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



 
    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2006

                              ----------                              

                                       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 CoMoCATTM (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 CoMoCATTM 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 HiPCOTM 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 700-950C 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\
---------------------------------------------------------------------------
    \1\ 800 Corporate Row, Cromwell, CT 06416.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    \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.''
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \15\ Exxon, Shell, Chevron, Conoco, Amoco and Placid.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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 
IntelliPipeTM 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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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 700C (1,292F) to 
1,000C (1,830F), 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
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