programs.
We currently have two cost-sharing research contracts \6\ \7\ from the
National Energy Technology Laboratory, one SBIR \8\ and one STTR \9\
grant. We have recently submitted a proposal for another cost-sharing
research project.\10\ This support has been critical to the growth of
APS and its introduction of new products for the industry.
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\6\ DE-FC26-02NT41664, ``Drilling Vibration Monitor and Control
System;''.
\7\ DE-FC26-04NT15501, ``Novel High-Speed Drilling Motor for Oil
Exploration & Production.''
\8\ DE-FG02-02ER83368, ``Rotary Steerable Motor System for Deep Gas
Drilling.''
\9\ DE-AC26-98FT40481, ``Downhole Fluid Analyzer''.
\10\ Under Announcement DE-PS26-05NT42395-1, ``Drilling, Completion
& Stimulation Program Analysis; Part 1: Deep Trek.''
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I will not discuss in detail the general justifications that you
know so well--the necessity of our striving toward energy independence
or near-independence; the importance of new technologies to reaching
this goal, while protecting the environment, etc. While these are
clearly important considerations, I would rather cite some particular
examples from my personal experience. I will give three: an example of
an outstanding success story, a description of the changes in the
business environment for oil and gas exploration, and some reasons that
DOE support for oil and gas research and development is more important
today than ever.
a success story--teleco oilfield services inc.
In 1972, I began a new venture, Teleco Oilfield Services Inc., with
the support of my then employer, Raymond Engineering \11\ and the
European oil company, S.N.P.A.\12\ The purpose of this new company was
to develop and commercialize a new technology, Measurements-While-
Drilling (or MWD). Even then, before there was a commercial tool, the
industry recognized MWD as a transformative technology. By transmitting
data to the surface in real time from the bottom of a well as it was
being drilled, it would open the door to directional and horizontal
drilling, real-time analysis of the oil and gas content of a well, and
other marvels that are now standard operating procedure in oilfields
around the world. In 1978, dozens of companies were trying to develop
these systems,\13\ including large corporations within the oil industry
and without. Most, however, were unsuccessfully trying to adapt
existing wireline technology to the much more severe environment within
a well during drilling. Teleco took the opposite approach\14\--it
adapted the proven reliable military and space technology of Raymond
Engineering and applied it to the new environment in a effort to attain
the reliability needed for such service.
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\11\ Now a part of Kaman Corporation.
\12\ Societe Nationale des Petroles d'Aquitaine, now a part of
TotalElfFina.
\13\ Cf., ``MWD: State of the Art,'' series of articles in the Oil
& Gas Journal, 1978.
\14\ R.F. Spinnler & F.A. Stone, ``MWD: State of the Art--4; MWD
Program nearing commerciality,'' Oil & Gas Journal, May 1, 1978.
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In 1975, after several years of intense and expensive self-funded
development, Teleco was ready to build and field test its first
prototype tools. The combination of their complexity and the
requirement that they work in an extreme environment made this a
prohibitive task. The oil companies were unwilling to invest in this
technology without a successful field test. It was at this time that
the company applied for, and received, $2 million in development
funding from the DOE. With these funds, the field testing could proceed
and proved successful. At this point, six major oil companies \15\
provided an additional $0.9 million funding in return for future
repayment through the company's sales. These funds allowed the
commercial launch of MWD in 1978.
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\15\ Exxon, Shell, Chevron, Conoco, Amoco and Placid.
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As anticipated, the commercial introduction of MWD by Teleco
revolutionized oil and gas exploration, first primarily offshore, but
now on land as well. Teleco was the sole provider of these services for
over 2 years, and the leading supplier throughout its existence. Over
the next 2 decades, with two successful stock offerings and its
acquisition by SONAT, Inc., the company grew to revenues of $140
million in 1992. It had 1,200 employees worldwide, including 850 in the
United States, with its headquarters in Connecticut, a major facility
in Louisiana, and offices in Texas, California, Wyoming, Alaska and
Oklahoma. In 1992, it was acquired by Baker Hughes for $380 million,
and ceased to exist as a separate company.
What was the role of the DOE in this success? MWD would have
certainly been developed in time, but it took over 2 years for other
companies to enter the market. The Teleco system remained the leader in
reliability over its entire existence. The support of the DOE was
critical to making the leap from a laboratory demonstration to fully
commercial systems in use worldwide. Thus, the small investment by the
DOE led directly to the development of a company and an industry that
served to improve the efficiency and safety of oil and gas exploration,
led to many advances that help restrain the price of oil including such
innovations as horizontal drilling, and created thousands of jobs in
the United States.
changes in the oil and gas industry over the past three decades
In the past 3 decades, the oil and gas industry has undergone
dramatic changes. In the 1970's the major production companies were the
principal sources of new technology for the industry. Exxon, Mobil,
Texaco and ARCO, to cite a few, maintained research facilities staffed
by the most experienced experts in their fields. These companies
developed many of the key innovations in the drilling and well logging
industry, despite their recognition that, as commodity producers, they
were neither equipped to market, nor particularly interested in,
technology per se. This was the province of the oil service companies,
to whom the producers licensed their use, often giving non-exclusive,
royalty-free licenses to any company that requested them.
In the ensuing decades, the industry has consolidated. For example,
all of the companies mentioned above have either merged or been
acquired since then, also consolidating their research programs. In the
volatile oil and gas industry, it difficult to justify to shareholders
investments in long-term programs that will not produce any direct
revenues or competitive advantage. Thus, companies have striven to
``right size'' their organizations, often at the expense of research.
A similar contraction has taken place in the oilfield services
business. New technologies were once transferred from the producers,
developed by the major service companies, or introduced by small,
specialized companies (such as Numar \16\ or Landmark Graphics\17\).
Many of the researchers laid off in the consolidation of the producers'
research labs found their way to service companies. The service
companies also acquired many of the smaller companies, such as those
listed above. Now, after significant consolidation and downsizing on
the part of the service companies, and under the continuous, short-term
scrutiny of the market, even they are moving away from the costs
associated with long-term development. To cite one example,
Schlumberger is closing its world-renowned Schlumberger-Doll Research
Center in Ridgefield, CT, and relocating to Cambridge, MA. In doing so,
they hope to do the work currently done by industry experts using
university professors, research associates and student. The service
companies are also outsourcing many high-risk projects to small
companies such as APS.
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\16\ Now a part of Halliburton Corp, see: http://
www.halliburton.com/news/archive/1997/corpnws_093097.jsp.
\17\ Now a subsidiary of Halliburton Corp, see: http://www.lgc.com.
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In this environment, the growth and success of a Teleco would be
impossible. The large companies have become more risk-averse and
oriented toward current revenues. Small companies lack the resources to
pursue high-risk, long-term developments. The government, through the
DOE, is the backer of last resort for these efforts.
current necessity for doe support
The U.S. oil and gas province is quite mature. Production of oil
peaked in the 1970's and gas production is nearly at its peak. To
produce additional reserves, technical progress is needed in two areas:
(a) drilling in deeper waters offshore and in deeper formations
onshore, requires operating at higher temperatures and pressures; and
(b) more completely producing the hydrocarbons in known fields through
reentry or infill drilling into smaller, dispersed pay zones, requires
new, lower cost drilling and production techniques to produce them
economically.
With Defense Department procurement now emphasizing ``off-the-
shelf'' components, there is little impetus for developing new, higher
temperature components and systems. Thus, high-temperature drilling
tools become more complex and expensive. In the market climate
described above, it will be extremely difficult to successfully launch
these new products and service. With the producers concentrating on
their core business, and the service companies emphasizing cost
efficiencies and outsourcing, it falls primarily to the small,
independent companies such as APS to produce these breakthroughs, but
they cannot fund them unilaterally. The DOE R&D support, which requires
cost-sharing by the applicant and outside sources, is the ideal
stimulant.
To cite one example, consider our ``Drilling Vibration Monitor and
Control System,'' currently under development. In 2002, the National
Energy Technology Laboratory (NETL) of the DOE launched the Deep Trek
initiative, aimed at developing new technologies to reduce the cost of
deep gas drilling. After review by outside experts of both a pre-
application and application, APS was granted a Cooperative Agreement to
develop this new tool, with the DOE paying 75 percent of the first
phase. During this period we designed and modeled this tool, which
senses the vibration of the bit and drillstring, and continually
adjusts the stiffness of an active vibration damper located above the
bit. As a result, the bit does not bounce off bottom, and applies the
optimal force to enhance the rate of drilling. Our calculations show
that use of this tool will increase the drilling speed by 10-50
percent, and reduce wear and failure of downhole components. We are now
near the end of Phase II (65 percent DOE), and have laboratory results
that demonstrate that the system operates as expected. Several major
producing and supply companies have expressed interest in supporting
the field tests of Phase III (50 percent DOE), and then using or
distributing the tool.
None of this development would have been possible without the DOE
support. APS was not in a position to fund it; the major service
companies were not interested until there was an indication of value to
the end user; and, the production companies needed something more
concrete before investing in the technology. We anticipate major
improvements in efficiency for the oil and gas drilling industry
through use of this product, and significant revenues for our company.
As one indicator of the value of this support, APS Technology has
been named for the second year in a row as a Connecticut Fast 50
Company, one of the fasted growing technology companies in the State.
Our revenues have been growing at 40 percent per year, and we have
increased our employment from 12 to 48 employees over the past 5
years, in the face of a very weak labor market.
Finally, the current run-up of the price of crude oil, and its
effect on our entire economy, is putting additional political pressure
on our government to ``do something.'' This ``something'', to be
effective, must address all possible solutions to our energy dilemma.
These include greater attention to energy conservation; development of
renewable energy sources; environmentally sound exploitation of our
existing resources, such as coal; increased domestic exploration and
production, etc. The most important key to increased oil and gas
production from our mature domestic fields is the development of new
technology. For the reasons described above, it is critical that the
government, through the DOE, provide timely support aimed at
commercializing these new technologies.
In summary, these DOE research initiatives are essential to ``prime
the pump'' of new technology development. This is even more important
in these times of high fuel prices, ``lean'' corporations and increased
dependence on foreign oil source. I urge you, in the strongest possible
terms, to restore the funding for these programs at least at the level
of the 2005 budget. Thank you.
______

Prepared Statement of The Independent Petroleum Association of America
Statement of The Independent Petroleum Association Of America, The
US Oil & Gas Association, The International Association Of Drilling
Contractors, The International Association of Geophysical Contractors,
The National Stripper Well Association, The Petroleum Equipment
Suppliers Association, The Association Of Energy Service Companies,
Public Lands Advocacy, and California Independent Petroleum
Association, Colorado Oil & Gas Association, East Texas Producers &
Royalty Owners Association, Eastern Kansas Oil & Gas Association,
Florida Independent Petroleum Association, Illinois Oil & Gas
Association, Independent Oil & Gas Association of New York, Independent
Oil & Gas Association of Pennsylvania, Independent Oil & Gas
Association of West Virginia, Independent Oil Producers Association
Tri-State, Independent Petroleum Association of Mountain States,
Independent Petroleum Association of New Mexico, Indiana Oil & Gas
Association, Kansas Independent Oil & Gas Association, Kentucky Oil &
Gas Association, Louisiana Independent Oil & Gas Association, Michigan
Oil & Gas Association, Mississippi Independent Producers & Royalty
Association, Montana Oil & Gas Association, National Association of
Royalty Owners, Nebraska Independent Oil & Gas Association, New Mexico
Oil & Gas Association, New York State Oil Producers Association,
Northern Alliance of Energy Producers, Ohio Oil & Gas Association,
Oklahoma Independent Petroleum Association, Oklahoma Commission on
Marginally Producing Oil and Gas Wells, Panhandle Producers & Royalty
Owners Association, Pennsylvania Oil & Gas Association, Permian Basin
Petroleum Association, Petroleum Association of Wyoming, Tennessee Oil
& Gas Association, Texas Alliance of Energy Producers, Texas
Independent Producers and Royalty Owners, Virginia Oil & Gas
Association, Wyoming Independent Producers Association.
These organizations represent petroleum and natural gas producers,
the segment of the industry that is affected the most when national
energy policy does not recognize the importance of our own domestic
resources. Independent producers drill 90 percent of domestic oil and
natural gas wells, produce approximately 85 percent of domestic natural
gas, and produce about 65 percent of domestic oil--well above that
percentage of the oil in the lower 48 States.
the issue
The administration's budget proposal for fiscal year 2006
eliminates all Federal funding of oil and natural gas technology and
regulatory evaluation programs. Funding for these programs needs to be
restored to fiscal year 2005 levels. The Department of Energy should
provide Congress with R&D plans at several levels of appropriations
($50 million, $75 million, & $100 million/year) over at least a 5-year
planning period.
The Office of Fossil Energy oil and natural gas technologies
programs are a vital investment in domestic oil and natural gas
development. They have a proven track record of success. These programs
include research and development (R&D), technology transfer, and
participation in regulatory development regarding domestic production
issues.
Independent producers are the beneficiaries of 85 percent of the
programs' R&D focus. Without this Federal research, domestic oil and
natural gas production will suffer from the loss of technology
development and enhancements that are essential to maintain domestic
production from existing resources and to find and produce new ones.
But these programs are more than just R&D. They include funding
that supports efforts like the Petroleum Technology Transfer Council
(PTTC)--an organization that creates the conduit to move research into
the hands of producers, particularly small producers, where it becomes
a production tool. Similarly, Federal research is a significant element
of the university research that educates the coming generations of
petroleum geologists and engineers--professionals that are essential to
maintain a strong domestic exploration and production industry.
Significantly, these funds also provide for participation within the
Federal Government on domestic oil and natural gas issues as they are
considered by Federal agencies; they keep the Department of Energy as
an effective voice during these long and complicated processes.
Successful during its initial years, the Fossil Energy R&D program
has been plagued recently by inconsistent and decreasing funding. For
example, DOE research efforts on coal bed methane yielded a 34-to-1
return on its investment. But now, planning a program based on annual
budget requests hampers the continuity that is essential to develop
long-term research strategies. Long-term project funding becomes
uncertain and short-term projects must be created. A better framework
would improve the program. Requiring plans based on different funding
levels could provide Congress with a clearer understanding of the
potential research that could be done.
Research and Development--Improving Domestic Oil and Natural Gas
Production--Looking Over the Horizon for New Technologies
Faced with enormous potential research challenges, changing
mandates for research, and inconsistent funding patterns, the Fossil
Energy R&D program has, nonetheless, created a diverse R&D program.
Moreover, the program requires significant cost sharing from non-
Federal partners to assure its projects have a meaningful value. The
program broadly addresses two key research needs--projects to improve
the development of existing resources, including improved environmental
management, and projects to meet future needs that will be essential to
domestic resource development. Much of the research is conducted by
universities and provides opportunities to attract strong students in
petroleum geology and petroleum engineering--disciplines where
enrollment has dropped 70 percent over the past 20 years--disciplines
that are key to a strong domestic industry. Brief descriptions of some
of the projects follow, but more details are available at the Fossil
Energy Oil & Natural Gas Supply and Delivery R&D website (http://
www.fe.doe.gov/programs/oilgas/index.html).
Marginal and Stripper Well Revitalization
This research effort supports an industry-driven program that
identifies technology research and development needs that can sustain
and improve the production performance of the Nation's low-producing
oil and gas wells. Particular attention is focused on preventing the
premature abandonment of marginal properties in the United States where
significant quantities of unproduced oil and natural gas remain.
Enhanced Oil Recovery/CO2 Injection
Production at most oil reservoirs includes three distinct phases:
primary, secondary, and tertiary, or enhanced, recovery. With much of
the easy-to-produce oil gone from U.S. oil fields, producers have
attempted several tertiary, or enhanced oil recovery (EOR), techniques
that offer prospects for ultimately producing 30 to 60 percent of the
reservoir's original oil. The Department of Energy's Fossil Energy
program has worked to develop and test a variety of EOR techniques. EOR
still holds considerable promise for recovering literally billions of
barrels of oil that left behind in the Nation's oil fields.
The potential dual benefits of CO2 injection for both
oil recovery and carbon sequestration have led the Energy Department to
reorganize its EOR research efforts to concentrate on this method in
the near-term. CO2 injection remains a highly specialized
niche application, but if DOE's research program can expand its
applicability, especially in regions where large power plants are
located, the technology could gain additional market acceptance.
``Deep Trek'' and Other Drilling R&D
``Deeper'' and ``smarter'' will likely be the watchwords of
America's drilling industry in the coming years. To help develop the
high-tech drilling tools industry will need to tackle these deeper
deposits, Fossil Energy kicked off ``Project Deep Trek''. The goal is
to develop a ``smart'' economical drilling system to withstand the
extreme conditions of deep reservoirs. Project ``Deep Trek'' builds on
a solid track record of achievements in past drilling R&D partnerships.
Fossil Energy's drilling program produced what could be the next major
advance in downhole telemetry, a new system called
IntelliPipe^TM that turns an oil and gas drill pipe into a
high-speed data transmission tool. Revolutionary new drill bits are
also one of the ``success stories'' of the Energy Department's research
program. The prime example is the polycrystalline diamond drill bit,
now the industry standard for drilling into difficult formations.
Methane Hydrates--The Gas Resource of the Future
If only 1 percent of the domestic methane hydrate resource could be
made technically and economically recoverable, the United States could
more than double its domestic natural gas resource base. With no
immediate economic payoff, the private sector is not vigorously
pursuing research that could make methane hydrates technically and
economically viable. Therefore, Federal R&D is the primary way the
United States can begin exploring the future viability of a high-risk
resource.
Improving Environmental Management
A host of advanced technologies now make it possible for America's
oil and gas industry to produce resources from beneath sensitive
environments. In the past 30 years, production footprints have shrunk
dramatically--by up to 80 percent--providing one of the best ways of
protecting the surface environment surrounding exploration and
production activities.
technology transfer--putting new technologies to work
Using its National Energy Technology Laboratory, Fossil Energy has
created programs to move technology from the laboratory to the field.
For example, the PUMP (Preferred Upstream Management Practices) program
helps slow the decline in America's oil production. PUMP pairs ``best
practices'' with solutions coming from new technologies to an active
campaign of disseminating information to domestic oil producers.
Through organizations like the Petroleum Technology Transfer Council,
jointly funded with industry and universities, R&D from the Fossil
Energy program expands throughout the Nation. PTTC conducts workshops
and seminars throughout the Oil Patch making research efforts and case
study applications of new technology available to domestic producers--
primarily small producers. Since its inception in 1994, PTTC has
conducted over 1,000 workshops and seminars. PTTC recently estimated
economic impact in just 11 areas identified and directed by industry
where independents are broadly applying technologies. Of 1,266 million
barrels of oil equivalent reserves that were realized, 88 million
barrels could be clearly attributed to PTTC activity.
Protecting Our National Energy Security--Making the Case in the
Regulatory Arena
The Department of Energy lists, as one of its principal strategic
goals, protection of `` . . . our National and economic security by
promoting a diverse supply and delivery of reliable, affordable, and
environmentally sound energy.'' Federal regulation development requires
interagency consultation. The Office of Fossil Energy evaluates the
impact of Federal regulations and regulatory proposals on domestic oil
and natural gas production. Because the May 2001 Executive Order
requires agencies to assess the energy impact of major Federal
regulations, this role has become more critical. But, it is not a new
role. Throughout its history, Fossil Energy has contributed to the
regulatory debate. Whether it is EPA regulation of drilling fluids and
produced waters under RCRA or OPS regulation of gathering lines or EPA
regulation of storm water discharges during the construction of
exploration and production operations, Fossil Energy develops the
technical analysis of the regulation on domestic production and argues
for sound regulatory approaches during the interagency reviews. It does
comprehensive reviews of regulations and evaluates the environmental
benefits of using advanced oil and natural gas exploration and
development technologies. Retaining these key functions is essential
for domestic oil and natural gas production to be maintained and
expanded.
______

Prepared Statement of the Ecological Society of America
As President of the Ecological Society of America, I am pleased to
provide written testimony for the Department of Energy (DOE). The
Ecological Society of America has been the Nation's premier
professional society of ecological scientists for 90 years, with a
current membership of 9,000 researchers, educators, and managers.
Under the President's budget, DOE's Office of Science would see its
R&D funding fall 4.5 percent to $3.2 billion. In particular, we are
concerned that the fiscal year 2006 budget could effectively eliminate
most biological and environmental research conducted at the Savannah
River Ecology Laboratory (SREL). Approximately 80 percent ($7.7
million) of SREL's fiscal year 2005 science budget has come from the
DOE's Office of Science. The fiscal year 2006 request would eliminate
this funding, and would direct SREL to compete for funding within the
Environmental Remediation subprogram rather than be included as a
separately funded research activity.
The DOE's elimination of funding for SREL would likely result in
its closure. Although SREL researchers would be able to compete for
funds from other programs, the physical facilities would likely not be
able to stay open. Additionally, the amount of competitive funds
available from other programs would fall short of previous funds to
SREL.
SREL is an institution that is globally recognized for its
scientific excellence and commitment to the highest standards of
education. The ecological monitoring and basic research that occur at
SREL are extremely cost-effective and valuable to DOE operations.
Largely as a result of SREL studies, the Savannah River Site is the
best ecologically characterized site in the DOE complex. By having such
information available, DOE and its contractors save time and money in
environmental risk assessments and regulatory actions. For example, a
1994 decision by DOE not to drain the Savannah River Site and remove
contaminated sediments was based on SREL research that suggested the
habitat could survive with the sediment intact. This information saved
billions of dollars in cleanup costs. SREL is also recognized as a
world leader for its expertise on such areas of research as the
movement of pollutants in streams and the effects of radiation on
reptiles.
The Ecological Society of America urges Congress to consider SREL's
historical success in providing valuable scientific research to the DOE
and the Nation, and to ensure that it can continue to do so.
______

Prepared Statement of the Nuclear Energy Institute
On behalf of the nuclear energy industry, I thank you for your
support of a comprehensive long-term solution to our energy needs,
including the Department of Energy's nuclear technology-related
programs. I also commend you for your continued oversight of the
Nuclear Regulatory Commission for fiscal 2005. My statement for the
record addresses three key points:
--The industry urges continued support for DOE's nuclear energy
programs.--NEI recommends funding the DOE's Office of Nuclear
Energy at its request of $503 million. We recommend restoration
of the Nuclear Energy Plant Optimizaton program at $10 million.
The industry also encourages DOE to increase Next Generation
Nuclear Plant funds by $30 million to $75 million and
University Fuel and Support program funds by $8 million to $32
million. To support basic science, we recommend funding the
Nuclear Energy Research Initiative at $10 million.
--Congress should provide secure, environmentally responsible
management of used nuclear fuel by fully funding the Yucca
Mountain project.--NEI recommends that the program be funded at
the President's request of $651.4 million, absent
reclassification of the Nuclear Waste Fund. With fund
reclassification, the program should receive funding of $750
million--the amount the Federal Government collects each year
from electricity consumers specifically for the program.
--The NRC's budget of $701.7 million should be reassessed.--This is
essential in view of the higher appropriations of the agency,
allocation of increased industry resources on plant security
upgrades and reduced demands on its budget in fiscal 2005 owing
to delays in Yucca Mountain licensing. The NRC must be ready to
revise its Yucca Mountain regulations in the second half of
fiscal 2005 and fiscal 2006.
I also will discuss briefly several important programs that the
nuclear energy industry supports.
The Nuclear Energy Institute is responsible for developing policy
for the U.S. nuclear energy industry. NEI's 250 corporate and other
members represent a broad spectrum of interests, including every U.S.
energy company that operates a nuclear power plant. NEI's membership
also includes nuclear fuel cycle companies, suppliers, engineering and
consulting firms, national research laboratories, manufacturers of
radiopharmaceuticals, universities, labor unions and law firms. The
industry is providing electricity for one of every five U.S. homes and
businesses and is taking steps to develop energy resources for the
future. Nuclear energy is a clean, reliable and sustainable source
generated here in the United States. We urge Chairman Domenici, Ranking
Member Reid and members of this committee to recognize nuclear energy
as an important part of a diverse, comprehensive, long-term energy
policy for America for generations to come.
research and development necessary for new nuclear energy systems
The industry supports increased funding for fiscal 2006 for DOE's
R&D programs for new nuclear energy systems. The nuclear energy
industry urges the committee to approve $56 million for the Nuclear
Energy 2010 program. Within the program, funding should be allocated
for demonstrating NRC regulatory processes for new nuclear plants,
including those for early site permits and the combined construction
and operating license. The industry remains fully committed to these
initiatives. DOE should support deployment of proven Generation III+
technology for this program.
The industry believes that the government has an early role in
bringing advanced reactor concepts, known as Generation IV reactors, to
the marketplace. NEI urges the committee's support for the development
of a next-generation nuclear plant at the new Idaho National
Laboratory, funded through the Generation IV Nuclear Energy Systems
Initiative program at $75 million. The industry also supports the
Nuclear Hydrogen Initiative at $20 million.
Although DOE continues to fund the International Nuclear Energy
Research Initiative (I-NERI), the domestic version of this program,
NERI, has been superseded by a new initiative that continues the basic
science of NERI under other nuclear energy programs at DOE. The
industry believes a collaborative basic science program between
national laboratories, industry and universities like NERI should be
continued at $10 million for fiscal 2006.
The administration originally recommended another R&D initiative--
the Nuclear Energy Plant Optimization (NEPO) program--to produce
additional electricity from America's 103 commercial reactors. Through
NEPO, the Energy Department has been working with the nuclear industry
and the department's national laboratories to apply new technology to
nuclear and non-nuclear equipment. The industry encourages the
committee to allocate $10 million for the NEPO program to help fund
important research on materials science and materials management issues
at nuclear power plants. This research would focus on improving the
availability of and maintenance at nuclear plants; developing
technology to predict and measure the extent of materials degradation
from plant aging; and introducing new materials to mitigate materials
effects. DOE proposed no funding for the program in fiscal 2006,
despite the benefits that the national laboratories can bring to bear
on these issues.
The industry also requests $32 million for DOE's University Support
Program, which provides for vital research and educational programs in
nuclear science at the Nation's colleges and universities. With nuclear
plant license renewal continuing at a brisk pace and the industry
developing plans for new nuclear plants, demand for highly educated and
trained professionals will continue. NEI encourages the committee to
consider a new $2 million program within the Office of Nuclear Energy,
Science and Technology to support universities that have undergraduate
and graduate programs in health physics. The industry's most recent
human resources survey reveals an increasing demand for health physics
professionals. This need will become acute in the next few years as
many of today's nuclear professionals retire.
industry supports budget request of $651.4 million for yucca mountain
Congress has approved Yucca Mountain, a remote desert site in
Nevada about 90 miles northwest of Las Vegas, as suitable for a
national repository for used nuclear fuel currently stored at nuclear
plant sites around the country. Under a Federal Government plan, used
nuclear fuel will be shipped to Yucca Mountain in highly engineered,
federally approved containers.
The industry greatly appreciates the support of this committee for
funding the Federal used nuclear fuel disposal program. NEI recognizes
the difficult challenge that the committee faced in fiscal 2005, in
view of assumptions included in the budget request regarding the
treatment of the Nuclear Waste Fund. This year, the administration has
requested nearly $80 million more than was appropriated for fiscal
2005, including a significant increase in funds for transportation-
related activities. However, there is still a funding shortfall that
affects the schedule for developing a repository. Absent sufficient
funding in fiscal 2006, the industry does not believe the program will
meet key milestones for used fuel acceptance. These potential delays
will result in higher costs for the program and increased liabilities
to the Federal Government resulting from breach of contracts with
energy companies.
Although the repository program is the keystone of our national
policy for managing used nuclear fuel, the industry also recognizes the
value in researching emerging technology for used fuel treatment and
management. Such farsighted programs will allow our Nation to remain
the world leader in nuclear technologies. However, technologies such as
transmutation--the conversion of used nuclear fuel into a smaller
volume of less toxic materials--still require a Federal repository for
disposal of the radioactive byproducts generated from the process.
congress should reclassify the nuclear waste fund
The industry urges Congress to reclassify the Nuclear Waste Fund
this year, consistent with the President's fiscal 2006 budget
recommendation. For each year of delay in the Yucca Mountain program,
the Federal Government accrues another $1 billion in costs relating to
disposal of defense nuclear materials and failure to meet contractual
obligations to move commercial used fuel.
Congressional action is required in the context of the fiscal 2006
budget resolution and reconciliation process to enact the necessary
legislation in a timely manner for the fiscal 2007 budget and
appropriations. The Nuclear Waste Fund has three unique characteristics
that justify modifying the current budget rules governing its use:
--The Federal Government is obligated by law and contracts signed
with electric companies that operate nuclear power plants to
implement the used fuel management program.
--The Nuclear Waste Fund is intended to cover the entire cost of the
Federal Government's commercial used fuel management program
over several decades.
--The disposal of used nuclear fuel from commercial reactors is
financed entirely through a fee established by Federal law and
paid by consumers of electricity generated at nuclear power
plants.
nrc budget and staffing should be reassessed
The NRC's proposed fiscal 2006 budget totals $701.7 million, an
increase of $32 million from the fiscal 2005 budget, and the highest
ever for this agency. Five years ago, the NRC's budget was $488
million. Fiscal year 2006 is an appropriate time for the NRC to review
its budget and resource allocations in light of current demands, and
the other resources available.
In accordance with a 2004 Federal appeals court ruling, the
Environmental Protection Agency must review and reconsider its Yucca
Mountain radiation standard. This action by EPA may require the NRC to
begin revising its Yucca Mountain regulations. Promulgation of the new
final NRC rules and related regulatory guidance must not stand in the
way of reviewing DOE's Yucca Mountain license application.
The NRC's budget for fiscal 2006 shows that approximately $61
million is for the purpose of regulating security at nuclear plants.
The nuclear industry believes that much of this funding is for the
purpose of providing for the national defense and should not be
included in the NRC's fees, of which 90 percent are reimbursed by the
industry. The Senate expressed concern over this issue by including a
provision in the energy bill indicating that security funding should
not be included in user fees.
America's nuclear power plants were the most secure industrial
facilities in the United States before the Sept. 11, 2001, terrorist
attacks, and are even more secure today. Over the past 3 years, the
industry has invested an additional $1.2 billion in security-related
improvements and added one-third more security officers. Security at
commercial nuclear facilities is unmatched by any other private sector
or area of the critical infrastructure. The industry should not be
expected to solely fund efforts to provide for the national defense.
industry support for additional activities
Nuclear Nonproliferation.--The industry supports the disposal of
excess weapons-grade nuclear materials through the use of mixed-oxide
fuel in U.S. and Russian reactors.
Low-Dose Radiation Health Effects Research.--The industry supports
continued funding for the DOE's low-dose radiation research program.
Nuclear Research Facilities.--The industry is concerned with the
declining number of nuclear research facilities. We urge the committee
to fully fund the new DOE lead lab in Idaho for nuclear energy research
and development.
Uranium Facility Decontamination and Decommissioning.--The industry
fully supports cleanup of the gaseous diffusion plants at Paducah, KY;
Portsmouth, OH; and Oak Ridge, TN. Commercial nuclear power plants
contribute more than $150 million to the Decontamination and
Decommissioning Fund for government-managed uranium enrichment plants
each year. Other important environmental, safety and/or health
activities at these facilities should be funded from general revenues.
International Nuclear Safety Program and Nuclear Energy Agency.--
NEI supports the funding requested for the DOE and NRC international
nuclear safety programs. They are programs aimed at improving the safe
commercial use of nuclear energy worldwide.
Medical Isotopes Infrastructure.--The nuclear industry supports the
administration's program for the production of medical and research
isotopes.
______

Prepared Statement of the University Corporation for Atmospheric
Research (UCAR)
On behalf of the University Corporation for Atmospheric Research
(UCAR) and the university community involved in weather and climate
research and related education, training and support activities, I
submit this written testimony for the record of the Senate Committee on
Appropriations, Subcommittee on Energy and Water. The major requests
that I address in this document are that funding for the DOE Office of
Science be restored in fiscal year 2006 to the fiscal year 2005 level
of $3.6 billion, and that, within the Office of Science, the Advanced
Scientific Computing Research program be restored in fiscal year 2006
to its fiscal year 2005 level of $234 million.
UCAR is a 68-university member consortium that manages and operates
the National Center for Atmospheric Research (NCAR) and additional
programs that support and extend the country's scientific research and
education capabilities. In addition to its member research
universities, UCAR has formal relationships with approximately 100
additional undergraduate and graduate schools including several
historically black and minority-serving institutions, and 40
international universities and laboratories. UCAR's principal support
is from the National Science Foundation (NSF) with additional support
from other Federal agencies including the Department of Energy (DOE).
doe office of science
The atmospheric and related sciences community appreciates
Congress' continued support for the DOE Office of Science, but we are
troubled by the downward trend in funding. The needs of the country
demand that DOE continue to produce a world-class program in science
and energy security research. The Office of Science manages fundamental
research programs in basic energy sciences, biological and
environmental sciences, and computational science, and it supports
unique and vital parts of U.S. research in climate change, geophysics,
genomics, life sciences, and science education. As in previous years,
the House Science Committee's recently released ``Views and Estimates''
for fiscal year 2006, calls the administration's budget request for
DOE's Office of Science ``inadequate.'' It points out that the request
for the Office of Science is well below the amounts authorized in H.R.
6, the Energy Policy Act of 2003, and H.R. 610, the Energy Research,
Development, Demonstration, and Commercial Application Act of 2005.
DOE is the largest Federal sponsor of basic research in the
physical sciences, but the level of funding for its peer reviewed, core
science programs has remained stagnant for years. If enacted, the
fiscal year 2006 request of $3.46 billion, a 3.8 percent cut, will
diminish the Office of Science's ability to serve the country. The
request would cut the Office of Science by $136.0 million. Of this
amount, $79.6 million is the elimination of add-ons, but factoring in
inflation, the Office takes a real cut of several percent.
I urge the subcommittee to fund the DOE Office of Science at the
level of the fiscal year 2005 Original Appropriation, or $3.6 billion,
at the very least, and to enable the agency to apply the entire
appropriated amount toward planned agency research priorities. This
level of research funding will augment and reinvigorate critical work
of researchers throughout the Nation.
biological and environmental research (ber)
Within the Office of Science, the Biological and Environmental
Research (BER) program develops the knowledge necessary to identify,
understand, and anticipate the potential health and environmental
consequences of energy production and use. These are issues that are
absolutely critical to our country's well-being and security, yet the
request of $455.7 million for BER is down over 9 percent from the
fiscal year 2005 enacted level of $502.3 million, a figure that does
not include add-ons.
Peer-reviewed university research programs play a critical role in
the BER program involving the best researchers the Nation's
institutions of higher learning have to offer, and developing the next
generation of researchers. Approximately half of BER basic research
funding supports university-based activities directly and indirectly.
All BER research projects, other than those in the ``extra projects''
category, undergo regular peer review and evaluation. I urge the
subcommittee to fund Biological and Environmental Research at the level
of the fiscal year 2005 Omnibus Appropriation, or $502.3 million (this
figure does not reflect add-ons), and to enable BER to apply the entire
appropriated amount toward planned agency research priorities that are
peer-reviewed and that involve the best researchers to be found within
the Nation's university research community as well as the DOE labs.
Climate Change Research.--Within BER, the Climate Change Research
long-term goal is to deliver improved climate data and models for
policy makers to determine safe levels of greenhouse gases for the
Earth system. This work is critical to the health of the planet. The
Climate Change Research Request of $142.9 million is a 1.4 percent
increase over the fiscal year 2005 appropriated level. I urge the
subcommittee to fund Climate Change Research at a level that is
consistent with the request for BER stated above.
Also within Climate Change Research, Atmospheric Chemistry and
Carbon Cycle is a program that includes Atmospheric Science, the work
of which is essential for assessing the effects of energy production on
air quality and climate through the quantification of the impacts of
energy-related aerosols on climate. Atmospheric Science is down by 1.6
percent in the President's Request. I urge the subcommittee to fund
Atmospheric Chemistry and Carbon Cycle at a level that is consistent
with the request for Climate Change Research.
advanced scientific computing research (ascr)
Within DOE's Office of Science, the Advanced Scientific Computing
Research program provides advances in computer science and the
development of specialized software tools that are necessary to
research the major scientific questions being addressed by the Office
of Science. ASCR's continued progress is of particular importance to
atmospheric scientists involved with complex climate model development,
research that takes enormous amounts of computing power. By their very
nature, problems dealing with the interaction of the earth's systems
and global climate change cannot be solved by traditional laboratory
approaches. The Intergovernmental Panel on Climate Change (IPCC) is
drafting its Fourth Assessment Report to be completed in 2007, and
ASCR's contribution to this international document is critical. Yet
ASCR is proposed to be cut in the fiscal year 2006 request by 11
percent, from the fiscal year 2005 level of $234 million for the fiscal
year 2006 request of $207.1 million.
The proposed ASCR cut eliminates one particularly important
component of ASCR--the National Collaboratories program. This program
develops, integrates and deploys a wide range of software tools that
enable geographically-distributed research teams to work together
effectively and that facilitate remote access to both facilities and
data resources. Researchers from industry, academia and national labs,
through this program, share access to facilities, large datasets and
environments, support the frequent interactions needed to address
complex problems, and speed up discovery and innovation. The National
Collaboratories Program has accomplished much in scientific computing
in its short history. One example is the establishment of the Earth
System Grid, an on-line repository of climate data providing over 100
terabytes of climate data to the U.S. climate research community. The
program and its predecessors have produced the innovations that
underpin the emerging major grid computing market that is expected to
reach a value of $10 billion by 2007.
In order to maintain our international leadership in
supercomputing, I urge the subcommittee to provide ASCR with the fiscal
year 2005 level of $234 million (this number does not reflect the
rescission), and to direct DOE's Office of Advanced Scientific
Computing Research to restore full funding for the National
Collaboratories program, an economic engine for U.S. competitiveness.
conclusion
A recent report by the Task Force on the Future of American
Innovation states, ``For more than half a century, the United States
has led the world in scientific discovery and innovation . . . However,
in today's rapidly evolving competitive world, the United States can no
longer take its supremacy for granted. Nations from Europe to Eastern
Asia are on a fast track to pass the United States in scientific
excellence and technological innovation.'' DOE plays an important role
in sustaining U.S. scientific leadership. On behalf of UCAR and the
atmospheric sciences research community, I want to thank the
subcommittee for the important work you do for U.S. scientific
research. We appreciate your attention to the recommendations of our
community concerning the fiscal year 2006 budget of the Department of
Energy. We understand and appreciate that the Nation is undergoing
significant budget pressures at this time, but a strong Nation in the
future depends on the investments we make in science and technology
today.
______

Prepared Statement of the Interstate Oil and Gas Compact Commission
Chairman Domenici and members of the subcommittee, thank you for
the opportunity to submit testimony on the appropriation to the U.S.
Department of Energy (DOE) Office of Fossil Energy. My testimony
represents the views of an organization of governors of 30 member
States of the Interstate Oil and Gas Compact Commission (IOGCC). These
States account for virtually all of the onshore domestic production of
crude oil and natural gas. The States strongly and unequivocally
support an appropriation to the Fossil Energy Research and Development
``Gas--Natural Gas Technologies'' and ``Petroleum--Oil Technology''
programs in an amount no less than that appropriated in fiscal year
2005 ($78.76 million). States strongly oppose the administration's
fiscal year 2006 budget request that would terminate these programs,
which would also effectively eliminate the DOE's Office of Oil and
Natural Gas within the Office of Fossil Energy. This would be a huge
mistake for a variety of reasons, set out more fully below. Taxpayers
are very supportive of Federal investments in energy security, and
there is no better investment than in Research and Development (R&D).
As I prepare this testimony we stand as a country very close to yet
another ``energy crisis.'' Crude oil prices this month reached price
levels not experienced before in our country's history. In addition,
the prices of heating oil, natural gas and gasoline also reached record
highs. The U.S. domestic oil industry today is the Nation's largest
single supplier of crude oil, supplying about 40 percent of the
national demand for oil. The rest is imported--a number which is
growing every year--making us more and more vulnerable to international
crises and foreign economic manipulation. Our dependence on others for
our energy security has never been greater. However, domestic natural
gas suppliers provide about 85 percent of all of the natural gas demand
in the Nation, with most imports coming from Canada. The United States
even exports natural gas and has an abundant supply.
One thing we can count on, however, is that domestic supplies of
crude oil and natural gas are our best hedge against this vulnerability
and increasing import dependency. Besides energy security there are a
myriad of other reasons why domestic production is preferable to
imports:
--Our domestic resources are produced under the world's most
effective environmental protections, which have been
established and are enforced primarily by the States.
--Domestic resources create high-quality jobs here at home and
provide the energy that powers our standard of living. For
example, few realize that stripper oil wells (wells producing
less than 10 barrels per day) account for about one-quarter of
the lower 48 States' onshore domestic oil production and
stripper gas wells (wells producing 60 Mcf per day or less)
about 10 percent of onshore domestic gas production. This is a
critical natural resource.
--Despite perceptions to the contrary, large qualities of oil and
natural gas remain onshore the United States. These resources
represent the most stable and secure energy available. These
resources may exist in fields that have already been discovered
and await a new technology that results in cost-effective
recovery. Or they may lie in reservoirs yet undiscovered due
only to a lack of technology appropriate for deeper horizons or
greater geologic complexity. The bottom line is vast reserves
remain untapped. While recovery rates have increased
dramatically in the past 50 years and exciting new tools have
been developed for exploration, still more can be done to reach
the full production potential for reservoirs.
The U.S. Department of Energy's Office of Oil and Natural Gas,
which is funded by the programs set forth above, is the only place in
the U.S. Government that is responsible exclusively for oil and natural
gas policy. It is also the only place in the U.S. Government that fully
understands and is thus able to represent within the administration the
critical importance of domestic oil and natural gas to our country, our
economy, and our national security. This resident expertise is a
national asset--one that is especially important as other agencies
embark on rulemaking and take other actions which impact our domestic
oil and natural gas industry. Terminating this office and its programs,
including its critical Research and Development programs, would be a
tragic mistake. For these reasons the IOGCC and its member States
strongly support the continued existence and viability of DOE's Fossil
Energy Office of Oil and Natural Gas and an appropriation in fiscal
year 2006 equal to the fiscal year 2005 appropriation.
Turning to critical area of R&D specifically, many experts believe
R&D is the most important factor in maximizing the availability and
utilization of petroleum resources, especially domestic reserves.
Several years ago, the Task Force on Strategic Energy Research and
Development noted that, ``There is growing evidence of a brewing `R&D
crisis' in the United States--the result of cutbacks and refocusing in
private-sector R&D and reductions in Federal R&D.''
A more recent report being compiled this month by the IOGCC
confirms the declining trend in R&D expenditures while the country is
experiencing a corresponding increase in reliance on imports. Major oil
companies once poured millions into research and development. Today,
however, their focus has largely moved overseas and offshore. Eighty-
five percent of the wells in the United States are drilled by
independent oil and natural gas producers (producing roughly 40 percent
of the domestic oil and 65 percent of the domestic natural gas). Such
smaller independents lack both the resources and infrastructure for
significant R&D.
The IOGCC report concluded that ``[w]hen private R&D is compared to
Federal expenditures, the outlook is even more bleak. Private spending
is substantiated . . . but Federal spending remains disproportionately
small compared to the relative importance of oil and gas to U.S. energy
requirements.''
The decline of Federal and private support for oil and gas research
is well documented. The reasoning for cutting government support seems
steeped in politics and a failure to understand the importance of
Federal R&D to our domestic oil and gas industry and our energy
security. However, this is a new era of uncertainty in our energy
security that requires a fresh look at spending priorities.
At present, our own economic recovery continues to be questioned,
and an energy shortage would certainly slow the comeback. Middle East
energy supplies are at considerable risk with war and internal conflict
that remains a constant threat. The recent anti-U.S. rhetoric from
Venezuela has caused companies to back away from future oil and gas
investments in this country, creating yet more uncertainties in a major
country supplying petroleum to the United States.
If the United States is to maintain its ability to produce its
domestic supplies of oil and natural gas, Federal expenditures on R&D
must fill some of the void left by private industry. Federal funding on
oil and natural gas must increase if the United States is to maintain
its ability to produce the domestic oil and natural gas resources our
country so desperately needs. But instead of filling the void and
expanding Federal expenditure on R&D, the administration's budget for
fiscal year 2006 eliminates oil and natural gas research.
In fact, the proposed budget calls for cutting the petroleum
technology R&D program at the very moment that our country could
benefit the most from technology breakthroughs that can be applied to
our own resources.
This is still so much promising work the taxpayers of this country
support, including: new methods of drilling that reduce impacts to the
environment; new materials that allow better, faster drilling; new
chemicals and biological tools that increase production; better uses of
renewables in the production of fossil fuels; minimizing waste; and
creating high quality jobs.
There have been many success stories from the DOE oil and gas
research program. One recent, striking example of how DOE makes a real
contribution to advances in environmental protection, energy production
and innovation comes from a DOE-IOGCC project in California. Under
DOE's Preferred Upstream Management Practices (PUMP) program, the
project is proving that unmarketable gas can be used on site to provide
power to oil wells previously idle. At the same time, the project is
meeting the strict air quality standards in the Los Angeles area. DOE
funding for this project was matched 100 percent by other partners,
which enabled the government to double its R&D investment. Every
government program investment should be as effective.
This is but one example of DOE helping provide leadership in
demonstrating a technology that may have much broader implications for
operators in 30 other oil and gas producing States who now won't have
to reinvent the well in order to satisfy environmental restrictions and
the urgent need for domestic energy.
Through careful regulation, IOGCC member States have helped
maximize production and minimize wasteful practices that can lead to
the premature abandonment of reservoirs. States have also developed
innovative approaches to deal with temporarily idled wells, created
incentives that maximize production and supported R&D that improve
recovery rates and lower finding costs.
Going forward, the IOGCC believes that a balanced and effective
energy policy must encompass a number of fundamental principles, with
R&D serving as a centerpiece in each. Other guiding principles include
conservation of resources both in the producing and consuming sectors,
encouraging domestic production to create economic growth and
stability, increasing access to public lands for responsible
development and prolonging production from wells at economic risk.
We strongly encourage the subcommittee's support of funding in oil
and gas research as a first step in implementing an energy plan that
makes sense for our country's future and our country's security today.
______

Prepared Statement of the National Association of State Energy
Officials
Mr. Chairman and members of the subcommittee, I am Sara Ward of
Ohio and Chair of the National Association of State Energy Officials
(NASEO). NASEO is submitting this testimony in support of funding for a
variety of U.S. Department of Energy programs. Specifically, we are
testifying in support of no less than $50 million for the State Energy
Program (SEP) and $250 million for the Weatherization Assistance
Program (WAP). We also support an important program which has been a
dramatic success: the State Energy Programs Special Projects (SEP
Special Projects) account, which should receive at least level funding
of $15.1 million. SEP Special Projects has set a standard for State-
Federal cooperation and matching funds to achieve critical Federal and
State energy goals. These programs are successful and have a strong
record of delivering savings to low-income Americans, homeowners,
businesses, and industry. We also support the increase proposed in the
President's budget for the Energy Information Administration (EIA) and
an increase of $600,000 for EIA's State Heating Oil and Propane Program
in order to cover the added costs of doubling the frequency of
information collection (to weekly), the addition of natural gas, and
increasing the number of State participants. EIA funding is a critical
piece of energy emergency preparedness and response. NASEO continues to
support at least level funding for a variety of critical deployment
programs, including Rebuild America, Energy Star and Clean Cities. The
States also strongly support increased funding for the State
Technologies Advancement Collaborative (STAC). The fiscal year 2005
Interior and Related Agencies conference report allocated $4 million
for STAC, and directed that STAC manage the Rebuild America Program.
This is a promising new area of cooperation. STAC has increased the
speed of the procurement process, dramatically improved multi-State/
Federal cooperation and coordination, and produced significant results.
NASEO supports the $5 million earmark contained in the fiscal year 2004
bill, as well as an $8.7 million funding level for Rebuild America,
with specific report language that it continue to be managed by STAC.
NASEO supports funding for the Office of Electricity and Energy
Assurance at least at the 2006 request, with $20 million for critical
energy assurance activities. The industries program should be funded at
a $125 million level to promote efficiency efforts and to maintain U.S.
manufacturing jobs, especially in light of the loss of millions of
these jobs in recent years. Proposed cuts in these programs are
counter-productive and are detrimental to a balanced national energy
policy.
State Energy Program.--Over the last year, both oil and gas prices
have been rising in response to international events as well as low
domestic inventories. We expect $50 oil to continue for an extended
period of time, with an expanded crisis situation as summer approaches.
In addition, we now have quantifiable evidence of the success of the
SEP program, which we did not have in years past, which demonstrates
the unparalleled savings and return on investment to the Federal
taxpayer of SEP. Every State gets an SEP grant and all States and
territories support the program.
In January 2003, Oak Ridge National Laboratory (ORNL) completed a
study and concluded, ``The impressive savings and emissions reductions
numbers, ratios of savings to funding, and payback periods . . .
indicate that the State Energy Program is operating effectively and is
having a substantial positive impact on the nation's energy
situation.'' ORNL has now updated that study and found that $1 in SEP
funding yields: (1) $7.22 in annual energy cost savings; (2) $11.29 in
leveraged funding from the States and private sector in 18 types of
project areas; (3) annual energy savings of 47,593,409 million source
BTUs; and (4) annual cost savings of $333,623,619. The annual cost-
effective emissions reductions associated with the energy savings are
equally significant: (1) Carbon--826,049 metric tons; (2) VOCs--135.8
metric tons; (3) NOX--6,211 metric tons; (4) fine
particulate matter (PM10)--160 metric tons; (5)
SO2--8.491 metric tons; and (6) CO--1,030 metric tons.
State Energy Program Special Projects and Gateway Deployment.--SEP
Special Projects provides matching grants to States to conduct
innovative project development. It has been operated for the past 10
years and has produced enormous results in every State in the United
States. We support funding of at least the fiscal year 2005 funding
level of $15.1 million. SEP Special Projects grants are awarded
competitively and thus complement the SEP formula grant, with 37 States
submitting winning proposals in 2004. These projects have provided
successes in virtually every State. The Gateway Deployment Programs
(including Rebuild America, energy efficiency outreach, Building Codes
Training and Assistance, Clean Cities, Energy Star, Inventions and
Innovations) should receive the fiscal year 2005 funding level of $34.3
million, plus the administration's proposed addition of $1.7 million
for Energy Star.
State Technologies Advancement Collaborative (STAC).--STAC is a
joint venture between the State energy offices, the Department of
Energy and the State research institutions to conduct multi-State
research, development, demonstration and deployment. It is a unique
partnership initiated in 2002, which is characterized by highly cost-
shared, innovative projects which leverage significant State resources,
reduce Federal/State duplication of effort and is more efficient than
the traditional Department of Energy procurement process (with more
involved parties). These multi-State collaborative efforts have
included: (1) 16 projects in 33 States in the first round; and (2) 8
projects in 14 States in the second round. We would request that the
subcommittee continue the earmark for this program, which has been in
place for each of the past 3 fiscal years, at least at the $5 million
level. In addition, in fiscal year 2005 Congress directed that the
Rebuild America program should be managed by STAC. The transition is in
process, and we would urge the subcommittee to include this language
again in the fiscal year 2006 bill. Rebuild America should receive
funding of $8.7 million, equal to the fiscal year 2005 funding level.
Continued recognition of the STAC program in the congressional
appropriations process will give increased visibility (and viability)
to this new and successful pilot program.
Industrial Energy Program.--A funding increase to a level of $125
million for the Industrial Technologies Program (ITP) is warranted.
This is a public-private partnership in which industry and the States
work with the Department of Energy to jointly fund cutting-edge
research in the energy area. The results have been reduced energy
consumption, reduced environmental impacts and increased competitive
advantage of manufacturers (which is more than one-third of U.S. energy
use). The States play a major role working with industry and DOE in the
program to ensure economic development in our States and to try to
ensure that domestic jobs are preserved.
Examples of Successful State Energy Program Activities.--The States
have implemented thousands of projects. Here are a few representative
examples.
Colorado.--This energy office has been promoting biomass programs,
include biodiesel in Telluride, use of fire mitigation ``thinnings''
for energy production and agricultural waste programs in Delta County.
The State has been a leader in developing capital improvements for
public buildings, including $25 million in energy projects already. The
State has also assisted small rural schools on energy efficiency
projects. Other diverse projects have ranged from working with CU to
install a microturbine, promoting wind projects, updating the State
energy emergency plan and expanding the use of alternative fuels and
hybrid vehicles.
Idaho.--In Idaho the State has rated homes utilizing the Energy
Star tools and signed-up 34 new builders to participate in the program.
An aggressive energy efficiency financing program issued 16 loans in
this fiscal year alone, for efforts in the hundreds of thousands of
dollars. The agricultural energy program has focused on reducing
irrigation costs and usage to improve agricultural productivity and
costs.
Kentucky.--The energy office is working with over 100 partner
organizations, including farmers, schools, civic groups, industries,
retailers, etc., to promote cutting-edge energy programs. In the past
18 months, the State has worked with 11 school districts to initiate
$20 million worth of energy performance contracts. A similar program
for State agencies is saving $2.3 million annually. The energy office
is demonstrating new biomass waste as a premium fuel and developing
efficient technologies in the aluminum industry (with University of
Kentucky), promoting the use of biofuels (biodiesel and ethanol) and
utilizing solar technology on schools.
Mississippi.--The State operates an innovative investment loan
program, which works with all sectors of the economy to provide energy
efficiency design assistance and development, which has helped reduce
costs for hospitals, schools, corporate facilities and local
governments. The State has developed extensive industrial energy
efficiency programs, biomass promotion activities, energy education
programs (reaching on average 28,000 students), as well as public
transit and carpool/vanpool programs.
Missouri.--The energy office in Missouri has been operating a low-
interest energy efficiency loan program for school districts, colleges,
universities and local governments. Thus far, public entities have
saved more than $62 million each year, with more than 350 projects. The
State energy office has also worked with the Public Utility Commission
and the utilities within the State to get $11.5 million invested in the
past 2 years in residential and commercial energy efficiency programs.
Montana.--The State has issued over $7.5 million in bonds to fund
60 energy efficiency projects in State buildings. The savings pay for
themselves very quickly. The State has also upgraded building energy
codes and instituted 44 projects impacting over 2 million square feet
of building space, with non-Federal leverage of $11.5 million.
Nevada.--A unique program has been developed to work with small
businesses to reduce energy costs through energy efficiency activities.
The State has also implemented new energy code training and technical
assistance to reduce demand in light of rapid population growth.
Working with Clark County schools, 10 new district energy managers have
been hired to reduce the $41 million electric bill for the sixth
largest school district in the country. The State has worked to develop
the Temporary Renewable Energy Development trust to guarantee payments
for renewable energy projects. Recently, the State opened the first
fleet ethanol refueling station in Reno.
New Mexico.--The State has worked with schools and colleges
throughout the State to implement energy performance contracts, with 35
now in place leading to annual cost savings of $3.9 million (examples
include biomass district heating in Jemez Mountain School, geothermal
ground source heating and efficient lighting in Alamogordo and
efficient lighting and building energy management controls at New
Mexico State University). In addition to the State renewable portfolio
standard, other new efforts include tax exemptions for hybrid vehicles,
a Clean Energy Grants Program for public entities and a $2.65 million
clean energy capital projects program. New initiatives include more
solar energy demonstrations, geothermal energy efforts in greenhouses,
upgrades of building codes and efficient school construction. All these
efforts match Federal funding, especially through SEP.
Texas.--The Texas Energy Office's Loan Star program has long
produced great success by reducing building energy consumption and
taxpayers' energy costs through efficient operation of public
buildings. This saved taxpayers more than $152 million through energy
efficiency projects. Over the next 20 years, Texas estimates that the
program will save taxpayers $500 million. In another example, the State
promoted the use of ``sleep'' software for computers, which is now used
on 105,000 school computers, saving 33 million kWh and reducing energy
costs by $2 million annually.
Utah.--The State has been implementing programs to promote energy-
efficient building design for new homes, including educational and
demonstration efforts. The State recently upgraded the building code
and the State energy office has been working to educate builders and
code officials. In addition, the energy office has been working to
implement the new renewable energy systems tax credit. In the
transportation area the energy office has been working to implement
carpool/vanpool programs and promoting the use of alternative fuels and
hybrid vehicles, in conjunction with the Utah Transit Authority and the
Salt Lake Clean Cities Coalition.
Washington.--The Resource Efficiency Managers (REM) program has
been successful. These officials have worked with Federal facilities to
produce energy savings. For example, Fort Lewis has achieved over $1.5
million in energy savings and the Puget Sound naval facilities have
over $1 million in projects. Other activities include promotion of
energy efficient products and services, renewable energy and energy
emergency preparedness.
West Virginia.--A focus on innovative industrial energy efficiency
programs has been a hallmark of this State's activities. Working with
the steel, aluminum, chemical, glass, metalcasting, wood products and
mining industries, over $29 million in projects have been developed.
The State is also working with other sectors of the economy to reduce
energy consumption.
______

Prepared Statement of the National Mining Association (NMA)
NMA represents producers of coal, uranium, metals and minerals,
manufacturers of processing equipment, mining machinery and supplies,
transporters, and engineering, consulting, and financial institutions.
office of fossil energy
The NMA strongly supports the $18 million requested for the
FutureGen Initiative, the deferral and designation of $257 million in
prior year Clean Coal Technology Program funds for FutureGen's use in
fiscal year 2007, and the $283 million requested for base coal research
and development programs. However, the NMA believes the $50 million
requested for the Clean Coal Power Initiative should be increased to
$132 million, thus ensuring a robust demonstration program for advanced
coal technologies.
FutureGen Initiative/Coal R&D/Clean Coal Power Initiative (CCPI).--
This project will be a prototype of the world's first, near-zero
emissions coal-fueled hydrogen and electricity generation plant, and it
will be the first power plant in the world to include large-scale
sequestration of CO2. The FutureGen facility will be managed
and cost-shared by an alliance of coal and utility companies with
extensive experience in building large-scale coal-fueled projects,
while meeting budget and performance requirements. The industry
alliance, currently negotiating a cooperative agreement with the
Department of Energy, remains committed to moving the FutureGen
Initiative forward, provided a multi-year funding scenario is secure
and the funding does not come at the expense of other coal research and
demonstration programs.
Technological advancements achieved in the base coal research and
demonstration programs such as gasification, turbines, and carbon
sequestration, provide the component technologies that will ultimately
be integrated into the FutureGen. Other advanced research efforts
focused on coal combustion, mercury control, and coal derived fuels,
will provide the United States with a suite of advanced coal
technologies necessary to meet environmental requirements while
providing the projected 50 percent increase in electricity demand by
the year 2025. Industry alone is unable to assume the financial risks
associated with the full-scale commercial demonstration of promising
technologies, such as those selected in the Clean Coal Power
Initiative. Therefore, the government's share in this program should be
increased $82 million above the $50 million request.
In addition, NMA recommends a $3 million level of funding for the
Center for Advanced Separation Technology (CAST), which is led by a
consortium of seven universities with mining research programs. The
advanced separations program conducts high-risk fundamental research
which will lead to revolutionary advances in separation processes for
the coal industry and develop technologies which crosscut the full
spectrum of mining and minerals industries. This program is highly
valued by the mining industry for both making new technology available
and for its workforce development in educating graduate students.
office of energy efficiency and renewable energy
Mining Industry of the Future Program.--The fiscal year 2006 budget
request included only $1.1 million for the Mining Industry of the
Future program. This request represents a 72 percent cut from the
fiscal year 2005 enacted level of $3.9 million. Not only is the
requested level not enough to allow any new solicitations or new starts
for this important program, but it is unlikely that projects already
approved under the Mining Grand Challenge will be given the promised
funding. Currently there are 40 projects in the pipeline, and 36 have
been completed. The requested level of funding will certainly mean that
not all the projects in the pipeline will be completed. According to
DOE the proposed reduction is meant to ``allow for canceling and
closing out lower priority projects . . . ''--a clear indication that
DOE intends to phase out this important program.
The Mining Industry of the Future Program is an important U.S.
government/industry partnership designed to demonstrate, evaluate, and
accelerate new technologies in the areas of exploration, extraction,
processing, utilization, environment, and safety and health. This
program is not only very popular as a technology development program,
but as an educational program as well, since each solicitation receives
many proposals involving most, if not all, major mining companies and
mining universities. Finally, we would like to note that NMA has
incorporated Mining Industry of the Future into our Mining Climate
Action Plan (MICAP) developed in response to the administration's
request to industry to voluntarily reduce greenhouse gas emissions. The
fiscal year 2006 proposed level of funding will jeopardize the
industry's ability to meet the goals of this plan.
u.s. army corps of engineers (usace)
Civil Works Program.--NMA reviewed the proposed fiscal year 2006
request for the USACE's Civil Works Program and supports the request
for additional expenditures from the Inland Waterway Users Fund and the
strategy to accelerate high-priority projects that provide benefits to
the Nation. However, NMA is very concerned that the proposed fiscal
year 2006 budget does not provide sufficient funding to keep critical
navigation projects on schedule, allow for the start of new projects,
and address the maintenance backlog for existing navigation projects.
Therefore, NMA provides the following recommendations:
--A minimum of $5.5 billion should be appropriated in fiscal year
2006 for the Civil Works Program. This level balances the need
to address the significant project backlog and the capability
of the Corps with our Nation's needs for jobs, economic growth,
homeland security and national defense.
--The effort to develop criteria for budgeting purposes is long
overdue. However, NMA is very concerned that performance based
budgeting and specifically the performance budgeting tool,
Remaining Benefit/Remaining Cost (RB/RC) ratio, that was
applied to navigation projects for the fiscal year 2006 budget
has not been fully developed and will have significant impacts
on project appropriations. The navigation projects span many
years and the benefits for many of the projects are not
realized until completion. In addition, the lack of sufficient
funding levels needed to keep projects on schedule compounds
the impact. An example is the Kentucky Lock and Dam project
that has received zero funding and has been placed on the
suspension list for fiscal year 2006. Using the RB/RC, the
project has a 2.7 ratio. If the project had received sufficient
funding from fiscal year 2002 until now, the ratio would be 3.1
(ratio for the fiscal year 2006 budget is 3.0 or higher to
receive funding). With more than 25 percent of the total
project cost expended ($163 million of the $639 million has
been spent), NMA strongly supports funding this project at its
full capability funding level of $40 million.
--The fiscal year 2006 appropriations for the Corps' General
Investigations account should be increased from $95 to $200
million. These studies are critical to ascertaining and
developing future projects.
--The fiscal year 2006 proposed funding in the amount of $1.979
billion for the Corps' Operations and Maintenance (O&M)
functions should be increased by $100 million. More than half
of the locks are more than 50 years old and in need of
significant maintenance. Delaying necessary maintenance impacts
the ability to move commerce efficiently, exacerbates further
deterioration and accelerates the need for major rehabilitation
and possibly at higher costs than necessary. This was
exemplified at Greenup Locks and Dams in 2003 when a scheduled
3-week outage lasted 54 days and conservatively cost the
navigation industry (shippers and carriers) an estimated $14
million in lost revenue. The current backlog of critical
maintenance is estimated to be more than $1 billion with more
than 62 percent for navigation on the inland and coastal
systems. Other work, not as sensitive, is estimated to be $1.9
billion. The replacement value of the lock and dam facilities
in the United States are estimated to be $125 billion. As a
Nation, we cannot abandon our inland waterway system and we
must increase the monies spent on O&M.
--Below is a table indicating NMA's fiscal year 2006 Priority
Projects needing additional funds.

----------------------------------------------------------------------------------------------------------------
Fiscal Year Fiscal Year
Construction Fiscal Year 2006 Budget 2006 Efficient
2005 Enacted Request Funding Level
----------------------------------------------------------------------------------------------------------------
Robert C. Byrd L/D, Ohio River, OH/WV........................... $900,000 $914,000 $3,000,000
Kentucky River Lock Addition, Tennessee River, KY............... 32,500,000 ( \1\ ) 40,350,000
Marmet L/D, Kanawha River, WV................................... 75,000,000 68,830,000 73,500,000
McAlpine L/D, Ohio River, IN/KY................................. 68,500,000 70,000,000 70,000,000
Locks and Dams 2, 3, & 4, Monongahela River, PA................. 35,500,000 50,800,000 63,500,000
J.T. Myers L/D, Ohio River, IN/KY............................... 1,000,000 .............. 5,000,000
Olmstead L/D, Ohio River, IL/KY................................. 69,000,000 90,000,000 110,000,000
Winfield L&D, Kanawha River, WV................................. 3,000,000 2,400,000 2,400,000
Major Rehabilitation:
Emsworth Dam, Ohio River, PA................................ .............. 15,000,000 15,000,000
General Investigations:
Emsworth, Dashields, & Montgomery (Upper Ohio R.)........... 500,000 .............. 3,000,000
Ohio River Main Stem Study.................................. 1,350,000 .............. 1,000,000
Greenup L/D, Ohio River, KY/OH.............................. 450,000 .............. 3,500,000
----------------------------------------------------------------------------------------------------------------
\1\ Suspension List.

Regulatory Program.--NMA requests $160 million for administering
the Corps Clean Water Act (CWA), Section 404 permit program and for
implementing the Memorandum of Understanding (MOU).
The Regulatory Branch plays a key role in the U.S. economy since
the Corps currently authorizes approximately $200 billion of economic
activity through its regulatory program annually. The ability to plan
and finance mining operations depends on the ability to obtain Clean
Water Act Section 404 permits issued by the USACE within a predictable
timeframe. NMA is concerned that the $145 million proposed in the
President's budget is insufficient for maintaining a robust regulatory
program. Therefore, NMA requests an additional $15 million for the
Corps' regulatory program budget. In addition, NMA requests that a
portion of such regulatory program funding be used for implementing the
MOU issued on February 10, 2005 by the U.S. Army Corps of Engineers,
the U.S. Office of Surface Mining, the U.S. Environmental Protection
Agency, and the U.S. Fish and Wildlife Service. This MOU encourages a
coordinated review and processing of surface coal mining applications
requiring CWA Section 404 permits.
______

Prepared Statement of ChevronTexaco Technology Ventures LLC
ChevronTexaco Technology Ventures appreciates the opportunity to
submit a statement for the record, and fully supports the President's
Budget fiscal year 2006 Request for Hydrogen Technology and Fuel Cell
Technologies. We believe that DOE is on a well-planned path forward in
its hydrogen research and demonstration program. Specifically, we are
supporting the President's budget request for the ``Controlled Hydrogen
Fleet and Infrastructure Demonstration and Validation Projects.'' This
is $14.9 million for Infrastructure Validation under Energy Supply
(Hydrogen Technology) for the energy component and $24 million for
Technology Validation under Energy Conservation (Fuel Cell
Technologies) for the auto component. The combined amount is requested
by the Department of Energy for the demonstration projects, and is the
amount for its cost-share.
As a global energy company, ChevronTexaco is involved in a whole
host of advanced clean energy and fuel technologies. As part of this
larger effort, ChevronTexacoTechnology Ventures is actively involved in
research and development to address the challenges facing hydrogen as a
fuel for the future. We readily acknowledge there are multiple
challenges facing the future commercialization of this technology.
These include, but are not limited to, hydrogen production, delivery,
and storage, and infrastructure as well as codes and standards.
Last May, the Department announced teams of both energy companies
and auto companies that after a competitive solicitation process are
participating together in DOE's 5-year public-private partnership to
further development of this Nation's future in hydrogen. These DOE
demonstration projects are critical in that they provide test
laboratories in real world settings. Vehicle testing, along with the
development of the infrastructure, in controlled settings that require
data collection and sharing is critical to the future development of
this technology. This is an unprecedented effort and resources devoted
by both energy and auto companies working together to advance hydrogen
technology. We are especially concerned that the infrastructure portion
of the demonstration projects be able to keep pace with the development
of the vehicle technology, and that without being able to overcome the
infrastructure issues this hydrogen technology will not be able to
advance.
Under this demonstration program, we opened our first demonstration
site in Chino, California with UTC Fuel Cells and Hyundai Motors as our
partners. The station opened on February 18, 2005, and will be testing
on-site production, compression, storage and dispensing. We are making
the hydrogen on-site at the facility with proprietary gas reforming
technology.
This demonstration program provides an impetus for the private
sector to focus attention and resources on the development of hydrogen
technologies in partnership with the U.S. Government. The committee has
historically required cost-sharing of DOE-funded projects to foster
partnerships in advancing important new technologies. This
competitively-bid project does require full cost-sharing by the private
sector for participation. By appropriating the full budget request for
this demonstration program, a strong message of support is sent to the
private sector to allocate its own resources and recognizes their
investments in the hydrogen future.
We are concerned about the number of designated Congressional
research and demonstration projects that were included in the fiscal
year 2005 budget. We believe that these projects seriously undermine
the overall DOE program by diverting both staff resources and program
funds. The DOE has competitively bid, and specifically asked by
Congress to do so, its demonstration programs as part of an overall
unified planned approach. In addition, participants in the DOE program
are required to share data with each other and the DOE; if the projects
are not part of the program there is no requirement for data sharing
which is critical to furthering the technology. In addition, they are
not required to cost share. We believe that it is critically important
to continue with DOE's planned program path in order to further
facilitate the development of this technology, and that all projects
and demonstrations should be part of this unified program effort.
We appreciate the opportunity to submit testimony for the record.
We urge the subcommittee to fully fund the President's request for
``Controlled Hydrogen Fleet and Infrastructure Demonstration and
Validation Projects.''
______

Prepared Statement of the State of Nebraska Oil and Gas Conservation
Commission
Mr. Chairman, thank you for the opportunity to provide written
comments on the proposed fiscal year 2006 Budget. I am writing this
letter on behalf of the State of Nebraska Oil and Gas Conservation
Commission, to encourage you to restore Congressional appropriations of
$100,000,000 for the Department of Energy's Office of Fossil Energy oil
and natural gas supply R&D program.
This DOE program provides valuable research and technical
assistance that benefits all of the citizens of the United States
through increased environmental protection and continued monies
generated through oil and natural gas production. The largest reserves
of oil and natural gas exist in currently operated oil and gas fields.
By increasing our recoverable reserves by only 5 percent, the United
States would produce billions of barrels of additional domestic oil.
Conversely, failure to use new technologies to fully recover these
proven reserves would result in the loss of billions of dollars of
revenues for this country. This money would instead be sent overseas
for oil imports. Currently, small independent oil and gas companies
produce the vast majority of oil and natural gas in this country. These
companies are efficient in their operations, but lack the necessary
research programs needed to fully exploit our domestic resources. This
research is a role for the Federal Government. We view this program as
vital to the health and security of the United States.
The DOE's Office of Fossil Energy has substantially assisted State
regulatory agencies efforts to enhance environmental protection. One
example of these cost effective research programs is the Risk Based
Data Management System (RBDMS). State oil and gas regulatory agencies
in partnership with the Ground Water Protection Council (GWPC) are
responsible for the development and operation of this information
system in 23 oil and natural gas producing States. This project is not
an example of Federal aid to States, but rather Federal/State
partnerships that really work. Your home State of New Mexico, has
contributed thousands of dollars of operations funding to implement
RBDMS. California has matched $500,000 of Federal money with $1,500,000
in State funds. Every State currently using the system has also
contributed to building the system. Through GWPC, the oil and natural
gas producing States are working together to protect ground water
resources, holding down the cost of environmental compliance, and
providing improved access to essential data for new oil and gas
exploration.
Funding from the Department of Energy has given the States the
opportunity to develop additional software and information management
tools that enable both State, and Federal agencies the tools needed to
share data and facilitate electronic commerce via the internet. The
States in turn share that information with the public and companies we
regulate, many of which are small businesses that would not otherwise
have the ability to access such accurate information. We are learning
that electronic commerce mutually saves time and money for both the oil
and gas industry and the regulatory agencies. The Federal share of cost
for this program was $1.15 million in fiscal year 2004. States
collectively contributed over $4 million during this fiscal year. On-
line permitting and reporting is cost effective and saves industry time
and money. One California operator estimated that an automated
permitting system for new drills and reworks could increase production
from one of its larger oil and gas fields by 500,000 barrels per year.
Therefore, any delay in issuing a permit caused by the inefficiencies
of manual processes and analyses can have a significant impact on
production. Continued funding from U.S. DOE will provide the smaller
independent oil and gas producers access to this environmental data
management system. Smaller producers are often the most in need of such
a system because high compliance costs hit them the hardest.
RBDMS is one of the best examples we have seen of how the States,
working with the Federal Government and the private sector, can improve
both industry production and environmental protection at the same time.
Continuing to fund the U.S. DOE's Office of Fossil Energy oil and
natural gas technologies R&D program in this manner allows us to tailor
our regulatory program needs to the industry which operates in our
respective States. There is no Federal alternative or ``one size fits
all'' national approach that would work as efficiently as this
cooperative multi-State effort.
In summary, the DOE Fossil Energy program funds research projects
like RBDMS which provide the following benefits: (1) improved
environmental protection, (2) less regulatory and compliance costs for
producers, (3) better State enforcement of environmental regulations,
(4) increased exploration activity by small and independent operators,
and (5) increased domestic oil and gas production.
______

Prepared Statement of Temblor Petroleum Corporation
Gentlemen, it is with great distress that I have read of the
impending cut-off of funding by the Bush Administration for the
valuable support that the DOE has given in recent years toward
research, development and exploration in the domestic oil industry.
Because of the great emphasis by the major oil companies, large
independents and major service companies on the international arena,
very little attention and funding remains for forward looking projects
and prospects on the domestic front. The DOE has been one of the few
innovative sources for funding or supplemental funding of these
projects. This has included supporting drilling projects that because
of cost and perceived risk, although with large potential impact on
domestic production, could not be funded without supplemental support
from the DOE.
The supplemental support provided by the DOE has proved invaluable
in obtaining private participation in these projects so they could be
carried forward.
As a recipient and beneficiary of some of this funding I know for a
fact the stimulus that the DOE can provide with benefits spreading
widely therefrom.
In my experience, the DOE has been cooperative, instructive and
helpful in other ways in moving these projects forward.
Because of the emphasis on foreign oil, layers of corporate
bureaucracy and other reasons, many large projects with great potential
economic impact are ignored by the large sources of private funding
required for such projects. As stated above, the DOE, through partial
support and grants, has proven to be an important stimulus for
obtaining the necessary private funding for these significant projects.
I believe that the DOE participation and support of research and
development in the domestic oil industry is a premier example of where
government and industry can work together beneficially in areas where
it is most needed and is most valuable, namely, in areas where full
funding is not otherwise available from private sources, or extremely
difficult to obtain.
______

Prepared Statement of General Electric Energy
The following testimony is submitted on behalf of General Electric
Energy (GE) for the consideration of the committee during its
deliberations regarding the fiscal year 2006 budget requests for the
Department of Energy's (DOE) Fossil Energy program. GE requests that
the committee add $15 million to the budget request for the Solid State
Energy Conversion Alliance (SECA) program for fiscal year 2006 (in the
Distributed Power Generation, Fuel Cells, Innovative System Concepts
line item). These added funds should be used to continue the program to
develop a MW-Scale SECA Hybrid system for stationary power generation.
mw-scale seca hybrids program
Solid-oxide fuel cells (SOFC) utilize an electrochemical process to
cleanly convert a range of fuels into electricity. A SOFC/gas turbine
system utilizes the fuel cell as the primary power generation source.
The residual fuel and energy from the fuel cell is combusted in a gas
turbine to create additional power. By combining these two
technologies, SOFC/gas turbine hybrid systems have the potential to
revolutionize fossil-based power generation with new standards for
efficiency and reduced emissions. SOFC/gas turbine systems would be
capable of using a range of fuels--coal syngas, biomass derived syngas,
hydrogen, and natural gas. Fuel cell/gas turbine systems can be a
building block for the hydrogen economy and can be compatible with
carbon sequestration. GE sees SOFC/gas turbine systems beginning in the
1MW to 10MW size range being deployed in dispersed power applications.
This would mitigate grid congestion, enhance reliability, and enhance
power quality while being more efficient and cleaner than any fossil
energy electric generating technology today. A successful SOFC hybrid
system would reduce fuel consumption by at least 10 percent and perhaps
as much as 20 percent, while simultaneously reducing emissions by an
even greater amount.
In fiscal year 2005, Congress provided $5 million to initiate MW
scale SECA hybrids work. This funding is to be awarded via a
competitive solicitation entitled ``Fuel Cell Coal-Based Systems.'' DOE
issued this solicitation on April 13, with responses due in early June
and initial selections targeted to occur in early July. In fiscal year
2006, DOE's $65 million budget request for the SECA program includes
the continuation of the SECA fuel cell and MW-class fuel cell hybrids
work, although the amount of funding that would be devoted to SOFC/gas
turbine hybrids is not specified. GE envisions the SOFC/gas turbine
hybrid program as a multiyear (8 to 9 year) effort. The pace at which
the program is conducted is contingent on the availability of Federal
funding and the number of participants. The successful testing of such
a SECA-derived system will be an important step on the path toward
larger systems and eventually systems in the hundreds of megawatt size.
In view of the uncertainty in the market today, the time frame for
development of this technology, and the technical challenges to realize
the benefits of cost effective systems, industry is not in the position
to develop the technology alone. Additional Federal cost-share funding
is required in fiscal year 2006, and will be necessary for several
years thereafter, for the MW-Scale SECA Hybrid program. Federal funding
will be leveraged with private industry cost share that will grow as
the program moves from the early technology development phase toward
the technology demonstration phase. Adequate Federal funding now will
allow a competitive program to progress.
GE is uniquely able to apply the broad technology resources needed
to succeed in this effort. GE will bring its vast technology expertise
and its rigorous development process to this important program. GE will
have key engagement of our world leading gas turbine technology center
of excellence located in Greenville, SC, our leading center of SOFC
development in Torrance, CA, and our premier corporate Global Research
Center in Niskayuna, NY.
seca program
GE is a SECA participant through our Torrance, CA, Hybrid Power
Generation Systems team. GE appreciates the Congressional support for
the SECA program in the past, and commends the administration for its
substantially increased request for the SECA program in fiscal year
2006.
GE is moving toward completion of the Phase 1 SECA program in
September 2005, with the completion of a prototype system demonstrating
the Phase 1 milestones of 35 percent efficiency at a projected cost of
$800 per kilowatt. As the SECA program transitions into Phase 2, the
scope of work will increase, and accordingly an increased funding
commitment will be required from government and industry. In view of
budget realities, and the necessity of keeping the program on schedule
to achieving the ultimate goal of $400 per kilowatt cost, Congress and
DOE need to carefully review the structure of SECA Phase 2. Six
industry teams are currently participating in Phase 1. Continued SECA
funding at traditional levels (excluding funding provided for the MW-
Scale SECA Hybrid program) will at most support four industrial teams.
A reduction in teams is necessary to maintain a strong, effective
program in Phase 2.
We urge the committee not to impose any restrictions on DOE's use
or distribution of SECA funds. Such a requirement would limit DOE's
ability to manage the SECA program based upon performance and merits of
the individual participants. DOE should have the flexibility to direct
SECA resources where they can be applied most cost-effectively to
advance technology.
igcc
A resurgence of interest in coal-fired generation is underway. We
are experiencing a high level of interest in Integrated Gasification
Combined Cycle (IGCC) technology for the next generation of coal
plants. IGCC reduces emissions of sulfur dioxide, nitrogen oxides, and
particulate matter by approximately 50 percent compared to a state of
the art pulverized coal plant. IGCC also is more cost effective at
removing mercury and carbon dioxide.
Initially, these plants will be more expensive. GE Energy has taken
important steps to reduce the technology and commercial risk that has
been associated with this cleaner coal technology. To lower costs, GE
will provide a standard plant coal-to-grid IGCC solution. Until
recently, an IGCC power plant has required multiple separate technology
vendors. With the acquisition last year of ChevronTexaco gasification,
GE Energy has joined the two key technology pieces of IGCC--
gasification technology and turbine technology. We are making the
technology investment and applying the resources to lower cost and
improve performance of the integrated IGCC power plant.
In October 2004, GE Energy and Bechtel announced the establishment
of an alliance to develop a standard commercial offering that is
focused on Bituminous coals for IGCC projects in North America. The GE
Energy-Bechtel Alliance will integrate the development, marketing,
commercialization and implementation of GE's IGCC process with
Bechtel's engineering, procurement and construction expertise to
produce a product that can meet utility requirements for cost,
performance and schedule. The GE-Bechtel Alliance will offer a standard
IGCC plant will full performance and price guarantees and take
responsibility from coal pile to putting electrons on the grid. In
time, our standard IGCC offering will achieve cost parity with
traditional coal plants.
We also need to advance IGCC technology so that it can more
efficiently use lower rank coals, such as those from the Powder River
Basin, that are increasing in importance as a low cost, domestic fuel
source. On April 4, the Governors of Wyoming, Utah, Nevada and
California jointly announced their partnership to develop what is known
as the ``Frontier Line,'' a 500 kV transmission line that would be a
major enhancement to the transmission grid in the West. The Frontier
Line is intended to be used to export electricity generated from the
coal and wind resources in the region to meet the growing demand for
electricity in Western markets, including California.
The Rocky Mountain Area Transmission Study assumes the addition of
more than 6,000 MW of new, coal-fired generation to produce electricity
to be transmitted via the Frontier Line or other new transmission
projects. This presents a significant opportunity for the use of IGCC.
However, in recognition of the level of interest in IGCC deployment
evident in the Eastern United States, GE's standard IGCC design will
operate on bituminous coal. Realizing the great potential for IGCC in
the West requires a specific first-of-a-kind engineering design for
lower rank western coals.
Unlike natural gas plants, advanced coal plant designs require
significant preliminary engineering development for first-of-a-kind
designs and technology integration. We therefore recommend that the
budget for DOE's IGCC program be increased by $10 million in fiscal
year 2006 to be used to partially offset the first-of-a-kind project
engineering development costs that are required to deliver commercial
IGCC plants capable of utilizing low rank coals. This would relieve
launch customers and early adopters of being differentially burdened
with advancing this technology, and will ultimately lead to benefits
throughout the industry as this up-front development engineering is
captured to provide designs for like-plants.
turbines
GE recommends that funding be increased by $7 million to a total of
$25 million for the Turbines program, within the Fossil Energy/Coal and
Other Power Systems/Central Systems/Advanced Systems budget line. This
program represents the Department's primary research effort focusing on
gas turbines for electricity production and is designed to enable the
low cost implementation of major policy initiatives in the areas of
climate change, reduced powerplant emissions and future generation
technologies. Continued turbine research and development provides a
path to greater efficiency and lower emissions in the use of the
Nation's most abundant domestic energy resource--coal--as well as the
technology base for the eventual use of hydrogen.
Turbines fueled by syngas are an indispensable step on the
technology continuum that must evolve for a future hydrogen economy.
Thus, while the Turbine program is being transitioned to a Hydrogen
Turbine Program, adequate funding must be provided for syngas turbine
technology R&D programs. DOE issued a Hydrogen Turbine solicitation
this spring. It is essential that efforts under this solicitation be
targeted to those research areas with the greatest potential for near
term applications (i.e., for the FutureGen power plant). Any other
approach would dilute the funding available, to the detriment of
program goals.
GE has experience with gas turbines operating on fuel blends
containing hydrogen, and has performed laboratory demonstration tests
on high hydrogen content fuel. This experience highlighted the need for
development of advanced combustion technology in order to drive down
NOX emissions and enable advanced hydrogen generation
processes. In addition, current strategies for effective integration of
all major subsystems need to be reviewed and redefined for use with
hydrogen fuel.
GE recommends the committee's attention to the testimony submitted
by the Gas Turbine Association (GTA) relative to the allocation of
additional funding above the budget submission within the Turbine
program budget. In particular, GE encourages the committee to assure
adequate funding for combustion work at the National Energy Technology
Laboratory, and to fully fund the University Turbine Systems Research
Program.
hydrogen from coal research
Early hydrogen production will be provided by centralized reforming
of natural gas and distribution of compressed gaseous and liquid
hydrogen. However, coal will have to be developed as a primary source
for hydrogen and concurrently as a means to low carbon power generation
from coal. The synthetic gas produced from feedstock gasification in an
IGCC system permits the economical removal of carbon to provide a
hydrogen-rich feedstock for either low-CO2 combustion in a
turbine, direct export to transportation demand, or chemical
production. IGCC thus offers the opportunity for first commercially
relevant steps to a hydrogen economy based on our most abundant energy
resource--coal. GE supports funding for the Fossil Energy hydrogen from
coal program, which ties closely to IGCC development.
natural gas infrastructure reliability
Within the Natural Gas Technologies program area, funding should be
restored to the fiscal year 2005 level ($7 million) for the delivery
reliability subprogram within the infrastructure program. Continued
activities to assure the reliability of the natural gas delivery
infrastructure represent a prudent expenditure of Federal resources,
and are particularly important in light of the increased pipeline
inspection requirements of the Pipeline Safety Act of 2002. Increased
inspections will result in increased costs and also has the potential
to affect availability as lines are taken out of service for inspection
or repair. To meet these challenges, industry needs new or enhanced
technologies to find more of the potential defects faster and with
greater accuracy/characterization. Additionally, more risks need to be
covered in a single passage of the inspection systems (i.e., corrosion
and cracking, metal loss and deformations, etc.). The cost of
developing such new tools can be in the tens of millions of dollars.
With no proven track record and lacking market acceptance for these new
technologies, the investment risk is unacceptably high. The DOE R&D
program provides a vital link to bridge the gap between the need for
new technology and substantial risks associated with developing that
technology.
crosscutting technologies--ceramic matrix composites
GE recommends that funding be provided for Ceramic Matrix Composite
(CMC) crosscutting technology material development. CMCs offer greater
than 200 degrees F capability when compared to current metal plus
coating technology in power generation (gas turbine) products. This
increased capability provides potential benefits in power output,
efficiency, emissions, and part life depending on the component and how
it is utilized in product system operation. Other potential energy-
related opportunities for CMCs include power generation (gas turbines),
nuclear system piping and transportation (truck brakes).
______

Prepared Statement of Departments of Mechanical and Chemical
Engineering, University of Illinois at Chicago
As a researcher in the field of Energy and Environment I am
concerned about the country's future energy resources. In particular,
our natural gas and oil supplies require careful attention so that they
can best be used for our country's security and prosperity. It is a
considerable solace to me to know that the NETL Strategic Center for
Natural Gas and Oil exists. Through the Strategic Center, research
critical to the country's needs is addressed. For example, a number of
programs are focused on the use of methane hydrates. These hydrates
contain more carbon than all the proven sources of oil, coal and
natural gas. They may eventually provide us with the fuel our country
needs for growth, energy independence and security. NETL's leadership
in this area is significant. Similarly, the Oil program's concern for
the environment is in accord with our citizens' awareness of and
sensitivity to environmental effects on health. Cognizance on the part
of our national energy organizations, such as NETL, and the research
conducted under its auspices are an essential part of meeting our
energy needs while maintaining the public's health and confidence in
our government's effort to provide clean and safe energy. For a
contrary example, look at how the use of nuclear energy in this country
has been bungled.
I have given only two examples of the importance of the Strategic
Center for Natural Gas and Oil to our country's welfare. There are
many, many more housed under ``Exploration and Production'',
``Environmental Solutions'' and ``Petroleum Fuels'' within the Office
of Petroleum and, within the Office of Natural Gas, under ``Methane
Hydrates'', ``Transmission, Distribution and Storage'', and again
``Exploration and Production''. A quick look at the Projects buttons on
the NETL Strategic Center web site reveals the depth of research being
conducted through these Offices. A look at the Reference Shelf buttons
further confirms the significance and impact of the research.
In summary, as an active researcher in the fields related to the
missions of the Offices of Petroleum and Natural Gas, I can say with
certainty that continued support for these Offices and the Strategic
Center is critical to the overall research and development programs
currently being conducted and those that still need to be conducted. I,
therefore, whole-heartedly encourage the Senate Appropriations
Committee to continue, if not expand, the financial support of this
Strategic Center as well as the NETL Strategic Center for Coal, the
Office of Science, Technology and Analysis, and the Office of Advanced
Initiatives.
______

Prepared Statement of the National Research Center for Coal and Energy
(NRCCE) \1\
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\1\ The National Research Center for Coal and Energy is located at
West Virginia University. This statement has been prepared by Richard
Bajura, Director. George Fumich, Program Advisor and now deceased,
contributed to this statement. For additional information, contact our
web site at http://www.nrcce.wvu.edu.
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This testimony focuses on three accounts from two agencies
administered by the subcommittee: (1) Office of Fossil Energy--Coal and
Oil & Gas Programs; (2) Office of Energy Efficiency and Renewable
Energy--Vehicle Technologies Programs; (3) U.S. Army Corps of
Engineers--Construction (General) Programs.
office of fossil energy--coal and oil & gas programs
The NRCCE believes that fossil fuels, used in an efficient and wise
manner, will provide the bulk of our energy needs in the near term.
Clean coal technologies offer the promise of increased efficiency with
reduced emissions, including the sequestration of carbon dioxide. We
are pleased with the level of support recommended by the administration
for the Coal and Power R&D Program for fiscal year 2006. The Nation
will also need continued investments in oil and natural gas research;
we disagree with the administration recommendation to terminate these
programs. We offer the following comments.
Coal Fuels and Combustion Programs
The administration has provided funding for the worthy goal of
developing hydrogen fuels from coal. We are concerned, however, that
other aspects of our Nation's fuel needs require similar support. C-1
Chemistry research conducted under Advanced Fuels Research in the Fuels
program focuses on the production of hydrogen while also developing
technologies which can produce clean liquid fuels for transportation
using an indigenous fuel (coal) as the feedstock. We recommend
continuation of this program at $2 million for fiscal year 2006.
Continued research is also needed in the solids fuels area to
develop advanced technologies to improve the environmental performance
of the coal sector and to develop new applications for coal products
for a wide range of industrial and transportation industries. Advanced
separations research conducted under Solid Fuels & Feedstocks in the
Fuels program develops new technologies to produce cleaner coal in an
environmentally acceptable manner. This research also provides
technologies to meet emissions requirements from coal power systems,
especially for mercury, in response to the lower emissions limits
recently implemented by the Environmental Protection Agency (EPA). We
recommend continuation of the advanced separations program at $3
million.
Coal extraction research conducted under the Solid Fuels &
Feedstocks subprogram provides new technologies for deriving carbon
products from coal. These products replace increasingly scarce
petroleum-based coke used in anodes for aluminum and steel
manufacturing. Other carbon products can be used to make lighter weight
vehicles to reduce gasoline and diesel fuel consumption. We recommend
continuation of the coal extraction program in fiscal year 2006 at $0.7
million.
The advent of high-speed multi-processor computing promotes the
development of new energy technologies more rapidly and with less
expense if the performance of systems and/or individual process
components can be studied initially via computer modeling rather than
in full scale experiments. We recommend the addition of $1 million to
the Computational Energy Science program for a total of $5 million for
fiscal year 2006.
We recommend the addition of $6 million for an advanced combustion
program with a focus on chemical looping technologies for
CO2 capture, ultra supercritical steam cycles, component
development for carbon capture, and design studies of advanced
combustion plants. Advanced combustion research will support the
continued improvement of existing coal power generation units and
develop new technologies. The subcommittee supported this program at $5
million for fiscal year 2005.
We thank the Appropriations Committee for their support of the zero
emissions research and technology (ZERT) program in fiscal year 2005
and recommend continued support for this center.
Oil & Natural Gas Programs
Termination of the oil and natural gas extraction programs will be
a disservice to our national interests. Many small producers contribute
substantially to our oil and natural gas supplies. These smaller
producers require R&D support to improve the performance of their
reserve fields. Termination of the oil and natural gas programs would
deprive these essential industries of advanced technology needed to
produce our exceedingly scarcer resources. We recommend reinstatement
of the oil and natural gas programs.
Of particular interest is the Petroleum Technology Transfer Council
(PTTC) Resource Centers program. With the 10 regional centers, the PTTC
program works directly with industry to promote the deployment of
advanced technologies. We recommend continuation of this program at a
level of $2.6 million for fiscal year 2006. Participants provide a 38
percent match to Federal funding.
office of energy efficiency and renewable energy--vehicle technologies
program
Along with the need to provide adequate supplies of liquid
transportation fuels, critical R&D is needed for integration of the
fuels-emissions-engines-vehicles component systems of transportation
vehicles. While we support the administration's programs in developing
hydrogen-based transportation technology, we believe that it is also
essential to improve the performance of our more conventional vehicles
since they will be the mainstay of our transportation infrastructure
well into the future. Three programs of interest to NRCCE in Vehicles
Technologies are described below.
Transportable Emissions Testing Laboratory.--EPA has established
stringent emissions standards for 2007 and 2010. Measuring emissions
from vehicles compliant with those standards requires sophisticated
techniques, especially for mobile measurement facilities which can be
transported to sites where fleet vehicles are located to reduce the
out-of-service time of such vehicles. The Office of Freedom Car and
Vehicle Technologies has developed a transportable emissions testing
laboratory that produces extensive data on alternative liquid fuels,
hydrogen, and advanced technologies that can not be obtained from any
other laboratory in the world. We recommend continued funding for this
laboratory at $2 million.
Composite Materials Program.--Metal matrix and polymer matrix
composites are used as lightweight and durable materials for heavy duty
vehicles (trucks and trailers). Composites permit substantial weight
reductions in critical systems such as chassis, suspensions, brakes,
joints, engines, enclosures and support structures. Lighter vehicles
increase fuel efficiency, reduce life-cycle-costs and reduce air
pollutant emissions. The metal matrix composites program supports the
high priority goals of the Freedom Car and Vehicle Technologies
programs to reduce energy demand and air pollution, and should be
continued at $1 million.
Cylinder Inspection Program.--With increased emphasis on the use of
alterative fuels for transportation, there are over 300,000 compressed
gas cylinders in vehicles used for road service which carry fuels like
natural gas and hydrogen. Current regulations and also equipment
manufacturers require that a detailed visual inspection be performed
every 3 years or 36,000 miles by certified inspectors. Many vehicles
are being resold in the public sector for the first time. Training and
certification of inspectors is needed to ensure safe operation of these
vehicles. The Office of Vehicle Technologies initiated a cylinder
safety inspection program in fiscal year 2005. We recommend
continuation of this program in fiscal year 2006 at $0.5 million.
u.s. army corps of engineers construction (general) programs
NRCCE recommends consideration for two projects conducted under the
U.S. Army Corps of Engineers Construction [General] programs.
Acid Mine Drainage Demonstration Program
Acid mine drainage continues to be the primary source of
degradation in Appalachian streams. While Federal and State programs
have enabled progress to be made in cleaning many streams, the
technologies that are being used now were to a large extent developed
10 to 20 years ago. Since then, there has been little research effort
into developing less expensive, more reliable treatment methods that
address large volume discharges. The U.S. Army Corps of Engineers
(USACE) should undertake a program of research and demonstration that
would focus on developing and demonstrating improved reclamation
methods in conjunction with the Appalachian States and the National
Mine Land Reclamation Center.
This program seeks to identify and develop a new generation of
innovative AMD remediation technologies that will demonstrate
substantial improvement in cost, performance, and reliability over
existing AMD remediation technologies. Recognizing the importance of
innovation, the project will encourage phased development with
appropriate technical milestones to demonstrate the feasibility of a
new technology prior to full-scale demonstration.
The USACE Technical Working Group for the Acid Mine Drainage
Demonstration Program will develop a standard set of criteria as a
guide to rank the quality of proposed demonstration projects. For
example, the proposed projects must demonstrate the development and
implementation of innovative technologies to mitigate adverse
environmental impacts of acid mine drainage. Other criteria include
emphasis on system wide technologies, efficient designs to prevent or
mitigate public health and safety hazards and damage to surface and
underground water resources. Proposed demonstration projects are
expected to quickly generate outcomes of value to the Corps' Ecosystem
Restoration Program and also be transferable to other locations.
We recommend that the Corps of Engineers undertake a 5-year, $20
million Acid Mine Drainage Demonstration program in partnership the
Appalachian States and request funding of $4 million in fiscal year
2006 to initiate this effort.
Appalachian Water Resource Center
Appalachian States are recognizing the value of their water
resources in future economic development. Larger metropolitan areas
external to Appalachia seek to obtain future supplies of drinking water
from the region. Water facilitates the use of mineral resources to
generate electricity and transportation fuels for local and national
consumption. Insufficient water resources are already forcing new power
generation projects to look for alternate water supplies, an outcome
which may be exacerbated in the future if coal conversion technologies
are deployed.
Impacts from previous mining impair thousands of miles of streams
in Appalachian States and contaminate large segments of our groundwater
with the attendant destruction of fisheries and drinking water
supplies. Discharges of pollutants from point sources and non-point
sources such as farm wastes and other industrial wastes jeopardize the
health of our waterways for both local residents and downstream
communities and downstream States. Drought and flooding inflict untold
damage to communities and businesses. Contaminated drinking water
supplies cause illnesses which are particularly dangerous to residents
who are economically disadvantaged, as is often the case in Appalachian
communities.
We recommend funding of $1 million in fiscal year 2006 to initiate
an Appalachian Water Resource Center (AWRC) through the U.S. Army
Engineer Research and Development Center. The AWRC will work closely
with the National Energy Technology Laboratory and the National Mine
Land Reclamation Center. The programs of the Appalachian Water
Resources Center would focus on research and technology assessment to
enable States to: (1) determine their current status regarding the
extent and quality of their water resources, (2) conduct projects to
develop cost-effective remediation measures for correcting water
problems, and, (3) provide advice to States regarding economic and
policy issues which can improve the standard of living within the
State.
Thank you for your consideration.
______

Prepared Statement of the National Coalition for Food and Agricultural
Research
On behalf of the National Coalition for Food and Agricultural
Research (National C-FAR), we are pleased to submit comments in strong
support of enhanced public investment energy biosciences research as a
critical component of Federal appropriations for fiscal year 2006 and
beyond.
summary position--fiscal year 2006
National C-FAR urges the subcommittee and committee to provide for
an increase in the administration's fiscal year 2006 request of $32.5
million for the Department of Energy's Energy Biosciences program in
the Office of Science and Office of Basic Energy Sciences, to at least
$35 million. National C-FAR also urges that funding for the Department
of Energy Office of Energy Efficiency and Renewable Energy (EERE) be
sustained, and enhanced to the extent practicable.
At a time when our Nation's energy security is being seriously
challenged, this modest increase in a small, but highly effective
program is a wise investment with potentially momentous benefits to the
Nation.
Basic energy research on plants and microbes supported by the
Energy Biosciences program contributes to advances in renewable
resources for fuel and other fossil resource substitutes from American
agriculture, clean-up and restoration of contaminated environmental
sites, and in discovering new knowledge leading to home-grown products
and chemicals now derived from petroleum.
interest of national c-far
National C-FAR serves as a forum and a unified voice in support of
sustaining and increasing public investment at the national level in
food and agricultural research, extension and education. National C-FAR
is a nonprofit, nonpartisan, consensus-based and customer-led coalition
established in 2001 that brings food, agriculture, nutrition,
conservation and natural resource organizations together with the food
and agriculture research and extension community. More information
about National C-FAR is available at http://www.ncfar.org.\1\
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\1\ National C-FAR seeks to increase awareness about the value of,
and support for, food and agricultural research, extension and
education. For example, National C-FAR is hosting an educational series
of ``Break & a Briefing'' seminars on the hill, featuring leading-edge
researchers on timely topics to help demonstrate the value of public
investment in food and agricultural research, extension and education.
The April 11 seminar was entitled ``Energy--A `Growing' Need,''
featuring Dr. Lonnie Ingram, Director of the Florida Center for
Renewable Chemicals and Fuels, Institute of Food and Agricultural
Science, University of Florida. National C-FAR also circulates a series
of 1-page Success Profiles highlighting some of the many benefits
already provided by public investment in food and agricultural
research, extension and education. Each provides a contact for more
information. Profiles released to date are titled `Anthrax,'
`Mastitis,' `Penicillin,' `Witchweed,' `Making Wine,' `Fighting
Allergens,' and `Harnessing Phytochemicals.' The Profiles can be
accessed at http://www.ncfar.org/research.asp.
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National C-FAR is deeply concerned that shortfalls in funding in
recent years for food and agricultural research, extension and
education--both through the U.S. Department of Agriculture and through
relevant programs in other agencies--jeopardize the food and
agricultural community's continued ability to maintain its leadership
role and more importantly respond to the multiple, demanding challenges
that lie ahead. Federal funding for food and agricultural research,
extension and education has been flat for over 20 years, while support
for other Federal research has increased substantially. Public funding
of agricultural research in the rest of the world during the same time
period has reportedly increased at a nearly 30 percent faster pace.
National C-FAR believes it is imperative to lay the groundwork now
to respond to the many challenges and promising opportunities ahead
through Federal policies and programs needed to promote the long-term
health and vitality of food and agriculture for the benefit of both
consumers and producers. Stronger public investment in food and
agricultural research, extension and education is essential in
producing research outcomes needed to help bring about beneficial and
timely solutions to multiple challenges.
The Department of Energy's biosciences program is an excellent
example of where a modest Federal investment can yield tremendous
societal benefits. Energy costs are escalating, dependence on petroleum
imports is growing and concerns about greenhouse gases are rising.
Research, extension and education can enhance agriculture's ability to
provide new, renewable sources of energy and cleaner burning fuels,
sequester carbon, and provide other environmental benefits to help
address these challenges, and indeed generate value-added income for
agricultural producers and stimulate rural economic development.
national c-far fiscal year 2006 funding recommendation
National C-FAR urges the subcommittee and committee to provide for
an increase in the administration's fiscal year 2006 request of $32.5
million for the Department of Energy's Energy Biosciences program in
the Office of Science and Office of Basic Energy Sciences to at least
$35 million. National C-FAR also urges that funding for the Department
of Energy Office of Energy Efficiency and Renewable Energy (EERE) be
sustained, and enhanced to the extent practicable.
At a time when our Nation's energy security is being seriously
challenged, this modest increase in a small, but highly program is a
wise investment with potentially momentous benefits to the Nation.
Basic energy research on plants and microbes supported by the
Energy Biosciences program contributes to advances in renewable
resources for fuel and other fossil resource substitutes, clean-up and
restoration of contaminated environmental sites, and in discovering new
knowledge leading to home-grown products and chemicals now derived from
petroleum.
The Energy Biosciences program supports world-leading research on
plants and microbes conducted primarily by university-based scientists
throughout the country. Competitive grants are awarded through a peer
review process based on the highest standards of scientific merit.
The Energy Biosciences program is dependent upon the knowledgeable
and experienced plant biologists who run the program, but who have
either resigned or are retiring. National C-FAR believes that for the
program to remain effective, it must be properly staffed. A fully
staffed, Energy Biosciences program is necessary for the continued
convening of panels, reviewing of proposals and awarding of grants for
the best research proposals adhering to the highest scientific
selection standards. This could lead to future discoveries that will
make environmentally benign, home-grown energy sources more plentiful
and cost-competitive with imported petroleum products, such as gasoline
and industrial chemicals.
We hope the committee will commend the Office of Science for its
support of Energy Biosciences, so that America's producers of domestic
energy crops can reach their huge and realistic potential of being able
to replace much of the imported petroleum products used for
transportation fuels and industrial chemicals, and urge the Office to
increase its emphasis in the areas of biology research sponsored by
Energy Biosciences.
As a coalition representing stakeholders in both the research,
extension and education community and the ``customers'' who need and
depend upon their outcomes, National C-FAR urges expanded public
participation in the administration's research, extension and education
priority setting and funding decision process and stands ready to work
with the administration and other interested stakeholders in such a
process.
National C-FAR appreciates the opportunity to share its views and
stands ready to work with the Chair and members of the subcommittee and
committee in support of these important funding objectives.
______

Prepared Statement of Alliance to Save Energy
The Alliance to Save Energy (the Alliance) is a bipartisan,
nonprofit coalition of business, government, environmental, and
consumer leaders committed to promoting energy efficiency worldwide to
achieve a healthier economy, a cleaner environment, and greater energy
security. The Alliance, founded in 1977 by Senators Charles Percy and
Hubert Humphrey, currently enjoys the leadership of Senator Byron
Dorgan as Chairman; Washington Gas Chairman and CEO James
DeGraffenreidt, Jr. as Co-Chairman; and Representatives Ralph Hall,
Zach Wamp and Ed Markey and Senators Jeff Bingaman, Susan Collins and
Jim Jeffords as its Vice-Chairs. More than 90 companies and
organizations currently support the Alliance as Associates. The
Alliance recommends increases of $15.3 million in several energy
efficiency and renewable energy deployment programs, increased funding
for building energy efficiency R&D, and $3 million for EIA end-use
surveys, compared to last year's appropriated levels.
Energy efficiency programs at DOE are largely voluntary programs
that further the national goals of broad-based economic growth,
environmental protection, national security, and economic
competitiveness. The Office of Energy Efficiency and Renewable Energy
does this through the development of new energy-efficient technologies
in cooperation with the national laboratories, by working with the
private sector to deploy those technologies, and by fostering energy
efficiency activities in the States.
background
Rationale for Federal Energy Efficiency Programs.--Both natural gas
and oil prices have more than doubled in the last few years, and both
continue to rise. High natural gas prices have caused plant closings,
loss of manufacturing jobs, and a variety of other direct and negative
impacts to the U.S. economy. In a recent survey, business leaders
placed energy costs as their second greatest concern after rising
healthcare costs.
Energy efficiency and conservation measures taken since 1973 now
displace the need for 40 Quads of energy each year, exceeding the
Nation's consumption of petroleum. Federal policies and programs such
as appliance standards, research and development, and Energy Star made
major contributions to these savings. Yet much more remains to be done
to increase our Nation's energy efficiency.
Energy efficiency must play a central role in the Nation's energy
future. With only 2 percent of known world oil reserves within our
domestic borders, flat natural gas production even as prices soar, and
an electricity grid that is under significant and growing stress in
many regions of the country, there is simply no choice. Even the
National Petroleum Council has concluded that natural gas supplies from
traditional North American production will not be able to meet
projected demand, and that ``greater energy efficiency and conservation
are vital near-term and long-term mechanisms for moderating price
levels and reducing volatility.''
A record of success.--Federal energy efficiency programs provide
enormous economic and environmental returns. A 2001 National Research
Council report found that every $1 invested in 17 DOE energy efficiency
research and development (R&D) programs returned nearly $20 to the U.S.
economy in the form of new products, new jobs, and energy cost savings
to American homes and businesses. Environmental benefits were estimated
to be of a similar magnitude. DOE itself estimates that its efficiency
and renewables programs will result in major savings, including $134
billion in energy bills, 157 GW of avoided new conventional power
plants, 1.9 quads of natural gas, and 213 MMTC of greenhouse gas
emissions in 2025.
Budget Studies and Recommendations.--A series of reports and bills
have supported a substantial increase in funding for DOE energy
efficiency programs. The 2004 energy bill conference report (H.R. 6)
would have authorized $772 million for energy efficiency R&D and $725
million for grants in fiscal year 2006. The authorization increases up
to a total of $1.625 billion in fiscal year 2008, an increase of 87
percent over the actual fiscal year 2005 appropriation. The National
Commission on Energy Policy's December 2004 report recommends a
doubling after inflation of current investments in energy RD&D,
including on efficiency, over 5 years. These recommendations echo
earlier calls for doubling by the President's Committee of Advisors on
Science and Technology and the Energy Futures Coalition, and support
for expanding the programs in the president's National Energy Policy.
Summary of the President's Request.--The President's overall fiscal
year 2006 budget request for DOE energy efficiency programs is $847
million, down $21 million from the fiscal year 2005 appropriation. This
continues a gradual slide from the $913 million appropriated for energy
efficiency programs in fiscal year 2002. However, in addition to the
overall decline, there are some major changes in priorities. The
President has requested significant increases for fuel cell vehicle and
biorefineries research. The money for these increases was taken from
other energy efficiency programs. Thus the core research, development
and deployment (RD&D) programs for energy efficiency--buildings,
industry, other vehicles R&D, distributed energy, Federal energy
management, and deployment programs--would be cut 16 percent overall
from fiscal year 2005 levels. Particularly distressing are a 19 percent
cut to the appliance standards program--a program that is already
plagued by long delays due in part to a lack of financial resources--
and a 21 percent cut in work to improve State building energy codes.
The proposed budget also cuts other Buildings RD&D, Industrial RD&D,
Federal Energy Management, and other critical programs.
alliance recommendations
The Alliance to Save Energy believes that a substantial increase in
support for DOE energy efficiency programs is vital for addressing the
critical energy problems facing our Nation, and that the proven track
record of DOE programs in reducing energy demand provides a solid
justification for such an increase. Thus the Alliance recommends a
doubling of funding for Federal energy efficiency programs over the
next 5 years (2006-2010), in line with the budget recommendations
above, with an allocation similar to the budget included in the
National Commission on Energy Policy report. However, given fiscal
realities, we have included much smaller recommendations for funding
increases to specific programs below.
The impact of DOE energy efficiency programs has been multiplied by
the combination of research to create new technologies, voluntary
deployment and market transformation programs to move them into the
marketplace, and standards and codes to set a minimum threshold for
using cost-effective technologies. All three legs are vital. However,
the Alliance believes that energy efficiency deployment programs
(including standards) are especially critical right now to meeting our
Nation's natural gas and electricity needs. The administration's fiscal
year 2006 budget request includes an important increase in funding for
the Energy Star program, but cuts other key deployment programs
including appliance standards, building codes, Federal energy
management, industrial best practices, State Energy Program grants, and
all the Gateway Deployment programs other than Energy Star. Such cuts
are not consistent with achieving our national energy policy goals of
reducing energy costs, promoting environmentally sound economic
development, and reducing our reliance on imported oil.
It is important that the program increases in the administration's
budget and proposed below not be paid for through cuts to other highly-
effective efficiency programs, which also address critical national
energy needs. While we support the fuel cell programs, they do not take
the place of core RD&D programs that can have broad energy savings
impacts and more certain and more near-term impact than fuel cells. In
particular, the Alliance opposes repeated cuts that now threaten the
viability of Industrial Technologies research programs.
eere deployment programs
Equipment Standards and Analysis (Building Technologies).--Federal
appliance standards already save an estimated 2.5 percent of all U.S.
electricity use; existing and draft standards are expected to save
consumers and businesses $186 billion by 2020. However, a number of
standards are many years behind schedule and appear stalled. DOE has
missed Congressionally-set legal deadlines for updating or establishing
18 appliance standards. In fact, some standards are over a decade
overdue. DOE has not issued a new energy-saving standard in more than 4
years. In December, the agency announced additional 24 to 30 month
delays for the three standards the agency terms its highest priorities.
Yet the administration's budget proposes to reduce this line by 19
percent. In recognition of the fact that establishing standards
requires a rigorous, time consuming, and costly rulemaking process, the
Alliance recommends a $2.5 million increase over the fiscal year 2005
appropriations level for total funding of $12.6 million.
Residential and Commercial Building Energy Codes.--While
residential and commercial building codes are implemented at the State
level, the States rely on DOE for technical specifications, training,
and implementation assistance. We are concerned that the Department is
significantly behind in providing information and guidance to the
States on both residential and commercial building energy codes. A few
States are currently considering the adoption of the current model
residential energy code--the 2004 IECC Supplement. This year, the 2006
IECC will be finalized, following the recent publication of the 2004
ASHRAE commercial code. DOE will be required to make determinations as
to whether these codes should be adopted; however, DOE still has not
made the required determinations on the 2003 IECC, the 2004 Supplement,
or the 2001 ASHRAE code. DOE must apply the necessary human and
financial resources to ensure timely determinations on the codes.
As the 2006 IECC code will include measures to simplify the code
and ease the burden of implementation (as the 2004 Supplement does
now), these determinations will lead to exciting opportunities to
increase the number of States that adopt the model code.
In addition, compliance with existing codes remains a major
problem. DOE needs increased financial resources in order to assist
States in the adoption of codes, and to provide training and assistance
that can boost compliance. We estimate that full adoption of and
compliance with building codes could save 7.2 quads of energy by 2025.
Yet the administration proposes to reduce overall codes funding by 21
percent, largely reversing funding Congress added last year. The
Alliance recommends:
--a $2.8 million increase for the Building Codes Training and
Assistance (Weatherization and Intergovernmental Programs), for
total funding of $7.4 million.
Federal Energy Management Program.--The Federal Government is the
Nation's largest consumer of energy. Federal agencies use 1 percent of
all energy consumed in the U.S. DOE's Federal Energy Management Program
(FEMP) has helped cut Federal building energy waste by 24 percent from
1985-2001--a reduction that now saves Federal taxpayers roughly $1
billion each year in reduced energy costs. A vital tool for upgrading
the efficiency of Federal buildings is the use of Energy Savings
Performance Contracts (ESPCs). However, authority for ESPCs lapsed from
October 1, 2003 until late last year, when Congress provided an
extension of the ESPC program until October 1, 2006 as part of the
defense authorization bill. During the lapse in authority, nearly $500
million worth of energy savings projects were stalled. Additional
funding is needed for FEMP to assist agencies in finalizing these
contracts and reviving this program. Yet the fiscal year 2006 budget
request would cut funding to this program by 4 percent from the fiscal
year 2005 appropriated level. The Alliance recommends a $3 million
increase, for total funding of $20.9 million.
Energy Star (Weatherization and Intergovernmental Programs).--
Energy Star is a successful voluntary deployment program at EPA and DOE
that has made it easy for consumers to find and buy many energy-
efficient products. For every Federal dollar spent, Energy Star
produces average energy bill savings of $75 and sparks $15 in
investment of new technology. Last year alone, Americans, with the help
of Energy Star, prevented 30 million metric tons of greenhouse gas
emissions--equivalent to the annual emissions from 20 million vehicles,
and saved about $10 billion on their utility bills. The President
proposed a significant increase for the Energy Star program, from $4.1
million to $5.8 million, but even more is needed both to add new
products and to increase consumer awareness and market penetration of
Energy Star products. The Alliance recommends a slightly higher $2
million increase for total funding of $6.1 million.
Industrial Best Practices (Industrial Technologies--
Crosscutting).--One of the most effective DOE industrial programs
conducts plant-wide energy assessments, develops diagnostic software,
conducts training, develops technical references, and demonstrates
success stories. Oak Ridge National Laboratory reports that DOE-ITP's
BestPractices outreach saved 82 trillion Btu in 2002, worth $492
million. University-based Industrial Assessment Centers have an
immediate impact on the competitive performance of hundreds of smaller
U.S. factories. The same efforts train industry's next generation of
innovators. Additional DOE funding can allow these programs to impact
thousands, as opposed to hundreds, of U.S. factories. The Alliance
recommends:
--a $3 million increase for Best Practices, for total funding of
$11.4 million, and
--a $2 million increase for Industrial Assessment Centers, for total
funding of $9.1 million.
other key programs
Building Technologies R&D.--Energy use by residential and
commercial buildings accounts for over one-third of the Nation's total
energy consumption, including two-thirds of the electricity generated
in the United States. Of all the DOE energy efficiency programs,
Building Technologies continues to yield perhaps the greatest energy
savings. The National Research Council study found that just three
small buildings R&D programs--in electronic ballasts for fluorescent
lamps, refrigerator compressors, and low-e glass for windows--have
already achieved cost savings totaling $30 billion, at a total Federal
cost of about $12 million. Current buildings research programs, such as
advanced windows and solid state (LED) lighting, are equally promising.
Yet the administration's proposed budget would reduce overall Building
Technologies funding by 11 percent, and eliminate the important Thermal
Insulation and Building Materials R&D. Buildings R&D should be a
priority for funding increases, especially for Window Technologies, in
addition to the Building Technologies deployment programs highlighted
above.
Energy Information Administration (EIA) End-Use Surveys.--Last
year, the Congress recognized the value that EIA's energy end-use
surveys provide to policymakers, congressional staff, national
laboratories and industry with report language urging an increase in
funding for this program. This year, the administration's budget
request includes $3.5 million (up from $2.2 million), just enough to
continue the valuable Residential, Manufacturing, and Commercial
Buildings Energy Consumption Surveys (RECS, MECS, and CBECS). The
Alliance strongly supports the administration's requested budget
increase for the existing surveys. In addition, the Alliance recommends
an increase of $1.5 million above the President's request, for total
funding of $5.0 million, in order to reinstate the residential
transportation energy consumption survey, last conducted in 1994, and
to conduct the surveys every 3 years as required by the Energy Policy
Act of 1992, instead of the current 4-year schedule.
conclusion
DOE's energy efficiency programs have a proven track record of
developing and deploying new energy efficiency technologies. With
natural gas and oil prices continuing to skyrocket, there is a
compelling need to increase these programs this year, as energy
efficiency continues to be the quickest, cheapest, and cleanest way of
making energy supplies meet energy needs. The Alliance recognizes that
the fiscal situation is tight, but the returns from these programs will
be large, and the cost of not making the investment--to the economy, to
energy security and reliability, and to the environment--is simply too
high.
______

Prepared Statement of the Center for Advanced Separation Technologies
Chairman Domenici and members of the subcommittee, I represent the
Center for Advanced Separation Technologies (CAST), which is a
consortium of seven leading U.S. mining schools. I appreciate the
opportunity to submit this testimony requesting your committee to add
$3 million to the 2006 Fossil Energy Research and Development budget,
U.S. Department of Energy, for Advanced Separations research. Research
in advanced separations is an integral part of the Solid Fuels and
Feedstocks Program of the Fossil Energy R&D.
I am joined in this statement by my colleagues from the consortium:
Ibrahim H. Gundiler, New Mexico Tech; Maurice C. Fuerstenau, University
of Nevada-Reno; Peter H. Knudsen, Montana Tech of the University of
Montana; Jan D. Miller, University of Utah; Richard A. Bajura, West
Virginia University; and Richard J. Sweigard, University of Kentucky.
funding request for the center for advanced separation technologies
Oil is the largest source of energy used in the United States,
providing 40 percent of the Nation's energy needs. At present, the
United States imports oil to meet nearly 60 percent of its domestic
consumption, and the oil import in 2004 accounted for nearly one-third
of the increase in the trade deficit that year. The situation can get
worse if world oil production reaches a peak any time between now and
2020 as many petroleum geologists predict. In anticipation of the
growing imbalance between energy supply and demand, President Bush has
developed a comprehensive National Energy Policy which stresses the
importance of increasing supplies while protecting the environment.
Unfortunately, coal contains many undesirable impurities and, hence,
emits pollutants during the course of production and utilization.
Therefore, there is a need to develop advanced separation technologies
that can be used to efficiently produce cleaner solid fuels in an
environmentally acceptable manner.
Availability of the new technologies will help industry meet the
stringent requirements of the Clean Air Interstate Rule (CAIR) and the
Clean Air Mercury Rule (CAMR) promulgated in March, 2005. The former
requires coal-burning power plants to reduce SO2 and
NOX emissions by 70 and 60 percent, respectively, while the
latter requires that mercury emissions be reduced to 38 and 15 tons-
per-year levels beginning 2010 and 2018, respectively. CAST is an
excellent vehicle to develop advanced technologies that can be used to
meet these new requirements.
organization
The Center for Advanced Separation Technologies (CAST) was formed
in 2001 between Virginia Tech and West Virginia University with the
objective of developing technologies that can help the U.S. coal
industry produce cleaner solid fuels with maximum carbon recovery in
environmentally acceptable ways. Initially, the scope of work was
limited to developing efficient physical separation methods
encompassing solid-solid and solid-liquid separations. In 2002, five
other universities, New Mexico Tech; the University of Nevada, Reno;
Montana Tech of the University of Montana; the University of Utah; and
the University of Kentucky joined the consortium to develop
crosscutting technologies that can also be used by the U.S. minerals
industry. As a result, the scope of work was expanded to chemical/
biological separations and environmental control. By working together
as a consortium, the Center can take advantage of the diverse expertise
available in the member universities, and the research activities can
address the diverse interests at different geographical regions of the
country. A recent National Research Council (NRC) report suggested that
``consortia are a preferred way of leveraging expertise and technical
inputs to the mining sector,'' and recommended that the U.S. Department
of Energy should support ``academia, which helps to train technical
people for the industry.''
progress and next step
At present, a total of 40 research projects are being carried out
at the seven CAST member universities. The project selection was made
by an industry panel in accordance with the priorities set forth in the
CAST Technology Roadmap, which was created as a result of the workshop
held in Charleston, WV, August 14-15, 2002. The research results were
presented at the First CAST Workshop, Charleston, WV, November 19-21,
2003. The meeting was attended by 120 participants, 60 percent of whom
were from industry. The Second CAST Workshop will be held July 26-27,
2005, in Blacksburg, VA.
The price of coal increased sharply beginning January, 2004, due to
factors such as increased demands in export coal markets, low U.S.
dollar value, depletion of long-wall mineable coal beds, shortages of
skilled manpower, and increasing pressure to reduce SO2 and
mercury. It is unfortunate that despite the favorable market
conditions, many coal companies are losing considerable amounts of coal
during cleaning operations due to the lack of appropriate separation
technologies. The loss of coal, particularly of fine particles,
contributes to high production costs and creates environmental problems
at mine sites. NRC reported recently that there are more than 760
impoundments in the eastern United States, many of which are rated as
``high risk.'' Therefore, the CAST Roadmap gave the highest priorities
to dewatering fine coal (solid-liquid separation) and fines
classification (size-size separation).
CAST conducted several fine coal dewatering research projects. In
one, pilot-scale tests were conducted on drill core samples from the
waste impoundment at the Pinnacle Mine, WV. The coal sample was cleaned
of ash and sulfur by means of an advanced solid-solid separation device
and was subsequently dewatered with an advanced solid-liquid separation
method to obtain marketable products. The same samples treated with
conventional technologies contained high levels of impurities and
contained too much water to be shipped. As a result of the successful
test work, Beard Technologies signed an agreement with PinnOak Mining
Company in September, 2004, to build a recovery plant which is capable
of producing 200 tons/hr of clean coal. It is anticipated that plant
construction will be completed by September, 2005. If successful, this
will be the first operation that can recover practically all of the
coal fines that have been discarded to a waste impoundment without the
benefit of the Section 29 tax credit.
In another dewatering project, CAST is developing a hyperbaric
centrifuge that can remove water from fine coal using a combination of
air pressure and centrifugal force. While a bench-scale semi-continuous
unit was being constructed by CAST, a license agreement was signed with
Decanter Machine Company in Johnson City, TN, in January of 2005. Based
on the bench-scale test results, a proof-of-concept (POC) module will
be constructed by Decanter and tested at a mine site. In another
dewatering project, a flocculant injection system has been developed to
minimize the loss of fine coal in screenbowl centrifuges, which are the
most widely used dewatering machines used in the U.S. coal industry. To
date, the new injection system has been installed in a total of 18
preparation plants operating in the U.S. coal industry. In addition,
CAST is developing a deep-cone thickener which is designed to increase
the consistency of refuse materials (mainly clay) so that they can be
disposed of without using refuse ponds.
Most of the coarse coal is cleaned by density-based separators. One
can, therefore, determine the efficiency of separation by using density
tracers. Typically, tracers of different densities are added to a feed
stream and manually collected from product streams, processes which are
cumbersome and entail inaccuracies. Therefore, a new method has been
developed in which each tracer is tagged with a transponder so that the
fate of each tracer can be determined accurately by means of an
appropriate electronic device. This technology has been tested
successfully in several coal plants and is ready for commercial
deployment this year.
Alternatives to copper smelting, e.g., chemical leaching, have been
sought for years to reduce cost and minimize environmental impact. It
is difficult, however, to leach certain types of copper minerals, such
as chalcopyrite, because its leach product (elemental sulfur) forms a
coherent layer on the mineral surface and impedes the leaching process.
It was found that chalcopyrite leaching is greatly enhanced in the
presence of nano-size silica particles, possibly due to their effect on
sulfur layer. Based on the successful test results obtained with dilute
suspensions, work is continuing on concentrated suspensions. In another
leaching project, a method is being developed for extracting gold using
alkaline sulfide rather than toxic cyanide as a lixiviant. On the basis
of the thermodynamic and kinetic studies conducted during the first
year, bench-scale leach tests have been conducted successfully on
actual ore samples. Initial tests showed very high (95 percent) gold
recoveries.
Processing water-soluble minerals, such as potash (KCl) and trona
(NaCO3), poses unique challenges. Potash has been mined in
New Mexico for the past 60 years, but depleting high-grade ore reserves
threatens the survival of the industry in the future. Therefore, CAST
has developed a new method in which potash ore is deslimed prior to
flotation and reagent additions are optimized. After a successful plant
trial last summer, Mosaic Potash, formerly IMC Potash, implemented the
new flotation process to increase the recovery by more than 10 percent.
CAST is also working with both Interpid Mining and Mosaic Potash to
develop a process of recovering potash from mixed ores containing large
amounts of clay, which cannot be processed otherwise.
Almost all of the U.S. soda ash production comes from the Green
River Basin of Wyoming. At present, high purity soda ash is being
produced by a process involving dissolution in a brine solution, which
is costly. CAST has developed a flotation process which can produce
trona concentrate with a high purity (99 percent). During the fall of
2004, a series of pilot-scale flotation tests were conducted at the
mine site. At present, continuous flotation tests are being conducted
at a much smaller scale to establish optimal operating conditions.
CAST is carrying out many other projects that cannot be reported
here due to page limit. Many of them are long-term, high-risk research
projects, which include fundamental studies, sensor development,
modeling, and computations.
rationale for funding request
The United States is the second largest mining country in the world
after China, followed by South Africa and Australia. In 2004, the U.S.
mining industry produced a total of $63.9 billion worth of raw
materials, including $19.9 billion from coal and $44 billion from
minerals. Australia is a much smaller mining country but has five
centers of excellence in advanced separations as applied to coal and
minerals processing. In the United States, CAST is the only such
center.
CAST is developing a broad range of advanced separation
technologies that can be used by the U.S. coal and minerals industries.
Although CAST is a relatively new center, many of our research projects
have yielded technologies that have already been transferred to
industry. However, many other promising projects are on-going and
require continued support. It has been found that working as a
consortium is an effective way of exchanging ideas and utilizing
different expertise required to solve difficult problems. Continued
funding will allow CAST to develop advanced technologies that can be
used to remove impurities from coal, including sulfur and mercury, in a
manner that is acceptable to the environment. Furthermore, the advanced
technologies can be used to clean up the waste impoundments created in
the past and to control acid mine water.
For fiscal year 2006, we are requesting $3 million of funding to
continue development of crosscutting advanced separation technologies.
In view of the CAIR and CAMR promulgated in March, 2005, we will also
study methods of removing mercury from coal prior to combustion. Recent
research conducted by CAST member universities has shown that
approximately 70 to 80 percent of mercury can be removed from eastern
U.S. coals. In order to do this, the coal must be pulverized first to
liberate iron sulfide minerals such as pyrite (FeS2) in
which most of the mercury is dispersed in solid solution. The fine coal
dewatering technologies being developed at CAST can minimize the costs
associated with processing the pulverized coal. Some of the advanced
separation technologies developed by CAST can also be used to recover
kerogen and bitumen from oil shale and tar sands and to help develop
zero-emission coal technologies.
______

Prepared Statement of the Ohio Oil & Gas Association
summary introduction
This is a statement of the Ohio Oil and Gas Association (``OOGA''),
a trade association primarily comprised of oil and natural gas
producers. OOGA's membership also includes oilfield drilling and
service contractors, natural gas pipeline companies, natural gas
marketers, and other businesses providing services, goods, and
equipment to the oil and natural gas industry in the State of Ohio.
OOGA's mission is to protect, promote, foster and advance the common
interests of those engaged in all aspects of the Ohio crude oil and
natural gas producing industry. The OOGA's membership totals 1,300
members, the majority of which are small business entities.
The administration's budget proposal for fiscal year 2006 would
remove all Federal funding that supports oil and gas technology
programs. Likewise, and of critical concern, the proposal eliminates
funding for the Office of Fossil Fuel, Oil and Gas Program's regulatory
evaluation programs that serve to make certain that other Federal
agency rulemakings take place with full regard for the potential
impacts the action may have on domestic oil and gas production.
Therefore, OOGA's members maintain a substantial interest in this
appropriation issue and offer the following discussion.
OOGA fully supports and is signatory to comments submitted by the
Independent Petroleum Association of America (IPAA) to this committee
regarding this issue. We take this opportunity to briefly itemize those
issues of particular concern to Ohio's independent oil and gas
producers.
OOGA requests that fiscal year 2006 funding of oil and gas
technology and regulatory evaluation programs be restored to fiscal
year 2005 levels. The Department of Energy should provide Congress with
research and development plans at several levels of appropriations
($50, $75 and $100 million per year) over at least a 5-year planning
period.
technology needs
Oil and natural gas stand out as essential fuels and feedstock of
the U.S. economy. Together they account for more than 60 percent of
U.S. energy consumption. Even though the United States is a mature
producing region, still nearly 40 percent of oil consumed comes from
domestic fields. The rest is imported from other sources--usually
nationalized petroleum owned by companies who do not have America's
best interests at heart.
Of the remaining U.S. resource base two-thirds of all the oil
discovered in the country remains in the ground. U.S. natural gas
resources remain plentiful. But, as demand increases, U.S. production
will increasingly come from more difficult-to-produce, technically
challenging resources and settings. In light of the current economic
situation characterized by escalating commodity prices caught in
increasingly more volatile cycles, it seems Congress is behooved to do
all possible to support increased research to exploit the U.S. resource
base. Likewise, cutting the primary R&D funding assisting American
independents, who drill 90 percent of domestic oil and gas wells, seems
entirely inappropriate.
Because there is so much future potential in this region, Ohio and
the Appalachian Basin are detrimentally impacted by the R&D funding
cuts. The U.S. Geological Survey recently issued a report assessing the
undiscovered oil and gas potential of the Appalachian Basin
Province.\1\ The USGS estimated a mean of 70.2 trillion cubic feet of
gas, a mean of 54 million barrels of oil, and a mean 872 million
barrels of total natural gas liquids exists in the region. That roughly
translates into 7.6 billion barrels of oil equivalents (at current
commodity price levels). If only 30 percent of the resource was
recoverable, still that would amount to nearly 50 percent of the
published proved oil reserves available in Alaska.
---------------------------------------------------------------------------
\1\ ``Assessment of Undiscovered Oil and Gas Resources of the
Appalachian Basin Province, 2002'', USGS Fact Sheet FS-009-3, United
State Geological Survey, February 2003.
---------------------------------------------------------------------------
Independent oil and gas producers will surely explore for and
develop the Appalachian resource. But this resource is contained in a
mature basin and within reservoirs that will require new technologies
to fully exploit. The Department of Energy's oil and gas technologies
programs provide technological products that are principally accessed
by small, independent oil and natural gas producers. These producers do
not have access to the in-house technology capabilities of large,
multi-national oil companies. In fact, 85 percent of the DOE programs
are targeted toward exploration and production activities associated
with the independent producer community. The survival of these
companies and the Nation's remaining oil and natural gas resources
often depends on new technologies created by the government-industry
partnership fostered through these programs.
Currently, small independent producers directly plug into proven
high-success programs such as the Petroleum Technology Transfer Council
(PTTC) and the Stripper Well Consortium. Both programs are dependent
upon Congress providing continued and adequate funding of the
Department of Energy R&D program. As a direct result of these programs
the flow of oil and gas has been sustained from thousands of domestic
marginal wells while opening new opportunities to tap large quantities
of the remaining oil and gas resource in place. Above and beyond PTTC
and the Consortium, recent Department of Energy R&D has yielded six new
deployment-ready oil and gas technologies that will extend the useful
life of more than 650,000 stripper wells that deliver almost 15 percent
of America's domestic oil production and almost 8 percent of natural
gas production.
technology and the rbdms database system
There is another outstanding success story that would not have
happened were it not for Federal funding of R&D and technology.
In partnership with the Department of Energy and the Ground Water
Protection Council (GWPC), the Ohio Division of Mineral Resources
Management, the lead oil and gas regulatory agency, developed an oil
and gas risk based data management system (RBDMS) designed with risk
functions embedded in the line code of the system. RBDMS is populated,
and is constantly being updated, with data on all known oil and gas
records in Ohio, including data contained in the DMRM's previous
database, supplemental electronic records provided by industry, well
log cards from the Ohio Division of Geologic Survey, abandoned well
site information, and digitized maps showing, among other things, known
well locations. It is now used in virtually every aspect of the DMRM
program, including permitting, inspection, plugging, enforcement and
administrative functions, as well as the DMRM's strategic planning
process for the identification and evaluation of enforcement issues and
trends.
Access to much of the data contained in RBDMS is also available to
the public, industry, and local, State and Federal agencies, through
the DMRM website, which has approximately 200,000 user visits annually.
Additionally, emergency data is shared with State and local emergency
response agencies and local fire departments through the DMRM website.
RBDMS serves as a risk based data management model for at least 17
other State oil and gas regulatory programs, and has received an Award
of Excellence in Technical Development from the GWPC and was named as
one of the U.S. Department of Energy's top 100 technical developments.
Ohio Oil and Gas Emergency Website.--As a direct result of the
RBDMS project, the Ohio agency developed a website for use by fire
departments and emergency response agencies to quickly and efficiently
distribute information on well sites and tank batteries in the event of
an emergency. This project was funded by a grant from the U.S.
Department of Energy, and was managed and developed by Argonne National
Laboratories. The website is an interactive, GIS-based system linked to
the RBDMS, and allows emergency responders to locate wells, access
Material Safety Data Sheets (MSDS) for chemicals stored at those
locations, and obtain related ownership and contact information. Among
other things, the website has been recognized at The Council of State
Governments, Midwestern Legislative Conference in July, 2004.
The RBDMS system and associated projects are an outstanding reason
to continue funding to benefit not only the domestic industry but also
the American public that interacts with the industry.
protecting the environment
Federal funding of DOE developed technology has resulted in
significant environmental improvements. They include:
--Fewer wells and dry holes--today, one well is needed to do the job
of four wells in 1985.
--Smaller footprints and well pads result in minimized environmental
impacts through horizontal and directional drilling and rig
technologies.
--Reduced waste volume.
--Reduced power and fuel consumption using modern drill bits.
--Reduced air emissions.
--Enhanced worker safety.
--Optimized recovery of oil and natural gas resources using advanced
hydraulic fracturing stimulation techniques.
advocacy--the crucial need
Perhaps the most critical function requiring dependable and on
going Federal funding is directed to the role that the Office of Fossil
Energy, Oil and Gas Program plays as an advocate to make certain that
rulemakings at other Federal agencies (DOT, DOI, DOC, EPA) do not move
forward unless potential impacts on domestic production are known.
Recently, the Office of Fossil Energy studied and reported on the
effects of the Environmental Protection Agency (EPA) construction
permitting requirements for stormwater management. The study explains
that there is a potential loss of between 1.3 and 3.9 billion barrels
of domestic oil and 15 to 45 TCF of domestic natural gas over the next
20 years, should stormwater construction permitting requirements be
extended to include oil and gas producing operations, again, domestic
production we can ill-afford to lose.
Other significant examples include EPA regulation of drilling
fluids and produced water as it relates to the Resource Conservation
and Recovery Act and the Office of Pipeline Safety regulation of
natural gas gathering lines.
DOE's assessment of regulatory impacts on energy, is critical to
achieve the mandates of the President's May 2002 Executive Order
requiring agencies to assess energy impacts as part of the regulatory
process. Continued Federal funding of DOE's role in interagency
consultation on rulemaking is key to assuring a fair and reasoned
regulatory environment. To put it bluntly--if we lose this critical
oversight, the independent oil and gas industry is exposed to high
risk. Don't let that happen!
conclusion
The Ohio Oil and Gas Association strongly urges the U.S. Senate
Committee on Appropriations to restore to the Department of Energy all
Federal funding of the oil and gas technology and regulatory evaluation
programs.
______

Prepared Statement of the American Association of Petroleum Geologists
To the chair and members of the subcommittee, thank you for this
opportunity for the American Association of Petroleum Geologists (AAPG)
to provide its perspective on fiscal year 2006 appropriations for oil
and gas research and development (R&D) programs within the
subcommittee's jurisdiction. The administration's budget contains
significant reductions for the Department of Energy (DOE), including
the elimination of the oil and gas technology programs in the Office of
Fossil Energy. AAPG requests restoration of these DOE Fossil Energy oil
and gas technology programs to fiscal year 2003 funding levels.
AAPG, an international geological organization, is the world's
largest professional geological society representing over 30,000
members. Its purpose is to advance the science of geology, foster
scientific research, promote technology and advance the well-being of
its members. With members in 116 countries, AAPG serves as a voice for
the shared interests of petroleum geologists and geophysicists in our
profession worldwide. Included among its members are numerous CEOs,
managers, directors, independent/consulting geoscientists, educators,
researchers and students. AAPG strives to increase public awareness of
the crucial role that geosciences, and particularly petroleum geology,
play in energy security and our society.
doe fossil energy research and development
AAPG feels appropriate funding for the Department of Energy's
Fossil Energy research and development budgets for the Oil Technology
R&D and Gas Technology R&D portions of the fiscal year 2006 Energy and
Water Appropriations bill is vital for a viable domestic industry in
the near-, mid- and long-term. The return on past R&D funding has
proven greater than the investment.
Historically, members of Congress have continually emphasized the
need for a comprehensive energy policy containing a strong R&D
component. AAPG recognizes the importance of maintaining a strong
domestic petroleum industry, and our members also support and emphasize
the need for continuing efforts in R&D in order to sustain the standard
of living U.S. citizens have earned and expect. While the price of
crude oil is established by a global market, the cost of exploration,
development and production are strongly influenced by the application
of discoveries in geosciences and new developments in technology. Thus,
focused R&D can make a significant contribution to sustaining our
domestic petroleum industry and to national energy security.
While our dependence on crude oil and natural gas has changed
little since the ``energy crisis'' of 1973, public and private funding
of R&D for these commodities have declined significantly. Many of the
major companies, and some companies in the related service industry
that once maintained strong programs in R&D, have disappeared through
mergers and acquisitions. Others have replaced or retooled some of
those R&D activities with technical-service functions, primarily in
support of their international activities. In addition, Federal funding
for R&D programs also has declined significantly. While some States,
private foundations, smaller companies and independents are continuing
to support R&D in oil and gas, the amount is woefully inadequate to
meet the needs of the domestic industry. Thus, absent adequate public
support for these endeavors, the continuing flow of new discoveries in
the geosciences and new technological breakthroughs that will be needed
to continue to support a viable domestic industry in the 21st century
will not occur.
Our Nation is the world's largest consumer and net importer of
energy. According to the Energy Information Administration, during the
first 10 months of 2004 the U.S. consumed 20.4 million barrels of oil
per day, producing only 26 percent of this consumption. Our national
energy and economic security depends on a vibrant domestic oil and gas
industry. Independent producers drill 90 percent of domestic oil and
natural gas wells, produce approximately 85 percent of domestic natural
gas and produce about 65 percent of domestic oil. Domestic production
creates jobs, produces tax revenue, provides royalty income to hundreds
of thousands of mineral owners and contributes to economic development
in producing areas (mostly rural) of the Nation.
Federal funding of R&D increases the domestic oil and gas supply,
and it is not a subsidy. Almost 85 percent of the jointly-funded R&D
and technology transfer programs carried out by universities, State
agencies and independent companies are focused on the development of
new reserves by domestic independent producers. R&D programs, such as
those designed for development of unconventional tight sandstone and
shale reservoirs, develop and demonstrate new and innovative
technologies. These technologies are used to extend the life of
existing oil and gas reservoirs as well as to explore and develop
reserves such as the U.S. supply of unconventional gas, which was
largely driven by focused Federal spending and tax incentive programs.
As technology evolves, today's unconventional oil and gas reserves are
tomorrow's conventional reserves. It is now more important than ever
that the United States leverage its investment to find new sources of
oil and gas--the unconventional reserves of tomorrow.
Today, revolutionary oil and gas technology is seldom available in
the market at any price. Irrespective of the price of oil and gas,
procurement of new technologies will be a continuing challenge for
domestic U.S. oil and gas producers. Private sector R&D typically is
conducted by major international companies with a strong focus on
international projects in super giant offshore fields, which have
limited application to domestic onshore production. Most programs
jointly funded by DOE result in the transfer of technologies to a much
wider range of problems, and thus are more cost-effective and useful
for increasing the supply right here in the United States.
The DOE Office of Fossil Energy oil and gas R&D programs play a
vital role in domestic oil and gas development. These programs include
not only R&D but also incorporate technology transfer through programs
like the Petroleum Technology Transfer Council (PTTC), an organization
that provides the conduit to move upstream research into the hands of
domestic oil and gas producers. Through PTTC, R&D from the DOE Fossil
Energy program expands throughout the Nation. PTTC conducts workshops
and seminars throughout the United States, disseminating research
results and case study applications of new technology available to
domestic producers. Since its inception in 1994, PTTC has conducted
over 1,000 technology transfer workshops and seminars. PTTC recently
estimated economic impact in 11 areas identified by industry where
independent producers are broadly applying technologies. Of 1,266
million barrels of oil equivalent reserves that were realized, 88
million barrels could clearly be attributed to technology transfer
under the direction of DOE-funded PTTC activity. The research dollars
spent by these DOE programs go primarily to universities, State
geological surveys and research consortia to address critical issues
like unconventional sources of natural gas and enhanced oil recovery.
Further, Federal R&D funds form a crucial element of university
programs that foster undergraduate and graduate research initiatives,
which replenish the corps of future petroleum geologists, engineers and
geophysicists. Enrollment in the geosciences departments across the
United States has decreased by 70 percent in the past 20 years, while
international oilfield education has increased significantly.
Accordingly, our universities will graduate even fewer technical
professionals to maintain an already strained national energy sector.
DOE's past R&D programs have helped develop broad advances in many
oilfield technologies, such as 3-D and 4-D multi-component seismology.
New completion and production techniques provide the opportunity to
enhance environmental compliance, thus minimizing industry impact to
our environment. Many of these technologies were funded under DOE's
Reservoir Class Program in the 1990's and are now significantly paying
dividends. DOE's oil and gas R&D programs have enabled producers to
reduce costs, improve operating efficiency and enhance environmental
compliance, while increasing ultimate recovery and adding new reserves.
The full recognition of the vital importance of R&D programs like
those sponsored by DOE's Office of Fossil Energy is of paramount
importance to the future of our country and our society. No task before
our Nation is more critical than energy security, and this concept is
not new--it is a traditional ideal of democracy. But it is time that we
moved toward the fulfillment of this ideal with more vigor and less
delay. For energy security is both a foundation and unifying force of
our democratic way of life--it is the mainspring of our economic
progress. In short, R&D programs are at the same time the most
profitable investment society can make and the richest return that it
can confer. Today, more than at any other time in our history, we need
to develop our oil and gas resources to the fullest. Without Federal
support for R&D programs this achievement becomes more difficult.
Thank you for the opportunity to present this testimony to the
subcommittee. If you would like any additional information for the
record, please contact me.
______

Prepared Statement of Southern Company Generation
Mr. Chairman and members of the committee, Southern Company
operates the Power Systems Development Facility (PSDF) (http://
psdf.southernco.com) in Wilsonville, AL for the U.S. Department of
Energy's (DOE's) National Energy Technology Laboratory (NETL) and
several industrial participants.\1\ The PSDF was conceived as the
premier advanced coal power generation research and development (R&D)
facility in the world. It has fulfilled this expectation. I would like
to thank the Senate for its past support of the PSDF and request that
the committees continue this support. This statement supports the
administration's budget request for DOE coal R&D which includes $25
million for work at the PSDF. These funds are necessary to conduct the
future test program agreed to with DOE (see details below) and to
support FutureGen--the integrated hydrogen and electric power
production and carbon sequestration research initiative proposed by
President Bush. DOE has identified the PSDF as one of the primary test
centers to support FutureGen through sub-scale component testing. DOE's
FutureGen Program Plan submitted to Congress on March 4, 2004 described
the transport gasifier (one of the technologies under development at
the PSDF) as a promising candidate for inclusion in FutureGen because:
---------------------------------------------------------------------------
\1\ Current PSDF participants include Southern Company, the
Electric Power Research Institute (EPRI), KBR, Siemens Westinghouse
Power Corporation (SWPC), Peabody Energy, the Burlington Northern Santa
Fe Railway Company, and the Lignite Energy Council. The Lignite Energy
Council includes major producers of lignite (who together produce
approximately 30 million tons of lignite annually); the Nation's
largest commercial coal gasification project; and investor-owned
utilities and rural electric cooperatives from a multi-State area that
generate electricity from lignite, serving 2 million people in the
Upper Midwest region. The Council also has over 250 contractor/supplier
members who provide products and services to the plants and mines. Air
Products and Chemicals has also proposed significant future
participation at the PSDF. In addition to the Wilsonville plant site
major work is planned for the PSDF, or components are being developed
at the following locations: Grand Forks, ND (sub-scale gasifier
testing), Houston, TX (gasifier development); Orlando, FL (gas turbine
low-NOX burner), Pittsburgh, PA (filter fabrication),
Allentown, PA and Tonawanda, NY (advanced air separation technology);
and Deland, FL (filter fabrication).

`` . . . its high throughput relative to size, simplicity, and
reduced temperature of operation compared with current gasifiers, will
yield benefits throughout the FutureGen plant . . . Planned
improvements in the coal feed system, particulate control device, and
the char cooling and removal system will significantly increase overall
reliability of the transport gasifier, which would further reduce
costs. The target is to achieve 95 percent availability rather than the
75 percent-80 percent availability typical of today's gasifiers.
``Because of its simplicity in design and lower temperature of
operation, the transport gasifier can potentially reduce the capital
cost of an IGCC plant by up to 20 percent (or from $1,400 to $1,120/kW)
over those employing today's technologies. In addition, the operations
and maintenance costs are expected to be lower and availability higher
because of the lower temperature of operation.''

A key feature of the PSDF is its ability to test new systems at an
integrated, semi-commercial scale. Integrated operation allows the
effects of system interactions, typically missed in unintegrated pilot-
scale testing, to be understood. The semi-commercial scale allows the
maintenance, safety, and reliability issues of a technology to be
investigated at a cost that is far lower than the cost of commercial-
scale testing. Capable of operating at pilot to near-demonstration
scales, the PSDF is large enough to produce industrial scale data, yet
small enough to be cost-effective and adaptable to a variety of
technology research needs.
As a follow-on to the ongoing development of the transport gasifier
at the PSDF, Southern Company and the Orlando Utilities Commission
(OUC) were recently selected by DOE as part of a competitive
solicitation under the Clean Coal Power Initiative (CCPI) to build an
advanced 285-megawatt transport gasifer-based coal gasification
facility at OUC's Stanton Energy Center in central Florida. The
facility will use state-of-the-art emission controls and will showcase
the cleanest, most efficient coal-fired power plant technology in the
world. The transport gasifier offers a simpler, more robust method for
generating power from coal than other available alternatives. It is
unique among coal gasification technologies in that it is cost-
effective when handling low rank coals (sub-bituminous and lignite) and
when using coals with high moisture or high ash content. These coals
make up half the proven U.S. and worldwide coal reserves.
Southern Company also supports the goals of the Clean Coal
Technology Roadmap developed by DOE, EPRI, and the Coal Utilization
Research Council (CURC). The Roadmap identifies the technical,
economic, and environmental performance that advanced clean coal
technologies can achieve over the next 20 years. Over this time period
coal-fired power generation efficiency can be increased to over 50
percent (compared to the current fleet average of 32 percent) while
producing de minimis emissions and developing cost-effective
technologies for carbon dioxide (CO2) management. EPRI
recently used the modern financial technique called ``Real Options'' to
estimate the value of advanced coal R&D.\2\ The major conclusion of
this study is that the value to U.S. consumers of further coal R&D for
the period 2007-2050 is at least $360 billion and could reach $1.38
trillion. But, for these benefits to be realized the critically
important R&D program outlined in the Clean Coal Technology Roadmap
must be conducted.
---------------------------------------------------------------------------
\2\ EPRI Report No. 1006954, ``Market-Based Valuation of Coal
Generation and Coal R&D in the U.S. Electric Sector'', May 2002.
---------------------------------------------------------------------------
summary
The United States has always been a leader in energy research.
Adequate funding for fossil energy research and development programs
will provide this country with secure and reliable energy while
reducing our dependence on foreign energy supplies. Current DOE fossil
energy research and development programs for coal, if adequately
funded, will assure that a wide range of electric generation and
hydrogen production options are available for future needs. Congress
faces difficult choices when examining near-term effects on the Federal
budget of funding energy research. However, continued support for
advanced coal-based energy research is essential to the long-term
environmental and economic well being of the United States. Prior DOE
clean coal technology research has already provided the basis for $100
billion in consumer benefits at a cost of less than $4 billion. Funding
the administration's budget request for DOE coal R&D and long-term
support of the Clean Coal Technology Roadmap can lead to additional
consumer benefits of between $360 billion and $1.38 trillion.
One of the key national assets for achieving these benefits is the
PSDF. The fiscal year 2006 funding for the PSDF needs to be $25 million
to support construction of new technologies that are critical to the
goals of the Clean Coal Technology Roadmap and to the success of
FutureGen. The major accomplishments at the PSDF to date and the future
test program planned by DOE and the PSDF's industrial participants are
summarized below.
psdf accomplishments
The PSDF has developed testing and technology transfer
relationships with over 50 vendors to ensure that test results and
improvements developed at the PSDF are incorporated into future plants.
Major subsystems tested and some highlights of the test program at the
PSDF include:
Transport Reactor.--The transport reactor has been operated
successfully on subbituminous, bituminous, and lignite coals as a
pressurized combustor and as a gasifier in both oxygen- and air-blown
modes and has exceeded its primary purpose of generating gases for
downstream testing. It is projected to be the lowest capital cost coal-
based power generation option, while providing the lowest cost of
electricity and excellent environmental performance.
Advanced Particulate Control.--Two advanced particulate removal
devices and 28 different filter elements types have been tested to
clean the product gases, and material property testing is routinely
conducted to assess their suitability under long-term operation. The
material requirements have been shared with vendors to aid their filter
development programs.
Filter Safe-Guard Device.--To enhance reliability and protect
downstream components, ``safe-guard'' devices that reliably and
completely seal off failed filter elements have been successfully
developed.
Coal Feed and Fine Ash Removal Subsystems.--The key to successful
pressurized gasifier operation is reliable operation of the coal feed
system and the filter vessel's fine ash removal system. Modifications
developed at the PSDF and shared with the equipment supplier allow
current coal feed equipment to perform in a commercially acceptable
manner. An innovative, continuous process has also been designed and
successfully tested that reduces capital and maintenance costs and
improves the reliability of fine ash removal.
Syngas Cooler.--Syngas cooling is of considerable importance to the
gasification industry. Devices to inhibit erosion, made from several
different materials, were tested at the inlet of the gas cooler and one
ceramic material has been shown to perform well in this application.
Syngas Cleanup.--A syngas cleanup train was constructed and has
proven capable of meeting stringent syngas decontamination
requirements. This module that provides an ultra clean slip stream is
now available for testing a wide variety of technologies.
Sensors and Automation.--Several instrumentation vendors have
worked with the PSDF to develop and test their instruments under
realistic conditions. Automatic temperature control of the Transport
Reactor has been successfully implemented.
Fuel Cell.--Two test campaigns were successfully completed on 0.5
kW solid oxide fuel cells manufactured by Delphi on syngas from the
transport gasifier marking the first time that a solid oxide fuel cell
has been operated on coal-derived syngas.
Combustion Turbine Burner.--Integrating the existing 3.8 MW
combustion turbine with a new syngas burner developed by SWPC has
allowed further system automation and controls development.
psdf future test program
Future testing at the PSDF is focused on supporting FutureGen and
the Technology Roadmap. These programs aim to eliminate the
environmental issues that present barriers to the continued use of coal
including major reductions in emissions of SO2,
CO2, NOX, particulates, and trace elements
(including mercury), as well as reductions in solid waste and water
consumption. The focus at the PSDF will remain on supporting
commercialization of new coal-based advanced energy technologies
including those initially developed elsewhere. Assuming adequate
funding, work at the PSDF will include:
Transport Gasifier.--Continue the development of the transport
gasifier to further optimize its performance, explore feedstock
flexibility, increase system pressure, and provide syngas for testing
of downstream systems.
Air Separation Membranes.--Test advanced air separation membrane
modules provided by U.S. manufacturers to evaluate membrane performance
and system integration issues.
Coarse Ash Handling.--Install and test a new type of coarse ash
depressurization system, with no moving parts or valves, which has been
developed. Like the fine ash removal system successfully developed
earlier, this system will reduce capital and maintenance cost and
improve plant reliability.
Advanced Syngas Cleanup.--Test new advanced syngas cleanup systems
for reducing hydrogen sulfide, hydrochloric acid, ammonia, and mercury
to near-zero levels.
H2/CO2 Separation Technologies.--Integrate and test advanced
H2/CO2 separation technologies to assess their
performance on coal-derived syngas.
Syngas Cooler.--Test alternative designs that are less complex,
have lower capital cost, and offer better control of the syngas exit
temperature.
New Particulate Control Device Internals.--Evaluate alternative
filter system internal designs from several vendors.
Improved Fuel Feed Systems.--Evaluate alternatives to conventional
lock hopper feed systems that have been identified.
High-Temperature Heat Exchangers.--Test high-temperature heat
exchangers as they become available. These exchanger can be used in
both advanced combustion and gasification technologies.
Syngas Recycle.--Add a syngas compressor to allow the use of syngas
instead of air or N2 for aeration to promote recycle solids
flow, dust filter back pulse gas, and coal feed transport to produce
higher heating value syngas and more closely match commercial operating
conditions.
Fuel Cell.--Install and test a 5 to 10 MW hybrid fuel cell/gas
turbine module.
Sensors and Automation.--Evaluate automation enhancements that
simulate commercial control strategies. Further development at
gasification operating conditions is planned for measuring coal feed
rate, temperature, gas analysis, dust at low levels, and hazardous air
pollutants.
______

Letter From the State of New Mexico Oil Conservation Division
April 29, 2005.
Honorable Pete V. Domenici,
Senate Committee on Appropriations, Subcommittee on Energy and Water
Development.
Dear Senator Domenici: Mr. Chairman, thank you for the opportunity
to provide written comments on the proposed fiscal year 2006 budget. I
am writing this letter on behalf of the Ground Water Protection Council
(GWPC) and my agency, the New Mexico Oil Conservation Division (NMOCD).
I, and other NMOCD staff, request continued funding for the GWPC's
successful oil and gas environmental management program and also to
encourage you to restore Congressional appropriations of $100,000,000
for the Department of Energy's Office of Fossil Energy oil and natural
gas supply R&D program.
This DOE program provides valuable research and technical
assistance to State regulatory agencies such as NMOCD and to small oil
and gas operators in the United States. Without the technical
assistance provided by this applied research program, it is estimated
that oil and gas operators will be unable to recover hundreds of
millions of additional barrels of oil in the United States. This
research program has also substantially assisted NMOCD and other State
regulatory agencies for protection of the environment.
State oil and gas regulatory agencies in partnership with the GWPC
are responsible for the development and operation of the nationally
acclaimed Risk-Based Data Management System (RBDMS) system. RBDMS has
been proven to assist the States in protecting the environment while at
the same time assisting oil and gas operators. Through the GWPC, the
producing States are working together to protect ground water
resources, holding down the cost of environmental compliance, and
providing improved access to essential data for new oil and gas
exploration. RBDMS has been operational in New Mexico for nearly 10
years and currently is being utilized in 19 other oil and gas producing
States.
Other benefits of the research programs provided by DOE's Office of
Fossil Energy Funding is for the States to have the opportunity to
develop management tools using newer technology that enable their
respective agencies to make decisions that result in the best possible
balance of exploration and environmental considerations. We are
learning that electronic commerce mutually saves time and money for
both the oil and gas industry and the regulatory agencies. In New
Mexico, and other States, online permitting and reporting is cost
effective and saves industry time and money. Electronic permitting has
expedited the processing of applications to drill making it easier for
operators to move quickly and adjust their exploration and production
programs. Demonstrably, oil and gas agencies with quality data
management systems that provide access to oil and gas data experience
increased oil and gas development as a result of the improved data
access.

Additionally, NMOCD has implemented an imaging system whereby more
than 5 million historical documents are available for download and
research via the Internet by large and small producers alike. Travel by
operators to NMOCD offices to research and copy paper files is no
longer needed. This one benefit may save New Mexico operators alone
more than $200,000 per year for travel expenses and countless personnel
hours. The NMOCD imaging system could be constructed in large part due
to the availability of existing RBDMS system data making the indexing
and implementation of imaging more intuitive and timely. Continued
funding from U.S. DOE will provide the smaller independent oil and gas
producers access to this and other environmental data management
systems. Smaller producers are often the most in need of such systems
because high regulatory costs hit them the hardest and they would
otherwise not have ready access to these data and information.
In our home State of New Mexico, NMOCD has contributed over
$100,000 and more that $0.5 million in staff resources as in-kind
matches over the last 10 years. Every State currently using the system
has also contributed to building the system and additional States are
planning to use stated dollars in addition to Federal funds. We are
thankful for the $1.15 million we received in fiscal year 2005 and
request that the committee continue to fund this successful GWPC
program at $1.15 million in fiscal year 2006.
RBDMS and the spin-off applications are the best examples we have
seen of how the States, working with the Federal Government and the
private sector, can improve both industry production and environmental
protection at the same time. Continuing to fund the U.S. DOE's Office
of Fossil Energy oil and natural gas technologies R&D program in this
manner allows us to tailor our regulatory program needs to the industry
which operate in our respective States. There is no Federal
alternative, or other national approach that would work as efficiently
as this cooperative multi-State effort.
The DOE Fossil Energy program funds research projects like RBDMS
which provide improved environmental protection, less regulatory and
compliance costs for producers, better State enforcement of
environmental regulations, increased domestic exploration activity by
large and small operators and increased oil and gas production.
Sincerely,
Benjamin E. Stone,
Petroleum Engineer.
Attachment.--RBDMS New Mexico Highlights
rbdms new mexico . . . key to nmocd's regulatory responsibilities
The Risk-Based Data Management System (RBDMS) was developed with
funding from the National Petroleum Technology Office (NMPO) of the
Department of Energy. Modification to address New Mexico's specific
regulatory and operational needs were accomplished by the Oil
Conservation division of the Energy, Minerals and Natural Resources
Department, with addition funding assistance from DOE through the
Ground Water Protection Council (GWPC) and from the Environmental
Protection Agency. New Mexico has realized a host of benefits
incorporated in the application using the latest technologies including
GIS, document imaging and statewide replication of the data with SQL
Server.
OCD would like to thank DOE for their continuing support of these
data management efforts, which help support the oil and gas industry,
the regulatory community and assist in maximizing domestic activity
while protecting the environment. RBDMS is essential to the NMOCD in
all daily activities toward carrying out its mission responsibilities
to the citizens of New Mexico.

______

Prepared Statement of the Gas Turbine Association
The Gas Turbine Association (GTA) appreciates the opportunity to
provide the United States Senate Committee on Appropriations,
Subcommittee on Energy and Water Development with our industry's
statement regarding the following fiscal year 2006 Department of Energy
(DOE) Turbine R&D funding levels. GTA recommends the following funding
levels for DOE R&D.
office of fossil energy
Coal and Other Power Systems, President's Coal Research Initiative,
Central Systems, Advanced Systems.--$25 million, TURBINES (an increase
of $7 million over budget request).
office of energy efficiency and renewable energy
Distributed Generation Technology Development.--$5.685 million,
MICROTURBINES (support budget request level); $3.5 million, INDUSTRIAL
GAS TURBINES (an increase of $1 million over budget request); $8.3
million, TECHNOLOGY BASED--ADVANCED MATERIALS AND SENSORS (support
budget request level); $2 million, FUEL FLEXIBILITY (an increase of $1
million over budget request).
advanced turbine technology to secure america's economic future
U.S. economic growth will be restrained by an inadequate supply of
electric power. DOE estimates that power interruptions already cost the
United States around $80 billion annually. According to the National
Petroleum Council (NPC), a 0.72 percent increase in electricity
production is needed to achieve each 1 percent growth in the U.S. GDP.
New turbine technologies will improve the power availability and
reliability needed to maintain our Nation's economic strength.
Forecasts indicate that, without substantial investment in gas and
transmission infrastructure, shortages in electric power supply are
likely over the next 2 decades. During the next 20 years, the Energy
Information Administration estimates that electricity consumption will
increase at an average rate of 1.8 percent per year, and U.S. natural
gas imports (LNG) will need to more than double. To further exacerbate
the problem, maintaining transmission adequacy at its current level
might require an investment of about $56 billion during the present
decade, roughly half that needed for new generation during the same
period according to Edison Electric Institute (EEI). Unfortunately, EEI
also predicted that only $35 billion is likely be invested in
transmission upgrades during this timeframe.
Federal investment in the development and deployment of versatile,
clean, multi-fuel-capable turbine power generation is needed to ease
the burden on the natural gas and transmission grid infrastructures.
The turbine technologies being developed through DOE/industry
partnerships can help power producers cleanly and efficiently produce
electric power from gasified coal, biomass and hydrogen, as well as
natural gas. The turbines being developed under the DOE Office of
Fossil Energy programs will greatly improve the Nation's large central
station fleet by improving coal plant efficiencies and offering
superior environmental performance. The DOE Energy Efficiency and
Renewable Energy (EERE) turbine programs will produce new technologies
that can be deployed in distributed power applications to relieve
stress on our over burdened transmission grid, while improving power
supply reliability and security.
office of fossil energy turbines program
Technology being developed through the DOE Office of Fossil Energy
Turbine program is a prerequisite for the successful development of
cost-competitive coal FutureGen systems (near-zero emission Integrated
Gasification Combined Cycle [IGCC] system fueled by coal and capable of
producing both electricity and hydrogen). The President's fiscal year
2006 budget expressly states that, ``developing turbines with superior
performance that operate on coal derived synthesis gas and hydrogen is
critical to the deployment of advanced power generation technologies
such as FutureGen plants.'' With adequate funding, the following
Program Strategic Performance Goals can be met:
--By 2010, a commercial design for a coal-based power system at 45-50
percent efficiency and a capital cost <$1,000/kW, with near-
zero emissions; and
--By 2020, a commercial design for a coal-fueled power system at 60
percent (HHV) efficiency with near-zero emissions with
competitive costs ($800-900/kW) and a zero CO2
emissions option.
GTA believes that increasing the plant efficiency and increasing
turbine equipment output are keys to driving down IGCC system capital
cost to $1,000/kW by 2010. Unfortunately, the fiscal year 2006 budget
requests under-fund technology R&D in the Turbines program. This could
push the completion dates for turbine R&D necessary for advanced IGCC
far beyond 2010. To achieve success by the 2010 goal, as well as
reaching the 2020 cost and efficiency targets, Federal investment in
Turbines program requires $25 million in fiscal year 2006. GTA
recommends Congress appropriate an additional $7 million over the
budget request.
The Turbine program funding of $25 million should be allocated to
the following subcomponent areas in order to expedite the availability
of a 50 percent efficient coal fired IGCC system at less than $1,000/kW
with near-zero emissions, and turbines capable of hydrogen combustion.
Syngas Turbine Technology R&D Activities (Funding required.--$18
million)
The basic Syngas Turbine Technology Improvement R&D activities
taking place under the program have not received adequate funding. The
two fundamental areas of Turbine R&D to be conducted are: (1)
Improvement in combustion turbine performance with coal derived
synthesis gas, and (2) Development of NOX emissions
reduction technology for fuel flexible turbines. The primary objective
of both areas of interest is to improve the overall performance of
combustion turbines, in terms of emissions and efficiency, when used in
IGCC applications. While initial Phase 1 planning has been
accomplished, Syngas Turbine R&D has yet to begin. Funding for Phase II
work requires a significant increase over the proposed fiscal year 2006
request. Inadequate funding for Phase II will greatly reduce the
potential to achieve the DOE Program Specific Performance Goal of a 50
percent efficient coal fired IGCC plant at a cost of less than $1,000/
kW and near zero emissions.
Fully Fund the University Turbine Systems Research Program (Funding
required.--$4 million)
The University Turbine Systems Research Program, a consortium of
107 U.S. universities from 40 States working closely with the
combustion turbine industry, has demonstrated considerable success in
developing new technologies and training people for the industry. The
requested funds will address the more difficult technical challenges
involved in operating turbines on coal syngas than on natural gas, and
respond to the increased need for university fellowships in the
industry.
Develop the Capability to Combust Hydrogen in Turbines (Funding
required.--$2 million)
As the potential to produce hydrogen from coal becomes attractive
the ability to utilize this fuel in a gas turbine becomes paramount.
The proposed $2 million funding level would be used to support basic
and applied research to address combustion of hydrogen with either
oxygen or air. There are limited market incentives for the private
sector to address this opportunity and the associated risk.
NETL In-house Syngas Combustion Studies (Funding required.--$1 million)
The NETL in-house combustion group is a recognized world leader in
combustion science. The requested funds will allow this group to fully
explore the combustion phenomena and emissions associated with the use
of coal derived syngas and hydrogen fuels. Without this funding the
full range of conditions and gas compositions will not be explored and
the ability to achieve the PSPG will be compromised.
office of eere distributed energy resources turbine programs
Much of the 21st century's demand for power will be met through the
increased use of distributed energy systems. The United States needs to
rapidly expand its supply of distributed energy for the Nation's
electricity security and economic future. As the Nation's economy
rebounds and expands, economic growth will intensify the demand for
dependable and secure power. A lack of available, secure and reliable
power would stifle economic growth and job creation.
As America confronts the need to modernize and upgrade the
electricity grid infrastructure, DOE Office of Energy Efficiency and
Renewable Energy Distributed Energy Resources programs are working on
the research, development and deployment of clean and efficient
turbines and microturbines to provide the dependable and secure power
needed in America today. Distributed generation turbines and
microturbines provide:
--Secure and reliable electricity at the point of demand through the
placement of small customized power plants on-site, isolating
critical facilities from grid outages.
--Dependable and secure power for growing high-tech commercial and
industrial facility, eliminating economic losses associated
with poor power quality.
--New sources of ``just-in-time'' dispatchable power that can be
instantly called upon to shore up instabilities in our
country's electricity grid.
--New power capabilities, strategically located to avoid transmission
bottlenecks, deferring or even eliminating the need for long-
lead-time transmission line approvals and construction.
--Fuel-flexible operation on gaseous and liquid renewable natural
resource fuels.
Microturbines (Fund budget request level.--$5.685 million)
Microturbines are currently being deployed in distributed energy
applications with competitive costs, performance, and emissions in
selected applications. They are ideally suited to alternate fuels,
combined heat and power (CHP) applications, and remote siting. While
microturbines are now entering the distributed energy market, improved
microturbine technologies are needed to expedite the installation of
clean, efficient and affordable systems. Once the goals of the DOE EERE
Advanced Microturbine Program have been achieved, microturbines can
significantly expand distributed energy market potential and deliver
the public benefits that flow from distributed energy. The
microturbines being developed under the EERE Microturbine program will
have with higher electrical efficiency, using significantly less fuel
to further conserve natural and renewable resources.
DOE EERE Advanced Microturbine program goals call for a 40 percent
electrical efficiency microturbine that can maintain ultra-low-single
digit NOX emissions with a system cost below $500/kW. The
Advanced Microturbine Program plans to deliver a single design capable
of operating on gas, liquid, biofuels (bio liquids, digester gas and
landfill gas) and waste fuels and will be coupled with ultra-low-
NOX technology.
Industrial Turbines (Funding required.--$3.5 million)
The Industrial Gas Turbine program enhances the efficiency and
environmental performance of gas turbines for applications up to 20MW.
The research focuses on advanced materials research, such as composite
ceramics and thermal barrier coatings that improve performance and
durability of industrial gas turbines. Work on low emissions
technologies R&D under the program promises to improve the combustion
system by greatly reducing the NOX and CO produced without
negatively impacting turbine performance. R&D and testing will
demonstrate innovative high temperature materials for combustor liners,
shrouds, blades and vanes in gas turbines to improve endurance levels
beyond 8,000 hours. GTA recommends that Congress provide fiscal year
2006 funding at levels at least equal to last year's appropriations--a
$1 million increase over this year's budget request is needed.
Technology Based--Advanced Materials and Sensors (Fund budget request
level.--$8.3 million)
This research provides long-term R&D in the area of materials,
sensors, information technologies, power electronics, combustion
modeling and assessments of crosscutting impacts and benefits of the
developments of distributed generation systems and end-use
applications.
Fuel Combustion (Funding required.--$2 million)
EERE will conduct a focused combustion solicitation to evaluate the
long-term combustion technologies for low-emissions such as rich
combustion, lean-burn combustion, and solonox, focusing on the next-
generation of dual fuels (gaseous or liquid) such as propane, digester,
land-fill methane, town gas, refinery gas, process natural gas, syngas,
associated gas, natural gas liquids, raw natural gas and other
variations. Laboratory research will evaluate fuel characteristics and
effects of fuel variations on the distributed generation equipment for
long-term availability and durability. This work has become extremely
important due to shortages in the Nation's natural gas fuel supply. The
capability to utilize non-traditional fuels in power generation is
essential to ensure national fuel diversification goals. GTA recommends
that Congress provide fiscal year 2006 funding at levels to launch a
serious effort in this area--a $1 million increase over this year's
budget request is needed.
______

Prepared Statement of the Fuel Cell Power Association
The Fuel Cell Power Association (FCPA) appreciates the opportunity
to submit this statement to the United States Senate Committee on
Appropriations, Energy and Water Development Subcommittee regarding
fiscal year 2006 Department of Energy (DOE) Office of Fossil Energy
Distributed Generation Systems Fuel Cells R&D programs. FCPA urges you
to commit the resources needed to this critical effort by appropriating
$75 million in fiscal year 2006 to the following areas:
Office of Fossil Energy--Distributed Generation Systems--Fuel
Cells--Innovative System Concepts.--$55 million, SECA (Solid State
Energy Conversion Alliance); $20 million, MW-SCALE SECA HYBRIDS.
The funding level of $65 million proposed in the administration's
fiscal year 2006 Budget represents a 13 percent reduction from last
year's appropriation, at such an early stage of this 10-year program.
Congress sent a strong message last year--that the SECA program should
be fully funded and that DOE should ``initiate a competitively awarded
turbine hybrid integration program.'' This Congress' affirmation of the
Federal Government's commitment to clean, high-efficiency fuel cell and
hybrid technology, should intensify this Nation's determination to
achieve the promise of secure, reliable, clean, cost-effective power.
FCPA asks Congress to send the same signal of commitment this year by
restoring funding to a $75 million level in fiscal year 2006.
revolutionizing power generation
The fiscal year 2006 budget request states that the DOE
programmatic strategic objective for ``Energy'' is to ``protect our
national and economic security by promoting a diverse supply and
delivery of reliable, affordable and environmentally sound energy.''
SECA Solid oxide fuel cells and hybrids can deliver on this strategic
objective because the systems promise to provide:
--Secure and Reliable Distributed Energy, making electricity
available at the location where it is needed, detachable from
the transmission grid when it goes down, or able to operate
grid free in remote locations.
--Fuel Flexibility, reducing dependence on foreign fuel sources since
fuel cells can operate on domestic fuel resources like natural
gas, ethanol, methanol, coal gas and hydrogen.
--Superior Fuel Efficiency, resulting in conservation of fuel
resources. DOE's simple cycle electrical system efficiency goal
is 40 percent on natural gas. DOE's fuel cell/turbine hybrid
electrical efficiency goal is 60 percent on coal synthetic gas.
On natural gas, hybrids have the potential for efficiencies of
65 percent to 70 percent, and combined heat and power
efficiencies of up to 85 percent.
--Environmentally Preferred Power Technology, using non-combustion
fuel cell technology to avoid the formation of pollutants, and
enables the production of hydrogen and the capture of carbon
dioxide for sequestration.
--U.S. Power System Exports, maintaining the Nation's leadership in
fuel cell technology, and its position of market preeminence in
the area of cost-competitive, ultra-low-emissions power
generation systems to meet the rapidly growing global energy
market.
seca solid oxide fuel cells and hybrids
The SECA program focuses on the development of cost-effective solid
oxide fuel cell systems that use fuel and oxygen from air to create
electricity and heat. These systems are different from traditional
power generation systems because they use an electrochemical process;
that does not rely on combustion of the fuel. This eliminates the
formation of NOX, as well as SOX, hydrocarbons
and particulates. Solid oxide fuel cells are considered to be one of
the most desirable fuel cell for generating electricity because the
electrolyte is constructed from solid-state ceramic materials. The
solid-phase electrolyte materials are tolerant to impurities that
affect other fuel cells, can internally reform hydrocarbon fuels,
reduce corrosion considerations, and eliminate liquid electrolyte
management problems. The systems operate between 700C (1,292F) to
1,000C (1,830F), producing heat for thermal energy application to
deliver ultra-high overall fuel efficiency in the combined heat and
power (CHP) applications.
The MW-Scale SECA Hybrids program will combine solid oxide fuel
cells and gas turbines to provide the synergy needed to realize the
highest efficiencies and lowest emissions of any fossil energy power
plant. According to DOE, fuel cell/turbine hybrids ``are promising
systems offering possibly the only option for meeting the DOE's
efficiency goal for advanced coal based power systems of 60 percent
(HHV) for fuel-to-electricity, with near zero emissions and competitive
costs for multi-MW class central power plants in a 2020 time frame.''
To meet U.S. goals for secure, reliable, clean, cost-effective
power, our Nation needs to maintain its commitment to SECA and MW-Scale
SECA Hybrid power technology development. It is critical that Congress
and the administration continue to make these technologies a top
funding priority, by budgeting and appropriating the resources needed
to drive this much needed power generation technology toward
commercialization and deployment.
Following is a summary of DOE SECA and MW-Scale SECA Hybrid
programs that need Federal cost-share funding in order to achieve
planned program milestones and accelerate system availability.
seca (solid state energy conversion alliance)
The DOE SECA R&D program goal is to develop a new generation of
lower cost fuel cells and should be funded at a level of $55 million in
fiscal year 2006. To attain an order of magnitude reduction in cost,
the program will focus on integration of design, high-speed
manufacturing, and materials selection. Ultimately, these fuel-
flexible, multi-function fuel cells will provide future energy
conversion options for large- and small-scale stationary and mobile
applications. The program is targeting the achievement of stack
fabrication and assembly costs leading to a system price of $400/kW,
with near-zero emissions. Such a low-priced system will be competitive
with any power generation system.
The SECA program aims to realize the full potential of fuel cell
technology through long-term materials development. The program is
focusing on the development and mass production of 3-10kW solid-state
fuel cell modules. The program is only in the first phase of a three-
phase program plan:
--Phase 1--Technology development.--Leading to $800/kW product;
--Phase 2--Manufacturing development.--Leading to $600/kW product;
and,
--Phase 3--Cost reduction and commercialization.--Leading to $400/kW
product.
There are six integrated industrial development teams that serve as
DOE's cost-sharing partners to provide R&D, manufacturing and packaging
capabilities needed to move the technology and complete systems forward
into the targeted stationary and mobile power markets. The teams design
fuel cell systems, develop materials and manufacturing processes, and
will ultimately deploy technologies. Industrial teams are listed below.
Industrial Development Teams.--Acumentrics, Cummins Power
Generation (SOFCo), Delphi Automotive Systems (Battelle Memorial
Institute), Fuel Cell Energy (Versa Power Systems/Materials and Systems
Research, Inc./GTI/EPRI), General Electric Energy, and Siemens
Westinghouse Power Corporation.
In addition, there are 28 core technology developers that support
the industrial development teams. They provide problem-solving research
needed to overcome barriers and assist the industry teams. The core
technology developers are universities, national laboratories, and
other research-oriented organizations. Core technology participants are
listed below.
Core Technology Organizations.--Argonne National Laboratory, Boston
University, California Institute of Technology, Ceramatec, Functional
Coating Technologies, Gas Technology Institute, Georgia Tech Research,
Lawrence Berkeley National Laboratory, Lawrence Livermore National
Laboratory, Los Alamos National Laboratory, Montana State University,
NexTech Materials, National Energy Technology Laboratory, North
Carolina A&T State University, Northwestern University, Oak Ridge
National Laboratory, Pacific Northwest National Laboratory, Sandia
National Laboratories, Southwest Research Institute, Texas A&M
University, TIAX, University of Florida, University of Illinois,
University of Missouri, University of Pittsburgh, University of Utah,
University of Washington, Virginia Tech.
mw-scale seca hybrids
In addition to fully funding the 5-10 kW-range SECA program, FCPA
encourages the Federal Government to extend the SECA technology to
larger scale systems. Thus, it should fund the MW-Scale SECA Hybrid
development effort at a level of $20 million in fiscal year 2006 to
achieve meaningful results and get it underway. While Congress provided
DOE with $5 million seed money in fiscal year 2005 to launch this
important effort, significantly increased fiscal year 2006 funding is
needed to ensure that the program can sustain multiple developers,
competitively chosen, and on a practical schedule.
A MW-Scale SECA Hybrid integrates emerging solid oxide fuel cell
technology with proven gas turbine technology to realize the highest
efficiencies and lowest emissions of any fossil energy power plant.
Such systems will operate on a range of fuels of national interest;
coal syngas, natural gas, and hydrogen as well as being compatible with
carbon sequestration concepts. The fuel cell's clean electro-chemical
process is the primary energy conservation mechanism. Maximum
efficiency and cost-effectiveness is achieved by making use of the
residual energy exiting the fuel cell to drive the gas turbine and
produce additional energy conservation. Various cycles and
configurations need to be examined and tested, and both fuel cells and
gas turbines adapted for optimal fuel efficiency and cost.
Development of MW-scale SECA Hybrid Systems is the path to DOE's
goals of:
--Achieving 60 percent coal syngas efficiency;
--Reducing emissions to ultra low levels of less than 1 ppm
NOX; and
--Providing the basis for meeting Clean Coal and FutureGen system
goals.
Building upon a SECA fuel cell foundation, the MW-scale SECA Hybrid
program should leverage the historical fuel cell research and
development with a focus on scaling the fuel cell technology to larger
sizes, and integrating it with the gas turbine to realize cost-
effective, high efficiency, clean MW-class systems.
The administration's fiscal year 2006 budget request states, ``In
fiscal year 2005 . . . initiate MW-scale SECA hybrids work in support
of coal-derived gas-based, FutureGen Fuel Cell systems . . .'' and `` .
. . hybrid systems are expected to be available for testing at
FutureGen and other sites in the 2010 to 2015 time frame.''
Adequate funding is needed to resolve scaling technology and
integration challenges, and move forward MW-scale SECA Hybrid systems
to a reality. The FCPA urges Congress to continue to support this
important initiative by providing $20 million in fiscal year 2006
funding.
fuel cell power association
The Fuel Cell Power Association promotes the interests of the fuel
cell industry by facilitating communication on the essential role the
government plays in improving the economic and technical viability of
fuel cells for stationary power. Contact FCPA at www.fuel-cell-
power.org.
______

Prepared Statement of Tulane University
Mr. Chairman, I appreciate this opportunity to submit this
statement in support of an important component of the Climate Change
Research program sponsored by the Energy Department's Office of
Science. I am Nicholas J. Altiero and I am Dean of the School of
Engineering at Tulane University in New Orleans, LA. For several years
I have served as a member of the Board of Trustees of the National
Institute for Global Environmental Change (NIGEC).
By way of background, this subcommittee established NIGEC in the
conference agreement to accompany the fiscal year 1990 Energy and Water
Appropriations bill. Its objective is to support university researchers
developing scientific knowledge of the effects of potential global
environmental change associated with energy production on national
resources. Currently, the Institute is composed of six regional centers
at the Universities of UC-Davis, Nebraska, Indiana, Alabama, Tulane and
Harvard. NIGEC, acting through the six Centers, provides funding in the
way of grants to academic and other non-governmental organizations that
are relevant to the DOE's climatic change research priorities. Each of
the regional centers supports and administers research programs that
are pertinent to environmental impacts within their region. The
research programs of each regional center vary based on their
geographical location, but all the Regional Centers have the following
general goals as part of their research agenda:
--Exchange of carbon (e.g., uptake of atmospheric CO2) by
U.S. terrestrial ecosystems;
--Effects of environmental change associated with energy production
on U.S. terrestrial ecosystems; and
--Development and testing of ecosystem models needed for integrated
assessments.
Since the creation of NIGEC has provided policymakers with valuable
information related to global climate changes including:
--Identification of potential impact of climate change and seasonal
flooding on a bottomland forest ecosystem and its carbon pools;
--Establishment of a long-term carbon flux monitoring station in
Colorado;
--Demonstration of grasslands' role in sequestering carbon; and
--Development of cotton model including response mechanisms to
temperature and carbon dioxide.
The mission set forth by DOE for the South Central Regional Center
(SCRC) located at Tulane University is to provide sound scientific
findings to enhance understanding of the response of key forested,
agricultural, and grassland ecosystems and important regional economic
sectors to environmental changes associated with energy production.
Current SCRC projects focus on the likelihood and effects of higher-
temperatures and amounts of precipitation in the region due to
greenhouse-induced climate change and the implications of climate
change on cotton production.
DOE recently notified the six Regional Centers that funding for the
NIGEC program will end on August 31, 2006. In its place DOE will
establish the National Institute for Climatic Change Research (NICCR)
with four regional centers. According to DOE, the mission of NICCR will
be the following:
--Experimental study of effects of warming, altered precipitation,
elevated carbon dioxide concentration, and/or elevated ozone
concentration on the structure and functioning of terrestrial
ecosystems of regional or national importance to the United
States, with a priority given to studies including multiple
factors;
--Development and/or evaluation of models appropriate to the
prediction of effects of climatic change on regionally
important terrestrial ecosystems, and development of methods
for upscaling ecosystem model results to address regional-scale
ecological issues; and
--Observation and analysis of contemporary exchanges of mass and
energy between the atmosphere and regionally important
terrestrial ecosystems or landscapes, and the use of those
observations and analyses to evaluate global climate and carbon
cycle models.
DOE's current Climate Change Research program has a glaring
omission. Overlooked by both NIGEC and NICCR are the impacts of climate
change on the Nation's river and coastal environments. These coastal
environments have a large economic value, as well as being the home for
a large percentage of the Nation's and the world's population. These
areas are very sensitive to global change, which will result in
increases in relative sea level (and associated flooding of natural and
urban areas), changes in temperature and precipitation (with potential
impact on wetland sustainability) and increased intensity and impact of
tropical storms. The proposed center will support research that will be
general and apply to all riparian flows and systems. Since the
Mississippi river system is by far the largest river system in the
country and affects a great deal of the coastal areas of the Nation, a
good number of the projects will deal with the Mississippi system.
Long-term changes of river flows will induce momentous physical changes
on the transport of water through the land, the flood-levels of rivers
and lakes, the nourishment of wetlands, and the salinity of river-coast
interface. Changes in the flow, sediment and nutrients of the rivers
will impact significantly the ecosystems and economic activities in
regions close to rivers, lakes and the coastal areas. For long-term
coastal restoration to be successful we will need to understand the
impacts global climatic changes will have on the regions affected by
water flow. Better understanding of the future river flows and
impending variations and long-term changes of the riparian and coastal
processes under the multiple scenarios predicted by the global and
regional environmental change models will enable us to plan and prepare
the infrastructure that is necessary for the mitigation of any
disastrous consequences of climatic change on coastal communities and
environments. This task requires effective and coordinated research in
the areas of global and regional climate models, the modeling of the
transport in rivers as well as in the scientific support for projects
related to land-water interfaces.
In order to coordinate such a research effort, the establishment of
a fifth NICCR Research Center, within the administrative framework of
the NICCR, is proposed. The fifth center will be designed to coordinate
and integrate the research strengths of the scientific community in
order to achieve significant advances on the impacts of climatic change
on the long-term variability of river flows, the effects of these
changes on the transport of water, nutrients, pollutants and sediment
in the rivers as well as the effects of these climatic changes on the
coastal regions of the United States, including the wetlands.
The proposed fifth Research Center will work in collaboration with
the other four Regional Centers of NICCR and will address the need for
the development of methodologies and tools for the understanding and
modeling of the impacts of global and regional climatic changes on
riparian and coastal environmental and ecological systems that are
throughout the Nation.
Among the objectives of the Climate Change Research within the
DOE's Office of Biological and Environmental Research Program is ``. .
. to understand the basic physical, chemical, and biological processes
of the Earth's atmosphere, land, and oceans and how these processes may
be affected by energy production and use. The research is designed to
provide data that will enable an objective assessment of the potential
for and the consequences of human-induced climate change at global and
regional scales. It also provides data to enable assessments of
mitigation options to prevent such a change. The research goals of the
proposed Center fit squarely within these objectives of the DOE.
Congress should direct the Energy Department to establish a fifth
center as part of the reorganization of the National Institute for
Global Environmental Change as the National Institute for Climate
Change Research. The scope of this Center's research would include the
following:
--Observation and analysis of simultaneous exchanges of mass and
energy between the atmosphere and ecosystems that are
influenced by the flow and other processes in rivers, lakes and
coastal environments.
--Modeling of long-term, multiple environmental changes associated
with energy production, on important riparian and coastal
ecosystems.
--Impacts of climatic change on the regional water resources, both
inland and coastal.
--Impacts of climatic change on wetlands nourishment, river and
coastal flood control, environmental protection and existing
navigation channels.
--Impacts of climatic change on the volume of riparian flows, the
transport of sediment, pollutants and nutrients and associated
effects in coastal environments.
--Impacts of sea-level rise associated with long-term climatic
effects on wetlands and coastal environments.
--Impacts of significant changes in river water flows on the cooling
systems of current and proposed large-scale electric power
plants, chemical plants and oil refineries.
Thank you.
______

Prepared Statement of the Petroleum Technology Transfer Council
This testimony is being submitted by the Petroleum Technology
Transfer Council (PTTC). In the mature U.S. natural gas and oil
exploration and production (E&P) industry, independent producers are
now dominant--drilling 85 percent of the wells, producing 65 percent of
natural gas and 40 percent of domestic crude production. Their role in
delivering production and reserves from domestic U.S. reservoirs is
only foreseen to increase and independents are forced to accomplish
technical feats foreign importers of energy have limited success in
developing. A clear distinction should be drawn between the interests
of multinational foreign importers of energy and that of domestic
producers delivering the majority of natural gas to American consumers.
Tens of thousands of American workers deliver local production in 33
oil and gas producing States--a significant tax base for local
townships. The domestic industry will be negatively impacted without
Federal investment into our industry as independent producers have no
means to fund the medium or long term energy Research, Development and
Demonstration (RD&D) needed to harvest left behind resources.
PTTC is a non-profit organization whose mission is to transfer E&P
technology to domestic producers. DOE's natural gas and oil R&D program
provides support funding to PTTC, currently at $2.6 million per year
levels. This Federal funding is matched essentially dollar for dollar
by States, academia and industry to allow PTTC to ``connect'' with
industry through workshops, the web, trade communications and one-on-
one interactions. This is just one of the many programs mentioned below
that would not be possible without Federal support and vision of
investment in domestic energy that benefit our Nation.
Data confirm that technology is a key driver. Domestic production
of oil and natural gas is in the hands of Independent producers and
technology enables domestic producers to:
--Increase recovery from existing mature fields,
--Minimize environmental impact of new wells and facilities and
increase reclaimation effectiveness,
--Realize recovery from unconventional natural gas reservoirs that
are increasingly a source of domestic production and reserves,
and
--Profitably develop ever-smaller domestic exploration projects.
Technology uptake in the domestic E&P industry applies to:
--Existing, underutilized proven technologies,
--Technologies being adapted from international applications, and
--Innovations moving from ``proof of concept'' to commercial product.
Effective technology transfer is integral to the R&D effort.
These definable trends point towards important roles for Federal
natural gas and oil R&D in:
--Early-stage R&D of longer-term, higher risk technologies,
--Adaptation of complex technologies to domestic applications,
--Proof-of-concept and field demonstration of innovations targeting
mature U.S. production,
--Technology transfer of both private and government R&D, targeted to
domestic producers.
The administration's budget proposal for fiscal year 2006
eliminates all Federal funding for the oil and natural gas technology
programs within DOE. Does this make sense when both natural gas and oil
supplies are strained? Abundant data, following, clearly answer ``NO.''
Federal funding of oil and natural gas R&D and Technology Transfer
directly increases domestic oil & natural gas supply.--Federally-funded
(and cost-shared) natural gas and oil R&D programs develop and
demonstrate new and innovative technologies to extend the life of
existing oil and gas reservoirs as well as to explore and develop
reserves such as the new U.S. supply of UNCONVENTIONAL GAS, which was
largely driven by focused Federal spending and tax incentive programs.
--The Barnett (UNCONVENTIONAL) Shale Natural Gas Play in North Texas
is now the largest domestic onshore gas field. This play was
originally pioneered utilizing technology that was developed
with Federal funding.
--Another successful program, the DOE-supported Stripper Well
Consortium has developed technologies whose target application
is the hundreds of thousands of the Nation's low volume
stripper wells.
A solid example I can personally speak to is PTTC. In a recent
economic impact study PTTC conducted of only a portion of its current
activities, PTTD documented that:
--During a recent period when 1,266 million barrels of oil equivalent
were realized by industry in 11 selected technology areas, 88
million barrels of that supply can be attributed to PTTC's
technology transfer activities.
Contrary to statements made by the Budget office, these programs
have proven to be highly effective by any criteria. That this
demonstrable return on Federal investment has been achieved with such
limited funding suggests that the most rational response would be to
increase, not eliminate, the DOE natural gas and oil programs that
support such activities.
Technology for mature U.S. production is not always available in
the marketplace.--Regardless of the prices for natural gas and oil,
industry funding for E&P appropriate to mature U.S. production is
limited. R&D funding from major oil companies has been greatly reduced
with the burden now shifted to the service sector. Business drivers for
the service sector dictate that their effort focus on higher potential
and productivity international markets. Technologies that may be
developed for those international markets need ``economic or technical
adaptation'' to be appropriate for mature U.S. production. Historically
and in the present, independents participate sparingly in R&D, lacking
both the human and financial resources to individually participate.
Innovations from very small companies or individuals, while often
targeting U.S. mature production, need support to refine the concepts
and demonstrate field performance. Throughout the private sector,
short-term business drivers make pursuing long-term, higher-risk R&D
difficult.
Federal R&D funding stimulates cost-sharing by industry, States and
academia.--With no Federal funding, States lose a lot more than just
the Federal dollars.
Research groups and independent energy producers in States like
Texas, Oklahoma, California and others contribute significant cost-
share when performing DOE-supported R&D projects. This cost share
highly leverages every Federal dollar spent. These compounded losses
are of a proportion sufficient to have considerable negative impact on
long-term domestic supplies.
--For example, if Federal R&D funding is ended to Texas-based
Universities, producers and technology providers, 150 programs
and an economic benefit amounting to over $340 million will be
lost over the next 3 years.
Federal R&D funding stimulates university programs that must
deliver tomorrow's energy professionals.--Enrollment in the geosciences
and petroleum engineering departments across the United States has
decreased by 70 percent in the past 20 years, while oilfield technical
education has boomed overseas. Although U.S. enrollments are increasing
with strong natural gas and oil demand, Federal research dollars still
play a key role in supporting graduate research work essential for
students to fully developing their potential. Without research we will
have even fewer graduates and continue to lose our technical edge.
Environmental advances are made through new technology.--Beyond
increasing production and reserves, newer technologies are delivering
``environmental advances'' that minimize the footprint or environmental
impact of domestic O&G operations. The DOE's R&D investments had helped
with technologies such as 3-D and multicomponent seismology, hydraulic
fracturing and smart completions, and horizontal drilling directional
control and logging while drilling.
The DOE industry advocacy role in interacting with other
governmental agencies when regulations are being developed ensures
regulations stay technically sound. DOE maintains numerous models to
delivers technology sound cost/benefit analysis. Federal support for
technology transfer spreads ``Preferred Environmental Practices'' more
broadly through the industry. There is significant positive
environmental impact from natural gas and oil R&D funding.
summary
Restoring the DOE Fossil Energy budget is a necessary step for
secure energy supply. This testimony highlights only a few of the
benefits of what this investment has meant to consumers in the past.
America needs a good plan going forward that offers a near, medium and
long term plan with steady support.
______

Prepared Statement of the Ground Water Protection Council
Mr. Chairman, thank you for the opportunity to provide written
comments on the proposed fiscal year 2006 budget. I am writing this
letter on behalf of the Ground Water Protection Council (GWPC) to
request continued funding ($1,150,000 in fiscal year 2005) for the
GWPC's successful oil and gas environmental management program and also
to encourage you to restore Congressional appropriations of
$100,000,000 for the Department of Energy's Office of Fossil Energy oil
and natural gas supply R&D program.
This DOE program provides valuable research and technical
assistance to State regulatory agencies and to small oil and gas
operators in the United States. Without the technical assistance
provided by this applied research program, it is estimated that oil and
gas operators will be unable to recover hundreds of millions of
additional barrels of oil in the United States. This research program
has also substantially assisted State regulatory agencies for
protection of the environment. We view this program as vital to the
health and security of the United States.
I would like to take this opportunity to discuss one unique benefit
of the research programs provided by DOE's Office of Fossil Energy.
State oil and gas regulatory agencies in partnership with the GWPC are
responsible for the development and operation of the nationally
acclaimed Risk Based Data Management System (RBDMS) system. Surveys
indicate that oil and gas agencies with advanced data management
systems that provide access to oil and gas data experienced an
estimated 10 percent increase for new oil and gas developments as a
result of the much improved data access. RBDMS has been proven to
assist the States in protecting the environment while at the same time
assisting oil and gas operators. Through the GWPC, the producing States
are working together to protect ground water resources, holding down
the cost of environmental compliance, and providing improved access to
essential data for new oil and gas exploration.
Funding from the Department of Energy has given the States the
opportunity to develop additional software and management tools that
enable States to make decisions that result in the best possible
balance of exploration and environmental considerations. The States in
turn share that information with the public and companies we regulate,
many of which are small businesses that would not otherwise have the
ability to access such accurate information. The system is currently
operational in Alaska, California, Montana, Nebraska, Mississippi,
Indiana, North Dakota, Ohio, New York, Pennsylvania, Utah, New Mexico,
Alabama, Kentucky, Missouri, Arkansas, Florida, Kansas, Nevada, as well
as the Osage Tribe in Oklahoma. We are learning that electronic
commerce mutually saves time and money for both the oil and gas
industry and the regulatory agencies. On-line permitting and reporting
is cost effective and saves industry time and money. One California
operator estimated that an automated permitting system for new drills
and reworks could increase production from one of its larger oil and
gas fields by 500,000 barrels per year. Therefore, any delay in issuing
a permit caused by the inefficiencies of manual processes and analyses
can have a significant impact on production. Continued funding from
U.S. DOE will provide the smaller independent oil and gas producers
access to this environmental data management system. Smaller producers
are often the most in need of such a system because high regulatory
costs hit them the hardest.
I want to stress that States are dedicating their own financial
resources to DOE sponsored programs like RBDMS. For example Ohio, is
using almost $600,000 in State capital improvement and $400,000 of
operations funding to implement RBDMS. California has matched $500,000
of Federal money with $1,500,000 in State funds. Every State currently
using the system has also contributed to building the system and
additional States are planning to use stated dollars in addition to
Federal funds. We are thankful for the $1.15 million we received in
fiscal year 2005 and request that the committee continue to fund this
successful GWPC program at $1.15 million in fiscal year 2006.
RBDMS is one of the best examples we have seen of how the States,
working with the Federal Government and the private sector, can improve
both industry production and environmental protection at the same time.
Attached is a listing of documented benefits to the environment and
energy production as a result of the RBDMS system. Continuing to fund
the U.S. DOE's Office of Fossil Energy oil and natural gas technologies
R&D program in this manner allows us to tailor our regulatory program
needs to the industry which operate in our respective States. There is
no Federal alternative, or ``one size fits all'' national approach that
would work as efficiently as this cooperative multi-State effort.
In summary, the DOE Fossil Energy program funds research projects
like RBDMS which provide the following benefits: (1) improve
environmental protection, (2) less regulatory and compliance costs for
producers, (3) better State enforcement of environmental regulations,
(4) increased exploration activity by small and independent operators
and (5) increased oil and gas production.
______

Prepared Statement of the American Society of Plant Biologists
My name is Roger Hangarter, President of the American Society of
Plant Biologists (ASPB) and Professor at Indiana University. I am
submitting this testimony on behalf of ASPB, a non-profit society of
nearly 6,000 scientists based primarily at universities. ASPB urges the
subcommittee to increase funding 7 percent above current year levels
for the Department of Energy's Office of Science and for the Office of
Basic Energy Sciences. We have joined with the Energy Sciences
Coalition in recommending an increase of 7 percent for the Office of
Science.
ASPB joins with National C-FAR, a broad-based coalition of
agricultural producers (including producers of energy crops),
universities and science societies, in urging the subcommittee and
committee to provide for an increase in the administration's fiscal
year 2006 request of $32.5 million for the Department of Energy's
Energy Biosciences program in the Office of Science and Office of Basic
Energy Sciences to at least $35 million.
Basic energy research on plants and microbes supported by the
Energy Biosciences program contributes to advances in renewable
resources for fuel and other fossil resource substitutes, clean-up and
restoration of contaminated environmental sites, and in discovering new
knowledge leading to home-grown products and chemicals now derived from
petroleum.
The Energy Biosciences program supports leading research on plants
and microbes conducted primarily by university-based scientists
throughout the country. Grants are awarded through a competitive
process utilizing rigorous peer-review standards.
Energy Biosciences grantees include scientists who have received
recognition from a number of distinguished science institutions and
organizations, including national and international science societies,
the National Academy of Sciences, and a Nobel Prize selection
committee. Basic research on plants and microbes contributes to
advances that help address the Nation's future demands for
domestically-produced energy sources, such as energy crops.
There is concern in the plant science community that the current
attrition of staff administering the Energy Biosciences program will
adversely affect the program, unless they are promptly replaced.
The Energy Biosciences program is dependent upon the knowledgeable
and experienced plant biologists who run the program, but who have
either resigned or are retiring. ASPB believes that for the program to
remain effective, it must be properly staffed. A fully staffed Energy
Biosciences program is necessary for the continued convening of panels,
reviewing of proposals and awarding of grants for the best research
proposals adhering to the highest scientific merit selection standards.
This could lead to future discoveries that will make environmentally
benign, home-grown energy sources more plentiful and cost-competitive
with imported petroleum products, such as gasoline and industrial
chemicals. Please encourage and support expedited efforts by the
Department to hire two plant biologists to replace two plant biologists
who are Biosciences Team Leader and Program Manager, who have announced
resignations.
The rigorous standards consistently followed by the Energy
Biosciences program in reviewing grant proposals and making awards have
contributed to the outstanding success of the program. For example,
research sponsored by the Biosciences program led to new findings on
the capture of energy from photosynthesis. This research led to the
presentation to Biosciences-program-grantee Dr. Paul Boyer of the
shared award of the 1997 Nobel Prize in Chemistry (biochemistry).
Photosynthesis is an essential energy conversion process upon which all
life on earth depends. Photosynthesis in plants is nature's way of
utilizing sunlight to produce chemical energy and to bring carbon
dioxide into biological organisms. Increased knowledge in this area
could lead to a better understanding of how to manage carbon dioxide in
the atmosphere. Further research in this area could also contribute to
development of alternative energy sources.
At the latter part of the 1800's, plants and animals provided
people of the world with the only sources of fibers, coatings,
lubricants, solvents, dyes, waxes, fillers, insulation, fragrances,
detergents, sizing, wood, paper, rubber and many other types of
materials. In 1930, fully 30 percent of industrial organic chemicals
were still derived from plants.
The discovery of extensive petroleum reserves and advances in
chemistry and petroleum engineering resulted in a major shift to
reliance on fossil sources of organic feedstocks such as petroleum.
These developments also led to the development of petroleum-based
materials, such as plastics, with properties that could not be
duplicated at the time by abundantly available natural materials.
Advances in modern plant research made possible by support from the
Energy Biosciences program is making possible a shift toward use of
feedstocks from domestically grown plants for chemical products. Plant-
produced products can provide the chemical industry with much greater
diversity than is available from the comparatively limited structures
found in crude oil.
Advances in basic plant research are contributing to subsequent
development of home-grown sources of polyurethane, new biodegradable
lubricants and superior quality nylon. The U.S. produces nylon,
polyurethane and other plastics to supply multi-billion dollar markets.
Genetically modified crop production of nylon alone could create over
$2 billion in new income for America's growers.
Plants are a major source of renewable and alternative fuels in the
United States. Greater knowledge of the basic biology of plants will
lead to further economies in domestic production of renewable fuels.
For example, the current level of U.S. production of more than 4
billion gallons of ethanol a year could be projected to increase by at
least three times that much and likely by a higher multiple with
further breakthroughs in basic plant and microbial research.
We deeply appreciate the continued strong support of the
subcommittee for innovative research on plants and microbes sponsored
by the Office of Science through its Office of Basic Energy Sciences'
Energy Biosciences program.
______

Prepared Statement of the State Oil and Gas Board of Alabama
Mr. Chairman, thank you for the opportunity to provide written
comments on the proposed fiscal year 2006 budget. I am the Oil and Gas
Supervisor of the State Oil and Gas Board of Alabama, and I am writing
this letter to encourage you to restore congressional appropriations of
$100,000,000 for the U.S. Department of Energy's (DOE) Office of Fossil
Energy oil and natural gas supply R&D program.
This DOE program provides valuable research and technical
assistance that benefits all of the citizens of the United States
through increased environmental protection and continued monies
generated through oil and natural gas production. The largest reserves
of oil and natural gas exist in currently operated oil and gas fields.
By increasing our recoverable reserves by only 5 percent, the United
States would produce billions of barrels of additional domestic oil.
Conversely, failure to use new technologies to fully recover these
proven reserves would result in the loss of billions of dollars of
revenues for this country. This money would instead be sent overseas
for oil imports. Currently, small independent oil and gas companies
produce the vast majority of oil and natural gas in this country. These
companies are efficient in their operations, but lack the necessary
research programs needed to fully exploit our domestic resources. This
research is a role for the Federal Government. We view this program as
vital to the health and security of the United States.
The DOE Office of Fossil Energy has substantially assisted State
regulatory agencies' efforts to enhance environmental protection. One
example of these cost effective research programs is the Risk Based
Data Management System (RBDMS). State oil and gas regulatory agencies
in partnership with the Ground Water Protection Council (GWPC) are
responsible for the development and operation of this information
system in 23 oil and natural gas producing States, including Alabama.
This project is not an example of Federal aid to States, but rather
Federal/State partnerships that really work. Through GWPC, the oil and
natural gas producing States are working together to protect ground
water resources, holding down the cost of environmental compliance, and
providing improved access to essential data for new oil and gas
exploration.
Past funding from the Department of Energy has given the States the
opportunity to develop additional software and information management
tools that enable both State and Federal agencies to have the tools
needed to share data and facilitate electronic commerce via the
internet. The States in turn share that information with the public and
the regulated companies, many of which are small businesses that would
not otherwise have the ability to access such accurate information. We
are learning that electronic commerce saves time and money for both the
oil and gas industry and the regulatory agencies. The Federal share for
this program cost was $1.15 million in fiscal year 2004. States
collectively contributed over $4 million during that fiscal year.
Future development and enhancement of the system continues to be
focused on expanded e-commerce due to the growing demand and need for
State regulatory agencies to have electronic commerce capabilities.
Such capabilities will be cost effective and will save the oil and gas
industry time and money. Any delays resulting from the inefficiencies
of manual processes and analyses can have a significant impact on
production. Continued funding from the Department of Energy will
provide the smaller independent oil and gas operators access to this
environmental data management system. Smaller producers often have the
most need for such a system because high compliance costs hit them the
hardest.
RBDMS is one of the best examples of how the States, working with
the Federal Government and the private sector, can improve both
industry production and environmental protection at the same time.
Continuing to fund the DOE Office of Fossil Energy oil and natural gas
technologies R&D program in this manner allows the State regulators to
tailor their program needs to the industry which operates in their
respective States. There is no Federal alternative or ``one size fits
all'' national approach that would work as efficiently as this
cooperative multi-State effort.
In summary, the DOE Office of Fossil Energy program funds research
projects like RBDMS which provide the following benefits: (1) improved
environmental protection, (2) less regulatory and compliance costs for
producers, (3) better State enforcement of environmental regulations,
(4) increased exploration activity by small and independent operators,
and (5) increased domestic oil and gas production.
______

Prepared Statement of the American Society for Microbiology
The American Society for Microbiology (ASM), the largest single
life science organization in the world, with more than 43,000 members,
appreciates the opportunity to provide written testimony on the fiscal
year 2006 budget for the Department of Energy (DOE) science programs.
The mission of ASM is to enhance microbiology to gain a better
understanding of basic life processes and to promote the application of
this knowledge for improved health, economic, and environmental well
being. Microbiological research is related to DOE programs involving
microbial genomics, climate change, bioremediation, and basic
biological processes important to energy sciences. The ASM supports a 7
percent increase, for a total of $3.85 billion, for the DOE Office of
Science in fiscal year 2006.
strong support is needed for the doe office of science
Scientific progress and the U.S. economy continue to benefit from
investments in the basic sciences made by the DOE Office of Science.
The DOE Office of Science, the Nation's primary supporter of the
physical sciences, is also an essential partner in the areas of
biological and environmental science research as well as in
mathematics, computing, and engineering. Furthermore, the Office of
Science supports a unique system of programs based on large-scale,
specialized user facilities that bring together working teams of
scientists focused on such challenges as global warming, genomic
sequencing, and energy research. The Office of Science is an invaluable
partner in several scientific programs of the National Institutes of
Health (NIH) and the National Science Foundation (NSF), and it supports
peer-reviewed, basic research in DOE-relevant areas of science in
universities and colleges across the United States. These cross-
disciplinary programs contribute to the knowledge base and training of
the next generation of scientists, while providing scientific
cooperation across the sciences.
The Office of Science will play an increasingly important role in
the administration's goal of U.S. energy independence in this decade.
Many DOE scientific research programs share the goal of producing and
conserving energy in environmentally responsible ways. Programs include
basic research projects in microbiology as well as extensive
development of biotechnology-based systems to produce alternative fuels
and chemicals, to recover and improve the process for refining fossil
fuels, to remediate environmental problems, and to reduce wastes and
pollution.
The administration's proposed budget for fiscal year 2006 requests
$3.46 billion for the Office of Science, a decrease of about $140
million compared to the fiscal year 2005 appropriation. This nearly 4
percent proposed cut for the Office of Science in fiscal year 2006 is a
significant departure from the congressionally authorized level of $4
billion. ASM recommends that Congress increase the DOE Office of
Science to a level of $3.85 billion in the fiscal year 2006
appropriation, an increase of $250 million over fiscal year 2005.
biological and environmental research (ber) programs
The proposed budget for Biological and Environmental Research (BER)
in fiscal year 2006 is nearly $456 million, which is $126 million below
the fiscal year 2005 appropriation for these programs. DOE is the lead
Federal agency supporting genomic sequencing of non-pathogenic microbes
through its Genomics: GTL Program. The sequence information being
compiled through this program provides clues into how we can design
biotechnology based processes that will function in extreme conditions
and potentially could address pressing national priorities, such as
energy and environmental security, bioremediation of waste sites,
global warming and climate change, and energy production.
ber genomics: gtl program
ASM supports the administration's request of $87.2 million for the
Genomics: GTL program in fiscal year 2006, a $20 million increase over
fiscal year 2005. Because microbes power the planet's carbon and
nitrogen cycles, clean up our wastes, and make important
transformations of energy, they are an important source of
biotechnology products, making DOE research programs extremely valuable
for advancing our knowledge of the non-medical microbial world. Knowing
the complete DNA sequence of a microbe provides important clues about
the biological capabilities of the organism and is an important step
toward developing strategies for efficiently detecting, using, or
reengineering particular microbes to address various national issues.
The DOE Genomics: GTL genomic sequencing program has an important
impact on nearly every other activity within BER.
In addition to this program, a substantial portion of the DOE Joint
Genome Institute's (JGI) sequencing capacity continues to be devoted to
the sequencing of microbial genomes as well as DNA in mixed genomes
obtained from microbial communities dwelling within specialized
ecological niches. As part of these efforts, DOE continues to complete
DNA sequences of genomes in microbes with potential uses in energy,
waste cleanup, and carbon sequestration.
About 40 percent of the JGI capacity is dedicated to serving direct
DOE needs, primarily through the Genomics: GTL program, while the
remaining 60 percent of this capacity serves as a state-of-the-art DNA
sequencing facility for whose use scientists submit proposals that are
subject to merit review. These sequencing projects will be conducted at
no additional cost for the extramural scientific community and are
expected to have a substantial impact on the BER Environmental
Remediation Sciences program, with much of this program focusing on
such uses of microbes. In addition, the Genomics: GTL program will
continue to have a major impact on the BER Climate Change Research
program because of the role microbes play in the global carbon cycle
and the potential for developing biology-based solutions for
sequestering carbon.
The ASM urges Congress to fully support this exciting program and
applauds DOE's leadership in recognizing this important need in science
and endorses an expansion of the department's microbial genome
sequencing efforts, particularly in the use of DNA sequencing to learn
more about the functions and roles of the many microorganisms that
cannot be grown in culture and sees this program as the basis for an
expanded effort to understand more broadly how genomic information can
be used to understand life at the cellular and at more complex levels.
environmental remediation
The overall goal of the DOE Environmental Management Science
Program (EMSP), which was transferred from Environmental Management to
the BER program, is to support basic research that improves the science
underpinning the cleanup of DOE sites. Traditional cleanup strategies
may not work or be cost effective for remediating DOE sites. The EMSP,
through its support of basic research, aims to develop and validate
technical solutions to complex problems, providing innovative new
technologies that reduce risks and provide savings in terms of costs
and time.
DOE bioremediation activities are centered on the Natural and
Accelerated Bioremediation Research (NABIR) program that supports basic
research focused on determining how and where bioremediation may be
applicable as a reliable, efficient, and cost-effective approach for
cleaning up or containing metals and radionuclides in contaminated
subsurface environments. In the NABIR program, research advances will
be made from molecular to field scales; on genes and proteins used in
bioremediation and in overcoming physicochemical impediments to
bacterial activity; in non-destructive, real-time measurement
techniques; on species interaction and response of microbial ecology to
contamination; and in understanding microbial processes for altering
the chemical state of metallic and radionuclide contaminants.
Additional EMSP research efforts focus on contaminant fate and
transport in the subsurface, nuclear waste chemistry and advanced
treatment options, and novel characterization and sensor tools. EMSP
projects will continue to be subject to a competitive peer review
process that identifies the most scientifically meritorious research
proposals and applications to support, based on availability of funds
and programmatic relevance to ensure a research portfolio that
addresses DOE needs. Research will be funded at universities, national
laboratories, and at private research institutes and industries. This
research will be conducted in collaboration with the Office of
Environmental Management.
The administration's proposed fiscal year 2006 budget for
remediation research, including the NABIR program, is $94.7 million, a
nearly $10 million decrease compared to $104.5 million for fiscal year
2005. The DOE environmental remediation programs deserve sustained
support.
climate change research
The ASM is pleased to see the administration's support of Climate
Change Research continue in its fiscal year 2006 budget. The
President's proposed $143 million budget for this activity in fiscal
year 2006, is a modest increase over fiscal year 2005. The Climate
Change Research subprogram seeks to apply the latest scientific
knowledge to the potential effects of greenhouse gas and aerosol
emissions on the climate and the environment. This program is DOE's
contribution to the interagency U.S. Global Change Research Program
proposed by President George Walker Bush in 1989 and codified by
Congress in the Global Change Research Act of 1990 (Public Law 101-
106).
The Ecological Processes portion of the subprogram is focused on
understanding and simulating the effects of climate and atmospheric
changes on ecosystems. Research will also identify potential feedbacks
from changes in the climate and atmospheric composition. This research
is critical to better understanding of the changes occurring in
ecosystems from increasing levels of atmospheric pollutants.
The ASM recommends continued support for this important research
within the DOE Office of Science. This program is vital to advance
understanding of energy balances between the surface of the Earth and
the atmosphere and how this will affect the planet's climate and
ecosystems.
basic energy sciences
The administration's requested funding for the Office of Basic
Energy Sciences (BES) for fiscal year 2006 is $1.146 billion,
representing an increase of $41.4 million over fiscal year 2005. This
program is a principal sponsor of fundamental research for the Nation
in the areas of materials sciences, chemistry, geosciences, and
biosciences as it relates to energy. The program supports initiatives
in the microbiological and plant sciences focused on harvesting and
converting energy from sunlight into feedstocks such as cellulose and
other products of photosynthesis, as well as how those chemicals may be
further converted into energy-rich molecules such as methane, hydrogen,
and ethanol. Alternative and renewable energy sources will remain of
strategic importance in the Nation's energy portfolio, and DOE is well
positioned to advance basic research in this area. Advances in genomic
technologies are giving this research area a tremendous new resource
for advancing the Department's bioenergy goals.
new technologies and unique facilities
New technologies and advanced instrumentation derived from DOE's
expertise in the physical sciences and in engineering have become
increasingly valuable to biologists. The beam lines and other advanced
technologies for determining molecular structures of cell components
are at the heart of current advances to understand cell function and
have practical applications for new drug design. DOE advances in high
throughput, low-cost DNA sequencing; and protein mass spectrometry,
cell imaging, and computational analyses of biological molecules and
processes are other unique contributions of DOE to the Nation's
biological research enterprise.
DOE has unique field research facilities for environmental research
important to understanding biogeochemical cycles, global change, and
cost-effective environmental restoration. DOE's ability to conduct
large-scale science projects and draw on its unique capabilities in
physics, mathematics and computer sciences, and engineering is critical
for future biological research.
conclusion
The ASM strongly supports DOE's basic science agenda across the
scientific disciplines and encourages Congress to maintain its
commitment to these important research programs. ASM recommends that
Congress increase funding for the DOE Office of Science to $3.85
billion in fiscal year 2006.
The ASM appreciates the opportunity to provide written testimony
and would be pleased to assist the subcommittee as it considers its
appropriation for the DOE for fiscal year 2006.

SCHEDULE OF FEDERAL AWARDS 2005
--------------------------------------------------------------------------------------------------------------------------------------------------------
Federal Grants Receipts or Grants
Federal Grantor/Pass-through Grantor/Program Cost CFDA Program or Award Receivable 1/1/ Revenue Disbursements/ Receivable 12/
Title Center Number Amount 2005 Recognized Expenditures 31/2005
--------------------------------------------------------------------------------------------------------------------------------------------------------
MAJOR PROGRAMS: Resident Postdoctoral Research... 783 93.28 $1,157,764.00 $83,055.50 ........... .............. $83,055.50
-------------------------------------------------------------------------------
Total Major Programs....................... ......... .......... 1,157,764.00 83,055.50 ........... .............. 83,055.50
===============================================================================
OTHER FEDERAL ASSISTANCE:
HHS:
NIGMS-MARC............................... 789 93.88 431,300.00 155,195.00 ........... .............. 155,195.00
DNA Repair and Mutagenesis............... 457 93.39 25,000.00 25,000.00 ........... .............. 25,000.00
Candida and Candidiasis.................. 434 93.12 10,000.00 10,000.00 ........... .............. 10,000.00
ASM Conf New phage Biology............... 430 93.86 10,000.00 10,000.00 ........... .............. 10,000.00
ASM Conf Cell Cell....................... 470 93.86 18,000.00 17,000.00 ........... .............. 17,000.00
ASM Conf Signal Transduction............. 429 93.86 20,000.00 20,000.00 ........... .............. 20,000.00
ASM Conf Viral Immune Evasion............ 428 93.86 20,000.00 .............. ........... .............. ..............
National Science Foundation:
Plant Biotechnology...................... 678 47.07 15,000.00 .............. ........... .............. ..............
Pathogens................................ 697 47.07 110,000.00 .............. ........... .............. ..............
Cell-Cell Communications................. 470 47.07 5,000.00 5,000.00 ........... .............. 5,000.00
Colloquium Genome Annotation............. 672 47.07 63,408.00 2,421.00 ........... .............. 2,421.00
U.S. Department of Energy:
DNA Repair and Mutagenesis............... 457 81.05 20,000.00 20,000.00 ........... .............. 20,000.00
Prokaryotic Development.................. 472 81.05 10,000.00 .............. ........... .............. ..............
Geobiology............................... 675 81.05 15,000.00 .............. ........... .............. ..............
Microbial Ecology and Genomics........... 676 81.05 25,000.00 .............. ........... .............. ..............
Multicellular Cooperation................ 671 81.05 15,000.00 .............. ........... .............. ..............
Integrating Metabolism................... 477 81.05 10,000.00 10,000.00 ........... .............. 10,000.00
Beyond Microbial Genomics................ 691 81.05 94,520.00 .............. ........... .............. ..............
USDA: Conf Salmonella Pathogenesis........... 421 10.21 10,000.00 .............. ........... .............. ..............
EPA:
Microbial Eolocy......................... 676 66.50 20,000.00 .............. ........... .............. ..............
Infectious Disease GI Tract.............. 670 66.61 50,000.00 .............. ........... .............. ..............
-------------------------------------------------------------------------------
Total Other Awards..................... ......... .......... 997,228.00 274,616.00 ........... .............. 274,616.00
===============================================================================
Total Federal Awards................... ......... .......... 2,154,992.00 357,671.50 ........... .............. 357,671.50
--------------------------------------------------------------------------------------------------------------------------------------------------------