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



 
 ENERGY AND WATER, AND RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 
                                  2007

                              ----------                              

                                       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 2007 
Energy and Water Development Appropriations Act.]

                      DEPARTMENT OF DEFENSE--CIVIL

                         Department of the Army

                           Corps of Engineers

 Prepared Statement of the Clark County Regional Flood Control District
    The United States Army Corps of Engineers Tropicana and Flamingo 
Washes Flood Control Project, Las Vegas, Nevada.--$15,000,000, 
Construction appropriations, which includes 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, which includes up to $9,000,000 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 President's fiscal year 2007 Civil 
Works budget request to Congress identifies $12,400,000 for this 
project. 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 1.8 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 were 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.
    In the winter of 2004-2005, the area experienced heavier than 
normal rainfall amounts. That winter brought twice the area's average 
annual rainfall causing flooding in along the Virgin and Muddy Rivers 
in Clark County, Nevada. Several areas in the Las Vegas Valley also 
experienced drainage problems. 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 $269,345,000 
(allocations $226.7 million), allowing continued project construction. 
The total cost of the flood control portion of the project is currently 
estimated at $336,342,000, higher than originally anticipated primarily 
due to the delay in Federal appropriations which has resulted in 
increases in real estate and construction costs.
    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 18.1 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 an additional 0.7 square miles of 
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 completion of construction of this 
flood control project in fiscal year 2007.
    The non-Federal sponsors are requesting $15,000,000 for both the 
continued construction and reimbursement to the local sponsors of this 
project. Funding at this level will allow the Corps of Engineers to 
complete the construction of the last project feature, the 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 is substantial and includes features that were designed by 
the non-Federal sponsors and constructed by either the Federal 
Government or the non-Federal sponsors. To date, $13.5 million has been 
reimbursed.
    The non-Federal sponsors are requesting up to $9 million of the $15 
million for 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 2007, in order to facilitate the completion of construction 
of this critical flood control project and use up to $9 million of the 
$15 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 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 Ventura Port District
    The Ventura Port District respectfully requests that the Congress 
increase the administration's request from $1,700,000 to $3,370,000 for 
inclusion in the fiscal year 2007 Energy and Water Development 
Appropriations Bill for the U.S. Army Corps of Engineers maintenance 
dredging of the Ventura Harbor Federal channel and sand traps.

                               BACKGROUND

    Ventura Harbor, homeport to 1,500 vessels, is located along the 
Southern California coastline in the City of San Buenaventura, 
approximately 60 miles northwest of the City of Los Angeles. The harbor 
opened in 1963. Annual dredging of the harbor entrance area is 
necessary in order to assure a navigationally adequate channel. In 
1968, the 90th Congress made the harbor a Federal project and committed 
the U.S. Army Corps of Engineers to the maintenance of the entrance 
structures and the dredging of the entrance channel and sand traps 
(Public Law 90-483, section 101).
    The harbor presently generates more than $50 million in gross 
receipts annually. That, of course, translates into thousands of both 
direct and indirect jobs. A significant portion of those jobs are 
associated with the commercial fishing industry which landed over 25 
million pounds of seafood in 2005 (the harbor is consistently amongst 
the top ten commercial fishing ports in the United States), and with 
vessels serving the offshore oil industry. Additionally, the 
headquarters for the Channel Islands National Park is located within 
the harbor, and the commercial vessels transporting the nearly 100,000 
visitors per year to and from the Park islands offshore, operate out of 
the harbor. All of the operations of the harbor, particularly those 
related to commercial fishing, the support boats for the oil industry, 
and the visitor transport vessels for the Channel Islands National Park 
are highly dependent upon a navigationally adequate entrance to the 
harbor.

                    OPERATIONS AND MAINTENANCE NEEDS

Maintenance Dredging
    It is estimated that $3,370,000 will be required to perform the 
maintenance dredging of the harbor's entrance channel and sand traps 
during fiscal year 2007. Because of reduced funding in fiscal year 2006 
more than 350,000 cubic yards of material was not removed by the Corps 
of Engineers contractor during the current dredging effort and thus the 
request is absolutely essential to the continued operation of the 
harbor in fiscal year 2007.
                                 ______
                                 
  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--$6.7 billion in fiscal year 2007--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 through 
House Bill 1327 introduce last year or through similar legislation this 
year. Construction Phase One is scheduled for completion in 2007. 
Continued Federal funding is requested for fiscal year 2007 consistent 
with this legislation which will authorize funding for 25 percent of 
the project cost up to a maximum of $30 million during the construction 
phases.

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 $5.0 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 $5 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: Mr. 
Scott McGeorge, President, Pine Bluff Sand and Gravel Company, Pine 
Bluff; Mr. N.M. ``Buck'' Shell, CEO, Five Rivers Distribution in Van 
Buren and Fort Smith; Mr. Jack Long, General Manager, Logistic 
Services, Inc., Port of Little Rock; and Mr. Jeff Pipkin, President & 
CEO of the Russellville Area Chamber of Commerce and Director of the 
Arkansas Valley Alliance for Economic Development.
    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 12-Foot Channel, Little Rock Port, Backlog of Channel 
and Structure Maintenance, and the Arkansas-White Rivers Cut-Off Study.
Arkansas River's 12-Foot Channel
    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 $40,000,000 to continue the work towards 
achieving the 12-foot navigation channel as noted in Public Law 108-
137. Corps of Engineers capability levels on this project are currently 
$20,000,000 in both the Tulsa and Little Rock Districts. The goal of 
completing this project in 4 years at the capability levels of the 
Corps 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.
Backlog of Channel Structure Maintenance
    We request $10 million Operation and Maintenance Budget which is 
urgently needed for critical repairs to damaged and deteriorated dikes 
and revetments to maintain channel alignment and provide original 
channel configuration while reducing the need for dredging.
    More than a decade of neglect to our navigation structures while 
funding the construction of Montgomery Point Lock & Dam has created a 
critical backlog of channel structure work that threatens the viability 
of the McClellan-Kerr Arkansas River Navigation System.
Arkansas-White Rivers Cutoff Study
    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, $300,000 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 complete the study and do the required 
environmental documentation.
    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. Funds in the amount of $7.0 million 
were allocated in fiscal year 2005 with $1.5 million used to complete 
the Feasibility Study and Environmental Impact Statement with the other 
$5.5 million used on engineering, design, and construction activities. 
In conjunction with the deepening project the Corps is preparing a 
Basin Wide Master Plan that will include an integrated major 
maintenance construction and operational maintenance prioritized list 
for investment opportunities. 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 critical water resources projects in the Kansas portion of the 
Arkansas River Basin are identified below. The projects are 
environmental and conservation in nature and all have regional and/or 
multi-State impact. We are grateful for your past commitment to these 
projects.
    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 Equus Beds are vital to the surrounding agricultural economy. 
Also, 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 one-third 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 the project as the needed cornerstone 
for the area agricultural economy and for the economy of the Wichita 
metropolitan area. The Chief Engineer of Kansas has authorized full-
scale construction.
    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 
approximately $25 million and is scheduled for completion in 2007. The 
total project involving the capture and recharge of more than 100 
million gallons of water per day is estimated to cost $130 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:
  --House Bill 1327 was passed by the House of Representatives last 
        year. The Senate passed a very similar bill, Senate Bill 1025. 
        This legislation, or similar legislation, would authorize the 
        project and also provide cost share funding up to 25 percent of 
        the project cost to a maximum of $30 million. We request your 
        support of this 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 within the limits of House Bill 
        1327 or similar legislation for fiscal year 2007.
    The Arkansas River Basin is a treasure that must be protected for 
future generations. However, 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 adding the following high priority watershed 
studies to the fiscal year 2007 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.
      The fiscal year 2006 budget for this project in the amount of 
        $200,000 is for continuation of the feasibility study. We 
        support the President's proposed fiscal year 2007 budget which 
        includes $80,000 for completion of the feasibility study in 
        September 2007.
  --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. The Reconnaissance Report has been approved. 
        Feasibility Cost Share Agreements will be executed in 2006. 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 exists for 
        ecosystem restoration projects and flood damage reduction 
        projects. We request funding in the amount of $450,000 in 
        fiscal year 2007.
    Grand Lake Feasibility Study.--A need exists 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 the WRDA of 2000 directed 
the Secretary to evaluate backwater effects specifically due to flood 
control operations on land around Grand Lake and authorizes a 
feasibility study at full Federal cost if the Secretary determines that 
Federal actions have been a significant cause of the backwater effects. 
The Tulsa District is preparing a letter report which will be submitted 
to the ASA(CW) for a determination on proceeding with a full federally 
financed feasibility study. If the ASA(CW) determines that Federal 
actions have been a significant cause of the flooding, feasibility 
study activities would be initiated at full Federal expense. Since 
Grand Lake is an integral component of a system flood control operation 
consisting of 11 principal reservoir projects in the Arkansas River 
basin, 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. A feasibility study is necessary 
to determine the most cost-effective comprehensive solution to the real 
estate inadequacies. We urge you to provide $500,000 to fund 
feasibility studies for this important project in fiscal year 2007 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 4 
years, but there are no funds in the fiscal year 2007 President's 
budget request to continue this project.
    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 also requests funding through these 
programs to address flooding problems. We urge you to support an 
increase of these programs to the $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 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: Mr. Ted Coombes, Tulsa; Mr. 
A. Earnest Gilder, Muskogee; Mr. Terry McDonald, Tulsa; and Mr. Lew 
Meibergen, Enid, who also serves as Chairman of the combined Arkansas 
River Basin Interstate Committee.
    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.
    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. Funds in the amount of $7.0 
million were allocated in fiscal year 2005 with $1.5 million used to 
complete the Feasibility Study and Environmental Impact Statement with 
the other $5.5 million used on engineering, design, and construction 
activities. In conjunction with the deepening project the Corps is 
preparing a Basin Wide Master Plan that will include an integrated 
major maintenance construction and operational maintenance prioritized 
list for investment opportunities. 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.
    Tow Haulage Equipment--Oklahoma.--We request funding of $5.0 
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.
    The Power Plant at Webbers Falls Lock and Dam on the Arkansas River 
has suffered from greatly reduced reliability due to turbine design 
problems. One of the three turbines at the project has suffered major 
damage and will remain unavailable for generation until it can be 
rebuilt. 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. By combining the turbine 
replacements into a single contract, the Little Rock District awarded a 
contract in May 2005 to replace the turbines with a more reliable 
design. This contract also includes three options to provide newly 
designed turbines for the Webbers Falls project as well, if additional 
funding is forthcoming as recommended by the Corps' Hydropower Design 
Center. The Corps has saved $5 million over the life of the project. 
Unfortunately, no funding for these projects was included in the 
administration's fiscal year 2006 and 2007 budget requests, and the 
conference report on the fiscal year 2006 Energy and Water Development 
Appropriations bill also excluded funding for them.
    The wholesale power customers are providing essential funding for 
the turbine replacement contract in fiscal year 2006 under terms of a 
Memorandum of Agreement (MOA) between the Corps, the customers and 
Southwestern Power Administration. However, the MOA is not a viable 
vehicle for long-term funding of the contract.
    The committee recommends that Congress appropriate $19.5 million to 
start the Webbers Falls major rehab in early in fiscal year 2007.
    Arkansas-White Rivers Cutoff Study is to determine a solution to 
prevent the developing cutoff from joining the Arkansas and White 
Rivers near the confluence of the McClellan-Kerr Arkansas River 
Navigation System and the Mississippi Rivers. If not corrected, this 
occurrence could have a dramatic adverse effect on the navigation 
system. Unless corrected, this will effectively drain the water from 
the navigation system and halt the movement of commerce on the system.
    Therefore we request an appropriation of $300,000 to protect the 
navigation system from closure.
    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 feet 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 3 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 was $8.2 million less (over 11 percent) than the fiscal 
year 2005 appropriation, which will result in no funding being 
available for critical infrastructure maintenance in fiscal year 2006. 
The fiscal year 2007 O&M President's budget is currently proposed at 
$72.4 million which is presently $10 million more than the fiscal year 
2006 budget. This $10 million increase is offset by higher energy, 
labor, and construction costs. We therefore request that $2.1 million 
be added to the budget to accomplish critical infrastructure 
maintenance items on the Oklahoma portion of the system as follows:
  --McClellan-Kerr.--$600,000 to repair plate seals for the weirs;
  --Robert S. Kerr.--$1,500,000 to repair erosion and construct 
        emergency mooring wood dolphins.
    Additional O&M funds are also requested for other high priority, 
non-navigation, water resource needs including $600,000 for tainter 
gate repair at Kaw Lake; $1,200,000 to repair sluice gates and liners 
at Keystone Lake; $1,500,000 for tainter gate repair at Fort Gibson 
Lake; and $400,000 for tainter gate hoist equipment replacement at 
Tenkiller Ferry Lake.
    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 
$500,000, which is $500,000 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 $450,000 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 report has been approved and 
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. 
Feasibility Cost Share Agreements will be executed in 2006 but the 
fiscal year 2007 President's budget did not provide funding to continue 
into the feasibility stage.
    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 $210,000 to continue this 
study.
    Grand Lake Feasibility Study.--A need exists 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 feasibility study is necessary to determine the most 
cost-effective comprehensive solution to the real estate inadequacies. 
We urge you to provide $500,000 to fund feasibility studies for this 
important project in fiscal year 2007 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 4 years, but there are no 
funds in the fiscal year 2007 President's budget request to continue 
this 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. 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 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 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 urge that you support the State 
of Oklahoma in requesting their full allocation of $500,000 for the 
Planning Assistance to States program for several important projects 
awaiting execution including the cities of Tulsa, Bristow, and 
Bartlesville and for State Water Planning efforts.
    In addition, we request your support of the Section 107 Navigation 
Program and ask that you provide $100,000 for the initiation of studies 
for a port in Wagoner County, Oklahoma. A Wagoner County Port could 
greatly benefit the region and utilize the authorized deepening of the 
McClellan-Kerr Arkansas River Navigation system to benefit the Nation.
    We strongly urge the Appropriations Committee to raise the Corps of 
Engineers' budget to $6.7 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.
    Mr. Chairman, we appreciate this opportunity to present our view on 
these subjects.
                                 ______
                                 
          Prepared Statement of the City of Flagstaff, Arizona

    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 $22.6 million in the Army 
Corps of Engineers budget for the Rio de Flag flood control project in 
fiscal year 2007. 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 nearly $10 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 2007.
    Like many other projects under the Army Corps' jurisdiction, Rio de 
Flag received no funding in the president's fiscal year 2007 budget, 
although the Corps has expressed $22.6 million as optimal funding to 
continue construction on the project. We are hopeful that the 
subcommittee will fund the Rio de Flag project at $22.6 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 optimal 
funding of $22.6 million in fiscal year 2007 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 $22.6 million for fiscal year 2007.
    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 $54,100,000 in and 
above the reconnaissance study or the feasibility study. The Non-
Federal share is currently $24,000,000 and the Federal share is 
currently $30,000,000. 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 commenced in 2004. Phase II of the project commenced last 
year.
    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 $30 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 $22.6 million for this project in the fiscal year 2007 
Energy and Water Development Appropriations bill. Thank you in advance 
for your consideration.
                                 ______
                                 
  Prepared Statement of the Tennessee-Tombigbee Waterway Development 
                               Authority

    Mr. Chairman, we are pleased to once again submit to you for your 
consideration the Authority's requests for fiscal year 2007 
appropriations for waterway projects of importance to our region, 
including the Tennessee-Tombigbee Waterway. This is the 47th 
consecutive year that the waterway compact has presented its funding 
requests to the Congress.
    The Tennessee-Tombigbee Waterway Development Authority is a 
federally authorized interstate compact. Its member States are Alabama, 
Kentucky, Mississippi, and Tennessee. Governor Haley Barbour of 
Mississippi is chairman of the development authority.
    As we have reported to you in the past, the Authority is most 
concerned that ports and waterways as well as the rest of the Nation's 
aging infrastructure are woefully under-funded commensurate with needs. 
While this Nation continues to underinvest in its infrastructure, China 
will spend $242 billion on rail service and intermodal connections with 
its seaports, alone, by 2020. China is projected to surpass the United 
States as the world's dominant economic power by 2050, largely 
supported by these kinds of improvements.
    While it is encouraging that the proposed 2007 budget request for 
the Corps of Engineers is the largest in memory by an administration, 
it is still nearly $600 million less than that approved by the Congress 
for this year. We are especially concerned that enough funds are not 
being provided to adequately operate and maintain our ports and 
waterways. Although the Tennessee-Tombigbee is a relatively new 
waterway compared to other systems, it has already accumulated a $12 
million backlog of indefinitely deferred maintenance and repairs due to 
under funding in prior years assuming the proposed budget is approved. 
The President's budget is nearly $4 million less than that needed to 
adequately fund the Tenn-Tom as described below.

                                          TENNESSEE-TOMBIGBEE WATERWAY
                                             [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                                    Authority's
                                                                    Fiscal Year    Proposed 2007       2007
                                                                    2006 Level        Budget      Recommendation
----------------------------------------------------------------------------------------------------------------
O&M.............................................................            24.0            20.6            24.5
Wildlife Mitigation.............................................             2.0             1.5             2.0
----------------------------------------------------------------------------------------------------------------

    Recognizing the budgetary constraints the Congress faces, we are 
recommending only level funding for the Tenn-Tom in 2007. If approved, 
the requested $24.5 million will adequately maintain the waterway and 
allow it to generate its expected benefits. This level of funding will 
also decrease the O&M backlog by nearly $4 million.
    The $3.9 million recommended increase above the President's budget 
would be used for dredging and to provide more upland disposal capacity 
to accommodate the increased dredging needs. Also, additional funds 
will help eradicate a growing problem with aquatic weeds that have in 
the past been so prevalent to stop the operation of one of the 
waterway's locks. This is the No. 1 complaint from the public 
concerning the waterway.
    The recommended $2 million for the Wildlife Mitigation Project will 
also provide level funding for the reimbursement of expenses incurred 
by the States of Alabama and Mississippi to manage some 126,000 acres 
of Federal wildlife habitat that is part of the project.
    The Tenn-Tom has now been in operation 21 years. There have not 
been any improvements made since its completion. The waterway has 
helped attract over $6 billion of new and expanded industrial 
development to the waterway corridor. Nearly $1 billion of new 
investments were announced in 2005, alone, that will generate about 1 
million tons of additional commerce for the project. The Authority is 
requesting that $5 million be appropriated to enable the Corps of 
Engineers to install cells near Columbus, MS, for mooring and fleeting 
of the growing number of barges operating on the waterway. The cells 
are also needed for mooring tows during high water when it is not safe 
to transit the Bevill Lock and Dam located downstream. The Tenn-Tom is 
the only major waterway where the Corps has not built these kinds of 
facilities to provide safer and more efficient navigation.

                                                  KENTUCKY LOCK
                                             [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                                    Authority's
                                                                    Fiscal Year    2007 Proposed       2007
                                                                    2006 Level        Budget      Recommendation
----------------------------------------------------------------------------------------------------------------
Lock Construction...............................................            23.0  ..............            55.0
----------------------------------------------------------------------------------------------------------------

    Construction of a new lock at Kentucky Dam on the Tennessee River 
is our highest priority of all the waterway improvements now being 
undertaken by the Corps. The Tennessee-Cumberland system transports 
nearly 60 million tons of commerce each year with nearly 40 million 
tons traversing Kentucky Lock. The nearly 60-year-old existing lock 
cannot accommodate such a large volume of traffic and is one of the 
most inefficient bottlenecks on the entire waterway system. Delays to 
transit the lock extend as long as 7 hours, costing shippers as much as 
$70 million in unnecessary transportation expense each year.
    Although construction has been underway for 6 years and nearly $200 
million have been invested so far, the Office of Management and Budget 
has again instituted a budget policy not to fund any Corps project that 
has less than a 3-to-1 remaining benefits-to-remaining-cost ratio. The 
Congress resoundingly rejected that arbitrary standard last year and we 
strongly recommend it do the same for 2007. The project has a 2.7-to-1 
B/C ratio, well above the 1-to-1 ratio the Congress has traditionally 
adopted to determine a project's eligibility for Federal funding.
    Fifty-five million dollars is requested to continue construction of 
this important project on a reasonable and efficient schedule.

                                                CHICKAMAUGA LOCK
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                                    Authority's
                                                                    Fiscal Year    Proposed 2007       2007
                                                                    2006 Level        Budget      Recommendation
----------------------------------------------------------------------------------------------------------------
Lock Construction...............................................            10.0           27.0            27.0
Lock Repairs....................................................             2.4            1.25            1.25
----------------------------------------------------------------------------------------------------------------

    We support the President's budget for this important project and 
recommend those funds shown above be approved. Twenty-seven million 
dollars will permit the Corps to make reasonable progress in 
constructing a new lock to replace the 60-year-old lock that is too 
small to serve existing commercial traffic. It also has some serious 
structural problems. These funds are critical to help preclude a 
potentially serious safety problem with the old lock.

                                                 TENNESSEE RIVER
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                                    Authority's
                                                                    Fiscal Year    Proposed 2007       2007
                                                                    2006 Level        Budget      Recommendation
----------------------------------------------------------------------------------------------------------------
O&M.............................................................            18.5            19.3            22.5
----------------------------------------------------------------------------------------------------------------

    We recommend that $22.5 million be appropriated for the operation 
and maintenance of the Tennessee River, one of the busiest waterways in 
the Nation. Like most of the Nation's waterways, many of the locks and 
dams on the Tennessee have outlived their 50-year economic life and 
need extensive repairs to prolong the project's physical life. This 
aggressive maintenance requires increased funding.
    In closing, we are very concerned about a new budget policy adopted 
by the Corps and the administration to aggregate O&M funds by region 
instead by individual projects as typically presented in the 
appropriations bills. As a non-Federal sponsor of one of the Corps' 
largest projects, it would be difficult, if not impossible, to fulfill 
our responsibilities for ensuring the waterway is adequately funded 
each year. Your committee, the project's congressional supporters and 
the Authority would have no assurance of its level of funding, either 
being proposed by the administration or what is finally allocated after 
enactment of the appropriations bill. The current procedure has always 
worked for the benefit of all parties, so why fix something that is not 
broken?
    Mr. Chairman, we greatly appreciate the leadership and support you 
have given to developing the Nation's water resources. We especially 
thank you for your continued support of the Tenn-Tom Waterway and its 
funding needs. We respectfully ask for your careful consideration and 
approval of the above requests for the Tenn-Tom Waterway and other 
projects of such great importance to our region.
                                 ______
                                 
  Prepared Statement of the Upper Mississippi River Basin Association 
                                (UMRBA)

                        [In millions of dollars]
------------------------------------------------------------------------
                                            President's        UMRBA
                                              Request     Recommendation
------------------------------------------------------------------------
Construction General:
    Upper Miss. River Restoration                   26.8           33.52
     Program (aka EMP)..................
    Lock and Dam 3 (Major                 ..............            4.30
     Rehabilitation) \1\................
    Lock and Dam 11 (Major                         20.32           27.75
     Rehabilitation) \1\................
    Lock and Dam 19 (Major                          5.44            5.60
     Rehabilitation) \1\................
    Lock and Dam 24 (Major                          3.90            3.90
     Rehabilitation) \1\................
    Locks 27 (Major Rehabilitation) \1\.            3.40            5.20
    Upper Mississippi and Illinois        ..............           16.20
     Rivers Navigation and Ecosystem
     Sustainability Program (if
     construction is authorized)........
Operation and Maintenance:
    O&M of the Upper Mississippi and              174.36          263.44
     Illinois Rivers Navigation System
     \2\................................
General Investigations:
    Upper Mississippi and Illinois        ..............           24.00
     Rivers Navigation and Ecosystem
     Sustainability Program (PED).......
------------------------------------------------------------------------
\1\ Funding for major rehabilitation projects would be shifted to the
  O&M account under the President's budget proposal. Major
  rehabilitation would still be cost-shared 50 percent from the Inland
  Waterways Trust Fund.
\2\ The administration has modified the structure of the O&M account in
  its fiscal year 2007 budget. Rather than budgeting for individual
  projects, the O&M request is organized by region and by business line
  within region. The UMRBA is addressing its testimony to that portion
  of the Region 7 navigation business line that is attributable to O&M
  of the Upper Mississippi and Illinois Rivers navigation system. Thus,
  we have disaggregated numbers from the President's budget.

    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:

                      CORPS CONTRACTING PRACTICES

    In its fiscal year 2006 energy and water appropriations measure, 
Congress included language generally barring the Corps from using 
continuing contracts. While the States understand Congress' need to 
retain appropriate control and oversight, this new provision, in 
combination with restrictions on reprogramming, significantly reduces 
the Corps' flexibility and efficiency in implementing ongoing programs, 
such as operation and maintenance, the River Restoration Program, and 
the proposed Navigation and Ecosystem Sustainability Program. By 
breaking work into smaller contracts, the Corps' planning and 
administration costs increase, as do costs associated with repeated 
mobilization/demobilization, purchasing in smaller quantities, etc. The 
impacts of these increased costs in this very tight fiscal environment 
are particularly deleterious. The UMRBA encourages Congress to develop 
an approach to Corps contracting that ensures appropriate controls and 
accountability while also permitting the Corps to execute its work 
efficiently and effectively.

         UPPER MISSISSIPPI AND ILLINOIS RIVERS NAVIGATION STUDY

    It has been more than a year since the Corps 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. While Congress has not yet authorized the recommended 
integrated plan for navigation improvements and ecosystem restoration, 
it has provided preconstruction engineering and design (PED) funding to 
ensure that the necessary planning and design work can proceed, in 
anticipation of construction authorization. Congress appropriated $13.5 
million for PED in fiscal year 2005 and $10.0 million in fiscal year 
2006. A similar bridging strategy will be necessary in fiscal year 2007 
if authorization is still pending.
    PED.--The UMRBA supports $24 million for PED in fiscal year 2007, 
despite the fact that the administration has once again not included 
PED in its budget request. 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 
continue without pause and be sustained over time. In fiscal year 2005 
and 2006, PED funding has been directed to both navigation improvements 
and ecosystem restoration projects. Continuing this dual purpose 
approach in fiscal year 2007 would require that $16.1 million be 
directed to navigation measures (including mooring facilities, economic 
modeling and evaluations, switchboats, and lock design at 3 sites), 
$5.9 million to ecosystem restoration plan formulation and evaluation, 
and $2.0 million for program management.
    Construction.--If the integrated navigation and ecosystem 
restoration program is authorized for construction this year, 
construction could be initiated on some projects in fiscal year 2007. 
In that event, UMRBA would recommend construction funding of $16.2 
million. This funding would support mooring facilities at 7 sites, 
switchboats at 2 sites, and 8 ecosystem restoration projects.

         UPPER MISSISSIPPI RIVER RESTORATION PROGRAM (AKA EMP)

    For the past 19 years, the Upper Mississippi River Restoration 
Program, commonly known as the 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. As the EMP embarks upon its 20th 
anniversary year, the UMRBA is pleased that the administration has 
identified the EMP as one of ``six construction projects considered to 
be national priorities.'' Even with this emphasis, however, the 
administration has requested only $26.8 million for the EMP in fiscal 
year 2007. This would continue the trend of the past 9 years, in which 
the annual EMP appropriation has fallen short of the authorized funding 
level. The UMRBA strongly urges Congress to appropriate full funding of 
$33.52 million for the EMP in fiscal year 2007.
    The administration's proposed $26.8 million budget would support 
planning and design work on eight habitat restoration projects and 
construction work on an additional 13 projects. In addition, the fiscal 
year 2006 request would support modest expansion of targeted research 
and data management efforts under the Long Term Resource Monitoring 
Program (LTRMP), which has suffered substantially from the funding 
shortfalls in recent years. However, to realize its full promise, the 
EMP requires funding at the full authorized amount of $33.52 million. 
This would support design work on three additional projects and 
construction on one additional project. It would also permit 
accelerated work on several other projects, thereby increasing overall 
program efficiency. Finally, funding at the full capability level would 
support LTRMP research on adaptive management, fish and water quality 
data analysis, and key modeling efforts. Therefore, the UMRBA urges 
Congress to fund the EMP at its full authorized amount of $33.52 
million.
    UMRBA is particularly concerned about an apparent directive from 
OMB that $3 million of fiscal year 2007 EMP funding be devoted to 
development of a ``10-year aquatic ecosystem restoration plan.'' Such a 
plan is unnecessary and would duplicate plans that the Corps just 
completed as part of the Navigation Study. Given the backlog of EMP 
habitat restoration projects awaiting construction, and the vast number 
of unmet needs under the LTRMP, 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 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, as recommended in the 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 20 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 President's fiscal year 2007 budget request 
for major rehabilitation work at L&D 24 ($3.9 million) and supports 
increasing the President's request for rehabilitation work at L&D 11 
($27.75 million), L&D 19 ($5.6 million), and Locks 27 ($5.2 million). 
L&D 11, located near Dubuque, Iowa, is nearly 70 years old. The major 
rehabilitation project currently underway includes new bulkheads, 
extensive miter gate rehabilitation, lock chamber and guidewall 
repairs, and electrical system upgrades. The increase of $7.4 million 
above the President's request for L&D 11 is needed to fully fund the 
Stage II contract. 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. The 
increase of $156,000 above the President's request for L&D 19, combined 
with anticipated fiscal year 2006 carryover, is required to fully fund 
the Stage I upper gate major rehabilitation. L&D 24, located near 
Clarksville, Missouri, is more than three-fourths through its $87 
million rehabilitation. Fiscal year 2007 funding will support work on 
dam tainter gate anchorages, dam bulkheads, and a bulkhead pickup beam. 
Lock 27 is located at a critical juncture on the inland waterways 
system, downstream of the Illinois and Missouri Rivers on the Chain of 
Rocks Canal in the St. Louis area. Major rehabilitation needs on this 
more than 50-year-old structure are extensive, including replacement of 
lock dates, lift gate machinery, and culvert valves. Fiscal year 2007 
would mark the first year of major rehabilitation at the structure. The 
increase of $1.8 million above the President's request would fund a 
range of design and construction work on lock lighting, culvert valves, 
sill anchors, and lock wall tie downs.
    The UMRBA also supports funding for a major rehabilitation project 
that is not included in the President's request: L&D 3 at $4.3 million. 
Navigation safety and embankment failure have been a concern for over 
20 years at L&D 3, and river pilots agree that this is the most 
dangerous stretch of the Upper Mississippi to navigate. Should there be 
an accident, the adjacent embankments, which have been severely 
weakened by age and past accidents, could be breached. In this event, 
commercial navigation would be curtailed and two large power plants 
would be forced to shut down. The $4.3 million in funding would be used 
to complete planning and fully fund the first phase of construction.

    OPERATION AND MAINTENANCE (O&M) OF THE UPPER MISSISSIPPI RIVER 
                           NAVIGATION SYSTEM

    The Corps 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 2007 budget request totals 
approximately $174.36 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.
    Unfortunately, the President's fiscal year 2007 budget represents a 
further widening of the gap between the amount requested and the amount 
required for adequate operation and maintenance of the navigation 
system. In fiscal year 2006, the gap between the President's request 
and the Corps' capability was $52.14 million. In fiscal year 2007, this 
shortfall has increased to $89.08 million. For segments of the Upper 
Mississippi System, this would mean multiple years during which 
resources have not supported even baseline operation and maintenance, 
resulting in an increasing backlog and a growing risk of failures and 
service interruptions. The impacts of these funding shortfalls will be 
amplified if Congress extends its fiscal year 2006 prohibition on 
continuing contracts. Responses to these continued fiscal pressures may 
include reductions in lock operating hours and cancellations of ongoing 
contracts. Funding beyond the President's request is needed to restore 
basic service levels, coordinate major maintenance with major 
rehabilitation at L&D 11 and 19, and purchase stop logs to ensure the 
Corps' ability to dewater lock chambers for emergency repairs.
    The UMRBA supports increased funding for O&M of the Upper 
Mississippi and Illinois River System to meet routine operation and 
maintenance needs, and to address the growing unfunded maintenance 
backlog. The Upper Mississippi River System is simply too valuable to 
invite disaster through chronic underfunding of basic O&M. For fiscal 
year 2007, O&M funding totaling $263.44 million is needed on the Upper 
Mississippi River System to address ongoing needs and critical backlog 
items.
                                 ______
                                 
      Prepared Statement of the City of Santa Barbara, California

    As your distinguished subcommittee writes the fiscal year 2007 
Energy and Water Resources Appropriations Bill, I would like to bring a 
very important Corps of Engineers' project to your attention. The City 
of Santa Barbara requests $2,020,000 from the Army Corps of Engineers' 
(ACOE) Operation and Maintenance (O&M) Account in fiscal year 2007 
Energy and Water Development Appropriations Bill for essential annual 
maintenance dredging of Santa Barbara Harbor's Federal Navigational 
Channel.

                         PROJECT JUSTIFICATION

    In 1970 Congress authorized (Public Law 91-611, Sec. 114) full 
funding for ACOE maintenance dredging for the Harbor's Federal Channel 
to reduce storm damage, shoaling and navigational hazards. Today more 
than ever, the Harbor continues to serve and support our National 
interests. The Harbor is home port for the 87 foot U.S. Coast Guard 
Cutter Blackfin and NOAA R/V Shearwater serving Channel Islands 
National Marine Sanctuary (CINMS). Blackfin's Harbor location is 
crucial to its mission of patrolling waters all the way to Morro Bay 
(100 miles north) and is critical to ocean safety and rescue, together 
with emerging Homeland Security Defense System (USCG) requirements 
along the California coastline. Santa Barbara Harbor also provides a 
staging area, facilities and resources required for oil spill 
prevention and response, and is a designated harbor of safe refuge.
    Every winter, approximately 400,000 cubic yards of sand piles up at 
Santa Barbara Harbor. Santa Barbara Harbor impedes the transport of 
sand downcoast resulting in shoaling of the Federal Channel and 
potential coastal erosion at several coastal communities. The Corps of 
Engineers conducted comprehensive studies of the Harbor in the 1950's 
and determined that annual dredging of the Harbor was necessary to 
maintain navigability and nourish downcoast beaches preventing erosion. 
It is essential to dredge at a minimum 250,000 cubic meters (c.m.) of 
sand from the Federal Channel every year to maintain year round 
navigability into and out of the Harbor.
    A recap of the last several years demonstrates the continuing trend 
of reduced dredge funding, which could impact Harbor operations and 
eventually accumulated sand could close the channel during winter 
storms.
  --Fiscal Year 2005.--Harbor inadvertently left out of President's 
        Budget Submittal (approximately $1.8 million was eventually 
        restored and reprogrammed).
  --Fiscal Year 2006.--President's Budget Submittal included $1.408 
        million (Congressional actions reduced dredge funding to $1.267 
        million).
  --Fiscal Year 2007.--President's Budget Submittal includes $1.2 
        million (Corps of Engineers indicates funding obligations of 
        approximately $2 million).
    On average, the Harbor has received approximately $1.8 million 
annually to undertake and complete maintenance dredging of the Harbor 
Federal Navigational Channel.

                            FUNDING REQUEST

    The President's fiscal year 2007 budget recommendation includes 
$1,200,000 for operations and maintenance dredging for Santa Barbara 
Harbor. I respectfully request that the U.S. House of Representatives, 
through your subcommittee, increase that level of funding to $2,020,000 
for fiscal year 2007 Corps of Engineers' Maintenance and Operation 
Account for dredging of the Harbor.
    Thank you for the opportunity to submit this statement.
                                 ______
                                 
  Prepared Statement of the Riverside County Flood Control and Water 
                         Conservation District

       FISCAL YEAR 2007 WATER RESOURCES DEVELOPMENT APPROPRIATIONS
------------------------------------------------------------------------
                         PROJECT                              REQUEST
------------------------------------------------------------------------
MURRIETA CREEK FLOOD CONTROL PROJECT: Construction           $11,500,000
 General................................................
HEACOCK AND CACTUS CHANNELS: Section 205--Design and           6,200,000
 Construction...........................................
NORCO BLUFFS BANK STABILIZATION PROJECT: Construction          1,000,000
 General................................................
SAN JACINTO & UPPER SANTA MARGARITA RIVER WATERSHEDS             532,000
 SPECIAL AREA MANAGEMENT PLAN (SAMP): General
 Investigations.........................................
SANTA ANA RIVER--MAINSTEM: Construction General.........      71,300,000
------------------------------------------------------------------------

MURRIETA CREEK FLOOD CONTROL, ENVIRONMENTAL RESTORATION AND RECREATION 
                                PROJECT

    Murrieta Creek poses a severe flood threat to the cities of 
Murrieta and Temecula. Over $12 million in damages was experienced in 
the two cities as a result of Murrieta Creek flooding in 1993. The 1997 
Energy and Water Appropriations Act dedicated $100,000 to conduct a 
Reconnaissance Study of watershed management in the Santa Margarita 
Watershed ``including flood control, environmental restoration, 
stormwater retention, water conservation and supply, and related 
purposes''. The study effort was initiated in April 1997 and completed 
the following December. The Reconnaissance Study identified a Federal 
interest in flood control on the Murrieta sub-basin, and recommended 
moving forward with a detailed Feasibility Study. This was completed in 
September 2000 and recommended the implementation of Alternative 6, the 
Locally Preferred Plan (LPP) for flood control, environmental 
restoration and recreation. The LPP was endorsed by the Cities of 
Temecula and Murrieta and by the community as a whole. H.R. 5483, the 
Energy and Water Appropriations Act of 2000, included specific language 
authorizing the Corps to construct ``the locally preferred plan for 
flood control, environmental restoration and recreation described as 
Alternative 6, based on the Murrieta Creek Feasibility Report and 
Environmental Impact Statement dated September 2000''.
    The Murrieta Creek Flood Control, Environmental Restoration and 
Recreation Project is being designed and will be constructed in four 
distinct phases. Phases 1 and 2 include channel improvements through 
the city of Temecula. Phase 3 involves the construction of a 250-acre 
detention basin, including a 160-acre environmental restoration site 
and over 50 acres of recreational facilities. Phase 4 of the project 
will include channel improvements through the city of Murrieta. 
Equestrian, bicycle and hiking trails as well as a continuous vegetated 
habitat corridor for wildlife are components of the entire 7-mile-long 
project.
    The Omnibus Appropriations Bill for fiscal year 2003 provided $1 
million for a new construction start for this critical public safety 
project. Construction activities on Phase 1 of the project commenced in 
the Fall of 2003. The appropriations for fiscal year 2004 and 
additional funds allocated through re-programming allowed the Corps to 
continue construction on Phase 1, which was completed in December 2004. 
Phase 2 traverses Old Town Temecula, one of the hardest hit areas 
during the flooding of 1993. The Corps anticipates having a Phase 2 
construction contract ready to award in the Winter of 2007. The 
District, therefore, respectfully requests the committee's support of 
an $11.5 million appropriation in fiscal year 2007 to allow the Corps 
to complete the Design Documentation Report, complete plans and 
specifications on Phase 2, and initiate construction on Phase 2 of the 
long awaited Murrieta Creek Flood Control, Environmental Restoration 
and Recreation Project.

 HEACOCK AND CACTUS CHANNELS PROTECTION OF MARCH AIR RESERVE BASE AND 
                         ADJACENT NEIGHBORHOODS

    Heacock and Cactus Channels are undersized, earthen channels that 
border the eastern and northern boundary of the March Air Reserve Base. 
Substantial vegetation becomes established within both channels and 
impedes the conveyance of tributary storm flows to an existing outlet 
located downstream. Storm flows overtop the Cactus Channel and traverse 
the March Air Reserve Base causing major disruption of the Base's 
operation, including the fueling of airplanes and transport of troops 
and supplies. The inadequate size of the Heacock Channel also causes 
storm drains from adjacent neighborhoods within the city of Moreno 
Valley to back up, flooding local residential areas and impeding access 
to these areas by residents as well as emergency services. The record 
rainfall of 2004/2005 also caused extensive erosion along Heacock 
Avenue jeopardizing existing utilities within the road right of way and 
cutting off access to approximately 700 residences.
    Under Section 205 of the Continuing Authorities Program (CAP), the 
Corps received $100,000 in fiscal year 2005 and completed an Initial 
Appraisal Report which determined the feasibility of proceeding with a 
project to provide flood protection to this sensitive area. With the 
$546,000 received in fiscal year 2006 the Corps completed a Project 
Management Plan, executed a Feasibility Cost Sharing Agreement and will 
complete the Detailed Project Report by Fall 2006. The Corps expects to 
initiate plans and specification during the Fall 2006 and be ready to 
award a contract for construction by Spring 2007, providing the needed 
funding is allocated during this fiscal year.
    The District requests support from the committee for a fiscal year 
2007 appropriation of $6,200,000 under Section 205 to complete the 
design and specifications and begin construction of the critically 
needed project.

                NORCO BLUFFS BANK STABILIZATION PROJECT

    The Norco Bluffs Bank Stabilization project consists of a soil 
cement toe protection structure constructed to the 100-year flood level 
at the base of the bluff, and a stable earthen buttress fill 
constructed to the top of the bluff along the Santa Ana River, in the 
city of Norco. The bluff stabilization work extends easterly from the 
Interstate 15 bridge to near Center Avenue. The estimated total cost of 
the project was approximately $14 million. The Corps received a total 
of $7.2 million in construction funds in the fiscal year 1998, fiscal 
year 1999 and fiscal year 2000 Federal budgets for the project. Since 
the available Federal funding fell short of that necessary to construct 
the entire project at once, the Corps decided to break it into two 
phases. Phase 1, which was completed in May 2000, includes a soil 
cement toe protection structure along the entire length of the project, 
as well as construction of approximately 1,300 feet of buttress fill in 
the most critical reach of the bluffs between Valley View and Corona 
Avenues. The Phase 2 contract involved the construction of the balance 
of the buttress fill. Construction of most of Phase 2 was completed in 
December 2003, with the exception of hydroseeding the slopes, which was 
differed until the appropriate season to ensure successful 
establishment. Unfortunately, the record rainfall of the 2004/2005 
season caused damages to the project that need to be repaired in order 
to complete the project and turn it over.
    The District requests support from the committee for a fiscal year 
2007 appropriation of $1,000,000 to complete the repairs, hydroseed the 
slopes and turn the project over to the District.

   SAN JACINTO & UPPER SANTA MARGARITA RIVER WATERSHEDS SPECIAL AREA 
                            MANAGEMENT PLAN

    The County of Riverside recognizes the interdependence between the 
region's future transportation, habitat, open space and land-use/
housing needs. Increased developmental pressure in the region has 
challenged local, State, and Federal agencies to respond to this 
unprecedented growth. In 1999, work was initiated on Riverside County's 
Integrated Project (RCIP) to determine how to best address this growth. 
In 2003 the County adopted a new General Plan and Multi-Species Habitat 
Conservation Plan (MSHCP) to address regional conservation and 
development plans that protect entire communities of native plants and 
animals, while streamlining the process for compatible economic 
development in other areas.
    The Corps began development of a Special Area Management Plan 
(SAMP) for both the San Jacinto and Upper Santa Margarita Watersheds in 
2001. This comprehensive planning effort will be used to assist 
Federal, State and local agencies with their decision making and 
permitting authority to protect, restore and enhance aquatic resources, 
while accommodating various types of development activities. The final 
product of the SAMP will be the establishment of an abbreviated or 
expedited regulatory permitting process by the Corps under Section 404 
of the Clean Water Act. This process will increase regulatory 
efficiency and promote predictability to the regulated public. The plan 
will also build on the protection of high value resource areas, as 
envisioned in the MSHCP.
    The District requests support from the committee for a fiscal year 
2007 appropriation of $532,000 to complete the work on the Nation's 
largest SAMP for the San Jacinto and Upper Santa Margarita Watersheds.

                       SANTA ANA RIVER--MAINSTEM

    The Water Resources Development Act of 1986 (Public Law 99-662) 
authorized the Santa Ana River--All River project that includes 
improvements and various mitigation features as set forth in the Chief 
of Engineers' Report to the Secretary of the Army. The Boards of 
Supervisors of Orange, Riverside and San Bernardino Counties continue 
to support this critical project as stated in past resolutions to 
Congress.
    For fiscal year 2007, an appropriation of $71.3 million is 
necessary to provide funding for the following activities:
  --$23 million to initiate construction activities on several features 
        within ``Reach 9'' of the Santa Ana River immediately 
        downstream of Prado Dam. This segment of the Santa Ana River 
        project is the last to receive flood protection improvements. 
        The streambed existing today in a relatively natural state 
        would receive only localized levee and slope revetment 
        treatment to protect existing development along its southerly 
        bank. The funding will also be used for landscape enhancement 
        of the river banks.
  --$13.3 million to fund required mitigation, complete tunnel repairs 
        and conduct a water quality study of the Seven Oaks Dam 
        project.
  --$35 million to continue with the construction of improvements to 
        Prado Dam's outlet works and embankment, and construction of 
        dikes to protect the properties within the Prado Dam basin.
    The District respectfully requests that the committee support an 
overall $71,300,000 appropriation of Federal funding for fiscal year 
2007 for the Santa Ana River Mainstem Project.
                                 ______
                                 
 Prepared Statement of the Board of Levee Commissioners for the Yazoo-
                           Mississippi Delta

    On behalf of its citizens in 10 counties in the Mississippi Delta, 
the Yazoo-Mississippi Delta Levee Board joins with the other local 
flood control operations within the Mississippi Valley Flood Control 
Association, in requesting full U.S. Army Corps of Engineers capacity 
funding of $510 million for the Mississippi River and Tributaries 
Project (MR&T).
    The Corps of Engineers projects that its engineering, construction 
and maintenance capabilities in fiscal 2007 amount to $510 million, but 
the administration's budget for this critical and highly cost-effective 
project for the Nation's heartland is only $278 million. We urge 
Congress, as it has before, to fully fund this vitally needed flood 
control project which has performed at a benefit-to-cost-ratio of an 
astounding 24-to-1 over the course of its history.
    In addition to its flood control benefits, the MR&T also provides 
almost $1 billion in navigation savings on the Mississippi River each 
year. Conceived and designed as a multi-component system to convey 
floodwaters that pass through the lower Mississippi Valley to the Gulf 
of Mexico, its components drain 41 percent of the continental United 
States. It simply must be completed.
    A line-item-by-line-item breakdown of the MR&T's proposed 2007 
works and cost estimates, along with suggested administration funding 
and Corps capabilities is attached and follows. We urge Congress to 
inspect this detailed project analysis and are confident that, as the 
branch of government most directly responsible to the people, it will 
reach favorable funding decisions.
    For our part in this very important process, we will focus our 
testimony on several aspects of one greater issue which we know to be 
of primary concern and importance to the citizens of our levee 
district.
    The Upper Yazoo Project (UYP), for which my board is proud to serve 
as local sponsor, represents a perfect model for what a flood control 
project should be, anywhere in the country. It is a perfect example of 
how critically-needed work can progress smoothly and without 
controversy or public upheaval.
    Designed to restore the Yazoo/Coldwater/Tallahatchie river system 
to its flow capacity and eliminate damaging interbasin transfer, the 
UYP has already provided flood protection to Greenwood, and upon its 
completion, would also protect the additional areas of Marks, Lambert, 
Moorhead, Mississippi Delta Community College, Tutwiler, Glendora, 
Sumner and Webb.
    The project is two-thirds complete. It needs only adequate funding 
to bring long-needed relief to thousands of people and their 
properties. Yet the proposed Federal budget for this public policy 
initiative contains not a dime. Not a cent. Such is an enormous 
injustice.
    We urge the Congress to fully fund in 2007 the Upper Yazoo Project 
at the Corps' capability of $22.5 million. The facts make the best case 
for the Upper Yazoo Project.
    The remaining stage--the final one-third--of the UYP is its most 
critical. The remaining channels to be cleared convey the waters from 
three-fourths of Mississippi's flood control reservoirs and 74 percent 
of all the water from the State's hill section. Those reservoirs have 
now exceeded their originally-projected lifespans and we cannot 
continue to expose them to needless stress, which they are almost 
annually, when existing stream capacities won't always allow timely 
release of their waters.
    The very successful Mississippi Delta Headwater Project (formerly 
DEC) has been very helpful in attempting to control the waters which 
flow from the hills to the Delta. We ask that it be funded to the Corps 
capability of $25 million, but again, the success of that project only 
makes sense within the context of the UYP.
    It is also critically important to note that for the UYP to 
proceed, it must be fully funded in the 2007 budget. With the 
longstanding practice of continuing construction contracts for Corps of 
Engineers' projects now eliminated, this project has come to a 
standstill simply for lack of funds.
    This badly-needed work has already been delayed from 8 to 10 months 
this year because its Corps line item has run out of money and under 
the new rules, it will continue to be delayed in 2007 as well, unless 
Congress fully funds it at the prescribed $22.5 million level.
    We implore the Congress not to make the same sort of mistake, the 
effects of which we have so tragically seen in the wake of Hurricane 
Katrina. Let not the question be asked: Why wasn't something done when 
they knew about the danger?
    Because of the stealthy nature of flooding in the unique area that 
is the Mississippi Delta, dangerously high water levels can appear 
literally overnight. We know these waterways must be restored to their 
capacities. We know that lives and property are threatened in the 
absence of that. We know we need to do this and we know the only issue 
is money.
    Should a mother, or God forbid her child, fall victim to the 
present dangers which are only amplified through procrastination, this 
year, then the all-too-easy anthem of ``wait until next year,'' will 
ring very hollow indeed.

  MISSISSIPPI VALLEY FLOOD CONTROL ASSOCIATION--FISCAL YEAR 2007 CIVIL
WORKS REQUESTED BUDGET--MISSISSIPPI RIVER AND TRIBUTARIES APPROPRIATIONS
------------------------------------------------------------------------
                                            PRESIDENT'S
            PROJECT AND STATE                 BUDGET       MVFCA REQUEST
------------------------------------------------------------------------
SURVEYS, CONTINUATION OF PLANNING AND
 ENGINEERING & ADVANCE ENGINEERING &
 DESIGN:
    Memphis Harbor, TN..................  ..............  ..............
    Germantown, TN......................  ..............  ..............
    Lower Steele Bayou..................  ..............        $100,000
    Homochitto River....................  ..............         100,000
    Memphis Metro Storm Water             ..............         152,000
     Management, TN.....................
    Bayou Meto, AR......................  ..............       1,553,000
    Southeast Arkansas..................  ..............         800,000
    Coldwater Basin Below Arkabutla             $300,000         495,000
     Lake, MS...........................
    Quiver River, MS....................  ..............         100,000
    Spring Bayou, LA....................  ..............         500,000
    Point Coupee to St. Mary Parish, LA.  ..............         100,000
    Atchafalaya Basin Floodway Land              100,000         300,000
     Study, LA..........................
    Alexandria, LA to the Gulf of Mexico         200,000         200,000
    Morganza, LA to the Gulf of Mexico..  ..............       4,000,000
    Donaldsonville, LA to the Gulf of     ..............          75,000
     Mexico.............................
    Tensas River, LA....................  ..............  ..............
    Donaldsonville Port Development, LA.  ..............         500,000
    Collection & Study of Basic Data....         400,000         735,000
                                         -------------------------------
      SUBTOTALS--SURVEYS................       1,000,000       4,157,000
ADVANCED ENGINEERING & DESIGN...........  ..............       5,553,000
                                         -------------------------------
      TOTAL GENERAL INVESTIGATIONS......       1,000,000       9,710,000
                                         ===============================
CONSTRUCTION:
    St. John's Bayou--New Madrid               2,500,000      15,000,000
     Floodway, MO.......................
    Eight Mile Creek, AR................  ..............  ..............
    Helena & Vicinity, AR...............  ..............  ..............
    Grand Prairie Region, AR............  ..............      33,000,000
    Bayou Meto, AR......................  ..............      11,847,000
    West Tennessee Tributaries..........  ..............         500,000
    Nonconnah Creek, TN.................  ..............         500,000
    Wolf River, Memphis, TN.............  ..............       1,500,000
    Augusta to Clarendon Levee, Lower     ..............         500,000
     White River........................
    St. Francis Basin, MO & AR..........  ..............      11,840,000
    Yazoo Basin, MS.....................  ..............      73,275,000
    Atchafalaya Basin, LA...............      27,600,000      30,000,000
    Atchafalaya Basin Floodway, LA......       4,840,000      10,809,000
    MS Delta Region, LA.................       3,212,000       3,933,000
    Channel Improvements, IL, KY, MO,         43,092,000      47,392,000
     AR, TN, MS & LA....................
    Mississippi River Levees, IL, KY,         40,756,000     118,800,000
     MO, AR, TN, MS & LA................
                                         -------------------------------
      SUBTOTAL--CONSTRUCTION............     122,000,000     358,896,000
      SUBTOTAL--MAINTENANCE.............     147,000,000     226,327,000
SUSPENSION FUND.........................       8,000,000  ..............
                                         -------------------------------
      SUBTOTAL--MISSISSIPPI RIVER &          278,000,000     594,933,000
       TRIBUTARIES......................
LESS REDUCTION FOR SAVINGS & SLIPPAGES..  ..............      84,933,000
                                         -------------------------------
      GRAND TOTAL--MISSISSIPPI RIVER &       278,000,000     510,000,000
       TRIBUTARIES......................
------------------------------------------------------------------------


  MISSISSIPPI VALLEY FLOOD CONTROL ASSOCIATION--FISCAL YEAR 2007 CIVIL
    WORKS REQUESTED BUDGET--MISSISSIPPI RIVER AND TRIBUTARIES PROJECT
                               MAINTENANCE
------------------------------------------------------------------------
                                            PRESIDENT'S
                 PROJECT                      BUDGET       MVFCA REQUEST
------------------------------------------------------------------------
Wappapello Lake, MO.....................      $4,768,000      $7,734,000
Mississippi River Levees................       6,400,000       9,000,000
Mississippi River Channel Maintenance...      60,280,000      66,600,000
Memphis Harbor, TN......................       1,013,000       1,942,000
Pidgeon Industrial Harbor, TN...........  ..............         250,000
Helena Harbor, AR.......................          63,000         402,000
Greenville Harbor, MS...................          30,000         437,000
Vicksburg Harbor, MS....................          71,000         385,000
St. Francis River & Tribs, AR...........       6,300,000      15,250,000
White River Backwater, AR...............       1,200,000       1,500,000
North Bank, Arkansas River, AR..........         560,000         560,000
South Bank, Arkansas River, AR..........         310,000         310,000
Boeuf & Tensas Rivers, LA...............       2,600,000       4,157,000
Red River Backwater, LA.................       3,350,000       6,650,000
Yazoo Basin, Sardis Lake, MS............       7,199,000      12,425,000
Yazoo Basin, Arkabutla Lake, MS.........       6,170,000       9,251,000
Yazoo Basin, Enid Lake, MS..............       5,397,000      12,532,000
Yazoo Basin, Grenada Lake, MS...........       5,690,000      10,949,000
Yazoo Basin, Greenwood, MS..............         620,000       1,020,000
Yazoo Basin, Yazoo City, MS.............         770,000         770,000
Yazoo Basin, Main Stem, MS..............       1,072,000       1,929,000
Yazoo Basin, Tributaries, MS............         830,000         830,000
Yazoo Basin, Whittington Aux Channel, MS         430,000         430,000
Yazoo Basin, Big Sunflower, MS..........         209,000       2,209,000
Yazoo Basin, Yazoo Backwater, MS........         468,000         734,000
Lower Red River, South Bank, LA.........          66,000          66,000
Bonnet Carre, LA........................       2,702,000       5,252,000
Old River, LA...........................       9,747,000      17,840,000
Atchafalaya Basin, LA...................      12,532,000      27,500,000
Atchafalaya Basin Floodway, LA..........       2,605,000       3,059,000
Baton Rouge Harbor Devil's Swamp, LA....          17,000         715,000
Mississippi Delta Region, LA............         241,000         349,000
Bayou Cocodrie & Tribs, LA..............          56,000          56,000
Inspection of Completed Works...........       1,850,000       1,850,000
Mapping.................................       1,384,000       1,384,000
                                         -------------------------------
      TOTAL MR&T MAINTENANCE............     147,000,000     226,327,000
------------------------------------------------------------------------

                                 ______
                                 
             Prepared Statement of the USA Rice Federation

    This is to convey the rice industry's request for fiscal year 2007 
funding for selected programs under the jurisdiction of your respective 
subcommittees. The USA Rice Federation appreciates your assistance in 
making this letter a part of the hearing record.
    The USA Rice Federation is the national advocate for all segments 
of the rice industry, conducting activities to influence government 
programs, developing and initiating programs to increase worldwide 
demand for U.S. rice, and providing other services to increase 
profitability for all industry segments. USA Rice members are active in 
all major rice producing States: Arkansas, California, Florida, 
Louisiana, Mississippi, Missouri, and Texas. The USA Rice Producers' 
Group, the USA Rice Council, the USA Rice Millers' Association, and the 
USA Rice Merchants' Association are members of the USA Rice Federation.
    USA Rice understands the budget constraints the committee faces 
when developing the fiscal year 2006 appropriations bill. We appreciate 
your past support for initiatives that are critical to the rice 
industry and look forward to working with you to meet the continued 
water and related needs of the rice industry in the future.
    The Mississippi River Valley alluvial aquifer is the primary source 
of irrigation water for one of the major rice-producing areas in the 
United States. Groundwater is being withdrawn at such a rate that the 
aquifer is in danger of being permanently damaged. Irrigation wells are 
failing. Loss of rice production in this area would result in severe 
economic and social repercussions to the local, State, and national 
economies.
    Rice producers continue to seek new sources of irrigation for their 
crops. In many rice-growing regions the aquifers used by rice farmers 
are the same aquifers used by local metropolitan populations. Some of 
these vital aquifers are at risk. Water levels are dropping fast due to 
deficit rainfall and expanding use from industrial, agricultural, and 
metropolitan users. Rice producers are working to build new sources of 
irrigation. The programs listed below are cost-share programs to help 
rice producers ensure there will be a plentiful water supply for their 
rice crops and their neighbors in the city. By using surface water from 
man-made reservoirs, rivers or bayous to irrigate rice crops, these 
precious aquifers can be saved for future generations. These water 
projects also provide invaluable wildlife habitat.
    To address these critical water needs the USA Rice Federation 
supports the following:
    White River Irrigation Demonstration Project.--Full funding to 
continue construction on this important Demonstration Project. This 
project is located in the major rice-growing region of East Arkansas 
and will help provide the critical water resources necessary for rice 
production, which plays such a vital role in the economy of Arkansas.
    Bayou Meto Basin.--Continued construction funding for this project 
located in East Central Arkansas in Lonoke, Pulaski, Prairie, 
Jefferson, and Arkansas counties.
    Boeuf Tensas Project.--Continued funding for work on this water 
project located in portions of Jefferson, Lincoln, Desha, and Chicot 
counties in Arkansas, as well as portions of Northeast Louisiana.
    For California, a very critical wetland wildlife habitat 
enhancement program was authorized by Section 3406(b)22 of the Central 
Valley Project Improvement Act. Unfortunately, the funds were sunset in 
2002. When fully funded, this program provided funding for the winter 
flooding of 35,000 to 40,000 acres of important rice wetland habitat in 
the Pacific Flyway of California. These acres are not only critical to 
the health of the Flyway for migrating waterfowl, but are also 
designated as Shorebird Habitat of International Significance by the 
Western Hemisphere Shorebird Reserve Network. USA Rice supports 
continuation of the winter flooding incentives program provided by 
Section 3402(b)22 of the Central Valley Project Improvement Act and 
requests restored funding for this important effort.
    The rice industry also supports continued funding for the 
Mississippi River and Tributaries Project, and within that, the St. 
Francis Basin Project which provides flood control and drainage from 
Cape Girardeau, Missouri to Helena, Arkansas. We also support the St. 
John's Bayou Project in Missouri and urge that funding be maintained 
for this project.
    Please feel free to contact us if you would like further 
information about the programs we have referenced. Additional 
background information is available for all of the programs listed, 
however, we understand the volume of requests the committee receives 
and have restricted our comments accordingly.
    Thank you for your consideration of our recommendations.
                                 ______
                                 
          Prepared Statement of the City of San Marcos, Texas

    Mr. Chairman and members of the subcommittee, on behalf of the City 
of San Marcos, Texas, I am pleased to submit this statement in support 
of our request for an earmark of $439,000 for a U.S. Army Corps of 
Engineers Section 206 Ecosystem Restoration Project for the San Marcos 
River in the fiscal year 2007 bill.
    The City of San Marcos seeks this allocation for the development of 
the Detailed Project Report/Integrated Environmental Assessment (DPR/
EA) as the next step toward completing a $4,540,000 project with 
Federal and local match to restore degraded aquatic and terrestrial 
habitat in the upper San Marcos River.
    San Marcos is located in south central Texas in Hays County, 
approximately 30 miles southwest of Austin, Texas. The proposed 
restoration area is located within the city limits of San Marcos along 
and within the San Marcos River and its headwaters. The study area 
consists of an approximate 1.0-mile stretch of the San Marcos River and 
associated riparian corridor. The ecosystem restoration project will 
restore and enhance degraded aquatic and terrestrial habitat along and 
within the San Marcos River.
    The spring-fed San Marcos River offers one of rarest aquatic 
ecosystems found in the United States. The headwaters of the river 
originate from underground springs from the Edwards Aquifer, producing 
millions of gallons of crystal clear, constant temperature water daily. 
The river creates a unique ecosystem supporting five threatened or 
endangered species that live in the San Marcos River (San Marcos 
salamander, fountain darter, Texas wild rice, San Marcos gambusia, and 
Comal Springs riffle beetle).
    The San Marcos River has attracted humans to its banks for more 
than 12,000 years, making San Marcos one of the oldest continuously-
inhabited places in the United States. The City of San Marcos has 
strived for the past 40 years to protect the river by establishing 
parks along its banks and restricting intense development.
    Still, the constant use of the popular river over many decades has 
impacted the riparian and aquatic habitat of the river, requiring 
restoration of this valuable waterway. The San Marcos River and 
associated tributaries have experienced aquatic ecosystem degradation 
due to a variety of human factors. Impoundment of water upstream, in 
its tributaries, and within the study area has altered the normal flow 
regime of the San Marcos River. The native aquatic plant communities 
within the San Marcos River have been diminished by invasive exotic and 
generalist plant species.
    Increased nutrient and sediment loads from overland surface flow, 
tributary runoff, non-point sources and storm water drainage have 
reduced water quality and in-stream habitat values within the river. 
The majority of the bottomland plant community within the study area is 
highly disturbed and fragmented due primarily to urban encroachment, 
installation of hardpan surfaces, recreational disturbance and invasion 
of non-native plant species.
    This degradation has resulted in the loss of high-quality in-stream 
and riparian habitat for plant and wildlife species within the study 
area. The proposed restoration plan will help restore aquatic and 
terrestrial habitat that has degraded due to human activity, including 
critical habitat for the federally-listed species.
    The City of San Marcos applied for U.S. Army Corps of Engineers 
Section 206 Aquatic Restoration Grant funds in 2002 to turn around the 
trend toward degradation in our river corridor. A Preliminary 
Restoration Plan (PRP) was developed by the U.S. Army Corps of 
Engineers and submitted in March 2003. The PRP was approved and moved 
forward to the next phase, the development of a Detailed Project Report 
(DPR).
    However, at this stage, Federal funding for this program was 
reduced, placing the City of San Marcos PRP on the back burner. Funding 
this project is essential to restore integrity to the San Marcos River, 
the central point of our community for tourism, recreation, and quality 
of life.
    This project will directly benefit the environment by increasing 
biodiversity, carrying capacity, stability and productivity of native 
plant and wildlife species endemic to the area. Additional benefits 
include improvement of existing recreational opportunities, enhancement 
of water quality, and improvement of natural aesthetics.
    Specifically, the project will restore and sustain approximately 
22.0 acres of riparian woodland habitat, 6.0 acre of tall grass prairie 
habitat, 4.0 acres of emergent wetland habitat and 16.0 acres of 
aquatic habitat within a highly urbanized area. The total project cost 
is estimated at $4,540,000, which will be cost-shared 65 percent 
Federal Government and 35 percent City of San Marcos. The Federal share 
is $2,951,000 with a local match of $1,589,000.
    The only COE Section 206 projects that will now receive funding are 
those that have Congressional support.
    Therefore, we ask you to approve a special appropriation earmark 
for $439,000 for the San Marcos River Section 206 Project to fund the 
restoration. Thank you for your consideration of this project.
                                 ______
                                 
              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' fiscal 2007 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. My name is Jimmie 
Powell and I am the Director of Government Relations at the 
Conservancy.
    The Nature Conservancy is an international, nonprofit 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. Our on-the-ground conservation work is carried out in 
all 50 States and in 27 foreign countries and is supported by 
approximately 1 million individual members. We have helped conserve 
nearly 15 million acres of land in the United States and Canada and 
more than 102 million acres with local partner organizations globally.
    The Conservancy owns and manages approximately 1,400 preserves 
throughout the United States--the largest private system of nature 
sanctuaries in the world. We recognize, however, that our mission 
cannot be achieved by core protected areas alone. Therefore, our 
projects increasingly seek to accommodate compatible human uses, and 
especially in the developing world, to address sustained human well-
being.
    The Conservancy has several concerns with policies required in the 
fiscal 2006 Energy and Water Appropriations bill and recommends some 
revisions to those provisions. As the largest non-Federal sponsor of 
ecosystem restoration projects (in numbers of projects, not total cost) 
these limitations have had a significant impact on our partnership with 
the Corps. The Conservancy urges the subcommittee to lift the ban on 
``new starts''/project advancement, and to revise the restrictions on 
re-programming of funds. The ban on ``new starts''/project advancement 
has halted a number of our restoration projects which are widely 
supported by local communities and important to local biodiversity. The 
Conservancy also urges the subcommittee to revise the limitations on 
re-programming. Several Conservancy projects, which had conference 
report language indicating Congressional funding intent, had funds re-
programmed and now the Corps cannot reprogram the funds back to those 
projects.
    The Conservancy urges the subcommittee to support the following 
appropriation levels in the fiscal 2007 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 $30 million appropriated in 
fiscal 2006. 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, which we seek $150,000 in fiscal 2007; 
and Chain Bridge Flats, DC/MD/VA, a floodplain restoration on the 
Potomac River which requires $210,000 in fiscal year 2007. In order to 
further reduce the funding backlog, the Conservancy strongly encourages 
a repeat of $30.0 million for the Section 1135 program in fiscal 2007, 
an increase over the President's $15.0 million request.
    Section 206: Aquatic Ecosystem Restoration.--Section 206 is a newer 
Corps program that authorizes restoration of aquatic habitat regardless 
of past activities. This is another popular restoration program with 
demand far exceeding the $30 million appropriated for fiscal year 2006. 
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; and Camp Creek, OR, 
a headwaters stream restoration project that needs $575,000 to continue 
the feasibility study. In order to further reduce the funding backlog, 
the Conservancy strongly encourages a repeat of $30 million for the 
Section 1135 program in fiscal 2007 an increase over the President's 
$19.9 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 full funding of $33.2 
million for fiscal year 2007, an increase over the President's $27.0 
million request.
    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 
and quantity, provide flood control; and provide outdoor recreation 
opportunity. The Conservancy supports the President's $5.0 million 
request for fiscal year 2007.
    South Florida Everglades Ecosystem Restoration Program.--The 
Everglades are home to a profusion of bird species, with 347 species 
recorded within Everglades National Park alone. The ecosystem provides 
breeding habitat for roseate spoonbills, snail kite, southern bald 
eagle, Cape sable seaside sparrow, wood stork, white ibis, glossy ibis 
and 11 species of egrets and herons. Beginning 60 years ago, the Corps 
began building projects for human benefit that shunted water away from 
the Everglades. Many factors, including these flood control projects 
and agricultural and urban development, have contributed to the 
reduction and degradation of the wetlands ecosystem. Restoration of 
this globally significant region is a priority for the Conservancy. The 
Conservancy requests $207 million in the South Florida Everglades 
Ecosystem Restoration Program in fiscal year 2007. This program 
includes the following suite of restoration programs:
  --Modified Water Deliveries to Everglades National Park ($35 
        million).--This project balances fresh water crossing Tamiami 
        Trail and entering the park. Completing this project is a 
        pressing concern to restore habitat and stave off the danger of 
        an estuarine collapse in Florida Bay.
  --Critical Projects Construction ($15 million).--This special program 
        is made up of nine projects that are critical to the future of 
        the entire ecosystem's restoration. Fiscal year 2007 projects 
        will include completion of construction on the Lake Okeechobee 
        Water Retention Areas and Ten Mile Creek projects and 
        continuing construction on the Seminole Big Cypress project.
  --Kissimmee River Restoration Construction ($50 million).--This 
        project involves restoring water-level fluctuations and 
        seasonal discharges from Lakes Kissimmee, Cypress and 
        Hatchineha in the upper basin. This project features 22 miles 
        of canal backfilling and structure removal along with land 
        acquisition of over 100,000 acres.
  --Comprehensive Everglades Restoration Plan (CERP) Project 
        Construction ($20 million).--Components of this plan include 
        aquifer storage and recovery; construction of surface water 
        storage reservoirs; construction of storm water treatment 
        areas; seepage management; removal of 240 miles of barriers to 
        sheet flow; and reuse of wastewater at two regional plants.
  --Central and Southern Florida Project to include the C111, CERP, and 
        STA 1 East projects ($87 million).--This program includes the 
        Upper St. Johns, Manatee Protection, C-51 and STA-1E, C-111, 
        Miami Canal Study and 10 initial projects of the CERP. Recent 
        progress includes initial construction of manatee pass gates, 
        with all gates expected to be completed this year; completed 
        construction on the C-51 and transfer of operations to the 
        South Florida Water Management District; and continuing design 
        for the next phase of buffer construction for the C-111 
        project.

General Investigation Priorities
    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 $250,000 in fiscal 
year 2007. This study is not included in the President's budget.
    Willamette River Floodplain Study.--This project will contribute to 
the long-term restoration of floodplain habitat in the Willamette River 
Basin, an important step toward the recovery of several threatened fish 
species listed under the Endangered Species Act. The restoration 
efforts associated with the Willamette River Floodplain Restoration 
Study, including increasing floodplain connectivity and replanting 
riparian forests, will contribute to the Corps' ability to reduce river 
temperatures and meet their obligations under the Clean Water Act. This 
project also leverages a unique national partnership between the Corps 
and the Conservancy, the Sustainable Rivers Project, to improve dam 
management in order to protect the ecological health of rivers and 
surrounding natural areas while continuing to provide services such as 
flood control and power generation. The Conservancy supports $436,000 
in fiscal year 2007. This study is not included in the President's 
budget.

Operations and Maintenance Priorities
    Missouri River Fish and Wildlife Recovery.--The Missouri River has 
an extensive and diverse array of aquatic and terrestrial systems that 
have had a dominant influence on the basin's biological diversity. A 
predictable yet dynamic interaction of aquatic and terrestrial 
ecological processes support more than 500 species of mussels, fish, 
amphibians, reptiles, birds and mammals. The Corps has completed 30 
projects along the river in the lower four States (Iowa, Kansas, 
Missouri and Nebraska) resulting in over 40,000 acres of restored 
aquatic and floodplain habitat. The Missouri River Fish and Wildlife 
Recovery Program will not only enhance these restoration efforts, but 
complement protection and restoration efforts by the Bureau of Indian 
Affairs, Bureau of Land Management, Bureau of Reclamation, Department 
of Defense, U.S. Forest Service, U.S. Fish and Wildlife Service, 
National Park Service and the Natural Resources Conservation Service in 
the entire river basin. Three species dependent on the Missouri River 
are federally-listed as endangered or threatened, two are candidates 
for Federal listing, and at least eight are species of special concern 
to State or Federal fish and wildlife management agencies. The 
Conservancy supports an appropriation in the amount of $85.0 million in 
fiscal year 2007.
    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.
                                 ______
                                 
      Prepared Statement of the Ouachita River Valley Association

    Mr. Chairman and distinguished members of the committee, thank you 
for the opportunity to present this testimony. The Ouachita-Black 
Navigation Project is the backbone of much of the economy of our region 
supporting employment, municipal water supplies, recreation, wildlife 
habitat and conservation of the endangered Sparta Aquifer. The Project 
was authorized by the River and Harbor Act of 1950 and modified by the 
River and Harbor Act of 1960. The 337-mile Ouachita-Black Navigation 
System is the only commercially navigable waterway serving the 11 
Parishes and Counties in northeast Louisiana and Southeast Arkansas.
    As a nonprofit organization, the Ouachita River Valley Association 
has worked with private enterprise and governments at the Federal, 
State, and local levels for more than 100 years to encourage 
investments in projects that are economically sound, socially justified 
and enhance the general welfare of the people in the Ouachita River 
basin in Arkansas, Louisiana, and the Nation.
    Mr. Chairman, we are grateful for the $13.9 million appropriated in 
fiscal year 2006 that is permitting significant lock maintenance to be 
performed for the first time in several years. This work is crucial 
since all project benefits depend upon the adequacy of the four small 
locks and dams (84 feet by 600 feet) that have been in place for up to 
30 years without adequate maintenance.
    The lack of investment in routine maintenance on Ouachita-Black 
Navigation Project is symptomatic of infrastructure problems throughout 
the country as was tragically demonstrated during the hurricanes of 
2005 which passed on both sides of the Ouachita Basin.
    We submit our funding 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. 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 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. Work is continuing this year at Columbia 
Lock and Dam and with the requested funding for fiscal year 2007 work 
can continue upstream to Felsenthal Lock and Dam. 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 $14.0 million for routine operations, 
        continuation of the stoplog slot modification program, repair 
        of critical components, initiation of preventive maintenance 
        work, and channel maintenance dredging. This amount is well 
        below the $17.25 million identified as the capability of the 
        Corps of Engineers to perform in fiscal year 2007.

                CONSTRUCTION GENERAL, BANK STABILIZATION

    The Ouachita River continues to erode the most vulnerable banks 
with annually rising and falling river stages. The rate and degree of 
this attack has increased and is now endangering critical public 
infrastructure such as levees and State highways. Levees have been 
``set back'' at several locations in the past year and bank caving is 
occurring on the shoulders of Louisiana State Highways 8 and 124. The 
most severe threat from this erosion is to the levees protecting the 
cities of Columbia and Monroe. Studies conducted by the Tensas Basin 
Levee District indicate damages from a failed levee at flood stage 
would result in damages up to $2 billion with extensive residential and 
business flooding, and rupture of transportation features such as the 
municipal airport and Interstate Highway 20.
    Protection of 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. 
A Corps of Engineers Status Report identified numerous caving sites the 
length of the river to Remmel Dam and prioritized them for protection. 
In absence of project authorization, appropriation action is requested. 
Prevention of damages is more economical than repair and replacement.
  --Request is made for $5.0 million for bank protection at the highest 
        priority sites. Proposed Bill and Report language are attached.

        GENERAL INVESTIGATIONS, POST-CONSTRUCTION BENEFIT STUDY

    Investment in our Nation's resources should be an integral part of 
our national defense strategy and receive this level of consideration 
in the national budget. Water resource infrastructure is the backbone 
of production in the Nation and our means to competitiveness in the 
global economy. Development and redevelopment of these resources 
utilizing Federal funds should be thoroughly evaluated and justified on 
the basis of sound investments. This requires study and evaluation 
periodically to ensure the maximum return on the public investment.
    Difficulty in providing acceptable evidence of waterway benefits 
frequently casts unwarranted doubt on the advisability of funding 
specific water resource projects. Efforts to abandon significant 
portions of the national waterway infrastructure based on narrowly 
defined, short-term measures of value or outdated uses based on 30-
year-old data will almost always result in unintended consequences. 
Such is the case with the argument that ``low use waterways or 
tributaries should be abandoned'' budget-wise for the main-stem 
waterways. 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 consequence of this action would be a decrease in benefits 
of the main-stem waterways while increasing the cost of the Nation's 
transportation. The ancillary benefits such as water supply, recreation 
and conservation generated in connection with navigation projects are 
perhaps even greater than transportation benefits and should be 
determined in greater detail through basin specific studies. Such a 
study is needed for the Ouachita-Black Navigation Project and the 
basin.
  --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 add our voice to those working to 
strengthen our 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 
continue maintaining through very modest investments this important 
component of the national waterway infrastructure. Proposed Bill and 
Report Language are enclosed for bank stabilization work.

                             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 Red River Valley Association

    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, Enclosure 
1.
    The Resolutions contained herein were adopted by the Association 
during its 81st Annual Meeting in Bossier City, Louisiana, on February 
24, 2006, and represent the combined concerns of the citizens of the 
Red River Basin area as they pertain to the goals of the Association, 
Enclosure 2.
    The President's budget included $4.733 billion for the civil works 
programs. Even though it is the largest budget provided by any 
administration it is $596 million less than what was appropriated in 
fiscal year 2006, $5.329 billion (11.2 percent reduction). The problem 
is also how the funds are distributed. A few projects received their 
full ``Corps Capability'' to the detriment of many projects that 
received no funding. The $4.733 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 $6.5 billion in fiscal year 2007. The traditional civil 
works programs remain at the low, unacceptable level as in past years. 
These projects are the backbone to our Nation's infrastructure for 
waterways, flood control, water supply and ecosystem restoration. 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, 100 percent of the construction, as well as much of the 
architect and engineering work. Not only do these projects provide 
jobs, but provide economic development opportunities for our 
communities to grow and prosper, creating permanent jobs.
    There are several policy changes proposed by the administration 
that we have concerns with.
    Major rehabilitation projects were moved from the CG account to O&M 
account. When you take out these major rehab projects the O&M proposed 
budget is actually $53 million less than fiscal year 2006. They have 
``disguised'' an actual reduction in O&M project funding.
    They also propose to continue using the Inland Waterway Trust Fund 
(ITWF) to fund 50 percent of the major rehab projects that were moved 
to O&M. The IWTF was authorized for CG projects, not O&M. If this is 
allowed, it will then be easy to recommend that all O&M funding be 
taken from the IWTF and this can never be allowed to happen.
    The proposed reduction in GI from $162 million enacted last year, 
to $94 million, proposed this year, is of concern. When you stop 
funding studies you assume the economy will stop growing, since you are 
preparing less projects for the future. Nobody is a proponent for a 
weak economy. There is also the danger of the Corps losing their 
planning expertise.
    Another proposal allocates O&M funding by region and eliminates 
funding by individual project. We do not accept this concept since you 
will lose ownership and identity of each project; therefore, losing 
grass root support. If this was done, due to reprogramming constraints, 
then reprogramming should be addressed. Major reprogramming issues are 
with CG projects, not with O&M projects.
    We want to express our concern for ``fully funded'' contracts. It 
is possible that the Corps will have a carryover that exceeds $1 
billion. Our fear is that this will be viewed as the Corps unable to 
execute their budget and be allocated less in following years. Another 
serious consequence is that it neglects the workload distribution of 
Corps Districts. Are we prepared to consolidate and close down 
Districts that do not have a workload to support their current work 
force?
    The Corps of Engineers should not be micromanaged and should have 
less restrictive reprogramming authority. They need to be able to 
manage their budget and projects in a way that best serves the needs of 
the Nation.
    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 last 8 years the 
Water portion has steadily decreased to only 16.6 percent of the total 
bill in fiscal year 2005 and increased slightly to 17.4 percent in 
fiscal year 2006. 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 level 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 were terminated 
the rail rates would increase. Many industries have experienced great 
``national'' transportation savings without using the waterway, which 
is why the project was authorized.
    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.
    I would now like to comment on some of 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. This upward ``trend'' in usage will continue as new industries 
commence operations. At the Port of Shreveport-Bossier ``Steelscape'' 
will be operational in April 2006 processing steel, eventually 
employing 250 people and moving 500,000 tons per year on the Waterway. 
A major power company, CLECO, is investing $1 billion in its Rodemacher 
Plant near Boyce, Louisiana, on the lower Red River and is expected to 
move over 3 million tons of Coal and ``petroleum coke'' by 2009. 
Groundbreaking is set this year for an Edison-Chouest facility, a 
shipbuilder of offshore support vessels, at the Port of Shreveport-
Bossier. These three projects are a reality and there are many more 
customers considering using our Waterway.
    You are reminded that the Waterway is not complete, 6 percent 
remains to be constructed, $121 million. We appreciate Congress's 
appropriation level in fiscal year 2006 of $13 million, however, the 
President's fiscal year 2007 budget drastically cuts that to $1.5 
million, which is unacceptable. There is a capability for $18.5 million 
of work, but we realistically request $13 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. All waterways below Cairo, Illinois are 
authorized at 12-foot, to include the Mississippi River, Atchafalaya 
River, Arkansas River and Gulf Intracoastal Waterway. A 12-foot channel 
would allow an additional one-third capacity, per barge, which will 
greatly increase the efficiency of our Waterway and further reduce 
transportation rates. This one action would have the greatest, positive 
impact to reduce rates and increase competition, bringing more 
industries to use waterborne transportation. We request a 1-year 
reconnaissance study be funded to evaluate this proposal, at a cost of 
$100,000. Fact: Approximately 95 percent is already at 12-foot year 
round.
    The feasibility study to continue navigation from Shreveport-
Bossier City, Louisiana, into the State of Arkansas will be completed 
in calendar year 2006. There is great optimism that the study will 
recommend a favorable project; however, the administration must 
consider the benefit analysis by modern day criteria, not by 25-year-
old standards. Benefit analysis is by administration policy and they 
can consider benefits that impact society today. 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 into Arkansas 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 2006 and request you fund this project at a level of $10 million 
in fiscal year 2007.
    Flood Control.--The recent events in New Orleans have demonstrated 
what will happen when we ignore our levee systems. We know the Arkansas 
Red River Levees do not meet Federal standards, which is why we have 
the authorized project, Red River Below Denison Dam, TX, AR & LA. Now 
is the time to bring these levees up to standards, before a major flood 
event, which will occur.
    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 $10 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 will 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 in the past 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 benefit-to-cost ratio.
    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 Director 
of Civil Works signed the Environmental Record of Decision. The plan 
was found to be economically justified. This year the ASA (CW) directed 
that construction would not proceed until a local sponsor was found to 
assume 100 percent of the O&M for the project. We strongly disagree 
with this position, since the current local sponsor signed a 
cooperation agreement that did not include responsibility for O&M, no 
project documents require this and the project truly benefits four 
States. This makes it unreasonable to place the O&M burden on one local 
sponsor. Since 1987 the Federal Government has funded over $1.5 million 
per year for O&M on the existing features of the project. We support 
language that directs 100 percent of the O&M and construction 
responsibility be federally funded. Completion of this project will 
reclaim Lake Kemp as a usable water source for the City of Wichita 
Falls, Sheppard AFB 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 $2,500,000 to continue the Wichita River features in Texas.
    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 $1,625,000 to continue with this effort.
    Water Supply.--Lake Kemp, just west of Wichita Falls, TX, is a 
major 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 needed to determine water distribution needs and raising the 
conservation pool. $375,000 is needed in fiscal year 2007. Since 
$207,000 is required for the base annual O&M of Lake Kemp, a Total O&M 
of $582,000 is requested for fiscal year 2007.
    Operation & 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, Enclosure 
2.
    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. The Civil Works 
program directly relates to national security by investing in economic 
infrastructure. If waterways are closed companies will not relocate to 
other parts of the country--they will move overseas. If we do not 
invest now there will be a negative impact on our ability to compete in 
the world market threatening our national security.

                              ENCLOSURE 1
                      RED RIVER VALLEY ASSOCIATION

    The Red River Valley Association is a voluntary group of citizens 
bonded together to advance the economic development and future well-
being of the citizens of the four-State Red River Basin area in 
Arkansas, Louisiana, Oklahoma and Texas.
    For the past 81 years, the Association has done notable work in the 
support and advancement of programs to develop the land and water 
resources of the Valley to the beneficial use of all the people. To 
this end, the Red River Valley Association offers its full support and 
assistance to the various Port Authorities, Chambers of Commerce, Levee 
and Drainage Districts, Industry, Municipalities and other local 
governing entities in developing the area along the Red River.
    The Resolutions contained herein were adopted by the Association 
during its 81st Annual Meeting in Bossier City, Louisiana on February 
24, 2006, and represent the combined concerns of the citizens of the 
Red River Basin area as they pertain to the goals of the Association, 
specifically:
  --Economic and Community Development;
  --Environmental Restoration;
  --Flood Control;
  --Bank Stabilization;
  --A Clean Water Supply for Municipal, Industrial and Agricultural 
        Uses;
  --Hydroelectric Power Generation;
  --Recreation; and,
  --Navigation.
    The Red River Valley Association is aware of the constraints on the 
Federal budget, and has kept those constraints in mind as these 
Resolutions were adopted. Therefore, and because of the far-reaching 
regional and national benefits addressed by the various projects 
covered in the Resolutions, we urge the members of Congress to review 
the materials contained herein and give serious consideration to 
funding the projects at the levels requested.

                              ENCLOSURE 2

                    RED RIVER VALLEY ASSOCIATION FISCAL YEAR 2007 APPROPRIATIONS--CIVIL WORKS
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                            Fiscal Year   RRVA 2007    President
                                            2006 Approp    Request    2007 Budget    Local Sponsor Requirements
----------------------------------------------------------------------------------------------------------------
Studies (GI):
    Continue Navigation into SW Arkansas:           150          400  ...........  (ARRC)
     Feasibility Study.
    Red River Waterway, LA--12 foot         ...........          100  ...........  N/A
     Channel, Recon  Study.
    Bossier Parish, LA....................           75          258  ...........  Bossier Levee
    Cross Lake, LA Water Supply Supplement           99          252  ...........  (Shreveport)
    Mangum Lake, OK.......................  ...........           59  ...........  .............................
    Southeast Oklahoma Water Resource                40          300  ...........  (OWRB)
     Study: Feasibility.
    Washita River Basin, OK, Watershed               50          195  ...........  (?)
     Rehab: Recon Study.
    SW Arkansas Ecosystem Restoration:              100          400  ...........  (L)
     Recon Study.
    Mountain Fork River Watershed, OK &     ...........  ...........  ...........  (?)
     AR, Recon Study.
    Red River Above Denison Dam, TX & OK:   ...........          100  ...........  (L)
     Recon Study.
    Red River Waterway, Index, AR to        ...........  ...........  ...........  (?)
     Denison Dam, Recon.
    Wichita River Basin Study, TX.........  ...........          100  ...........  .............................
Construction General (CG):
    Red River Waterway:
        J. Bennett Johnston Waterway, LA..       13,000       18,500        1,500  .............................
        Index to Denison Reach, Bendway     ...........  ...........  ...........  (?)
         Weir Demo Project (Note: Need
         language for full federally
         funded project).
    Chloride Control Project:
        Wichita River, TX.................        1,125        2,500  ...........  .............................
        Area VI, OK.......................          375        1,625  ...........  .............................
    Red River Below Denison Dam...........        3,000       10,000  ...........  .............................
        Levee Rehabilitation, AR..........  ...........  ...........  ...........  .............................
        Bowie County Levee, TX............  ...........  ...........  ...........  .............................
        Upgrade Levees, LA................  ...........  ...........  ...........  .............................
        Rehabilitate Levee Structures, LA.  ...........  ...........  ...........  .............................
    Red River Emergency Bank Protection...        3,200       10,000  ...........  .............................
    Big Cypress Valley Watershed, TX:               530          500  ...........  .............................
     Section 1135.
    McKinney Bayou, AR, PED...............  ...........  ...........  ...........  .............................
    Little River County/Ogden Levee, AR,    ...........          200  ...........  100 (ASWC)
     PED.
    Millwood, Grassy Lake, AR: Section              100          125  ...........  (?)
     1135.
Operation and Maintenance (O&M):
    J. Bennett Johnston Waterway, LA......       11,804       21,000       10,542  .............................
    Lake Kemp, TX Reallocation Study......  ...........          582  ...........  .............................
    Lake O' the Pines Dam, TX.............  ...........          250  ...........  .............................
Mississippi River & Tributaries (MR&T):
    Old River Lock:
        Old River Lock Structure..........        9,690       10,000        9,747  .............................
        Old River Lock Oxbow Dredging.....  ...........          600  ...........  .............................
----------------------------------------------------------------------------------------------------------------
Note.--Local Sponsor Column--Sponsor indicated in ( ); (?) indicates No Sponsor Identified and need one to
  continue. (L) indicates Sponsor not required now, but need one for feasibility; Blank--No Sponsor required.

                                 ______
                                 
       Prepared Statement of the Calaveras County Water District

------------------------------------------------------------------------
                         Project                             Requests
------------------------------------------------------------------------
COSGROVE CREEK FLOOD CONTROL PROJECT (Construction              $100,000
 General)...............................................
NEW HOGAN LAKE REOPERATION STUDY (General                        200,000
 Investigations)........................................
------------------------------------------------------------------------

                    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 of these rivers flow west, running 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 Groundwater Basin 
(ESJCGB).
    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 FLOOD CONTROL PROJECT

    The Cosgrove Creek Flood Control Project will address flooding that 
occurs along the lower reaches of the creek, as well as flooding that 
occurs on Spring Creek. Flooding in these areas impacts over 400 people 
and 100 structures located in the 100-year floodplain. Within the 
context of the flood control effort, the project will also address 
options for the beneficial use of peak flows and address other local 
concerns such as the need for recreational opportunities in the area.
    The Calaveras County Water District respectfully requests $100,000 
for this project in fiscal year 2007 from the Corps of Engineers 
Construction General account.

                    NEW HOGAN LAKE REOPERATION STUDY

    Funding for this project is needed to continue the study effort by 
the U.S. Army Corps of Engineers to examine other project purposes 
including water uses efficiency, ecosystem restoration and recreation. 
The New Hogan Lake Reoperation Study continues the study effort 
initiated under Section 205 for reoperation of the New Hogan Reservoir 
and for the Corps to look at other project purposes including water use 
efficiency, ecosystem restoration and recreation.
    The Calaveras County Water District respectfully requests $200,000 
from the Corps of Engineers General Investigations Account to continue 
this study effort.
                                 ______
                                 
        Prepared Statement of the City of St. Helena, California

------------------------------------------------------------------------
                         Project                             Requests
------------------------------------------------------------------------
ST. HELENA COMPREHENSIVE FLOOD CONTROL PROJECT (General         $450,000
 Investigations)........................................
UPPER YORK CREEK DAM REMOVAL AND RESTORATION PROJECT           1,600,000
 (Section 206 Aquatic Ecosystem Restoration Program)....
ST. HELENA NAPA RIVER RESTORATION PROJECT (Section 206           350,000
 Aquatic Ecosystem Restoration Program).................
------------------------------------------------------------------------

                           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 of St. Helena is a General Law City and operates under the 
Council-City Manager form of government. St. Helena is a full service 
city and encompasses an area of 4 square miles. 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, 2003 is 6,041. 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 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 Napa River flows along the east 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 time of 
year, runoff from York and Sulphur Creeks, and urban area discharges. 
During the winter months when stream flow is high, pollutants are 
diluted; however, sedimentation and turbidity is high as well. During 
the summer months when stream flow 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 COMPREHENSIVE FLOOD CONTROL PROJECT

    The project site is on the City of St. Helena in Napa County, 
California (County), along the Napa River and adjacent areas. Within 
and adjacent to this reach of the River, the city proposes various 
flood control components, ranging from widening the floodplain and 
constructing new floodwalls and levee, to relocating homes. An 
additional component includes flood protection at the Wastewater 
Treatment Plant (WWTP) south of the city.
    With this project, the City of St. Helena seeks to develop and 
implement a plan that will reduce damage resulting from Napa River 
flooding in a manner that is economically feasible, acceptable from a 
public policy standpoint, and environmentally sensitive. In particular, 
the city wishes to reduce flooding in a manner that will result in 
overall improvement to the health of the ecosystem in the project 
reach.
    The project will re-connect the Napa River to its historic 
floodplain, thereby reducing water surface elevations through the area 
by several feet, avoiding large flood control structures and 
canalization, and would provide 100-year flood protection to the area. 
It will also restore habitat of the natural floodplain terraces, 
including riparian and aquatic habitat. Within and adjacent to this 
reach of the River, the city proposes various flood control components, 
ranging from widening the floodplain and constructing new floodwalls 
and levee, to relocating homes. The St. Helena Comprehensive Project 
will also restore native plant and tree communities through re-
vegetation efforts.
    The City of St. Helena respectfully requests the committee's 
support for $450,000 under the Corps of Engineers General 
Investigations Account.

          UPPER YORK CREEK DAM REMOVAL AND RESTORATION PROJECT

    The Upper York Creek Watershed originates at the western side of 
the Napa Valley watershed and the creek flows through a narrow canyon 
before joining the Napa River at a 225-foot elevation.
    This project will improve fish passage and ecological stream 
function for the York Creek, a key Napa River Tributary. The project 
will open an additional 2 miles of steelhead habitat upstream from the 
current dam location by removing an earthen dam and accumulated 
sediment necessary to restore fish passage to provide unimpeded 
upstream adult and downstream juvenile fish passage.
    Revegetation, as part of the project, will restore a self-
sustaining native plant community that will help exclude non-native 
invasive species.
    The City of St. Helena respectfully requests the committee's 
support for $1,600,000 under the Corps of Engineers Section 206 Aquatic 
Ecosystem Restoration Program to design and initiate construction under 
a design build contract in fiscal year 2007.

               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 six 
Federally-listed threatened and endangered species within the Napa 
River and its adjoining tributaries 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 
urbanization removing significant amounts of shading and cover 
vegetation within and adjacent to the river; and a detrimental lack of 
pool habitat.
    In an effort to address these Federal environmental issues, the St. 
Helena Napa River Restoration Project, a Section 06 Aquatic Ecosystem 
Restoration Project, was identified in the Napa Valley Watershed 
Management Feasibility Study of April 2001 as a specific opportunity 
for restoration.
    This project will develop riparian planting regimes to maximize 
habitat values for species, in particular, steelhead, California 
Freshwater Shrimp and young salmon.
    This project will address the lack of shading and cover vegetation 
along the river which has impaired the river's ability to serve as a 
critical habitat for many different species of fish and wildlife. It 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.
    The City of St. Helena respectfully requests $350,000 in fiscal 
year 2007 funding from the Corps of Engineers Section 206 Aquatic 
Ecosystem Restoration Program to complete the feasibility study. This 
study will recommend actions not only for maximizing habitat for 
species by removing obstacles and hard bank stabilization, but to 
implement improvements to in-stream habitat such as woody debris, 
boulders and establishment of pools.
                                 ______
                                 
     Prepared Statement of the California State Coastal Conservancy

                                SUMMARY

    The following testimony is in support of the California State 
Coastal Conservancy's fiscal year 2007 Energy and Water Development 
Appropriations request. The Conservancy respectfully requests needed 
funding for the following critical projects: $11.7 million for the 
Hamilton Bel-Marin Keys Wetland Restoration Project, Army Corps of 
Engineers, Construction General; $2 million for the South San Francisco 
Bay Shoreline Study, Army Corps of Engineers, General Investigations; 
$550,000 for the Napa River Salt Marsh Restoration Project, Army Corps 
of Engineers, General Investigations; $18 million for the Upper Newport 
Bay Ecosystem Restoration Project, Army Corps of Engineers, 
Construction General and $100,000 for the Redwood Creek Restoration 
Project, Army Corps of Engineers, General Investigations.

                         CONSERVANCY BACKGROUND

    The California Coastal Conservancy, established in 1976, is a State 
agency that uses entrepreneurial techniques to purchase, protect, 
restore, and enhance coastal resources, and to provide access to the 
shore. We work in partnership with local governments, other public 
agencies, nonprofit organizations, and private landowners.
    To date, the Conservancy has undertaken more than 950 projects 
along the 1,100 mile California coastline and around San Francisco Bay. 
Through such projects, the Conservancy: protects and improves coastal 
wetlands, streams, and watersheds; works with local communities to 
revitalize urban waterfronts; assists local communities in solving 
complex land-use problems and protects agricultural lands and supports 
coastal agriculture to list a few of our activities.
    Since its establishment in 1976, the Coastal Conservancy has: 
helped build more than 300 access ways and trails, thus opening more 
than 80 miles of coastal and bay lands for public use; assisted in the 
completion of over 100 urban waterfront projects; joined in partnership 
endeavors with more than 100 local land trusts and other nonprofit 
groups, making local community involvement an integral part of the 
Coastal Conservancy's work and completed projects in every coastal 
county and all nine San Francisco Bay Area counties. In addition, we 
currently have over 300 active projects that are benefiting the 
citizens of California.

          HAMILTON BEL-MARIN KEYS WETLAND RESTORATION PROJECT

    In fiscal year 2007 the California Coastal Conservancy is seeking 
$11.7 million, consistent with Corps of Engineers' capability, for the 
continued construction of this project.
    This project is of critical importance as it will provide nearly 
700 acres of restored tidal and seasonal wetlands at a former Army 
base, in Marin County, California and provide much needed habitat for 
several threatened and endangered species; as well as, shorebirds and 
waterfowl migrating along the Pacific Flyway. In addition, this project 
beneficially uses dredged material from the San Francisco Bay which 
provides for increased navigation and maritime commerce for the Bay 
Area, a much needed economic stimulus for the region.
    The first phase of construction, which started last year, is taking 
place on the former Army Airfield. Miles of levees are currently under 
construction, after which the main runway and taxiways will be buried 
under millions of cubic yards of clean dredged sediment. Subsequently, 
the easterly levee will be breached allowing tidal waters to once again 
flood the site. Later in the project, the Corps will work on the 
adjacent Antenna field and Bel Marin Keys V property (subject to WRDA 
approval) resulting in a total project area of nearly 2,500 acres. This 
phased approach will be used to complete the design and construction 
tasks in conjunction with the availability of land and dredged 
material.

                SOUTH SAN FRANCISCO BAY SHORELINE STUDY

    The Conservancy is seeking $2,000,000 in funding in order to 
continue the Feasibility Study for this project. The study was 
initiated in fiscal year 2005 and has been ongoing, receiving $600,000 
in funds in fiscal year 2006.
    This project is of national significance as it will create the 
largest restored wetland on the west coast of the United States and 
will provide extensive habitat for federally endangered species and 
migratory waterfowl. In addition, the project is also critical to the 
region as it will provide tidal and fluvial flood protection for the 
South San Francisco Bay Area protecting approximately 42,800 acres, 
7,400 homes and businesses, and significant urban infrastructure, to 
include major highways, hospitals and airport facilities.
    In order to continue to advance this important study it is 
imperative that local interests and the Federal Government work 
together to ensure a reliable funding stream for the project. In 
accordance, substantial cost-sharing has already begun among the land 
management agencies. The U.S. Fish and Wildlife Service contributed $8 
million toward the $100 million acquisition of the salt ponds. The 
State of California provided $72 million and the Hewlett Foundation, 
Packard Foundation, Moore Foundation, and Goldman Fund provided $20 
million. The foundations are providing an additional $15 million for 
restoration planning and $9 million for land management. The State of 
California is providing $8 million for planning and $6 million for land 
management.

                         NAPA RIVER SALT MARSH

    For fiscal year 2007, we are seeking $550,000 in Federal funds in 
order to complete Preconstruction Engineering and Design (PED) for this 
project which will allow construction to commence as soon as the 
project is authorized by Congress. Last year, $125,000 was appropriated 
to the Corps of Engineers for PED activities.
    The funds requested would allow the Corps of Engineers to complete 
design of the Napa River Salt Marsh Project. Upon authorization of the 
project in WRDA, the Corps will be able to construct the project. 
Construction of the project will provide extensive benefits to the 
region, to include: providing extensive wetland habitat in San 
Francisco Bay; the beneficial use for recycled water in the North Bay; 
improve open space and recreational opportunities; and resolve urgent 
issues associated with deterioration of the site's levee, water control 
structures, and water quality.
    The 10,000 acre Napa River Salt Marsh was purchased by the State of 
California from Cargill in 1994 and is managed by the California 
Department of Fish and Game. The State Coastal Conservancy has been the 
non-Federal sponsor working with the Corps on the Feasibility Study. 
The Corps' Feasibility Study was completed and the Chief's Report was 
signed in December of 2004. Preconstruction Engineering and Design is 
currently taking place with construction commencing once the project is 
authorized in WRDA.

                UPPER NEWPORT BAY ECOSYSTEM RESTORATION

    In fiscal year 2007, we are seeking $18 million in funding to 
complete construction and avoid cost increases and project delays.
    Upper Newport Bay, one of the largest remaining tidal wetlands in 
Southern California, provides significant habitat for numerous 
federally endangered species, migratory waterfowl and shorebirds along 
the Pacific Flyway, and anadromous fish and other aquatic species. To 
ensure the long-term viability of this diverse salt marsh ecosystem as 
well as the stability of the region's ecosystem, the Army Corps of 
Engineers and the County of Orange developed the Upper Newport Bay 
Ecological Restoration Project, which was authorized in the Water 
Resources Development Act of 2000.
    The project will address the habitat conversion resulting from 
sedimentation in the upper bay, increase the quantity and quality of 
wetlands habitat, improve water quality by reducing sediment inflows 
and algal blooms and preserve both Federal and local navigational 
channels, which if unaddressed will require costly maintenance 
dredging.
    A construction contract was awarded in September 2005 and 
construction is underway. The available funds (Federal and non-Federal) 
will be expended by late summer 2006. The funding request of $18 
million for fiscal year 2007 will complete construction of this project 
and avoid cost increases from re-mobilizing equipment and inflation.

                   REDWOOD CREEK RESTORATION PROJECT

    For fiscal year 2007, we are seeking $100,000 to initiate a 
reconnaissance study of the flood control project.
    The Redwood Creek Federal Flood Control Project was originally 
completed by the Corps of Engineers in 1968, however since the 
completion of the project very few resources have been dedicated to its 
management and maintenance and as a result the project is now in need 
of overdue maintenance to key infrastructure. Despite this fact, 
ecological concerns make project restoration to design standards 
prohibitively expensive and legally infeasible.
    The $100,000 in requested funding will facilitate a reconnaissance 
study of the flood control project in order to allow the Army Corps of 
Engineers to compile and analyze all prior hydrologic and ecological 
research done on the project area. In addition, the study will bring 
together local, State, and Federal stakeholders to understand the best 
opportunities available for enhancement of the flood control and 
natural areas in the lower river and estuary of Redwood Creek.
    The project will provide numerous local and national benefits. For 
example, the estuary's proximity to the Redwood National and State 
Parks provides an excellent opportunity to enhance Federal park 
resources while improving flood control for the community of Orick 
while provide substantial rearing habitat for numerous federally 
endangered species.
                                 ______
                                 
 Prepared Statement of the Metropolitan Water Reclamation District of 
                            Greater Chicago

    On behalf of the Metropolitan Water Reclamation District of Greater 
Chicago (District), I want to thank the subcommittee for this 
opportunity to present our priority for fiscal year 2007 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 the 
Corps of Engineers 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 support the President's fiscal year 2007 budget request 
of $45,000,000 from the Army Corps of Engineers Construction, General 
account in the fiscal year 2007 Energy and Water appropriations 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 (including 
Lake Michigan, which is the source of drinking water for millions of 
people) is the inevitable result. 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, connected to large CSO storage 
reservoirs. The ``underground rivers'' are tunnels up to 35 feet in 
diameter and 350 feet below the surface. All 109.4 miles of the tunnels 
have just recently been completed. 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. The Thornton and McCook Reservoirs are currently 
under construction, but until and unless they are completed, 
significant areas will remain unprotected. Without these reservoirs as 
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, 823 billion gallons of CSOs have been 
captured by TARP, 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 has 
become a rarity. After the completion of both phases of TARP, 99 
percent of the CSO pollution will be eliminated. 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. Already, these counties have received millions of gallons of 
additional 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, many 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 by IDOT 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.

                   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, as previously discussed, are a part of TARP, a flood 
protection 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 annual benefits of $115 million. The 
total expected annual benefits of these projects are approximately 
twice as much as their total annual costs. 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/cost ratio for these two reservoirs 
together is 3.0. They 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 
farsightedness, innovation, and benefits.
    Based on two successive Presidentially-declared flood disasters in 
our area in 1986 and again in 1987, and severe 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 as our 
past sponsorship for flood control projects, 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 of 
construction completion.
    We have been very pleased that over the years the subcommittee has 
seen fit to include critical levels of funds for these important 
projects. We were delighted to see the $27,500,000 in construction 
funds for the McCook and Thornton Reservoirs included in the Energy and 
Water Appropriations bill for fiscal year 2006. However, it is 
important that we receive a total of $45,000,000 in construction funds 
in fiscal year 2007 to maintain the commitment and finish these 
projects. This funding is critical in order to construct the McCook 
Reservoir Stage 1 Grout Curtain, Stage 2 Slurry Wall, and Stage 1 Rock 
Wall Stabilization Contracts and to continue the engineering design of 
other McCook and Thornton Reservoir projects. The community has waited 
long enough for protection and we need these funds now to move the 
project in construction. We respectfully request your consideration of 
our request.

                                SUMMARY

    To emphasize the area's plight, I would like to relate a flooding 
event that occurred when just under 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 9:00 p.m. 
and 3:00 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 and 
regularity of flooding in our area, the Corps was compelled to develop 
a plan that would complete the uniqueness of 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, which 
are subject to flooding at any given time. The annual damages sustained 
exceed $150 million. With the TARP CUP Reservoirs 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 proceeds on schedule 
through construction.
    Therefore, we urgently request that a total of $45,000,000 in 
construction funds be made available in the fiscal year 2007 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

------------------------------------------------------------------------
                         Project                             Requests
------------------------------------------------------------------------
NAPA RIVER FLOOD CONTROL PROJECT (Construction, General)     $31,000,000
NAPA RIVER DREDGING PROJECT (Operation and Maintenance,        3,172,800
 General)...............................................
------------------------------------------------------------------------

    On behalf of the Napa County Flood Control and Water Conservation 
District (District), I want to thank the subcommittee for this 
opportunity to present our priorities for fiscal year 2007 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 the 
Corps of Engineers award-winning Napa River Flood Control project and 
we are requesting the subcommittee's full support of this project to 
ensure that it stays on schedule. Specifically, we request the 
subcommittee to support our request of $31,000,000 from the Army Corps 
of Engineers Construction, General account for the Napa River Flood 
Control Project. We are also seeking $3,172,800 for the maintenance 
dredging of the Napa River from the Army Corps of Engineers (Operation 
and Maintenance, General account). The following text outlines these 
projects and the need for the requested funding.

                    NAPA RIVER FLOOD CONTROL PROJECT

Background
    In the last 50 years, 19 floods have struck the Valley region, 
exacting a heavy toll in loss of life and property.
    Cleanup and claims processing continues today from the most recent 
disaster, a massive flood that began in the overnight hours of December 
30, 2005. This most recent event is estimated to have caused some $70 
million in damage within the City of Napa--with the vast majority of 
that damage in areas that will be protected by the project that is 
currently under construction.
    The flood in 1986 killed three people and caused more than $100 
million in damage in 1986 dollars. 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 had authorized a flood control project in 1965, 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.
    The project is located in the city and county of Napa, California. 
The population in the city of Napa, approximately, 67,000 in 1994, is 
expected to exceed 77,000 this year. 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 local runoff. Floods in the 
Napa area have occurred in 1955, 1958, 1963, 1965, 1986 (flood of 
record), 1995, 1997 and 2005. 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.

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.
    The Corps has developed the revised plan, which provides 100-year 
protection, with the assistance of the community and its consultants 
into the Supplemental General Design Memorandum (SGDM) and its 
accompanying draft Environmental Impact Statement/Environmental Impact 
Report (SEIS/EIR). Construction of the project began 2 years ago. The 
coalition plan now memorialized in the Corps final documents includes 
the following engineered components: lowering of old dikes, marsh plain 
and flood plain terraces, oxbow dry bypass, Napa Creek flood plain 
terrace, upstream and downstream dry culverts along Napa Creek, new 
dikes, levees and flood walls, bank stabilization, pump stations and 
detention facilities, and bridge replacements. 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 positive 
benefit-to-cost ratio under the Corps calculation. 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 4 years ago by a two-
thirds majority of the county's voters for the local share. Napa is 
California's highest repetitive loss community. This plan is 
demonstrative of the disaster-resistant community initiative, as well, 
as the sustainable development initiatives of FEMA and EPA.

                      NAPA RIVER DREDGING PROJECT

    The Napa River navigation project was authorized by the Rivers and 
Harbors Acts of 1888, 1935, and 1946.
    The Napa River is a shallow draft navigation channel which serves 
light commercial and recreational traffic. The project is normally 
dredged by the Corps of Engineers on a 6-year cycle, with the most 
recent dredging being completed in 1998. This dredging is 2 years 
overdue and is causing not only impediment to commercial activity but 
posing major obstacles for construction of the project from the river. 
Maintenance dredging is required to restore depths required for 
existing traffic and in anticipation of the additional boat traffic 
resulting from replacement of Maxwell Bridge. The Napa County Flood 
Control and Water Conservation District is responsible for providing a 
suitable disposal site for the dredged material.
                                 ______
                                 
           Prepared Statement of the City of Arlington, Texas

    Mr. Chairman and members of the subcommittee, on behalf of the City 
of Arlington, Texas, I am pleased to submit this statement for the 
record in support of our request for funding in the amount of $7.8 
million in the fiscal year 2007 Appropriation Bill for Energy and Water 
Development to support the city's continued efforts to reduce flood 
damage, improve public safety, reduce erosion and sedimentation, and 
enhance wildlife habitat and passive recreation within the Johnson 
Creek corridor through Arlington, Texas.

                       PROJECT EXECUTIVE SUMMARY

    Johnson Creek, a tributary of the Trinity River, has been the topic 
of extensive study by the Corps of Engineers (Corps) and the City of 
Arlington, Texas (city) since the early 1980's due to a history of 
flooding, extensive erosion and sedimentation, recreational challenges 
and opportunities, and important wildlife habitat.
    In 1990, the Corps proposed to address flooding by planning and 
allocating funds to channelize and line with concrete substantial 
stretches of Johnson Creek. The city rejected this plan on the grounds 
that it provided flood relief at the expense of recreational 
opportunities, wildlife habitat and economic development. The city 
adopted in 1997 a more holistic alternative called the Johnson Creek 
Corridor Plan that received wide community support but was not 
fundable. In 1999, the Corps prepared an Interim Feasibility Report and 
Integrated Environmental Assessment for Johnson Creek in Arlington. The 
document recommended a National Economic Development (NED) Plan for 
flood damage reduction that also addressed the city's desires for 
enhanced wildlife habitat and recreation in the Johnson Creek corridor. 
In 2000, the city adopted the Corps' 1999 plan to purchase homes within 
the floodplain of Johnson Creek, create linear parks with trails, and 
acquire and restore open space for wildlife habitat and recreation.
    In 2004, subsequent to the city's contract with the Corps, the city 
entered into a partnership with the Dallas Cowboys to build a new 
football stadium adjacent to the Texas Rangers' venue and land 
purchased and restored as part of the 1999 plan. In 2005, the Corps' 
1999 plan was amended to remove approximately 90 acres of city-owned 
land north of Union Pacific Railroad tracks.
    During ecological investigations associated with design and master 
plan development of the football stadium, a number of critical issues 
arose that the 1999 plan (as amended in 2005) only partially addressed. 
The city realized that a holistic, watershed approach, in conjunction 
with maximizing the use of on-site best management practices (BMPs), 
would be required to truly address flooding, water quality, and 
wildlife habitat/recreation issues at Johnson Creek. The challenge was 
that deviations from 1999 plan, which largely has been implemented, 
require explicit authorization from Congress.
    In March 2006, the city prepared a watershed conservation plan 
entitled Johnson Creek: A Vision of Conservation that modifies the 
1999/2005 authorized plan. The modified plan allows the city to: (1) 
implement and modify, if necessary, unfinished components of the 1999/
2005 plan; (2) design and construct new bank stabilization, flood 
control, recreation, and habitat restoration projects on public lands 
and easements along Johnson Creek; (3) acquire and/or receive 
reimbursement for an additional 90 acres of environmental lands within 
Trinity River and/or Rush/Village Creek floodplain; and (4) obtain 
reimbursement for new acquisitions, if desired, and for the use of city 
parks for funded Federal projects.
    Total project cost to implement the modified plan is estimated at 
$79,997,666, including contingency. This includes $30,000,000 in sunk 
costs for completed Johnson Creek projects.

                          PROJECT DESCRIPTION

    The modified plan is divided into a minimum of two phases as 
summarized below:
    Phase 1 includes property between the Union Pacific railroad tracks 
between Division Street and Abram Street to the northerly Rangers' 
Pond. Phase 1 was selected for a variety of reasons as follow: (1) 
There is adequate open space for regional flood control; (2) the 
riparian corridor has high potential for restoration to improve 
wildlife habitat, water quality, and recreational opportunities; (3) 
the property is owned by the city; (4) a significant portion of 
existing environmental stresses, particularly erosion and 
sedimentation, occur within this area; (4) the city has identified this 
area as an entertainment district; and (5) this area includes the 
future Dallas Cowboys stadium, the existing Texas Rangers stadium, and 
a future Arlington, Texas town center. These developers have all agreed 
to provide matching money for the city to improve the green space 
within this corridor for environmental benefits listed above. Phase 1 
work will provide the catalyst and inspiration for future work 
throughout the remainder of the watershed.
    Phase 1 work is all new work and includes constructing a major 
flood control detention basin between the Union Pacific railroad tracks 
and Division Street; constructing a detention/sedimentation basin just 
west of the Stone Gate Mobile Park; restoring the south Rangers' pond 
to a stream; bank stabilization and creek restoration; modifying the 
north Rangers' ponds to maximize detention; installing two pedestrian 
bridges across Johnson Creek; providing trails and other passive 
recreational amenities; and enhancing remaining green space for 
wildlife habitat.
    Phase 2 includes the Johnson Creek corridor between Union Pacific 
railroad tracks and Vandergriff Park, and 90 acres of environmental 
land within Trinity River and/or Rush/Village Creek floodplain. Within 
the Johnson Creek corridor, Phase 2 work will occur within three main 
areas. At Vandergriff and Meadowbrook Parks, proposed activities 
include creating a detention/sedimentation basin; restoring eroded 
creek banks and creek restoration; enhancing passive recreational 
opportunities using trails and other amenities; and enhancing wildlife 
habitat. The third area includes the restoration of two tributaries of 
Johnson Creek on either side of the main stem, between Sanford Street 
and Randol Mill Road. Possible acquisition of three homes between 
Collins Street and Park Row Avenue may also occur as part of Phase 2.
    The city has long recognized that the ecological health of Johnson 
Creek and its contributing watershed are inextricably tied to the 
quality of life of its residents. In this light, the city hopes to 
develop a stronger link between its residents and its natural 
surroundings by restoring the creek, and, in doing so, revitalizing the 
community. Immediate local benefits include flood damage protection, 
habitat restoration, improved water quality and public health, 
increased access to Johnson Creek for passive recreation, elevated 
community pride, and economic redevelopment. The project complements 
larger, regional efforts to improve water quality and maximize the 
function of floodplain communities in the Trinity River watershed. 
Nearly all local benefits also contribute to statewide water quality, 
stormwater management, flood control, and environmental planning 
efforts by the North Central Texas Council of Government, U.S. 
Environmental Protection Agency, U.S. Fish and Wildlife Service, Corps 
of Engineers, Texas Parks and Wildlife, and Texas Commission on 
Environmental Quality.

                             FUNDING NEEDS

    The modified plan, which includes completed components of the 1999/
2005 plan and new Johnson Creek projects as described above, has a 
total estimated cost of $79,997,666, of which 35 percent will be 
provided by the city.
    For fiscal year 2007, the City of Arlington, Texas is seeking $7.8 
million from the U.S. Army Corps of Engineers Programs account through 
your Energy and Water Development Appropriations Subcommittee.
    Thank you for your consideration of our request.
                                 ______
                                 
      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 a fiscal year 2007 
administration budget request of $319,000 to complete the feasibility 
study for the Upper Penitencia Creek Flood Protection Project.

                          STATEMENT OF SUPPORT

    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 2 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 an August 2004 U.S. 
Army Corps of Engineers' (Corps) Economics Analysis, over 5,000 homes 
and businesses in the cities of San Jose and Milpitas are located in 
the 1 percent or 100-year flood area. Flood damages were estimated at 
$455 million. Benefit-to-cost ratios for the nine project alternatives 
range from 2:1 to 3.1:1.
    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 2007.
    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 2006 Funding.--$628,000 was appropriated in fiscal year 
2006 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 2007 
budget request of $319,000 for the Upper Penitencia Creek Flood 
Protection Project to continue the Feasibility Study.

COYOTE/BERRYESSA CREEK PROJECT, BERRYESSA CREEK PROJECT ELEMENT--SANTA 
                        CLARA COUNTY, CALIFORNIA

                                SUMMARY

    This statement urges the committee's support for a fiscal year 2007 
appropriation add-on of $2 million to complete 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

    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) 2005 report, a 1 percent or 
100-year flood could potentially result in damages exceeding $179 
million. Benefit-to-cost ratios for the six project alternatives being 
evaluated range from 2:1 to 7.3:1.
    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 million, and should be 
completed in the spring of 2007.
    Fiscal Year 2006 Funding.--$375,000 was appropriated in fiscal year 
2006 for the Coyote/Berryessa Creek Flood Protection Project to 
continue the General Reevaluation Report and environmental documents 
update.
    Fiscal Year 2007 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 $2 million 
for the Berryessa Creek Flood Protection Project element of the Coyote/
Berryessa Creek Project.

     UPPER GUADALUPE RIVER PROJECT--SANTA CLARA COUNTY, CALIFORNIA

                                SUMMARY

    This statement urges the committee's support for a fiscal year 2007 
appropriation add-on of $8.5 million to complete final design and 
continue construction for the Upper Guadalupe River Flood Protection 
Project.

                          STATEMENT OF SUPPORT

    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 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 Report was approved 
by the Corps in October 2005. The report recommended full cost-sharing 
on the Locally-preferred Plan project. Current efforts are underway to 
reauthorize the project at its current project cost in the Water 
Resources Development Act of 2005 currently being considered by 
Congress.
    Fiscal Year 2006 Funding.--$3.5 million was authorized in fiscal 
year 2006 for the Upper Guadalupe River Project to continue final 
design and initiate construction.
    Fiscal Year 2007 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $8.5 million 
in fiscal year 2007 to complete final design and continue construction 
on the Upper Guadalupe River Flood Protection Project.

   THOMPSON CREEK RESTORATION PROJECT--SANTA CLARA COUNTY, CALIFORNIA

                                SUMMARY

    This statement urges the committee to support a fiscal year 2007 
earmark of $400,000 within the Section 206 Aquatic Ecosystem 
Restoration Program to continue the Thompson Creek Restoration Project.

                          STATEMENT OF SUPPORT

    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
    Request Federal assistance under Sec. 206 Aquatic Ecosystem 
Restoration Program--Feb 2002;
    Complete Preliminary Restoration Plan--Jan 2004;
    Initiate Detailed Project Report (Feasibility Study)--Jan 2005;
    Final Detailed Project Report to South Pacific Division of Corps--
Dec 2007;
    Initiate Plans and Specifications--Jan 2008;
    Project Cooperation Agreement signed--Nov 2008;
    Complete Plans and Specifications--Dec 2008;
    Advertise Construction Contract--Jan 2009;
    Award Construction Contract--Mar 2009;
    Construction Start--Apr 2009;
    Complete Physical Construction--Mar 2010.
    Fiscal Year 2006 Funding.--No funding was received for the project 
in the fiscal year 2006.
    Fiscal Year 2007 Funding Recommendation.--It is requested that the 
congressional committee support an earmark of $400,000 within the 
fiscal year 2007 Section 206 Aquatic Ecosystem Restoration Program.

SOUTH SAN FRANCISCO BAY SHORELINE STUDY--SANTA CLARA COUNTY, CALIFORNIA

                                SUMMARY

    This statement urges the committee's support for a fiscal year 2007 
appropriation add-on of $2 million to continue a Feasibility Study to 
evaluate integrated flood protection and environmental restoration for 
the South San Francisco Bay Shoreline.

                          STATEMENT OF SUPPORT

    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. A Corps 
Reconnaissance Study was completed in September 2004 and the 
Feasibility Study was initiated in September 2005.
    Fiscal Year 2006 Funding.--$600,000 was appropriated in fiscal year 
2006 to continue the Feasibility Study.
    Fiscal Year 2007 Funding Request.--It is requested that the 
congressional committee support an appropriation add-on of $2 million 
to continue the Feasibility Study to evaluate integrated flood 
protection and environmental restoration.
san francisquito creek flood damage reduction and ecosystem restoration 

                PROJECT--SANTA CLARA COUNTY, CALIFORNIA

                                SUMMARY

    This statement urges the committee's support a fiscal year 2007 
appropriation add-on of $450,000 to continue a Feasibility Study of the 
San Francisquito Creek Watershed.

                          STATEMENT OF SUPPORT

    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 creek's 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. The Reconnaissance Study was 
completed in March 2005 and the Feasibility Study was initiated in 
November 2005.
    Fiscal Year 2006 Funding.--$225,000 was appropriated to San 
Francisquito Creek in fiscal year 2006 to initiate a Feasibility Study.
    Fiscal Year 2007 Funding Recommendation.--It is requested the 
congressional committee support an appropriation add-on of $450,000 to 
continue the Feasibility Study.

          LLAGAS CREEK PROJECT--SANTA CLARA COUNTY, CALIFORNIA

                                SUMMARY

    This statement urges the committee's support for a fiscal year 2007 
appropriation add-on of $618,000 for planning, design, and 
environmental updates for the Llagas Creek Flood Protection Project.

                          STATEMENT OF SUPPORT

    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 83-566), 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 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 83-566 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 83-566 
construction program since 1990, the Llagas Creek Project had not 
received adequate funding from to complete the Public Law 83-566 
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. Efforts are underway to reauthorize the project 
at its current project cost in the Water Resources Development Act of 
2005 currently being considered by Congress.
    Fiscal Year 2006 Funding.--$450,000 was appropriated in fiscal year 
2006 for the Llagas Creek Flood Protection Project for planning and 
design.
    Fiscal Year 2007 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 $618,000 in 
fiscal year 2007 for planning, design, and environmental updates for 
the Llagas Creek Project.

        GUADALUPE RIVER PROJECT--SANTA CLARA COUNTY, CALIFORNIA

                                SUMMARY

    This statement urges the committee's support for a fiscal year 2007 
administration budget request of $5 million and an appropriation add-on 
of $2.5 million, for a total of $7.5 million to continue construction 
of the final phase of the Guadalupe River Flood Protection Project.

                          STATEMENT OF SUPPORT

    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 2006 Funding.--$5.6 million was authorized in fiscal 
year 2006 to continue Guadalupe River Project construction.
    Fiscal Year 2007 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $2.5 
million, in addition to the $5 million in the administration's fiscal 
year 2007 budget request, for a total of $7.5 million to continue 
construction of the final phase of the Guadalupe River Flood Protection 
Project.

      COYOTE CREEK WATERSHED STUDY--SANTA CLARA COUNTY, CALIFORNIA

                                SUMMARY

    This statement urges the committee's support for a fiscal year 2007 
appropriation add-on of $100,000 to initiate a Reconnaissance Study of 
the Coyote Creek Watershed.

                          STATEMENT OF SUPPORT

    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 and Funding.--The 
Coyote Watershed Study was one of only three ``new start'' studies 
proposed for funding nationwide in the administration fiscal year 2006 
budget request. Congress did not include funding for the study in the 
final fiscal year 2006 appropriations bill.
    Fiscal Year 2007 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $100,000 to 
initiate a multi-purpose Reconnaissance Study within the Coyote Creek 
Watershed.
                                 ______
                                 
     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 full funding of the 
Channel Deepening Project at the Port of Los Angeles/Los Angeles 
Harbor; the largest container seaport in the United States and eighth 
largest in the world. Our testimony speaks in support of a fiscal year 
2007 appropriation of $12 million for the Federal share of continued 
construction of the Channel Deepening Project. Proposed funding for the 
Channel Deepening Project was not included in the President's fiscal 
year 2007 budget because the enabling legislation enacted subsequent to 
completion of the budget document. The Army Corps of Engineers has 
acknowledged its capability to fully obligate a $12 million 
appropriation for the project.
    The Port of Los Angeles is America's busiest seaport with record 
volumes of cargo moving through the 7,500-acre harbor. Its strong 
performance is attributed to a solid U.S. economy and the recovering 
Asian economies with a renewed manufacturing demand for American 
exports. The Port itself is a major reason for the remarkable cargo 
volumes. Its world-class facilities and infrastructure maximize the 
``one-stop shopping'' concept of cargo transportation and delivery 
favored by most shipping lines. Ocean carriers can send the majority of 
their West Coast-bound cargo to Los Angeles with full confidence in the 
Port's modern cargo terminals and efficient train/truck intermodal 
network. The Channel Deepening Project is a critical Federal navigation 
improvement project, and is the underpinning of shipping line 
confidence in the Port of Los Angeles.
    In the fiscal year 2006 Energy and Water Development Appropriations 
Act, Congress authorized an increase in the total project cost to $222 
million from $194 million, representing a Federal share of $72,000,000 
and a local share of $150,000,000, in accordance with the Army Corps of 
Engineers' revision. This revision accounts for credits for in-kind 
services provided by the Port and other required project modifications, 
including adjustments to the disposal costs for the dredged material, 
adjustments for construction contract changes, and project 
administration costs. The cost-share amounts for the Channel Deepening 
Project is currently under review, as well as a Supplemental EIS/EIR 
that will evaluate and determine the best alternative for increased 
disposal capacity. Upon completion of both reviews, the new cost-
sharing amounts and the additional costs for disposal at the 
recommended site(s) will be established. The need for a Supplemental 
EIS/EIR has moved project completion to fiscal year 2007.

                        PORT NAVIGATION DEMANDS

    The evolving international shipping industry prompted a 
collaborative effort by the Port of Los Angeles and the Corps of 
Engineers to implement the Channel Deepening Project in the early 
1980's. With this project, the Port will deepen its main Federal 
channel and tributary channels by 8 feet, from -45 to -53 feet Mean 
Lower Low Water (MLLW), to accommodate the industry's shift to larger 
container vessels. The first of these deeper-draft ships began calling 
at the Port of Los Angeles in August of 2004, carrying 8,000 20-foot 
equivalent units of containers (TEUs) and drafting at -50 feet. 
Currently, carriers have on order more than 155 of these larger vessels 
that range in size from 7,500 to 10,000 TEUs. These vessels will be 
delivered at a steady pace over the next 3 years, which means that 
ports unable to accommodate the bigger ships could be left out of the 
surge in trade.
    In addition to greater navigability for these larger ships, 
deepening the Main Channel improves safety and security, shipping 
efficiencies and provides beneficial use of dredged material to create 
new land for future terminal development. Dredging for the project 
began in early 2003 with construction scheduled for completion in 2006. 
Currently, nearly 45 percent of containerized cargo entering the United 
States goes/travels through the San Pedro Bay port complex. The Port of 
Los Angeles, alone, handled a record 7.5 million TEUs in calendar year 
2005, representing continued growth for any American seaport.
    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 the steady 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 $12 million for fiscal year 2007 that will enable the 
Corps of Engineers to continue construction of the Channel Deepening 
Project, on schedule, through the project's anticipated completion in 
2008.

                           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 7.5 million TEUs handled by the Port 
of Los Angeles in 2005 had a commercial value of more than $400 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 more than $6 
billion in 2005 alone. The return on the Federal investment at the Port 
of Los Angeles is real and quantifiable, and we expect it to continue 
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 
$12 million in fiscal year 2007 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 role of the 
Port of Los Angeles in contributing to this country's economic 
strength, and the port industry's importance to the economic vitality 
of the United States.
                                 ______
                                 
                 Prepared Statement of American Rivers

    American Rivers, on behalf of more than 500 national, regional and 
local organizations representing more than 5 million constituents 
concerned with river conservation,\1\ urges the committee to provide 
$2,399,145,000 for the following programs in the Energy and Water 
Development Appropriations bill for fiscal year 2007, including 
programs run by the U.S. Army Corps of Engineers, the Department of 
Energy and Department of Interior agencies. I request that this 
testimony be included in the official record.
---------------------------------------------------------------------------
    \1\ These groups and individuals have endorsed the Citizen's Agenda 
for Rivers which includes the ``River Budget'' for fiscal year 2007, a 
report of national funding priorities for local river conservation. For 
more information on the Citizen's Agenda for Rivers go to 
www.healthyrivers.org.
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                      U.S. ARMY CORPS OF ENGINEERS

    Project Modification for Improvement of the Environment.--The 
Project Modification for Improvement of the Environment program 
(Section 1135) allows the U.S. Army Corps of Engineers (Corps) to 
restore river systems degraded by existing Corps projects. Under 
Section 1135, the Corps can modify existing dams and flood control 
projects to increase habitat for fish and wildlife, and restore areas 
affected by Corps projects. Non-Federal interests must provide for 25 
percent of project costs, and modifications must not interfere with a 
project's original purpose. American Rivers urges the committee to 
appropriate $25 million for the Project Modification for Improvement of 
the Environment program in fiscal year 2007.
    Aquatic Ecosystem Restoration.--Section 206, the Aquatic Ecosystem 
Restoration program, allows the Corps to undertake small-scale projects 
to restore aquatic habitat, even in areas not directly harmed by past 
Corps projects. Projects carried out under this program must improve 
the quality of the environment, be in the public interest, and be cost-
effective. American Rivers urges the committee to appropriate $25 
million for the Aquatic Ecosystem Restoration program in fiscal year 
2007.
    Penobscot River Restoration Project.--The Penobscot River 
Restoration Project is an unprecedented approach to river restoration 
that will reconfigure hydropower facilities and maintain energy 
production while opening up more than 500 miles of habitat to 10 native 
species of anadromous fish, improve water quality, boost wildlife and 
create new opportunities in communities along New England's second 
largest river. The two lowermost Penobscot dams, Veazie and Great 
Works, will be removed and a state-of-the-art fish bypass will be 
installed at Howland Dam. American Rivers urges the committee to 
appropriate $300,000 for a reconnaissance and feasibility study on the 
Penobscot River Restoration Project for in fiscal year 2007.
    Missouri River Fish and Wildlife Recovery Project: IA, NE, KS & 
MO.--The Missouri River Fish and Wildlife Recovery Project is the 
primary habitat restoration program for the lower Missouri River 
between Sioux City and St. Louis. Congress established it in 1986 to 
primarily help reverse the long-term impact on habitat due to the 
federally sponsored channelization and stabilization projects of the 
Pick-Sloan era. Supporting the Missouri River Fish and Wildlife 
Recovery Project will help reverse the decline of river wildlife by 
restoring historic chutes, side channels, wetlands, backwaters, and 
other habitat that fish and wildlife need survive. American Rivers 
urges the committee to appropriate $82.8 million for the Missouri River 
Fish and Wildlife Recovery Project in fiscal year 2007.
    Upper Mississippi Environmental Management Program.--The Upper 
Mississippi River Environmental Management Program (EMP), the primary 
habitat restoration and monitoring program on the Upper Mississippi, 
has a goal of restoring more than 97,000 acres of habitat; the Army 
Corps reports that EMP has restored or created 28,000 acres of habitat 
to date. American Rivers urges the committee to appropriate $33.5 
million for the Upper Mississippi River Environmental Management 
Program in fiscal year 2007.
    Lower Mississippi River Resource Assessment.--The Lower Mississippi 
River Resource Assessment (LMRRA) was authorized by Congress in the 
Water Resources Development Act of 2000. Conducting the Lower 
Mississippi River Resource Assessment is the first step in 
consolidating into one region-wide assessment all information about the 
current status of aquatic habitat in the 954-mile-long Lower 
Mississippi River, specific habitat development/enhancement 
opportunities to restore the river ecosystem, and recreational needs. 
American Rivers urges the committee to appropriate $1.75 million for 
the Lower Mississippi River Resource Assessment project in fiscal year 
2007.
    Flood Hazard Mitigation and Riverine Restoration (Challenge 21).--
Challenge 21, a flood damage reduction program authorized in 1999, is 
designed to help support non-structural flood control solutions. 
Challenge 21 allows the Corps to relocate vulnerable homes and 
businesses in smaller communities, restore floodplain wetlands, 
increase opportunities for riverside recreation, and improve quality of 
life in riverside communities. Challenge 21 also authorizes the Corps 
to work with other Federal agencies to help local governments reduce 
flood damages and conserve, restore, and manage riverine and floodplain 
resources. American Rivers urges the committee to appropriate $50 
million for the Flood Hazard Mitigation and Riverine Restoration 
Program in fiscal year 2007.
    Lower Columbia River Ecosystem Restoration, OR & WA.--Coastal 
estuaries in the Pacific Northwest play a vital role in supporting 
healthy stocks of wild salmon and steelhead trout and other species and 
improving the quality of life of countless communities. The Northwest 
Coastal Estuary Program is designed to restore more than 16,000 acres 
of critical fish and wildlife habitat, augment existing monitoring 
efforts, and help citizens protect and manage resources by bringing 
together local governments, State and Federal agencies, environmental 
groups, ports, and citizens. American Rivers urges the committee to 
appropriate $3 million for the Lower Columbia River Ecosystem 
Restoration project in fiscal year 2007.
    The Estuary Restoration Act of 2000.--The Estuary Restoration Act 
of 2000 created the Estuary Habitat Restoration Council to develop a 
strategy for coordinating and prioritizing estuary restoration while 
enhancing estuary monitoring, data sharing, and research capabilities. 
If fully funded at its authorized level, the Act would restore 1 
million acres of estuary habitat by 2010. American Rivers urges the 
committee to appropriate $27.5 million for the Estuary Restoration Act 
of 2000 in fiscal year 2007.
    Individual River Restoration Projects.--Over the past 100 years, 
the United States has led the world in dam building for a variety of 
uses, including hydropower, irrigation, flood control and water 
storage. While they can provide benefits to society, numerous dams have 
outlived their intended purpose and no longer make sense. Many are old, 
unsafe, and represent a threat to their river ecosystems. Several 
individual dam removal projects will restore natural river functions, 
restore access to migratory fish habitat, and provide economic benefits 
to neighboring communities. American Rivers urges the committee to 
appropriate to the Corps the following for individual river restoration 
projects in fiscal year 2007: (i) $5 million for the removal of the 
Matilija Dam on the Ventura River in southern California; (ii) $595,000 
for the feasibility study on the removal of Rindge Dam on Malibu Creek, 
CA; and:
  --Kissimmee River Restoration.--Upon completion of the Kissimmee 
        River restoration project in 2011, over 40 square miles of 
        river and floodplain ecosystem will be restored, including 
        returning 43 miles of meandering river to its original course 
        and re-creating 27,000 of the 35,000 acres of wetlands that 
        were lost to past flood control efforts. The estimated $494.8 
        million restoration project is being jointly implemented and 
        equally cost-shared by the South Florida Water Management 
        District and the Army Corps of Engineers. American Rivers urges 
        the committee to appropriate $20 million for the Kissimmee 
        River Restoration in fiscal year 2007.
  --Everglades Ecosystem Restoration Projects.--The 18,000-square-mile 
        Everglades ecosystem of central and southern Florida is one of 
        the world's most diverse and productive wetlands, but is also 
        one of the Nation's most imperiled natural wetland ecosystems. 
        Since 1900, more than half of the ecosystem has been drained 
        and lost to urban and agricultural development, and the 
        remaining marshes are criss-crossed by 1,400 miles of canals 
        that alter natural water flows: (i) American Rivers urges the 
        committee to appropriate $15 million for the Everglades and 
        South Florida Ecosystem Restoration Program in fiscal year 
        2007; (ii) American Rivers urges the committee to appropriate 
        $100 million for the Comprehensive Everglades Restoration 
        Program in fiscal year 2007.

                     DEPARTMENT OF ENERGY PROGRAMS

    Federal Energy Regulatory Commission in Hydropower Licensing.--The 
Federal Energy Regulatory Commission (FERC) is responsible for issuing 
licenses and permits that govern the operation and construction of non-
Federal hydropower dams. Congress authorizes the amount of money FERC 
may spend in a given year, but that money is collected entirely from 
licensees through annual fees and not from tax dollars. Thus, an 
increase in FERC's authorized hydropower budget will be passed onto the 
dam owners and will not impact taxpayers or the deficit. American 
Rivers urges the committee to appropriate $57.7 million for FERC 
hydropower relicensing in fiscal year 2007.
    Energy Conservation and Energy Efficiency & Renewable Energy 
Resources.--Many different types of energy production, including 
hydropower dams and fossil fuels, affect our rivers. As we advance in 
energy-efficient technology and the use of renewable energy sources, we 
can reduce demand and soften the impacts of energy production on 
rivers. Congress should take steps to eliminate our dependency on 
fossil fuels by supporting enhanced appropriations for DOE's energy 
supply and energy conservation programs. American Rivers urges the 
committee to appropriate $1.2 billion and $700 million, respectively 
for DOE Energy Conservation program and the Energy Efficiency & 
Renewable Energy Resources program in fiscal year 2007.

             DEPARTMENT OF INTERIOR--BUREAU OF RECLAMATION

    Savage Rapids Dam Removal and Pump Replacement (Rogue River, OR).--
The Savage Rapids Dam, built in 1921, is the single largest killer of 
salmon on the Rogue River, including coho salmon, which are listed as 
threatened under the Federal Endangered Species Act. Removing Savage 
Rapids dam will provide an enormous boost to the Rogue River's 
imperiled salmon and steelhead populations. American Rivers urges the 
committee to appropriate $13 million Savage Rapids Dam Removal and Pump 
Replacement in fiscal year 2007.
    National Irrigation Water Quality Program (Departmental Irrigation 
Drainage Program).--The National Irrigation Water Quality Program 
(NIWQP) was created in 1985 in response to a waterfowl die off caused 
by polluted irrigation discharges. The program focuses on the effects 
of irrigation on rivers, lakes, and the wildlife that use them. NIWQIP 
focuses on irrigation systems that discharge water from Federal lands, 
addressing the impacts that any chemicals associated with agricultural 
practices (including DDT, arsenic, selenium, and mercury) may have on 
fish and wildlife. American Rivers urges the committee to appropriate 
$3 million for the National Irrigation Water Quality Program in fiscal 
year 2007.
    Yakima River Basin Enhancement Project.--The Yakima River Basin is 
home to Washington's largest Native American tribe and contains one of 
the largest Bureau of Reclamation (Bur. Rec.) projects in the west. The 
various Bur. Rec. projects in the basin have depleted and polluted 
river flows, and water rights conflicts in this basin are legendary. 
This program aims to restore the river and make better use of the 
existing water supplies. American Rivers urges the committee to 
appropriate $14 million for the Yakima River Enhancement Project in 
fiscal year 2007.
    Deschutes Resources Conservancy.--The Deschutes Resources 
Conservancy (DRC) is focused on restoring streamflow and improving 
water quality in the Deschutes Basin of Central Oregon. The DRC acts as 
a catalyst, bringing together all groups working to restore the 
Deschutes through its restoration grants program, enterprise programs 
creating markets for environmental services, and community development 
work aimed at developing a shared vision for basinwide restoration 
smoothing the endangered species recovery process. American Rivers 
urges the committee to appropriate $2 million for the Deschutes 
Resources Conservancy in fiscal year 2007.

                  CALIFORNIA-FEDERAL BAY DELTA PROGRAM

    The California-Federal Bay Delta Program (CalFed) is a partnership 
between Federal and California agencies to provide a balanced, 
collaborative approach to the water resource demands on the San 
Francisco Bay and San Pablo Bay watersheds. The Ecosystem Restoration 
and Watershed program within CalFed works to restore and improve 
wildlife habitat through out the watershed, improve fish passage, 
integrate flood control and ecosystem restoration, and implement 
specific watershed restoration projects in conjunction with watershed 
plans. American Rivers urges the committee to appropriate $15 million 
from the Bureau of Reclamation and $5 million from the U.S. Army Corps 
of Engineers for the CalFed Ecosystem Restoration and Watershed Program 
in fiscal year 2007.
                                 ______
                                 
             Prepared Statement of Granite Falls, Minnesota

    Chairman Domenici and members of the Appropriations subcommittee, I 
appreciate the opportunity to submit this testimony on behalf of the 
City Council and the citizens of Granite Falls, Minnesota. We are 
requesting $2 million in Federal funds for the development of the 
Detailed Design Report (DDR) plans and specifications, and the initial 
construction of critical preventative measures to protect the city from 
future flooding of the Minnesota River. These funds must be earmarked 
under Section 205, through the U.S. Army Corps of Engineers flood 
protection work.
    This request is based on the ``Supplement to the Locally Preferred 
Plan for Flood Damage Reduction, January, 2002'' prepared on behalf of 
FEMA, the city, and information from the U.S. Army Corps of Engineers, 
Section 205 study not yet completed. The project has now been 
authorized in the Water Resources Development Act of 2005 for $12 
million ($8 million Federal funds) in HR 2864, Sec. 3078 as a Section 
205 project, in accordance with the Water Resources Development Act of 
1986 (100 Stat. 4184) as may be required.
    The geological features of the terrain discourages the construction 
of diversion channels due to the granite subsurface of the soil. Most 
of the homes and businesses have been relocated using FEMA, State and 
local resources. The existing uncertified and inadequate levee system 
must be improved to provide adequate protection for the communities, 
critical pumping stations installed, and the Municipal Water Plant 
adjacent to the Minnesota River will require relocation.

                       THE CITY OF GRANITE FALLS

    The City of Granite Falls is a community of slightly more than 
3,000 citizens, is located in West Central Minnesota about 122 miles 
west of St. Paul.
    The Minnesota River runs through the northern and eastern portions 
of the city, and is directly adjacent to the downtown area. The 
majority of the city's residential and commercial properties are 
located on the west bank of the Minnesota River in Yellow Medicine 
County.
    Low-lying residential areas on the north end of the city, 
structures in the commercial business district along the river, and 
residences located next to the secondary river channels in the 
southwest part of the city are especially vulnerable to flooding.

                            RECENT DISASTERS

    While the river represents a valuable resource to the community, it 
has taken a severe toll on residents and businesses during spring 
floods. The 1997 floods that devastated much of Western Minnesota and 
North Dakota did not spare Granite Falls. The Flood drove many from 
their homes and their downtown businesses, and resulted in millions of 
dollars in damages. Virtually every downtown business was flooded. More 
than $850,000 was spent by the city, and another $175,000 by the Corps 
of Engineers to fight the flood.
    Hundreds of volunteers from Granite Falls area and the State 
prevented further devastation as the Minnesota River reached a peak 
discharge of 53,000 cubic feet per second, more than 3 million cubic 
feet of floodwater per minute. The rushing water was within inches of 
the top of the temporary dike as volunteers continued to stack sand 
bags. If the water had topped the dike, literally dozens of the workers 
lives would have been severely endangered. Total costs and damages 
exceeded $5 million.
    In July of 2000, the city was hit by an F-4 tornado. An F-5 tornado 
is the top of the scale. One person was killed, 14 badly injured, and 
325 homes were either totally destroyed or severely damaged. The 
tornado caused more than $26 million in damages in the community.
    The following year, 2001, the city was again hit by another record 
flood event. Though not as severe as the 1997 flooding, damage was 
reduced significantly by careful city planning and preparation with 
Federal and State governmental units. Even so, the costs to fight the 
flood exceeded $500,000 for the city and the Corps of Engineers, and 
much of the downtown commercial area was evacuated.
    Other significant floods have occurred in 1951, 1952, 1965, 1969, 
and 1994. While floods have cost the community millions of dollars in 
extensive property damage and economic hardship, the primary concern is 
the significant risk to the hundreds of volunteers whose work is 
required building levees during flood events to protect the homes and 
business.
    The preparation for fighting disaster costs has reached nearly $4 
million in the past 4 years. That amounts to thousands of dollars to 
every property owner in the city. Total flood damages and costs were 
more than $30 million from 1997 through 2001.
    Granite Falls has received financial support from FEMA, the Corps 
of Engineers, the State of Minnesota, in addition to local funds, to 
clean up after the disasters and to repair damages. Funds have been 
received to repair streets, housing rehabilitation and construction, 
economic development, and special services. All the help has been 
directed toward restoration after the floods and tornado event, but no 
funds have been made available to protect the city and its citizens 
from future flooding.

                  CORPS OF ENGINEERS SECTION 205 STUDY

    Following the 1997 flood, the Corps of Engineers initiated a 
Section 205 study in May, 1998, to evaluate the extent of the flooding 
problem in Granite Falls, and to explore possible remedies. The study 
is essentially complete, but has not been released to date. The major 
problems of cost and funding level addressed in the 205 study have been 
resolved in the project authorization in HR 2864.

                           STUDIES CONDUCTED

    The city, through a FEMA project grant under the direction of the 
Minnesota Department of Natural Resources MN/DNR, conducted a study of 
the flood problems confronting Granite Falls. The overall objective of 
the study was to evaluate hazards for the Granite Falls area, and to 
develop preliminary evaluation and prioritization for those hazards.
    The Report states, ``Because of the tremendous impacts of flooding 
on the Granite Falls community, and the relative frequency of flooding 
events, the report begins with an all hazard evaluation, but then 
focuses on flood hazards, and presents mitigation options and 
preliminary costs for implementing those options.''
    The Report evaluated each area of the community, determined the 
risk factors, and suggested options available to protect the area 
against flooding. In the conclusion of the Report, it was recommended 
the most economical solution to provide the necessary protection was 
buy out many of the properties and move them to a location outside the 
flood plain. This work is currently in progress.
    The elevation of other areas would have to be raised, pump stations 
would need to be installed, some levees constructed, and the sanitary 
lift station and the water plant would need to be relocated. It is 
estimated the cost of this work would be approximately $12 million.
    The Supplement to the Locally Preferred Plan (SLPP) provides a 
level of flood protection for flood events up to the 500-year event. 
The 1998 Corps of Engineers 205 study indicates the 500-year level of 
protection is about the same as the 100-year flood plus 3 feet of 
freeboard. This level of protection is necessary as the result of a 
reevaluation by FEMA indicated that the current level of protection for 
Granite Falls was violated in both the 1997 and the 2001 flood events.
    The SLPP identifies seven areas severely impacted by flooding, 
suggests the remedial action needed, and the cost of such work. 
Relocation costs are not included in this report. The city believes 
that with the financial assistance received from FEMA and the State of 
Minnesota to relocate many of the structures in low-lying areas, the 
remaining project needs are appropriately addressed under flood 
protection programs administered by the Corps of Engineers.
    The Locally Preferred Plan includes the removal of about 41 
structures in the lower areas of the city, including several in the 
commercial district. FEMA has provided the funds for 25 structure 
moves, leaving only 15 additional structures to be moved as a part of 
the project.

                         APPROPRIATION REQUEST

    The city requests $2 million from the committee for the purpose of 
the development of the Detailed Design Report, preparation of plans and 
specifications, and the placement of pumps stations at two of three 
critical locations in the city. These pump stations will provide some 
immediate flood relief during an emergency, but are also needed 
permanently as a part of the total project.
    Thank you for your consideration of this request. And may I also 
take this opportunity to express our appreciation to the St. Paul 
District Office of the Army Corps of Engineers for their help and 
assistance during the crisis we have experienced in recent years. We 
will be happy to respond to any questions you may have regarding the 
needs of the city, and the flood protection project.
                                 ______
                                 
        Prepared Statement of the City of Stillwater, Minnesota

    Chairman Domenici and members of the Energy and Water Development 
Subcommittee, I thank you for the opportunity to submit this testimony 
requesting the $2 million needed to begin construction on Stage 3 of 
the Stillwater, Minnesota flood control project. In 2001, the city 
experienced its seventeenth flood since 1937, immediately after the 
Corps completed construction work on Lock and Dam No. 3, 20 miles South 
of the convergence of the Mississippi River and the St. Croix River. 
This construction on the Mississippi River raised the water level at 
Stillwater by 8-10 feet.
    The first two stages of the project have been completed, and 
Congress appropriated $2 million in the fiscal year 2002 appropriations 
bill to begin construction on the critical Stage 3 of the project. When 
the Corps did not make the funds available for Stage 3 flood wall 
construction, Congress enacted Sec. 124 in the Consolidated 
Appropriations Act of 2004, which states,

    ``Sec. 124. The Secretary of the Army, acting through the Chief of 
Engineers, is directed to use previously appropriated funds to proceed 
with design and initiate construction to complete the Stillwater, 
Minnesota Levee and flood control project.''

    The Corps was not able to locate the $2 million during fiscal year 
2004, stating the funds had been redirected to another project(s). The 
city had obtained the necessary property from the Burlington Northern 
Santa Fe Railroad at a cost of $1 million on which a portion of the 
floodwall will be constructed. Local funds were used to purchase this 
property.
    In 2005, Minnesota Representatives Jim Oberstar, and Mark Kennedy, 
and Senators Norm Coleman and Mark Dayton contacted the Corps of 
Engineers regarding the Corps lack of response to the language in the 
fiscal year 2004 appropriations bill. These contacts resulted in a 
meeting in a Stillwater City Hall that included members of Congress and 
their staff, city officials, Brig. General Robert Crear, Commander of 
the Mississippi Valley Division, and the leadership from the St. Paul, 
MN Corps of Engineers District Office.
    General Crear promised that the funds would be made available 
immediately to begin work on the DDR, design, plans and specifications, 
and the relocation of utilities for Stage 3 flood protection for the 
city. The Corps has begun such work as promised. While not moving as 
fast as the city would like, they plan to let bids and begin 
construction early in 2007. Most of the appropriated funds have been 
used by the Corps during 2005 and 2006, and additional construction 
funding will be necessary during fiscal year 2007. The Corps states 
they are awaiting approval from the House and Senate Appropriation 
Committees to transfer additional funds back to the Stillwater project.
    The $2 million in Federal funds requested this year, plus State and 
local funds will make substantial headway toward the completion of the 
project. It is projected that the project construction will require 2 
years to complete.

                    PROJECT DELAY COSTLY TO THE CITY

    The delay in the completion of the flood control has proven costly 
to the city. A number of local projects have been held back, waiting 
for the completion of the floodwall. The Lowell Park development, which 
parallels the St. Croix River, and is adjacent to the floodwall 
location, cannot be completed until the floodwall is constructed. The 
city received to grants to assist in this effort, one for $250,000, and 
one for $75,000. Both grants were aborted when the city was unable to 
move forward on the park improvement grants.
    There has also been a delay in the inflow and infiltration (I&I) 
improvements to the trunk storm sewer line that is located 
approximately where the floodwall will be constructed. Currently, the 
amount of I&I flowing into the trunk sewer line that flows to the water 
treatment plant is costing the city more than $10,000 each month, 
paying for the treatment of river water. The 7-year delay in the 
completion of the project has cost the city $840,000.
    Other projects delayed include the expansion of Lowell Park to the 
north of the levee system, delayed construction of a pedestrian pathway 
connecting north Main Street, Lowell Park, the St. Croix River, and 
downtown Stillwater. Approximately 1.5 million people visited the park 
and the river area last year, yet we cannot build permanent bathroom 
facilities until the floodwall in completed. More than 1,100 new 
citizens will be moving into apartments and condominiums currently 
under construction in downtown Stillwater. The Mayor and City Council 
Members had hoped the newcomers would not be greeted with major 
construction of the floodwall.

                            PROJECT OVERVIEW

    The project is divided into three stages. Stage 1 included the 
repair and reconstruction of the existing retaining wall that extends 
1,000 feet from Nelson Street on the South to the gazebo on the North 
end of the levee wall system. Stage 2 consists of the extension of the 
levee wall about 900 feet from the gazebo North around Mulberry Point.
    The completion of Stage 2 was delayed by floods of 1997, costing 
the city and the Federal Government nearly $500,000. After the waters 
subsided, it was discovered that the soil beneath the planned levee 
extension was very unstable, requiring a revision of plans, and the 
addition of another stage in the construction process.
    The floodwaters of the St. Croix River did not recede until August 
of 1997. The construction area remained under water preventing 
construction work to proceed as scheduled. Lowell Park, which extends 
the full length of the levee wall system, several structures, and the 
emergency roadway which is used to provide emergency medical assistance 
for those using the recreational St. Croix River, and as a water source 
for local fire departments, were all either under water or 
inaccessible.
    Phase I, the repair and reconstruction of the original levee wall, 
was completed in the summer of 1998. Work on Stage 1 was completed in 
late summer of 1997, and additional soil borings were taken for Stage 
2. The soil was found to be very unstable, and unable to support the 
levee system designed for Stage 2 of the project.
    The construction of Stage 2 required remedial action, and was 
designated as Stage 2S. A contract was awarded for Phase 2S in 
November, 1998, and was completed in 1999. Phase 2 was begun in the 
late Fall of 1999, and the major construction work was completed at the 
end of the year 2000. The Design Memorandum schedule called for the 
construction of Stage 3 in fiscal year 2002, and to be completed in 
fiscal year 2003, according to the Corps schedule.
     Stage 3 expands the flood protection system by constructing a berm 
or a 3-foot floodwall, and driving sheet piling below the surface to 
reduce seepage and to provide a base for the wall. The floodwall will 
be constructed about 125 feet inland from the riverbank. Stages 1 and 2 
were critical to the protection of the fragile waterfront, and also, to 
prevent minor flooding on the North end of the riverfront.
    Stage 3 is the component that provides the flood protection for the 
city. The rising elevation of the terrain, the floodwall, and minimal 
emergency measures are designed to provide the city with up to 100-year 
flood protection.
    The Mayor, City Council Members, and Engineering staff all 
understand that Stage 3 of the flood control project is essential for 
the protection of life and property of the citizens, that the Stage 3 
flood wall is a critical phase of the project, and that the project 
must be completed at the earliest possible date. The Corps acknowledged 
the necessity for all three stages of the project when the Design 
Memorandum included plans for all three stages.
    The U.S. Congress directed the Secretary of the Army acting through 
the Chief of Engineers to proceed with the design and construction to 
complete the Stillwater Levee and Flood Control Project under Section 
124 of the Omnibus Appropriations Act for fiscal year 2004. The city 
and the State of Minnesota have allocated matching funds for this work. 
The State has appropriated half of the non-Federal matching funds 
needed to complete Stage 3 of the project, as well as for Stages 1 and 
2. The city has provided the remainder of the required matching funds, 
consequently, only the Federal share is missing to complete the 
project.

         THE IMPACT OF LOCK AND DAM NO. 3 ON FLOODS STILLWATER

    The Lock and Dam No. 3 was constructed in 1937-38 on the 
Mississippi River at Red Wing, Minnesota. The Lock and Dam construction 
raised the level of the St. Croix at Stillwater by 8 to 10 feet. It has 
made the City of Stillwater vulnerable during periods of high water and 
flooding of the St. Croix since that time. Records prove that the lock 
and dam construction, raising the water levels of both the Mississippi 
and the St. Croix River, has markedly increased the incidence of 
flooding at Stillwater. The culpability of the Corps is clearly 
evident.
    The Mississippi and the St. Croix Rivers merge about 14 miles south 
of Stillwater. When constructing the Lock and Dam at Red Wing in 1938, 
the Federal officials recognized that detaining the flow of the 
Mississippi would back up the water in the St. Croix at Stillwater. A 
1,000-foot levee wall system was constructed at Stillwater by the WPA 
under the supervision of the Corps to protect the fragile waterfront.

                          LEGISLATIVE HISTORY

    The Stillwater Flood Control and Retaining Wall project first was 
authorized in section 363 of the Water Resources Development Act (WRDA) 
of 1992. An allocation of $2.4 million was made in the Energy and Water 
Development Appropriations Act of 1994.
    A committee report described the project in three parts--to repair, 
extend, and expand the levee wall system on the St. Croix River at 
Stillwater, Minnesota. ``To repair'' (Stage 1) the original existing 
levee wall system constructed in 1936. ``To extend'' (Stage 2) the 
original wall by approximately 900 feet to prevent the annual flooding 
that occurs at that location, and ``To expand'' (Stage 3) the system by 
constructing the flood wall approximately 125 feet inland from the 
levee wall system to protect the downtown and residential section in 
the flood plain.
    In 1995, the Design Memorandum confirmed the cost estimate for the 
project was much too low, and the project was reauthorized for $11.6 
million by Congress in the 1996 WRDA legislation. In 2001, the Corps 
estimated the Federal cost at $9.86 million, the non-Federal cost at 
$3.29 million, and the total cost of the project to be $13.15 million.

                                SUMMARY

    The Mayor and Council for the City of Stillwater, Washington County 
Officials, the Governor and Minnesota State Legislature, and bipartisan 
support of Minnesota Representatives and Senators in Congress, all 
recognize the significant importance of completing this project by 
constructing the Stage 3 flood wall on the St. Croix River at 
Stillwater. The Members are committed to accomplishing this work as 
soon as possible. It is critical to the protection of property, the 
preservation of our history, the respect of historic Indian sites, and 
the safety of our citizens and their homes and business.
    We respectfully urge the Energy and Water Development Subcommittee 
for Appropriations to allocate the $2 million needed to begin 
construction of the Stage 3 flood wall in the fiscal year 2007 
Appropriations Bill. If you have questions or would like additional 
information regarding this project, please call on us.
                                 ______
                                 
       Prepared Statement of the Western Coalition of Arid States

    FISCAL YEAR 2007 CIVIL WORKS PROGRAM OF THE U.S. ARMY CORPS OF 
                            ENGINEERS BUDGET

    The Western Coalition of Arid States (WESTCAS) is submitting this 
testimony regarding the President's fiscal year 2007 budget request for 
the U.S. Army Corps of Engineers.
    WESTCAS is a coalition of Western towns and municipalities, water 
and wastewater agencies, irrigation districts, Native American nations, 
companies with water and wastewater concerns and professionals in the 
fields of engineering, the environmental sciences, and natural 
resources law and policy. WESTCAS was formed in 1992 by Western water 
and wastewater agencies concerned with the quality and management of 
water resources in the Arid West. A grass roots organization, WESTCAS 
is dedicated to encouraging the development of water programs and 
regulations which assure adequate supplies of high quality water for 
those living in the arid regions while protecting the environment.
    The United States Army Corps of Engineering is the world's largest 
public engineering, design, and construction management agency. Its 
mission includes:
  --Protecting the country's hundreds of rivers, lakes, wetlands, and 
        thousands of miles of coastal shoreline;
  --Environmental restoration and stewardship;
  --Maintaining direct control of 609 dams, 257 navigational locks and 
        75 Hydroelectric facilities which generate 24 percent of the 
        Nation's hydropower;
  --Providing engineering expertise and emergency management abilities 
        for homeland security; and
  --Building much of the infrastructure the Army and Air Force uses to 
        train, house, and deploy our troops.
    The fiscal year 2007 budget for the Civil Works Program of the U.S. 
Army Corps of Engineers emphasizes three critical Corps activities. 
First, it funds the construction and completion of water resources 
projects that will provide a high rate of return on the Nation's 
investment in the Corps' primary mission areas of commercial 
navigation, flood and storm damage reduction, and aquatic ecosystem 
restoration.
    Second, it increases funding for the Corps' regulatory program to 
help protect and preserve the Nation's precious waters and wetlands. 
Third, it reflects the administration's proactive support for the 
Corps' critical emergency preparedness and response mission by funding 
the mission in the regular budget process, and not through emergency 
transfers or supplemental funding. These goals are all extremely 
important to the arid southwest and general membership of the Western 
Coalition of Arid States (WESTCAS).
    The fiscal year 2007 budget transmitted to Congress consists of 
$5.271 billion in Direct Program funding which includes $4.733 billion 
in discretionary funding and $538 million in mandatory funding for the 
Civil Works program of the U.S. Army Corps of Engineers. The Civil 
Works program of the U.S. Army Corps of Engineers will be augmented by 
additional Reimbursed Program funding in the range of $2 billion to $3 
billion.
    As shown below, over 80 percent of the Civil Works program of the 
U.S. Army Corps of Engineers will be appropriated as Operation and 
Maintenance and General Construction.

------------------------------------------------------------------------
                                            Fiscal Year
         Appropriation Accounts                2007        Percentage of
                                            (millions)         Total
------------------------------------------------------------------------
Operation & Maintenance.................          $2,258            47.7
Construction............................           1,555            32.9
Flood Control, Mississippi River........             278             5.9
Regulatory Program......................             173             3.7
General Expenses........................             164             3.5
Formerly Utilized Remedial Action                    130             2.7
 Program................................
General Investigations..................              94             2.0
Flood Control & Coastal Emergencies.....              81             1.7
                                         -------------------------------
      Total.............................           4,733           100.0
------------------------------------------------------------------------

    The following table illustrates that additional funding will be 
appropriated to Operation & Maintenance and Flood Control and Coastal 
Emergencies, while reducing the funding appropriation for General 
Construction. The reduced funding in the Construction appropriation 
account will result in fewer projects in the Civil Works backlog being 
completed. This is a significant issue that should be corrected.

----------------------------------------------------------------------------------------------------------------
                                                                                          Percentage
                                                                    Fiscal      Fiscal     of Total   Percentage
                     Appropriation Accounts                        Year 2006   Year 2007    Budget      Change
                                                                  (Millions)  (Millions)    Fiscal    From Prior
                                                                                           Year 2007     Year
----------------------------------------------------------------------------------------------------------------
Operation & Maintenance.........................................      $1,979      $2,258        47.7        14.1
Construction....................................................       1,637       1,555        32.9        -5.0
Flood Control, Mississippi River................................         270         278         5.9         3.0
Regulatory Program..............................................         160         173         3.7         8.1
General Expenses................................................         162         164         3.5         1.2
Formerly Utilized Remedial Action Program.......................         140         130         2.7        -7.1
General Investigations..........................................          95          94         2.0        -1.1
Flood Control & Coastal Emergencies.............................          70          81         1.7        15.7
                                                                 -----------------------------------------------
      Total.....................................................       4,513       4,733       100.0         4.9
----------------------------------------------------------------------------------------------------------------

    The fiscal year 2007 Civil Works budget is a performance-based 
budget, which reflects a focus on the projects and activities that 
provide the highest net economic and environmental returns on the 
Nation's investment. However, the proposed budget is less than the 
actual U.S. Army Corps of Engineers budget in fiscal year 2001. One 
must ask whether our priorities are properly in focus.
    The impacts caused by Hurricane Katrina could have been 
significantly reduced with enhanced flood control projects in place to 
protect the region. The Association Press has recently reported that 
the estimates of Hurricane Katrina's staggering toll on the Treasury 
are highly imprecise, costs are certain to climb to $200 billion in the 
coming weeks. The final accounting could approach the more than $300 
billion spent in 4 years to fight in Afghanistan and Iraq. It would 
seem prudent to invest in construction of facilities to protect the 
Nation rather than expend hundreds of billions of dollars after a major 
natural disaster.
    Therefore, a priority should be placed on appropriating funds for 
construction activities focusing on flood control and shoreline 
protective measures in the U.S. Army Corps of Engineers budget for 
fiscal year 2007. The construction projects identified in the proposed 
budget for flood control enhancements in the arid southwest such as the 
American River Watershed and Santa Ana Mainstem projects in California, 
the Alamogordo project in New Mexico, and the Brays Bayou project in 
Texas all should be funded.
    Thank you for considering our request.
                                 ______
                                 

                       DEPARTMENT OF THE INTERIOR

                         Bureau of Reclamation

               Letter From the Wyoming Water Association
                                       Cheyenne, WY, March 6, 2006.
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 20510.
    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 2007 of $4,594,000 to the Bureau of 
Reclamation within the budget line item entitled ``Endangered Species 
Recovery Implementation Program'' for the Upper Colorado Region. 
Consistent with the requests made by our other Upper Colorado and San 
Juan Recovery. Programs' partners, the funding designation the Wyoming 
Water Association seeks is as follows: $3,104,000 for construction 
activities for the Upper Colorado River Endangered Fish Recovery 
Program; $1,090,000 for the San Juan River Basin Recovery 
Implementation Program and $400,000 for activities to avoid jeopardy. 
The President's recommended budget for fiscal year 2007 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 State-wide 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.
    The Wyoming Water Association is a participant in the Upper 
Colorado River Endangered Fish Recovery Program. That program, and its 
sister program within the San Juan River Basin, 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 1,000 Federal, 
tribal, State and privately managed water projects depleting 
approximately 2.9 million acre-feet of water per year.
    The requested fiscal year 2007 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 
2007 funding to ensure the Bureau of Reclamation's continuing financial 
participation in these vitally important programs.
            Sincerely yours,
                                           John W. Shields,
                                               Executive Secretary.
                                 ______
                                 
  Prepared Statement of the Colorado River Water Conservation District

    Chairman Domenici and Senator Reid, we are requesting your support 
for an appropriation in fiscal year 2007 of $4,594,000 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 2007 includes this line-
item amount. The funding designation we seek is as follows: $3,104,000 
for construction activities for the Upper Colorado River Endangered 
Fish Recovery Program; $1,090,000 for the San Juan River Basin Recovery 
Implementation Program and $400,000 activities to avoid jeopardy.
    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 past support and assistance of your subcommittee has greatly 
facilitated the success of these programs. We thank you for that 
support and request the subcommittee's assistance for fiscal year 2007 
funding to ensure the Bureau of Reclamation's continuing financial 
participation in these vitally important programs.
                                 ______
                                 
          Prepared Statement of the San Juan Water Commission

    Chairman Domenici, the San Juan Water Commission is requesting your 
support for an appropriation in fiscal year 2007 of $4,594,000 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 2007 
includes this line-item amount. The funding designation we seek is as 
follows: $3,104,000 for construction activities for the Upper Colorado 
River Endangered Fish Recovery Program; $1,090,000 for the San Juan 
River Basin Recovery Implementation Program and $400,000 for activities 
to avoid jeopardy.
    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 past support and assistance of your subcommittee has greatly 
facilitated the success of these multi-State, multi-agency programs. We 
thank you for that support and request the subcommittee's assistance 
for fiscal year 2007 funding to ensure the Bureau of Reclamation's 
continuing financial participation in these vitally important programs.
                                 ______
                                 
           Prepared Statement of the Four Corners Power Plant

    Chairman Domenici & Senator Reid, we are requesting your support 
for an appropriation in fiscal year 2007 of $4,594,000 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 2007 includes this line-
item amount. The funding designation we seek is as follows: $3,104,000 
for construction activities for the Upper Colorado River Endangered 
Fish Recovery Program; $1,090,000 for the San Juan River Basin Recovery 
Implementation Program and $400,000 activities to avoid jeopardy.
    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 past support and assistance of your subcommittee has greatly 
facilitated the success of these programs. We thank you for that 
support and request the subcommittee's assistance for fiscal year 2007 
funding to ensure the Bureau of Reclamation's continuing financial 
participation in these vitally important programs.
                                 ______
                                 
   Prepared Statement of the Upper Gunnison River Water Conservancy 
                                District

    Chairman Domenici and Senator Reid, we are requesting your support 
for an appropriation in fiscal year 2007 of $4,594,000 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 2007 includes this line-
item amount. The funding designation we seek is as follows: $3,104,000 
for construction activities for the Upper Colorado River Endangered 
Fish Recovery Program; $1,090,000 for the San Juan River Basin Recovery 
Implementation Program and $400,000 activities to avoid jeopardy.
    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 past support and assistance of your subcommittee has greatly 
facilitated the success of these programs. We thank you for that 
support and request the subcommittee's assistance for fiscal year 2007 
funding to ensure the Bureau of Reclamation's continuing financial 
participation in these vitally important programs.
                                 ______
                                 
           Prepared Statement of the Colorado Water Congress

    Chairman Domenici and Senator Reid, we are requesting your support 
for an appropriation in fiscal year 2007 of $4,594,000 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 2007 includes this line-
item amount. The funding designation we seek is as follows: $3,104,000 
for construction activities for the Upper Colorado River Endangered 
Fish Recovery Program; $1,090,000 for the San Juan River Basin Recovery 
Implementation Program and $400,000 activities to avoid jeopardy.
    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 past support and assistance of your subcommittee has greatly 
facilitated the success of these programs. We thank you for that 
support and request the subcommittee's assistance for fiscal year 2007 
funding to ensure the Bureau of Reclamation's continuing financial 
participation in these vitally important programs.
                                 ______
                                 
     Prepared Statement of the Public Service Company of New Mexico

    Chairman Domenici and Senator Reid, we are requesting your support 
for an appropriation in fiscal year 2007 of $4,594,000 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 2007 includes this line-
item amount. The funding designation we seek is as follows: $3,104,000 
for construction activities for the Upper Colorado River Endangered 
Fish Recovery Program; $1,090,000 for the San Juan River Basin Recovery 
Implementation Program and $400,000 activities to avoid jeopardy.
    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 past support and assistance of your subcommittee has greatly 
facilitated the success of these programs. We thank you for that 
support and request the subcommittee's assistance for fiscal year 2007 
funding to ensure the Bureau of Reclamation's continuing financial 
participation in these vitally important programs.
                                 ______
                                 
 Prepared Statement of the Central Arizona Water Conservation District

    The Central Arizona Water Conservation District (CAWCD) is pleased 
to present written testimony regarding the fiscal year 2007 proposed 
budget for the Bureau of Reclamation (Reclamation).
    CAWCD is a political subdivision of the State of Arizona, governed 
by an elected 15-member board of directors. CAWCD was created in 1971 
for the purpose of contracting with the United States to repay the 
reimbursable construction costs of the Central Arizona Project (CAP) 
authorized by the Colorado River Basin Project Act of 1968. CAWCD 
subsequently assumed the responsibility for operating and maintaining 
the Project. CAWCD has and continues to meet its repayment 
responsibility. In addition to a $175 million upfront contribution from 
CAWCD, Reclamation has been paid $655 million since repayment began in 
January 1994.

                         BUREAU OF RECLAMATION

    CAWCD generally supports Reclamation's budget request. However, we 
believe that some of the priorities are misplaced. Reclamation has 
begun a scoping process to develop new guidelines for managing the 
Colorado River system and to adopt Lower Basin shortage sharing 
guidelines. The Seven Basin States sent a letter to the Secretary of 
the Interior, dated February 3, 2006, that strongly supports 
Reclamation's process and encourages Reclamation to take several 
actions to preserve, enhance and more efficiently manage the Colorado 
River water supply. Reclamation's Lower Colorado River Operations 
budget request has funds identified to complete the scoping process, 
but does not have sufficient funds for structures and programs to 
improve operational efficiency or augment supplies.
    We would urge the committee to reorder priorities in this budget to 
focus meaningfully on important strategies for the Lower Colorado 
River.

                LOWER COLORADO RIVER WATER CONSERVATION

    Specifically, we are concerned about the lack of concrete focus on 
preserving storage capacity in Lake Mead by undertaking activities that 
would augment water availability and improve system operational 
efficiency.
    Congress is well aware of the huge impacts that a multi-year 
drought has imposed on this region, and of the significant drawdown of 
stored water in the river's reservoirs that has resulted from this 
drought. A significant amount of water has been released over these 
years from Hoover Dam that could have been retained if effective 
downstream strategies had been implemented.
    The construction of an off stream regulatory storage reservoir near 
Drop 2 of the All-American Canal has been identified as capable of 
saving over 60,000 acre-feet per year. The Colorado River Front Work 
and Levee System budget request only has funds to complete designs, 
specifications, and environmental compliance activities. Were 
Reclamation serious about aggressively pursuing these strategies, its 
request for these items would be in excess of $40 million, not the $2.5 
million requested. In order to ensure that this critical reservoir is 
constructed, the Seven Basin States have approved a program to make 
contributed funds available from Southern Nevada Water Authority (SNWA) 
to construct the reservoir. SNWA is prepared to contribute $84 million 
over 2 years (the full estimated cost). Reclamation should be prepared 
with plans, administrative procedures and personnel to accept the money 
and initiate construction in fiscal year 2007.

                          YUMA DESALTING PLANT

    Reclamation's budget justification concerning the Yuma Desalting 
Plant (YDP) continues to be disingenuous. Reclamation continues to say 
that the plant is in ``ready reserve'' status, but quickly states it 
would take 4 years and $26 million to have the YDP fully operational. 
The October 26, 2006, report to Congress and the budget request for a 
pilot program to pay U.S. water delivery contractors to forebear use of 
water indicate the Reclamation preference for a forbearance program as 
opposed to salvaging the saline water by operating the YDP. A long-term 
program relying primarily on forbearance in the United States is not 
acceptable to CAWCD or any of the Lower Basin States. Decisions need to 
be made and resources need to be applied to bring the YDP into actual 
operation. Every year the YDP remains idle results in the loss of 
enough water to supply the annual water needs of half a million people. 
We urge the committee to direct Reclamation to make the Yuma Desalting 
Plant operational at one-third capacity and initiate regular operations 
no later than September 30, 2008.

                      COLORADO RIVER AUGMENTATION

    CAWCD would like to call the committee's attention to the 
provisions of Sections 201, 202 and 203 of Title 1 of the Colorado 
River Basin Project Act of 1968 (Public Law 90-537). These provisions 
call for studies and actions to augment the supply of water available 
for distribution within the Colorado River Basin. These provisions 
specifically make satisfaction of the obligations of the 1944 Treaty 
with Mexico a national obligation and anticipate that that obligation 
will be met through augmentation of the Colorado River supply. The 
Seven Basin States have initiated a program, led and funded primarily 
by the Southern Nevada Water Authority, to review previous augmentation 
studies and evaluate new concepts. We intend to develop recommended 
augmentation programs to be undertaken by local, State, and Federal 
organizations. At the very least, Reclamation needs to commit 
sufficient funds to support these studies in fiscal year 2007. CAWCD 
suggests that at least $200,000 be committed from Reclamation's overall 
appropriations for such activities as General Planning, Research and 
Development, or Water 2025. CAWCD urges the committee to direct 
Reclamation to take action and provide funding to fulfill the 
commitment Congress made 37 years ago to augment the water supply in 
the Colorado River Basin.

                    CAP INDIAN DISTRIBUTION SYSTEMS

    We support Reclamation's request for $18,918,000 in funding for CAP 
Indian Distribution Systems. A key element of the negotiated settlement 
embodied in the Arizona Water Settlements Act is continued Indian 
distribution system funding through 2009.

                           TUCSON RELIABILITY

    We note that Reclamation has reduced its funding request for 
``Tucson Reliability'' to a much lower level of $200,000. We have 
testified before and we reiterate here that Reclamation is obligated to 
confer with CAWCD before proceeding with any reliability projects that 
would increase the CAWCD repayment obligation. That said, we believe 
the $200,000 requested will be sufficient for Reclamation's planned 
activities in fiscal year 2007.

                LOWER COLORADO RIVER OPERATIONS PROGRAM

    In its fiscal year 2007 budget request, Reclamation includes 
$9,603,000 in its Lower Colorado River Operations Program for the Lower 
Colorado River Multi-Species Conservation Program (MSCP).
    The MSCP is a cost-shared program among Federal and non-Federal 
interests to develop a long-term plan to conserve endangered species 
and their habitat along the Lower Colorado River from Lake Mead to 
Mexico. CAWCD is one of the cost-sharing partners. Development of this 
program will provide habitat for threatened and endangered species and, 
at the same time, allow current water and power operations to continue. 
CAWCD supports Reclamation's budget request for the Lower Colorado 
River Operations Program. This funding level is necessary to support 
the MSCP effort as well as environmental measures necessary to fully 
implement the interim surplus criteria for the Lower Colorado River. 
These are critical programs upon which Lower Colorado River water and 
power users depend.

    INCREASED SECURITY COSTS FOR RECLAMATION HYDRO POWER FACILITIES

    We continue to oppose the funding of post-9/11 increased security 
costs for Reclamation facilities through hydropower rates. The 
increased costs are being incurred for national security reasons, not 
project maintenance or operation. Details of these costs must be kept 
secret and cannot be disclosed like other data in Power Marketing 
Administration rate cases, raising serious due process issues. Other 
project beneficiaries are not and, in some cases, cannot be charged a 
fair share of these costs. Congress should make these increased 
national security costs nonreimbursable.

                               CONCLUSION

    We have worked for over 3 decades with the Congress and all the 
succeeding administrations to make the Central Arizona Project a 
reality as envisioned by Congress in the 1968 Act and to ensure its 
major contribution to the economic welfare of the State of Arizona. 
Improving the ability of the Lower Colorado River system to conserve 
and store precious Colorado River water supplies is central to our 
mission and, we believe, a core directive of the 1968 Act. The lengthy 
drought on the Colorado River has proven the correctness of that focus 
and the wisdom of Congress in passing the 1968 Act. It is time to 
aggressively move forward to accomplish the additional tasks that have 
been identified. We look forward to working with the Congress, the 
Bureau of Reclamation and the other Federal agencies and the Basin 
States to get this work done.
                                 ______
                                 
                   Prepared Statement of Denver Water

    Chairman Domenici and Senator Reid, we are requesting your support 
for an appropriation in fiscal year 2007 of $4,594,000 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 2007 includes this line-
item amount. The funding designation we seek is as follows: $3,104,000 
for construction activities for the Upper Colorado River Endangered 
Fish Recovery Program; $1,090,000 for the San Juan River Basin Recovery 
Implementation Program and $400,000 activities to avoid jeopardy.
    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 past support and assistance of your subcommittee has greatly 
facilitated the success of these programs. We thank you for that 
support and request the subcommittee's assistance for fiscal year 2007 
funding to ensure the Bureau of Reclamation's continuing financial 
participation in these vitally important programs.
                                 ______
                                 
      Letter From the Northern Colorado Water Conservancy District
                                       Berthoud, CO, March 7, 2006.
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 20510.
    Dear Chairman Domenici and Senator Reid: On behalf of the Northern 
Colorado Water Conservancy District, I am writing to request your 
support for an appropriation in fiscal year 2007 of $4,594,000 to the 
U.S. Bureau of Reclamation (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 2007 includes this line-item amount. The funding designation we 
seek is as follows: $3,104,000 for construction activities for the 
Upper Colorado River Endangered Fish Recovery Program; $1,090,000 for 
the San Juan River Basin Recovery Implementation Program; and $400,000 
for activities to avoid jeopardy.
    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 past support and assistance of your subcommittee has greatly 
facilitated the success of these programs. I thank you for your support 
and request the subcommittee's assistance for fiscal year 2007 funding 
to ensure Reclamation's continuing financial participation in these 
vitally important programs.
            Sincerely,
                                         Eric W. Wilkinson,
                                                   General Manager.
                                 ______
                                 
         Prepared Statement of the Pueblo Board of Water Works

    Chairman Domenici and Senator Reid, we are requesting your support 
for an appropriation in fiscal year 2007 of $4,594,000 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 2007 includes this line-
item amount. The funding designation we seek is as follows: $3,104,000 
for construction activities for the Upper Colorado River Endangered 
Fish Recovery Program; $1,090,000 for the San Juan River Basin Recovery 
Implementation Program and $400,000 activities to avoid jeopardy.
    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 past support and assistance of your subcommittee has greatly 
facilitated the success of these programs. We thank you for that 
support and request the subcommittee's assistance for fiscal year 2007 
funding to ensure the Bureau of Reclamation's continuing financial 
participation in these vitally important programs.
                                 ______
                                 
    Prepared Statement of the Tri-County Water Conservancy District

    Chairman Domenici and Senator Reid, we are requesting your support 
for an appropriation in fiscal year 2007 of $4,594,000 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 2007 includes this line-
item amount. The funding designation we seek is as follows: $3,104,000 
for construction activities for the Upper Colorado River Endangered 
Fish Recovery Program; $1,090,000 for the San Juan River Basin Recovery 
Implementation Program; and $400,000 activities to avoid jeopardy.
    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 past support and assistance of your subcommittee has greatly 
facilitated the success of these programs. We thank you for that 
support and request the subcommittee's assistance for fiscal year 2007 
funding to ensure the Bureau of Reclamation's continuing financial 
participation in these vitally important programs.
                                 ______
                                 
   Prepared Statement of the Central Utah Water Conservancy District

    Chairman Domenici and Senator Reid, we are requesting your support 
for an appropriation in fiscal year 2007 of $4,594,000 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 2007 includes this line-
item amount. The funding designation we seek is as follows: $3,104,000 
for construction activities for the Upper Colorado River Endangered 
Fish Recovery Program; $1,090,000 for the San Juan River Basin Recovery 
Implementation Program; and $400,000 activities to avoid jeopardy.
    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 past support and assistance of your subcommittee has greatly 
facilitated the success of these programs. We thank you for that 
support and request the subcommittee's assistance for fiscal year 2007 
funding to ensure the Bureau of Reclamation's continuing financial 
participation in these vitally important programs.
                                 ______
                                 
   Prepared Statement of the Southwestern Water Conservation District

    Chairman Domenici and Senator Reid, the Southwestern Water 
Conservation District was established by the Colorado General Assembly 
in 1941 to conserve and protect the water of the San Juan and Dolores 
Rivers and their tributaries in nine counties in Southwest Colorado. 
Therefore, we are requesting your support for an appropriation in 
fiscal year 2007 of $4,594,000 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 2007 includes this line-item amount. The funding 
designations we are seeking are as follows: $3,104,000 for construction 
activities for the Upper Colorado River Endangered Fish Recovery 
Program; $1,090,000 for the San Juan River Basin Recovery 
Implementation Program; and $400,000 for activities to avoid jeopardy 
to the endangered fish.
    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 past support and assistance of your subcommittee has greatly 
facilitated the success of these multi-State, multi-agency programs. We 
thank you for that support and request the subcommittee's assistance 
for fiscal year 2007 funding to ensure the Bureau of Reclamation's 
continuing financial participation in these vitally important programs.
                                 ______
                                 
               Prepared Statement of the State of Wyoming

    Chairman Domenici and Senator Reid, I am writing to request 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 two successful ongoing 
cooperative partnership programs involve the States of Colorado, New 
Mexico, Utah and Wyoming, Indian tribes, Federal agencies and water, 
power and environmental interests. Wyoming and the other participating 
States request your support for an appropriation in the President's 
recommended budget for fiscal year 2007 of $4,594,000 to the Bureau of 
Reclamation within the budget line item entitled ``Endangered Species 
Recovery Implementation Program'' for the Upper Colorado Region. The 
funding designation we seek is as follows: $3,104,000 for construction 
activities for the Upper Colorado River Endangered Fish Recovery 
Program; $1,090,000 for the San Juan River Basin Recovery 
Implementation Program and $400,000 for activities to avoid jeopardy.
    These recovery programs have become national models for 
collaboratively working to recover endangered species while meeting 
water use and water development demands in compliance with the 
Endangered Species Act, State law, and interstate compacts 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 1,000 Federal, tribal, State and privately managed 
water projects depleting approximately 2.9 million acre-feet of water 
per year.
    The requested fiscal year 2007 appropriation will allow the Upper 
Colorado River Endangered Fish Program to proceed with construction of 
additional fish passage structures on the Colorado River to provide 
access to historic habitat upstream of existing diversion dams, a fish 
screen on a major diversion on the Green River to avoid entrainment of 
endangered fish, and construction of the Elkhead Project to provide low 
flow augmentation water on the Yampa River. The requested funding for 
the San Juan River Recovery Program will be used for construction of a 
fish screen and fish passage in critical habitat on the San Juan River.
    These activities are funded pursuant to Public Law 106-392, as 
amended, which authorized the Federal Government to provide 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 fish screens in canal systems and controlling nonnative fish 
populations are key components of the programs' ongoing capital 
construction projects. Substantial non-Federal cost-sharing funding 
exceeding 50 percent for capital construction activities demonstrates 
the strong commitment and effective partnerships embodied in both of 
these successful programs.
    The requested Federal appropriations are critically important to 
continuation of these efforts. The past support and assistance of your 
subcommittee has greatly facilitated the success of these multi-State, 
multi-agency programs. Wyoming thanks you for that support and requests 
the subcommittee's assistance for fiscal year 2007 funding to ensure 
the Bureau of Reclamation's continuing financial participation in these 
vitally important programs.
                                 ______
                                 
   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 
2007. 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 to date 
$11.71 million. The administration has zeroed out our funding for 2007. 
To stay on course with our project, it is very important that we get a 
write-in on the Senate's Appropriations Committee for $6.0 million. 
Cost share for the System is 75 percent Federal, 10 percent State, and 
15 percent local match. The State of South Dakota has legislated to 
loan PCRWS the local share for 40 years at 3 percent interest to keep 
costs down to the consumer.
    Breakdown for the project for 2007 is as follows:

                               2007 BUDGET
------------------------------------------------------------------------
                                                              Amount
------------------------------------------------------------------------
INCOME:
    BUREAU OF RECLAMATION...............................      $6,000,000
    STATE OF SOUTH DAKOTA...............................       1,500,000
    MISC................................................         350,000
                                                         ---------------
      TOTAL.............................................       7,850,000
                                                         ===============
EXPENSE:
    FINISH PIPE FOR 2006................................         450,000
    NORTH DAKOTA STATE WATER COMMISSION.................       1,320,000
    RESERVOIR...........................................         800,000
    SHADEHILL AREA......................................       1,300,000
    PRAIRIE CITY AREA...................................         925,000
    BISON RURAL.........................................         925,000
    BOOSTER PUMP STATION................................         200,000
    ENGINEERING.........................................         350,000
    CONSTRUCTION MISC...................................       1,580,000
                                                         ---------------
      TOTAL.............................................       7,850,000
------------------------------------------------------------------------

    PCRWS will need $6.0 million for each of the next 3 years to 
complete our project on schedule. This consists of 550 miles of various 
size pipe ranging from 1.5 inches to 8 inches, one booster pump station 
capable of moving 800 gallon per minute, a 1.0 million storage 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 
dissolved solids are exceedingly high by the State of South Dakota 
standards. Water quality and quantity in Perkins County, South Dakota 
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 back up 
system for other times would make life a lot easier for those rural 
areas. Due to the isolation from major water supplies, this may be our 
only chance to obtain water at an affordable cost.
    On behalf of the Board of Directors of PCRWS and the people of 
Perkins County, South Dakota, thank you for you for allowing us to 
enter this testimony in subcommittee's report.
                                 ______
                                 
    Prepared Statement of the Grand Valley Water Users' Association

    Chairman Domenici and Senator Reid, we are requesting your support 
for an appropriation in fiscal year 2007 of $4,594,000 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 2007 includes this line-
item amount. The funding designation we seek is as follows: $3,104,000 
for construction activities for the Upper Colorado River Endangered 
Fish Recovery Program; $1,090,000 for the San Juan River Basin Recovery 
Implementation Program; and $400,000 activities to avoid jeopardy.
    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 past support and assistance of your subcommittee has greatly 
facilitated the success of these programs. We thank you for that 
support and request the subcommittee's assistance for fiscal year 2007 
funding to ensure the Bureau of Reclamation's continuing financial 
participation in these vitally important programs.
                                 ______
                                 
 Prepared Statement of the Colorado River Basin Salinity Control Forum

    Colorado River Basin Salinity Control Forum's Recommendation:
  --1. Title II Program (Basinwide Program) Authorized in 1995 (Public 
        Law 104-20)--$17,500,000.
  --2. Colorado River Water Quality Improvement Program--Administration 
        Request.
  --3. Paradox Valley Unit and Grand Valley Unit--Administration 
        Request.
    This testimony is in support of funding for the Title II Colorado 
River Basin Salinity Control Program. The 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 
role and the authorized program were refined and confirmed by the 
Congress when Public Law 104-20 was enacted. A total of $17,500,000 is 
requested for fiscal year 2007 to implement the needed and authorized 
program. Failure to appropriate these funds will result in significant 
economic damage in the United States and Mexico.
    In recent years, the President's requests have dropped to below $10 
million. In the judgment of the Colorado River Basin Salinity Control 
Forum (Forum), this amount is inappropriately low. Water quality 
commitments to downstream United States and Mexican water users must be 
honored while the Basin States continue to develop their Colorado River 
Compact-apportioned waters. Concentrations of salts in the river cause 
about $330 million in quantified damage in the United States with 
significantly greater unquantified damages. Damages occur from:
  --a reduction in the yield of salt sensitive crops and increased 
        water use for leaching in the agricultural sector,
  --a reduction in the useful life of galvanized water pipe systems, 
        water heaters, faucets, garbage disposals, clothes washers, and 
        dishwashers, and increased use of bottled water and water 
        softeners in the household sector,
  --an increase in the use of water for cooling, and the cost of water 
        softening, and a decrease in equipment service life in the 
        commercial sector,
  --an increase in the use of water and the cost of water treatment, 
        and an increase in sewer fees in the industrial sector,
  --a decrease in the life of treatment facilities and pipelines in the 
        utility sector,
  --difficulty in meeting wastewater discharge requirements to comply 
        with National Pollutant Discharge Elimination System permit 
        terms and conditions, and an increase in desalination and brine 
        disposal costs due to accumulation of salts in groundwater 
        basins,
  --increased use of imported water for leaching and the cost of 
        desalination and brine disposal for recycled water.
    For every 30 mg/l increase in salinity concentrations, there is $75 
million in additional damages in the United States. The Forum, 
therefore, believes implementation of the program needs to be 
accelerated to a level beyond that requested by the President.
    The program authorized by the Congress in 1995 has proven to be 
very successful and very cost effective. Proposals from the public and 
private sector to implement salinity control strategies have far 
exceeded the available funding and Reclamation has a backlog of 
proposals. Reclamation continues to select the best and most cost-
effective proposals. Funds are available for the Colorado River Basin 
States' cost sharing for the level of Federal funding requested by the 
Forum. Water quality improvements accomplished under Title II of the 
Colorado River Basin Salinity Control Act also benefit the quality of 
water delivered to Mexico. Although the United States has always met 
the commitments of the International Boundary & Water Commission's 
(Commission) Minute No. 242 to Mexico with respect to water quality, 
the United States Section of the Commission is currently addressing 
Mexico's request for better water quality at the International 
Boundary.
    Some of the most cost-effective salinity control opportunities 
occur when Reclamation can improve irrigation delivery systems at the 
same time that the U.S. Department of Agriculture's (USDA) program is 
working with landowners (irrigators) to improve the on-farm irrigation 
systems. Through the USDA Environmental Quality Incentives Program, 
adequate on-farm funds appear to be available and adequate Reclamation 
funds are needed to maximize the effectiveness of the effort. These 
salinity control efforts have secondary water conservation benefits at 
the point of use and downstream at the point of reuse.

                                OVERVIEW

    In 2000, the Congress reviewed the program as authorized in 1995. 
Following hearings, and with administration support, the Congress 
passed legislation that increased the ceiling authorized for this 
program by $100 million. Reclamation has received cost-effective 
proposals to move the program ahead and the Basin States have funds 
available to cost-share up-front.
    The Colorado River Basin Salinity Control Program was originally 
authorized by the Congress in 1974. The Title I portion of the Colorado 
River Basin Salinity Control Act responded to commitments that the 
United States made, through Minute No. 242, to Mexico concerning the 
quality of water being delivered to Mexico below Imperial Dam. Title II 
of the Act established a program to respond to salinity control needs 
of Colorado River water users in the United States and to comply with 
the mandates of the then newly legislated Clean Water Act. Initially, 
the Secretary of the Interior and Reclamation were given the lead 
Federal role by the Congress. This testimony is in support of adequate 
funding for the Title II program.
    After a decade of investigative and implementation efforts, the 
Basin States concluded that the Salinity Control Act needed to be 
amended. The Congress revised the Act in 1984. That revision, while 
leaving implementation of the salinity control policy with the 
Secretary of the Interior, also gave new salinity control 
responsibilities to the USDA and to the Bureau of Land Management 
(BLM). The Congress has charged the administration with implementing 
the most cost-effective program practicable (measured in dollars per 
ton of salt removed). The Basin States are strongly supportive of that 
concept as the Basin States cost share 30 percent of Federal 
expenditures up-front for the salinity control program, in addition to 
proceeding to implement salinity control activities for which they are 
responsible in the Colorado River Basin.
    The Forum is composed of gubernatorial appointees from Arizona, 
California, Colorado, Nevada, New Mexico, Utah and Wyoming. The Forum 
has become the seven-State coordinating body for interfacing with 
Federal agencies and the Congress to support the implementation of the 
program necessary to control the salinity of the river system. In close 
cooperation with the Environmental Protection Agency (EPA) and pursuant 
to requirements of the Clean Water Act, every 3 years the Forum 
prepares a formal report analyzing the salinity of the Colorado River, 
anticipated future salinity, and the program elements necessary to keep 
the salinities at or below the concentrations in the river system in 
1972 at Imperial Dam, and below Parker and Hoover Dams.
    In setting water quality standards for the Colorado River system, 
the salinity concentrations at these three locations have been 
identified as the numeric criteria. The plan necessary for controlling 
salinity and reducing downstream damages has been captioned the ``Plan 
of Implementation.'' The 2005 Review of water quality standards 
includes an updated Plan of Implementation. The level of appropriation 
requested in this testimony is in keeping with the agreed upon plan. If 
adequate funds are not appropriated, significant damages from the 
higher salt concentrations in the water will be more widespread in the 
United States and Mexico.

                             JUSTIFICATION

    The $17,500,000 requested by the Forum on behalf of the seven 
Colorado River Basin States is the level of funding necessary to 
proceed with Reclamation's portion of the Plan of Implementation. In 
July of 1995, the Congress amended the Colorado River Basin Salinity 
Control Act. The amended Act gives Reclamation new latitude and 
flexibility in seeking the most cost-effective salinity control 
opportunities, and it provides for utilization of proposals from 
project proponents, as well as more involvement from the private as 
well as the public sector. The result is that salt loading is being 
prevented at costs often less than half the cost under the previous 
program. The Congress recommitted its support for the revised program 
when it enacted Public Law 106-459. The Basin States' cost sharing up-
front adds 43 cents for every Federal dollar appropriated. The 
federally chartered Colorado River Basin Salinity Control Advisory 
Council, created by the Congress in the Salinity Control Act, has met 
and formally supports the requested level of funding. The Basin States 
urge the Energy and Water Development Subcommittee to support the 
funding as set forth in this testimony.

                     ADDITIONAL SUPPORT OF FUNDING

    In addition to the funding identified above for the implementation 
of the most recently authorized program, the Forum urges the Congress 
to appropriate funds requested by the administration to continue to 
maintain and operate salinity control facilities as they are completed 
and placed into long-term operation. Reclamation has completed the 
Paradox Valley unit which involves the collection of brines in the 
Paradox Valley of Colorado and the injection of those brines into a 
deep aquifer through an injection well. The continued operation of this 
project and the Grand Valley Unit will be funded primarily through the 
Facility Operations activity.
    The Forum also supports funding to allow for continued general 
investigation of the Salinity Control Program as requested by the 
administration for the Colorado River Water Quality Improvement 
Program. It is important that Reclamation have planning staff in place, 
properly funded, so that the progress of the program can be analyzed, 
coordination between various Federal and State agencies can be 
accomplished, and future projects and opportunities to control salinity 
can be properly planned to maintain the water quality standards for 
salinity so that the Basin States can continue to develop their 
Colorado River Compact-apportioned waters.
                                 ______
                                 
            Prepared Statement of Colorado Springs Utilities

    We are requesting your support for an appropriation in fiscal year 
2007 of $4,594,000 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 2007 includes this line-item amount. The funding 
designation we seek is as follows: $3,104,000 for construction 
activities for the Upper Colorado River Endangered Fish Recovery 
Program; $1,090,000 for the San Juan River Basin Recovery 
Implementation Program; and $400,000 activities to avoid jeopardy.
    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 past support and assistance of your subcommittee has greatly 
facilitated the success of these programs. We thank you for that 
support and request the subcommittee's assistance for fiscal year 2007 
funding to ensure the Bureau of Reclamation's continuing financial 
participation in these vitally important programs.
                                 ______
                                 
       Letter From the State Engineer's Office, State of Wyoming
                                      Cheyenne, WY, March 16, 2006.
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 20510.
    Dear Chairman Domenici and Senator Reid: This letter is sent in 
support of fiscal year 2007 funding for the Bureau of Reclamation's 
Colorado River Basin Salinity Control Project--Title II 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. A total of $17,500,000 is requested for 
fiscal year 2007 Reclamation activities to implement authorized 
Colorado River Basin salinity control program programs. Failure to 
appropriate these funds will directly result in significant economic 
damages being accrued by United States and Mexican water users.
    In addition to the funding identified above for the implementation 
of the most recently authorized program, the State of Wyoming urges the 
Congress to appropriate funds requested by the administration to 
continue to maintain and operate salinity control facilities as they 
are completed and placed into long-term operation. Reclamation has 
completed the Paradox Valley unit which involves the collection of 
brines in the Paradox Valley of Colorado and the injection of those 
brines into a deep aquifer through an injection well. The continued 
operation of this project and the Grand Valley Unit will be funded 
primarily through the Facility Operations activity.
    The State of Wyoming also supports funding to allow for continued 
general investigation of the Salinity Control Program as requested by 
the administration for the Colorado River Water Quality Improvement 
Program. It is important that Reclamation have planning staff in place, 
properly funded, so that the progress of the program can be analyzed, 
coordination between various Federal and State agencies can be 
accomplished, and future projects and opportunities to control salinity 
can be properly planned to maintain the water quality standards for 
salinity so that the Basin States can continue to develop their 
Compact-apportioned waters of the Colorado River.
    The Colorado River provides municipal and industrial water for 27 
million people and irrigation water to nearly 4 million acres of land 
in the United States. The River is also the water source for some 2.3 
million people and 500,000 acres in Mexico. Limitations on users' 
abilities to make the greatest use of this critically important water 
supply due to the River's high concentration of total dissolved solids 
(hereafter referred to as the salinity of the water) are a major 
concern in both the United States and Mexico. Salinity in water 
supplies affects agricultural, municipal, and industrial water users. 
While economic detriments and damages in Mexico are unquantified, the 
Bureau of Reclamation presently estimates salinity-related damages in 
the United States amount to $330 million per year. The River's high 
salt content is in almost equal part due to naturally occurring 
geologic features that include subsurface salt formations and 
discharging saline springs; and the resultant concentrating effects of 
our users man's storage, use and reuse of the waters of the River 
system. Over-application of irrigation water by agriculture is a large 
contributor of salt to the Colorado River as irrigation water moves 
below the crop root zone, seeps through saline soils and then returns 
to the river system.
    The Environmental Protection Agency's interpretation of the 1972 
amendments to the Clean Water Act required the seven Basin States to 
adopt water quality standards for salinity levels in the Colorado 
River. In light of the EPA's regulation to require water quality 
standards for salinity in the Basin, the Governors of Arizona, 
California, Colorado, Nevada, New Mexico, Utah and Wyoming created the 
Colorado River Basin Salinity Control Forum as an interstate 
coordination mechanism in 1973. To address these international and 
regionally important salinity problems, the Congress enacted the 
Colorado River Basin Salinity Control Act of 1974. Title I addressed 
the United States' obligations to Mexico to control the River's 
salinity to ensure the United States' water deliveries to Mexico are 
within the specified salinity concentration range. Title II of the Act 
authorized control measures upstream of Imperial Dam and directed the 
Secretary of the Interior to construct several salinity control 
projects, most of which are located in Colorado, Utah, and Wyoming.
    Title II of the Act was again amended in 1995 and 2000 to direct 
the Bureau of Reclamation to conduct a basin-wide salinity control 
program. This program awards grants to non-Federal entities, on a 
competitive-bid basis, which initiate and carry out salinity control 
projects. The basin-wide program has demonstrated significantly 
improved cost-effectiveness, as computed on $1 per ton of salt basis, 
as compared to the prior Reclamation-initiated projects. The Forum was 
heavily involved in the development of the 1974 Act and its subsequent 
amendments, and continues to actively oversee the Federal agencies' 
salinity control program efforts.
    During the past 32 years, the seven-State Colorado River Basin 
Salinity Control Forum has actively assisted the Federal agencies, 
including the Bureau of Reclamation, in implementing this unique and 
important program. At its October 2006 meeting, the Forum recommended 
that the Bureau of Reclamation seek to have appropriated and should 
expend for Colorado River Basin salinity control the sum of $17,500,000 
in fiscal year 2007. We strongly believe the combined efforts of the 
salinity control efforts of the Bureau of Reclamation, Department of 
Agriculture and the Bureau of Land Management constitute one of the 
most successful Federal/State cooperative non-point source pollution 
control programs in the United States.
    The State of Wyoming greatly appreciates the subcommittee's support 
of the Colorado River Salinity Control Program in past years. We 
strongly believe this important basin-wide water quality improvement 
program merits continued funding and support by your subcommittee. 
Thank you in advance for inclusion of this letter in the formal hearing 
record concerning fiscal year 2007 appropriations.
            With best regards,
                                        Patrick T. Tyrrell,
                                            Wyoming State Engineer.
                                 ______
                                 
       Letter From the Duchesne County Water Conservancy District
                                      Roosevelt, UT, March 9, 2006.
The Honorable Pete Domenici,
Subcommittee on Energy and Water Development, Senate Appropriations 
        Committee, United States Senate, 127 Dirksen Senate Office 
        Building, Washington, DC 20510.
    Dear Mr. Domenici: We are writing this letter to request your 
support for continued funding for the Colorado River Salinity Control 
Title II Program. This program has greatly assisted in removal of many 
tons of salt from the Colorado River, but there is still a great deal 
of work to be completed that will require an adequate level of funding. 
The seven Colorado River Basin States, as well as Mexico, have greatly 
benefitted from this important program. For many years high 
concentrations of salt in the Colorado River had severely damaged 
agricultural production in the West as well as resulting in poor 
quality water being delivered to Mexico.
    Great strides have been made in improving water quality in the 
Colorado River since the inception of this program but we strongly feel 
that there is still a great deal to be done. We understand that the 
Colorado River Basin Salinity Control Forum is requesting $17,500,000 
in funds be appropriated for this program for fiscal year 2007 and we 
would like to add our full support to that funding level request. We 
would also like to express support for the continued funding of the 
Natural Resource Conservation Service program, the Environmental 
Quality Incentive Program (EQIP) which works closely with the Salinity 
Program. It is very important that adequate funding levels be 
maintained for it also.
    We request the subcommittee's assistance to ensure that the 
Colorado River Salinity Control Title II program and EQIP program are 
provided with continued adequate funding.
            Sincerely,
                                             Randy Crozier,
                                                   General Manager.
                                 ______
                                 
   Prepared Statement of the Metropolitan Water District of Southern 
                               California

    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 2007 budget process: (1) California Bay-Delta Restoration, $38.61 
million; (2) South Delta Temporary Barriers, $2.0 million; (3) Atlas 
Mill Tailings Removal in Moab, Utah, $22.865 million; (4) Water 
Conservation Field Services Program, $0.7 million; (5) Lower Colorado 
River Investigations Program, Brine Management Study, $0.1 million; (6) 
Colorado River Front Work and Levee System, Water Management Reservoir 
Near the All American Canal Subactivity, $47.541 million; (7) Yuma Area 
Projects, Excavating Sediments Behind Laguna Dam, $4.654 million; (8) 
Colorado River Basin Salinity Control--Title II Basinwide Program; 
$17.5 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.
    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 and help our members to develop local 
supplies through increased water conservation, recycling, storage and 
other resource-management programs. Metropolitan's imported 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.

                    CALIFORNIA BAY-DELTA RESTORATION

    Metropolitan recommends your support of the President's fiscal year 
2007 budget request of $38.61 million in new funding from the Bureau of 
Reclamation (Reclamation) for funding the Federal share of the CALFED 
Bay-Delta program to supplement the State's cost share. The Bay-Delta 
system is critical to the State's economy and provides potable water to 
two-thirds of California homes. Included in this budget are $10,890,000 
for the Environmental Water Account; $11,385,000 to continue storage 
activities related to the Shasta Enlargement Study, Sites Reservoir, 
Upper San Joaquin Reservoir, and Los Vaqueros enlargement, and other 
study and planning activities; $5,198,000 for conveyance activities; 
$2,970,000 for science based studies; $2,970,000 for activities that 
will help meet water quality standards; $1,980,000 for ecosystem 
restoration; and $2,970,000 for planning and management activities. 
Metropolitan also supports an emphasis on funding for Delta Emergency 
Response actions, critical levee repairs, and CALFED habitat 
conservation planning activities.

                     SOUTH DELTA TEMPORARY BARRIERS

    Metropolitan strongly recommends that $2.0 million be added to 
Reclamation's budget to fund the South Delta Temporary Barriers. The 
Temporary Barriers project would protect water quality in the southern 
Sacramento-San Joaquin Delta from salt water that normally intrudes 
into the Delta. As flow control structures, these structures would use 
normal tidal action to trap fresh water behind the structures to 
improve water quality and circulation in the South Delta, and to 
provide for use of this fresh water by local agricultural agencies. 
These Federal funds will leverage up to $6 million dollars in State 
funding.

                      ATLAS MINE TAILINGS CLEANUP

    In cooperation with the Utah State Department of Environmental 
Quality, the Metropolitan Water District supports the President's 
budget request of $22.865 million in fiscal year 2007 for DOE for the 
purposes of moving forward with the clean-up of uranium mine tailings 
at the Atlas Site in Moab, Utah.

               WATER CONSERVATION FIELD SERVICES PROGRAM

    Metropolitan is requesting a $0.7 million augmentation of 
Reclamation's budget for the Water Conservation Field Services Program. 
This program encourages conservation of scarce water resources by 
providing assistance to State, agricultural, and urban water districts 
through training, technology transfer, technical guidance, and other 
related activities. The requested funding would be above Reclamation's 
current budget for the following programs and includes: $400,000 for 
the California Friendly program for water conservation to improve water 
efficiency in new construction and municipal landscapes; $100,000 for 
industrial water efficiency surveys to survey opportunities to conserve 
water in industrial water use; and $200,000 for weather based 
irrigation controller and market research activities to pilot 
innovative ways to speed distribution and acceptance of these landscape 
efficiency devices.

  LOWER COLORADO RIVER INVESTIGATIONS PROGRAM, BRINE MANAGEMENT STUDY

    Metropolitan is requesting an additional $0.1 million for the Lower 
Colorado River Investigations Program Brine Management Study in 
Reclamation's budget. This study continues Reclamation's work toward 
addressing brine concentrates. This additional money request would 
allow Reclamation to gather additional data with its partners, create a 
regional issue sensitivity analysis, and finalize and prioritize 
alternative solutions that manage brine concentrates in an economic and 
environmentally acceptable manner. The results of the study would also 
provide benefits for future seawater and brackish desalination 
projects.

               COLORADO RIVER FRONT WORK AND LEVEE SYSTEM

Water Management Reservoir Near the All-American Canal Subactivity
    Reclamation has completed 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 in Imperial 
County near Drop 2 of the All-American Canal would be of great benefit 
to the Colorado River Basin States. Benefits include conservation of 
reservoir system storage, improving river regulation and water delivery 
scheduling, providing opportunities for water conservation, 
facilitating storage and conjunctive use programs, and setting the 
stage for new cooperative water supply and water quality management 
endeavors with Mexico.
    Colorado River Front Work and Levee System Project funding of 
$47.541 million is needed in fiscal year 2007 in order to obtain 
permits, acquire land, clear and prepare the site, procure materials 
for construction, and for construction.
    In recommending the Energy and Water Development appropriations 
bill provisions for fiscal year 2006, the conference committee 
submitted House Report 109-275 in which the conferees strongly 
recommended that Reclamation proceed aggressively with this work and to 
reflect the urgency of completing this project in future budget 
requests. The conferees noted that this project would provide needed 
improvements in river control and management, all of which are Federal 
responsibilities. The President's fiscal year 2007 request does not 
include funding needed for reservoir construction. Construction of the 
Drop 2 Reservoir is a high priority of the Seven Basin States. On 
February 3, 2006 the Basin States provided recommendations to the 
Secretary of the Interior on future operations of the Colorado River 
System. The States recommendations included creative opportunities to 
conserve water and improve system efficiencies, including the potential 
for non-Federal funding of certain efficiency improvement projects in 
exchange for benefits to the funding entity. Drop 2 Reservoir may 
provide an opportunity for such a partnership. We request that adequate 
Federal funds be provided in fiscal year 2007, that in concert with any 
non-Federal funding, will allow for the timely completion of the Drop 2 
Reservoir.

                           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 $4.654 
million is needed in fiscal year 2007 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 2007 request for the sediment control 
subactivity is $1.154 million for completion of all necessary 
environmental documentation and engineering design. Metropolitan 
requests that Reclamation's funding for sediment control be augmented 
so as to provide a total of $4.654 million to ensure funds are 
available for the work to excavate sediments from behind Laguna Dam 
immediately upon completion of the environmental documentation.
    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 over 100,000 and up to 300,000 
acre-feet per year from Colorado River reservoir storage.

        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--Basinwide Program, an 
increase of $8.59 million from the President's request of $8.91 
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 of dollars in damage 
in the United States.
    We look forward to working with your office to further advance 
sound water management activities in California. Please contact me if I 
can answer any questions or provide additional information.
                                 ______
                                 
   Prepared Statement of the New Mexico Interstate Stream Commission

                                SUMMARY

    This statement is submitted in support of fiscal year 2007 
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 2007 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, 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 $330,000,000 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. 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. 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. 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. Thus, continued strong support and adequate funding of the 
salinity control program is required to control salinity-related 
damages in the United States and Mexico.
    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 2007. 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. Some of the most 
cost-effective salinity control opportunities occur when Reclamation 
improves irrigation delivery systems concurrently with on-farm 
irrigation improvements undertaken by the U.S. Department of 
Agriculture's Environmental Quality Incentives Program (EQIP). The 
Basin States cost-share funding is available for both parts, on-farm 
and off-farm, and EQIP funding appears to be adequate to accomplish 
needed on-farm work. Adequate funding for Reclamation off-farm work is 
needed to maintain timely implementation and effectiveness of salinity 
control measures.
    Maintenance and operation of the Bureau of Reclamation's salinity 
control projects and general investigations to identify new cost-
effective salinity control projects are necessary for the continued 
success of the salinity control program. Investigation of new 
opportunities for salinity control are critical while 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.
    Continued funding primarily through Reclamation's Facility 
Operation activity to support maintenance and operation the Paradox 
Valley Unit and the Grand Valley Unit is critically needed. General 
Investigation funding through Reclamation's Colorado River Water 
Quality Improvement Program has been lacking in the recent past, and 
needs to be restored to a level that supports the need for 
identification and study of new salinity control opportunities to 
maintain the levels of salinity control to meet water quality standards 
and control economic damages in the Lower Colorado River Basin.
    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 Commission of Nevada

    As a Nevada representative of the Colorado River Basin Salinity 
Control Forum, the Colorado River Commission of Nevada (CRC) supports 
funding the fiscal year 2007 budget request for $17,500,000 for the 
Bureau of Reclamation's Colorado River Basin Salinity Control Program. 
The CRC urges the Congress to appropriate funds requested by the 
administration to continue to maintain and operate salinity control 
facilities as they are completed and placed into long-term operations. 
Reclamation has completed the Paradox Valley unit which involves the 
collection of brines in the Paradox Valley of Colorado and the 
injection of those brines into a deep aquifer through an injection 
well. The continued operation of this project and the Grand Valley Unit 
will be funded primarily through the Facility Operations activity. The 
CRC also supports funding to allow for continued general investigation 
of the Salinity Control Program as requested by the administration for 
the Colorado River Water Quality Improvement 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 in support of 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 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 three specific requests for the future 
economic well-being of the citizens residing in the Red River Valley 
region in Oklahoma. We support the following studies and request that 
the Bureau of Reclamation be funded at their full fiscal year 2007 
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 comprehensive evaluation of water resources in the 
North Fork of the Red River in Oklahoma. We sincerely appreciate your 
support in past appropriations.
    An allocation of $300,000 is requested for the fiscal year 2007 
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. We appreciate 
your support of this study by funding the last 3 years of the study.
    We request $1,500,000 be appropriated for fiscal year 2007 and 
support that the study be cost shared, 90 percent Federal and 10 
percent State/Local funds.
    Fort Cobb, Washita Basin Project, Water Supply Augmentation 
Appraisal Study.--Fort Cobb Reservoir is located at river mile 7.4 on 
Pond (Cobb) Creek, a tributary of the Washita River, in the Red River 
Basin in Caddo County, about 14 miles northwest of Anadarko. The 
project is authorized for flood control, municipal water supply, fish 
and wildlife and recreation. Construction of the project, by the Bureau 
of Reclamation, began in February of 1958 and was completed in March of 
1959. The project is designed to provide about 11.9 MGD of water 
supply.
    Over the past several years, the Fort Cobb Master Conservancy 
District has begun to experience difficulty in delivering sufficient 
water through their aqueduct to meet the peak demands of the service 
population. Although the total demand has not yet exceeded the amount 
contracted to the member cities and other user entities, there is an 
urgent need to evaluate opportunities for augmentation of the project 
supply to ensure the ability to meet the future needs of the member 
communities. The appraisal study would evaluate both surface and ground 
water resources in the area and look at alternatives to augment 
available water supply from the project.
    The RRVA requests the appropriation of $100,000 in the Bureau of 
Reclamation's fiscal year 2007 budget to conduct an appraisal study of 
water supply augmentation options at the Fort Cobb Reservoir, Washita 
Basin Project.
    The Red River Valley Association understands these are difficult 
times with our Nation's budget, so we appreciate your support for these 
studies in the past. 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 2007.
    We are always available to provide additional information and 
answer whatever questions you may have.

                              ENCLOSURE 1

                      RED RIVER VALLEY ASSOCIATION

    The Red River Valley Association is a voluntary group of citizens 
bonded together to advance the economic development and future well 
being of the citizens of the four-State Red River Basin area in 
Arkansas, Louisiana, Oklahoma and Texas.
    For the past 80 years, the Association has done notable work in the 
support and advancement of programs to develop the land and water 
resources of the Valley to the beneficial use of all the people. To 
this end, the Red River Valley Association offers its full support and 
assistance to the various agricultural organizations and other local 
governmental entities in developing the area along the Red River.
    The Resolutions contained herein were adopted by the Association 
during its 801st Annual Meeting in Bossier City, Louisiana on February 
24, 2006, and represent the combined concerns of the citizens of the 
Red River Basin Area as they pertain to the goals of the Association, 
specifically:
  --Economic and Community Development;
  --Environmental Restoration;
  --Flood Control;
  --Bank Stabilization;
  --A Clean Water Supply for Municipal, Industrial and Agricultural 
        Uses;
  --Recreation; and,
  --Navigation.
    The Red River Valley Association is aware of the constraints on the 
Federal budget, and has kept those restraints in mind as these 
Resolutions were adopted. Therefore, and because of the far-reaching 
regional and national benefits addressed by the various projects 
covered in these Resolutions, we urge the members of Congress to review 
the material contained herein and give serious consideration to funding 
these initiatives at the levels requested.
                                 ______
                                 
      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 for a fiscal year 2007 
administration budget request of $38.6 million and an appropriation 
add-on of $61.4 million, for a total of $100 million for California 
Bay-Delta Restoration.

                          STATEMENT OF SUPPORT

    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 passage of H.R. 2828 in 2004 reauthorized Federal participation 
in the CALFED Bay-Delta Program and provided $389 million 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 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 2006 Funding.--$37 million was appropriated for CALFED 
activities in fiscal year 2006.
    Fiscal Year 2007 Funding Recommendation.--It is requested that the 
committee support an appropriation add-on of $61.4 million, in addition 
to the $38.6 million in the administration's fiscal year 2007 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 a fiscal year 2007 
administration budget request of $495,000 and an appropriation add-on 
of $3.61 million, for a total of $4.1 million to fund the program's 
work.

                          STATEMENT OF SUPPORT

    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 517 active customers and delivers 
approximately 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 $26.62 million of the $35 million 
authorization.
    Fiscal Year 2006 Funding.--$422,000 was appropriated in fiscal year 
2006.
    Fiscal Year 2007 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $3.61 
million, in addition to the $495,000 in the administration's fiscal 
year 2007 budget request, for a total of $4.1 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 for a fiscal year 2007 
administration budget request of $1.485 million and an appropriation 
add-on of $5.515 million, for a total of $8 million, to complete the 
Feasibility Study. This request is included in the $100 million CALFED 
Bay-Delta Program appropriation request.

                          STATEMENT OF SUPPORT

    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: (1) Increase the 
operational flexibility of San Luis Reservoir by increasing the 
effective storage; (2) 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; (3) Provide 
opportunities for project-related environmental improvements; and (4) 
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 passage of H.R. 2828 in 2004 reauthorized Federal participation 
in the CALFED Bay-Delta Program. The San Luis Reservoir Low Point 
Improvement Project was 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 2006 Funding.--$2 million was appropriated in the 
fiscal year 2006 CALFED appropriation.
    Fiscal Year 2007 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $5.515 
million, in addition to the $1.485 million in the administration's 
fiscal year 2007 budget request, for a total of $8 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 Energy Distributors 
                              Association

    The Colorado River Energy Distributors Association (CREDA) 
appreciates this opportunity to submit its views on recommendations in 
the President's fiscal year 2007 budget proposal that affect specific 
programs of the Bureau of Reclamation (Bureau) and the Western Area 
Power Administration (Western) in the Energy and Water Development Act 
of 2007. Our testimony will address two issues:
  --Our request for the inclusion of 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 change interest rate calculations 
        of the Federal Power Marketing Administrations.
    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.

     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 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 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. 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 noted that 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 
Reclamation facilities following the September 11, 2001 attacks on our 
country. Congress also recognized that the Reclamation 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.''

    The May 2005 Report indicated the desire of the Bureau to collect 
the costs of guards and patrols from project beneficiaries (primarily 
power) based on the existing project cost allocations for operation and 
maintenance. In the CRSP, this would require about 95 percent of the 
costs to be borne by the power customers.
    In the Energy and Water Development Appropriations Act of 2006 (HR 
2419, November 7, 2005), Congress directed that $10 million of the 
estimated $18 million for guards and patrols be provided by 
reimbursable funding. Further, Congress directed that a report to 
Congress be provided with further detail in 60 days.

``. . . the Bureau of Reclamation is expected to receive approximately 
$10,000,000 in reimbursements for additional security guards and 
patrols, which are considered project O&M costs. The conferees agree, 
however, that all project beneficiaries that benefit from an enhanced 
security posture at the Bureau's facilities should pay a share of the 
security costs. Accordingly, the Bureau is directed to provide to the 
House and Senate Committees on Appropriations, not later than 60 days 
after the enactment of this Act, a delineation of planned reimbursable 
security costs by project prorated by all project purposes.''

    The report (issued in March 2006) is similar to the previous (May 
2005) report, except that it also includes ``facility fortification 
upgrades'' as a reimbursable cost. Previously the USBR had assured its 
stakeholders that only the costs of guards and patrols would be 
reimbursable. This additional obligation in essence makes EVERYTHING 
reimbursable at some point.
    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. We 
urge Congress to add language to the Energy and Water Development 
Appropriations Act of 2007 to clarify that all costs of increased 
security at dams owned and operated by the Bureau of Reclamation be 
non-reimbursable.

         POWER MARKETING ADMINISTRATION INTEREST RATE PROPOSAL

    The administration's fiscal year 2007 budget includes a 
recommendation that would raise electricity rates by changing the 
interest rate charged by the Southeastern Power Administration (SEPA), 
the Southwestern Power Administration (SWPA), and the Western Area 
Power Administration (WAPA) on all new investments in projects whose 
interest rates are not set by law. Specifically, the Department of 
Energy's (DOE) budget calls for the these three Power Marketing 
Administrations (PMAs) to set their interest rates at the level that 
government corporations pay to borrow funds from the Federal 
Government. To implement this proposal, (DOE) will amend the regulation 
that governs how the PMAs establish their rates and will do so 
administratively, without any consultation with or action from 
Congress.
    The administration's budget proposes to increase the interest rate 
charged on all new investments in these hydroelectric facilities to a 
level that is charged government corporations--the rate that reflects 
the interest cost for the Federal Government to provide loans to 
government corporations. SEPA, SWPA and WAPA are neither government 
corporations nor do they borrow funds from the U.S. Treasury. All rates 
are set to recover the dollars appropriated by Congress for the 
investment in the hydroelectric facilities and to cover the cost to 
operate these projects. If implemented, this proposal could increase 
rates considerably for customers served by most of the Power Marketing 
Administrations.
    This proposal creates a serious precedent and should be rejected, 
because:
  --The process for implementing the proposal can be done without 
        congressional involvement or approval;
  --The proposal would arbitrarily raise revenue from electric 
        customers for deficit reduction; and
  --The proposal reverses decades of rate making precedent and accepted 
        cost recovery practices by administrative fiat.
    We urge the subcommittee to reject this proposal.
                                 ______
                                 
 Prepared Statement of the Fort Peck Assiniboine and Sioux Tribes and 
                     Dry Prairie Rural Water System

    The Fort Peck Assiniboine and Sioux Tribes and Dry Prairie Rural 
Water respectfully request fiscal year 2007 appropriations in the 
amount of $29,797,000 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 2007 WORK PLAN--FORT PECK RESERVATION RURAL WATER SYSTEM
                          (PUBLIC LAW 106-382)
------------------------------------------------------------------------
                                                              Amount
------------------------------------------------------------------------
Fort Peck Tribes:
    Work Plan (100 Percent Federal).....................     $15,626,000
    Water Treatment Plant Pipelines:
        Poplar to Big Muddy.............................       5,021,000
        Poplar to Wolf Point............................       3,296,000
    FP OM Buildings.....................................         654,000
                                                         ---------------
      TOTAL.............................................      24,597,000
                                                         ===============
Dry Prairie:
    Work Plan (Branch Pipelines): A, Bainville and Other
     Branch Lines:
        Federal.........................................       5,246,000
        State and Local.................................       1,259,000
                                                         ---------------
      TOTAL.............................................       6,505,000
                                                         ===============
Federal.................................................      29,843,000
State and Local.........................................       1,259,000
                                                         ---------------
      Total.............................................      31,102,000
------------------------------------------------------------------------

    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 less than the average annual appropriations needed 
to complete the project in fiscal year 2012 ($34,446,000), as provided 
by the authorizing legislation, but is within our capability to use:

------------------------------------------------------------------------
                                                            Fiscal Year
                                                               2007
------------------------------------------------------------------------
Total Federal Funds Authorized (October 2005 Dollars)...    $247,267,000
Federal Funds Expended Through Fiscal Year 2006.........     $40,590,000
Percent Complete........................................           16.42
Amount Remaining........................................    $206,677,000
Average Annual Required for Fiscal Year 2012 Finish          $34,446,000
 (Public Law 106-382)...................................
Fiscal Year 2006 Amount Requested.......................     $29,797,000
Years to Complete.......................................               6
------------------------------------------------------------------------

    Note that cost indexing from last year due to inflation increased 
the cost of the project from $235 million to $247 million, an increase 
of $12 million. 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 bid under the engineer's estimate. The 
critical Missouri River water treatment plant will begin construction 
in spring 2006 and will use $12.600 million of funds on hand. At a cost 
of $31.0 million the project (contract and non-contract costs) will be 
constructed over a 3-year period. Fiscal year 2007 funds of $15.573 
million are needed to honor the construction contract. The remaining 
funds would be requested in fiscal year 2008.
    The request for fiscal year 2007 also provides for construction of 
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 $5.025 and 
$3.299 million, respectively. The Tribes will also use $654,000 for an 
administration, operation and maintenance building. The Bureau of 
Reclamation can confirm that the use of funds proposed for fiscal year 
2007 is well within the project's capability.
    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. There is urgency in 
completing the pipeline to Poplar before the advancing plume of 
contamination reaches existing community wells. 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 and Dane Valley residents 
can be served with the existing system capacity that is now constructed 
and in operation. Fiscal year 2006 funds are being used to construct 
part of the distribution to this area.
    The request for fiscal year 2007 funds of $5,246,000, supplemented 
by a non-Federal cost share of $1,259,000, will be used to finish 
branch pipelines connecting with the Culbertson-Froid-Medicine Lake 
core pipeline. Additional funds will be available to build other branch 
lines in other areas of the project and continue bringing high quality 
water to rural users in need. The Bureau of Reclamation can confirm the 
capability to construct these pipelines based on the current status of 
design.

                        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 has 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, in accordance with the cooperative 
agreements, 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.

                         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 Plains.
                                 ______
                                 
           Prepared Statement of the Three Affiliated Tribes

    Our lands were flooded in the early 1950's, over 50 long years ago, 
with the construction of the Garrison Dam. That dam took from us over 
156,000 acres of our best and most fertile land. We lost forever the 
river bottomlands where our Tribal membership and our Tribal ancestors 
lived and prospered. In the late 1940's, the Three Affiliated Tribes 
would have been looking to construct two or three Rural Water Projects 
on Fort Berthold. With the construction of the dam and a physical 
barrier of Lake Sakakawea, we are now required to construct six or 
seven water treatment plants as well as Rural Water Distribution 
Projects to meet the needs of our Reservation. Our land is 
geographically and physically split into six separate and distinct 
areas. Many of our Tribal members still do not have access to safe and 
abundant drinking water.
    Under the Dakota Water Resources Act of 2000 (Public Law 106-554), 
Congress has charged the Secretary of the Interior with the 
responsibility to ``construct, operate, and maintain'' the Fort 
Berthold Rural Water Supply System. The Three Affiliated Tribes depends 
on funding appropriated for the purposes under this act to develop 
water supply systems on the Fort Berthold Reservation. Funding for 
tribal water construction projects has always been disproportionately 
lower than funding for other projects in the Garrison Diversion Unit. 
Over the last 30 years, Congress has appropriated well over $600 
million for the Garrison Diversion Unit and less than $30 million of 
these funds have been expended on all Indian MR&I projects combined.
    To address the Fort Berthold Reservation's water supply problems, 
the Tribes have undertaken the construction of the Fort Berthold Rural 
Water Supply System. The Fort Berthold Rural Water Supply System 
currently consists of four separate water treatment facilities and 
distribution systems with a total of 750,000 linear feet of water mains 
and the capacity to store 1,000,000 gallons of potable water. The Fort 
Berthold Rural Water Supply System currently serves 586 households and 
last year added 30 new households to the system.
    With the passage of the Dakota Water Resources Act of 2000, we have 
begun a process of reevaluation of our critical water needs and an 
analysis of actions and infrastructure we need to address those needs. 
Currently we have plans for numerous water supply and water 
distribution projects that will, when constructed in total, provide a 
safe and dependable supply of water to the Fort Berthold Indian 
Reservation. Our plan, when completed, will provide such benefits to 
all residents of the Reservation, both rural and residential residents, 
and both Indian and non-Indian alike.
    We have carefully considered the opportunities now made available 
to us. Our infrastructure projects are purposely fragmented and 
designed so that we may adapt and accommodate both small and large 
appropriation amounts and so that we can also proceed with multiple 
projects in any given year. Preliminary estimates of the costs of our 
identified projects indicate a need for over $95 million. The DWRA has 
an indexing clause, which reflects the inflation percentage of 
construction cost on MR&I Water Projects. The amount of indexing for 
Fort Berthold's component has exceeded the $34 million that is 
projected, at the end of 2008. To date, we have only received $3.805 
million in funding for these water projects. The Tribes have borrowed 
another $2.5 million towards construction of its water supply projects. 
When completed in full we anticipate installation of nearly 1,000 miles 
of pipeline, the construction of nine separate rural water reservoirs 
and tanks, and a system capacity for service to over 1,500 rural 
households. The work will also include an upgrade of our four existing 
water treatment plants and Tribal participation in the water 
infrastructure development of the various communities of the 
Reservation.
    Those projects identified in our six specific segments include the 
following:
    Four Bears Segment.--We have already installed approximately 17 
miles of pipeline and an elevated storage tank at a cost of over $2 
million. There is a need to expand the water treatment plant in this 
segment as this plant is nearing its 200 gallon-per-minute capacity. 
The total costs to resolve the water needs of this segment, and to 
assist our McKenzie County neighbors with their critical water needs, 
are estimated to be approximately $7 million.
    North Segment.--We have joined the City of New Town in their 
efforts in the construction of a new water treatment plant. Our 
commitment to New Town in this effort is costing approximately $2.5 
million. That plant has the capacity to provide water to all users of 
the segment, including growth within this segment, for the next 40 
years. Subsequent projects needed within this area include the 
construction of a rural water system which will utilize the New Town 
treatment plant. The total costs to resolve the water needs of this 
segment are estimated to be approximately $22 million. With the 
possibility of completing the negotiation with the City of New Town, 
additional appropriations will be needed to bring this water source 
into the FBRW. If sufficient water production can't be produced by the 
city, a separate water treatment plant may be needed to provide potable 
water to the North and Northeast Segment's Rural Water Lines. An 
additional $350,000 of O&M funding will be necessary to accommodate the 
new component to the FBRW System.
    Northeast Segment.--There is an immediate need for the installation 
of approximately 36 miles of pipeline and the construction of a ground 
level storage tank. The cost for this project is estimated at $2.79 
million. Subsequent projects needed within this segment will allow for 
a continuation of the water line to other rural areas of the segment 
and will allow us to furnish water to our neighbors of adjacent 
Mountrail County and the North Central Rural Water Consortium to our 
Reservation. The total costs to resolve the water needs of this 
segment, and to assist our Mountrail County neighbors with their 
critical water needs, are estimated to be $15 million.
    West Segment.--We have already replaced an existing treatment plant 
intake line. This project cost approximately $1.07 million. Subsequent 
projects needed within this segment will allow for a construction of a 
rural water system and an expansion of the existing water treatment 
plant. The water needs of this segment, and to assist our McKenzie 
County neighbors, will be addressed with this expansion. The total 
costs to resolve the water needs of this segment are estimated to be 
$23 million.
    South Segment.--There is an immediate need for the replacement an 
existing intake line, expansion of the existing water treatment plant 
and a water storage reservoir. The anticipated cost is approximately 
$3.3 million. Subsequent projects needed within this segment include 
the construction of a rural water system and further expansion of the 
existing water treatment plant. The total costs to resolve the water 
needs of this segment are estimated to be $12 million.
    East Segment.--There is an immediate need for the installation of 
approximately 48 miles of pipeline. This first effort in this segment 
is anticipated to cost approximately $1.92 million. Subsequent projects 
needed within this area will allow a continuation of the water line to 
other rural areas of the segment, and for a water treatment plant 
expansion. The total costs to resolve the water needs of this segment 
are estimated to be $16.59 million.
    As you can see, the total funding needed to accommodate the water 
supply system needs of the Three Affiliated Tribes is in excess of $95 
million.
    Over the next several years, major construction expenses for the 
Fort Berthold Rural Water Supply System are expected to peak. A minimum 
of $12.165 million is needed in fiscal year 2007 to enable the Tribes 
to construct the next productive stage of the project. The Tribes also 
require Operation, Maintenance and Replacement (``OM&R'') funding for 
calendar year 2007 of at least $2.5 million. As our water supply 
systems expand, our operation and maintenance costs increase. We ask 
that appropriations for these rising OM&R be increased in future years 
to cover these increasing costs. The Bureau of Reclamation is our 
funding agency, but they are restricted from requesting sufficient 
appropriations or budgeting sufficient amounts to cover the increasing 
cost of operating and maintaining a water system of our design. 
Currently another governmental agency (OMB) sets target budgeting 
amounts that USBR must maintain and this doesn't address the amount of 
appropriation actually needed. Congress needs to get the Office of 
Management and Budget to make adjustments and to meet the TRUST 
RESPONSIBILITY OF THE U.S. GOVERNMENT.
    Also, the Fort Berthold Rural Water Program currently provides 
indirect costs to the Three Affiliated Tribes through its Construction 
and OM&R program funds. The Bureau of Reclamation has PL638 
capabilities with Indian Tribes. However, unlike the Bureau of Indian 
Affairs, Reclamation does not have an indirect cost pool which may be 
utilized by Tribes. The current indirect cost funds are taken from the 
direct OM&R line items, which hinders the program. In order to 
alleviate this, an indirect cost pool should be implemented for USBR 
for its contracts with Tribes.
    Monies which may be provided for our immediate needs only allow us 
to start the infrastructure development process in each segment. We 
need to establish a process of continued funding in subsequent years to 
complete the facilities of each segment in a timely fashion. If we 
proceed at the present funding rate, it will take us years to complete 
our projects and construction costs will undoubtedly increase beyond 
increases in funding. After enduring a wait of 50 years to even begin 
this process, it is not reasonable to continue to delay the needs 
addressed by the Act by continuing to fund these projects at 
unreasonable levels.
    We request a favorable review of our request for $12.165 million 
which will allow a start of construction of the immediately needed 
facilities within each segment. We believe that, given adequate funding 
levels in the $15 million to $20 million per year range, we could 
substantially complete all infrastructure projects within the six 
Reservation segments in a 4- to 6-year time frame.
                                 ______
                                 
    Prepared Statement of the Oglala Sioux Rural Water Supply System

          MNI WICONI PROJECT (PUBLIC LAW 100-516, AS AMENDED)
              FISCAL YEAR 2007 CONSTRUCTION BUDGET REQUEST

    The Mni Wiconi Project beneficiaries (as listed below) respectfully 
request appropriations of $43.032 million for construction as shown 
below:

------------------------------------------------------------------------
                                                              Amount
------------------------------------------------------------------------
Oglala Sioux Rural Water Supply System:
    Core................................................      $1,492,000
    Pine Ridge (Distribution)...........................      21,405,000
West River/Lyman-Jones Rural Water System...............      10,534,000
Rosebud Rural Water System..............................       9,601,000
                                                         ---------------
      Total.............................................      43,032,000
------------------------------------------------------------------------

and $9.256 million for operation, maintenance and replacement.
    Note that the Lower Brule project will complete construction in 
fiscal year 2006 and that no funds are requested for fiscal year 2007.
    The project sponsors were provided by the 107th Congress (Public 
Law 107-367) with authority to finish in fiscal year 2008. Three years 
are needed to conclude our project at the rate requested with 
completion in fiscal year 2009 (see table below). Completion of the 
project is achievable in fiscal year 2009 if funded at the rate 
requested.

------------------------------------------------------------------------
                                                              Amount
------------------------------------------------------------------------
Total Federal Funding (Oct 2005 Dollars)................    $439,927,980
Estimated Federal Spent Through Fiscal Year 2006........    $310,832,465
Percent Spent Through Fiscal Year 2006..................           70.66
Amount Remaining........................................    $129,095,515
Completion Fiscal Year (Statutory Fiscal Year 2008;                2,009
 Public Law 107-367)....................................
Years to Complete.......................................               3
Average Annual Required for Finish......................     $43,032,000
------------------------------------------------------------------------

    The administration's fiscal year 2007 budget is $22.914 for 
construction and $9.256 for OMR. The project is now over 70 percent 
complete and can be completed in the next 3 years, but the fiscal year 
2007 construction budget is highly inadequate and significantly less 
than the $31 million for construction available to the project before 
the PART exercise on rural water projects in 2003. The project sponsors 
strongly urge that the subcommittee appropriate funds to complete the 
Mni Wiconi Project over the next 3 years. The needs and merits of this 
project are considerable as described in section 2. The testimony is 
supplemented by sections 3 through 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, relations 
between the Indian population and the non-Indian settlers on Great 
Sioux Reservation lands have been improving in successive generations. 
The Mni Wiconi Project is perhaps the most significant opportunity in 
more than a century to bring the 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. Progress has been made in the reducing the 
occurrence of these diseases.
    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.\1\ Mni 
Wiconi 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, Lower Brule and Rosebud Indian 
reservations of the project area.
---------------------------------------------------------------------------
    \1\ Table 1 was based on census data that understates population 
and poverty on the reservations and overstates income when compared 
with Interior sources. The purpose of Table 1 is to compare statistics 
from a single source between decades, namely the United States Census, 
but use of the data does not imply acceptance of census statistics by 
the Tribes.

                          TABLE 1.--PROFILE OF SELECTED ECONOMIC CHARACTERISTICS: 2000
----------------------------------------------------------------------------------------------------------------
                                                                          Income
                                                          Change  ----------------------  Families
       Indian Reservation/State              2000       From 1990     Per       Median     Below    Unemployment
                                          Population    (Percent)    Capita   Household   Poverty     (Percent)
                                                                   (Dollars)  (Dollars)  (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 Indian Health 
Service and 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.
    The Mni Wiconi Project Act provides that the United States will 
work with us:

    ``. . . 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 to complete the critical elements of the project 
proposed for fiscal year 2007.

                         SUPPLEMENTAL TESTIMONY
 OSRWSS CORE PIPELINE REACHES 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 
fiscal year 2006 funding level will complete the OSRWSS Kadoka to White 
River pipeline 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.
    OSRWSS will use $1,492,000 in fiscal year 2007 funds to begin 
construction of the pipeline link between the OSRWSS North core and 
South core. When completed, this essential pipeline will permit the 
delivery of water to the Pine Ridge Indian Reservation and parts of 
West River/Lyman Jones by alternative pipeline routes and will finalize 
the strategy in the Final Engineering Report to provide reliability in 
the delivery of a safe and adequate water supply.
    Oglala Sioux Tribe supports the funding request of West River/Lyman 
Jones for fiscal year 2007, which focuses on building the OSRWSS North 
Core westerly toward Hayes through the West River/Lyman Jones service 
area. The intent is to complete the OSRWSS North Core and all other 
OSRWSS core facilities in fiscal year 2008. West River/Lyman Jones is 
acting as the Tribe's contractor on the OSRWSS North Core.
    Nearly half of the Mni Wiconi design population is located on the 
Pine Ridge Indian Reservation. The fiscal year 2006 work plan and the 
fiscal year 2007 funding request will make major advances in the 
completion of the OSRWSS core. Fiscal year 2008 will be the final year 
to complete the core facilities. Earlier stages of the OSRWSS core 
facilities have served the Lower Brule Indian Reservation, Rosebud 
Indian Reservation and eastern regions of West River/Lyman Jones.
    Funding for OSRWSS core and distribution facilities is necessary to 
address health needs and 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 2007 will significantly advance 
construction of facilities that continue 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 in fiscal year 2009.
    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 completed 5 years ago (2002), the 
Oglala Sioux Tribe finished all facilities that could 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 primary water source 
to complement the groundwater source. Much pipeline has been 
constructed, primarily between Kyle, Porcupine, Manderson and Red Shirt 
and between Pine Ridge Village and the communities of Oglala and Slim 
Buttes.
    Of critical 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. This transmission line construction has been 
stalled due to decline in the appropriation levels for Mni Wiconi after 
fiscal year 2003. The transmission line is needed to interconnect the 
OSRWSS core system with the distribution system described in the 
previous section. Groundwater sources with high arsenic and 
radionuclides need replacement at the earliest possible time to reduce 
exposure of the population relying on those sources. With completion of 
the transmission pipeline to Kyle, Missouri River water can be 
delivered to the existing OSRWSS distribution system constructed 
between 1994 and 2002. The most populous portions of the Reservation 
can then be served by the Missouri River water treatment plant for the 
first time.
    This critical segment of the project can be completed to the 
halfway point in fiscal year 2007. It will require funds in fiscal year 
2007 and fiscal year 2008 to complete. The component is urgently needed 
for the OSRWSS core system to be utilized on the Pine Ridge Indian 
Reservation and to provide a safe and adequate replacement supply for 
contaminated groundwater sources.

        WEST RIVER/LYMAN-JONES RURAL WATER SYSTEM--DISTRIBUTION

    The requested appropriation is part of a 3-year effort directed to 
serving WR/LJ members between the Mni Wiconi water treatment plant at 
Ft. Pierre and the City of Philip, a distance of approximately 70 
pipeline miles. Funds received in fiscal year 2007 will be used for 
construction of the North Core pipeline and distribution lines to 
service areas adjacent to the core pipeline.
    The North Core pipeline serves as the primary water source for half 
of the WR/LJ membership, most of which is now served by water sources 
that do not meet SDWA standards or by interim sources of very limited 
capacity and reliability. The North Core pipeline additionally provides 
a limited capacity alternate source to the South Core pipeline serving 
the Oglala Sioux Tribe.
    Distribution pipelines in the Four Corners to Philip Junction 
service area meets the domestic and livestock needs of the rural area 
and the municipal needs of the Town of Midland. Recent membership 
surveys from that area indicate that most of the residents haul their 
domestic water and half of the ranchers also haul water for their 
livestock. This area is in desperate need of a reliable supply of 
quality water.

            ROSEBUD RURAL WATER SYSTEM (SICANGU MNI WICONI)

    As in past years, Rosebud's work plan focuses on bringing high 
quality water to more people and improving critical infrastructure on 
the Rosebud Reservation. The Tribe accomplishes this through the wise 
use of project funds and working with other agencies and entities to 
obtain the maximum value from available funds.
    The East Todd project provides quality water to an area of Todd 
County that is suffering from increasing nitrate concentrations in the 
limited groundwater available in the area. This project was initiated 
in 2006 and will be completed in 2007. This project includes more miles 
of pipeline than any other in the Rosebud system and by bidding it as 
one project the unit costs for pipelines are reduced.
    The Old Rosebud Improvements are being designed in 2006 and will be 
constructed in 2007. This project focuses on the replacement of older 
corroded metallic pipelines and undersized pipelines. The replacement 
pipelines will be able to meet critical demands in the center of 
government for the Rosebud Sioux Tribe. The timing of construction of 
this project is being coordinated with the Bureau of Indian Affairs. 
The Bureau of Indian Affairs is funding the replacement of the older 
paved streets in the community and construction of pipelines will 
coincide with street construction. This cooperative approach reduces 
the cost of pipeline construction because the cost of pavement 
demolition and replacement is eliminated as a Mni Wiconi Project cost. 
The cooperative approach also protects the investment in the streets 
and pipes because the new pavement will not have to be disturbed for 
the replacement or repair of the water mains.
    The Todd County Reservoirs project provides additional storage for 
the Todd County portion of the Sicangu Mni Wiconi. Two similar 
reservoirs are being combined into one bidding package as a means of 
reducing the cost of the work. The eastern reservoir provides storage 
for the East Todd project area and the other will replace the corroded 
steel reservoir that supplies the town of Mission. The replacement of 
the Mission reservoir is integral to the Mission Area Improvements.
    The Mission Area Improvements address all facets of this older 
municipal system that was transferred to the United States in trust for 
the Tribe in 2002. The improvements address the deficiencies identified 
in the transfer agreement and other aspects of the system. For example, 
one of the low-yielding wells will be replaced and chlorination and 
storage will be provided at the wellfield rather than 7 miles further 
north near the town of Mission. This will provide treated water to the 
residents along the pipeline route. The pipeline route is adjacent to 
U.S. Highway 83 and is in one of the more rapidly growing areas on the 
reservation.
    The Two Strike North project fills in the gap north of Two Strike 
and south of Rosebud where there is currently no service. Because of 
proximity to two of the larger reservation communities, this is also a 
rapidly expanding area.
    The Service Lines and Connections project is an ongoing effort to 
provide existing and new homes with high-quality water from the Sicangu 
Mni Wiconi. It also provides for livestock water connections as well. 
This work is done by tribal crews and provides direct employment 
benefits as well as quality water to reservation residents. In addition 
to the construction work, the tribal crew is now utilizing global 
positioning system (GPS) equipment in the layout of the facilities and 
preparation of the record drawings. This skill can be used by both the 
individual tribal members and the Tribe as a whole in other endeavors 
after the construction of Mni Wiconi is completed. This is just one 
more example of the Tribe obtaining additional value from Mni Wiconi 
Project funds.

              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 2006 budget. The vast majority of the 
funds necessary to complete the LBRWS were provided in the fiscal year 
2005 budget. LBRWS will only be receiving $440,000 from the fiscal year 
2006 budget to fully complete its system. The result of completing the 
funding for the LBRWS is a savings of $1.5 million to the project as a 
whole.
    With the funds received in fiscal year 2006, LBRWS will complete 
the replacement of some water lines that were installed previous to 
this project and that have become undersized.
    The LBRWS would like to take this opportunity to thank the other 
sponsors for their cooperation and support in completing the funding of 
the LBRWS in this manner and Congress, especially the South Dakota 
delegation past and present, for their continued support of this truly 
needed project. It should be noted, however, that this will not end 
LBRWS's involvement in the project. 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.
    The project has been treating and delivering more water over the 
last 3 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 as the project has now reached 
71 percent completion. The OMR budget must continue to be adequate to 
keep pace with 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 $9,256,000 as requested in the fiscal year 2007 budget:

------------------------------------------------------------------------
                                                              Amount
------------------------------------------------------------------------
Oglala Sioux Rural Water Supply System:
    Water Treatment Plant and Core Pipeline.............      $2,073,000
    Pine Ridge Distribution.............................       2,400,000
Rosebud Rural Water System..............................       2,200,000
Lower Brule Rural Water System..........................       1,400,000
Reclamation Oversight...................................       1,183,000
                                                         ---------------
      Total.............................................       9,256,000
------------------------------------------------------------------------

    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.
                                 ______
                                 
       Prepared Statement of the Western Coalition of Arid States

  FISCAL YEAR 2007 BUREAU OF RECLAMATION & DEPARTMENT OF ENERGY BUDGET

    The Western Coalition of Arid States (WESTCAS) is writing in 
support of the following multi-State 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 2007 budget process:
  --Colorado River Front Work and Levee System, Water Management 
        Reservoir Near the All American Canal Subactivity--$37.4 
        million;
  --Yuma Area Projects, Excavating Sediments Behind Laguna Dam--$3.5 
        million;
  --Water Reclamation/Reuse Title XVI--$30 million;
  --Water 2025--$14.5 million;
  --Science and Technology--$8.5 million;
  --Atlas Mill Tailings Removal in Moab, Utah--$22.8 million.
    WESTCAS is a coalition of Western towns and municipalities, water 
and wastewater agencies, irrigation districts, Native American nations, 
companies with water and wastewater concerns and professionals in the 
fields of engineering, the environmental sciences, and natural 
resources law and policy. WESTCAS was formed in 1992 by Western water 
and wastewater agencies concerned with the quality and management of 
water resources in the Arid West. A grass roots organization, WESTCAS 
is dedicated to encouraging the development of water programs and 
regulations which assure adequate supplies of high quality water for 
those living in the arid regions while protecting the environment.

               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 would significantly 
improve the flexibility of the Lower Colorado System. 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 $37.4 million is needed in fiscal year 2007 
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 2007 
under the Water and Energy Management and Development Activity of the 
Colorado River Front Work and Levee System Project.
    The President's fiscal year 2007 request for this activity is $5.5 
million. WESTCAS requests that Reclamation's funding for the Water 
Management Reservoir near the All American Canal subactivity are 
augmented so as to provide $37.4 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 $3.5 
million is needed in fiscal year 2007 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.
    WESTCAS requests that Reclamation's funding for sediment control be 
augmented so as to provide $3.5 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.

                   WATER RECLAMATION/REUSE TITLE XVI

    Projects funded under Title XVI of the Reclamation Projects 
Authorization and Adjustment Act of 1992 (Public Law 102-575) and the 
Reclamation Recycling and Water Conservation Act of 1996 (Public Law 
104-266) will greatly enhance the Arid West's water supply reliability 
and the environment through effective water recycling and recovery of 
contaminated groundwater. Funding in the fiscal year 2007 budget for 
previously unfunded projects, as well as the continued support for 
previously funded projects, is essential to realizing regional water 
supply reliability. The Bureau of Reclamation's budget request for 
research into the technologies and science of water recycling is 
another vital step toward making water reuse a viable alternative for 
communities faced with limited water supplies. WESTCAS urges your full 
support for increasing the Title XVI funding to $30 million.

                               WATER 2025

    Implementation of Water 2025 includes water system optimization 
reviews that will assess the potential for water management 
improvements, financial assistance for irrigation and water districts 
in creating water markets and facilitating more efficient use of 
existing water supplies through water conservation, efficiency, and 
marketing projects. WESTCAS recommends your support of a Reclamation 
fiscal year 2007 budget that includes $14.5 million in funding for the 
Water 2025 Program.

                         SCIENCE AND TECHNOLOGY

    As the ``Voice of Water Quality in the Arid West,'' WESTCAS 
advocates wise use of water resources by promoting scientifically-sound 
laws, regulations, funding, and policies that protect public health and 
the environment in the arid West. WESTCAS is dedicated to the use of 
sound science in the promulgation of rules and regulations, and 
supports funding for water quality research, in particular. The Science 
and Technology Program uses funds for the development of new solutions 
and technologies that respond to the Bureau's mission-related needs in 
this area. WESTCAS strongly recommends your support of a Reclamation 
fiscal year 2007 budget that includes $8,500,000 in funding for the 
Science and Technology Program.

                      ATLAS MINE TAILINGS CLEANUP

    In cooperation with the Utah State Environmental Quality 
Department, WESTCAS supports the President's budget request of $22.8 
million in fiscal year 2007 for the purposes of moving forward with the 
clean-up of uranium mine tailings at the Atlas Site in Moab, Utah. 
WESTCAS supports the Governor of Utah's position that these mine 
tailings must be removed from their dangerously close proximity to the 
Colorado River and advocates removal as the only acceptable solution to 
this issue.
    Thank you for considering our request.
                                 ______
                                 

                          DEPARTMENT OF ENERGY

Prepared Statement of the Bureau of Economic Geology, The University of 
                            Texas at Austin

    This testimony addresses: (1) the fiscal year 2007 Energy and Water 
Development Appropriations bill regarding funding for oil and natural 
gas R&D and (2) the Domestic Energy Production through Offshore 
Exploration and Equitable Treatment of State Holdings Act of 2006 
(proposed by Representative Jindal as H.R. 4761).
    The bottom line: Eliminating Federal investment in oil and gas R&D 
and mining programs is destroying the ability of U.S. universities to 
train science and engineering students in energy- and mining-related 
fields and significantly damaging independent oil and natural gas 
producers, who are responsible for 90 percent of the wells drilled in 
the United States. Contrary to a few decades ago, today, in terms of 
U.S. oil and natural gas R&D investment, the major international oil 
companies play a very limited role, do not benefit greatly from Federal 
oil and gas R&D, and should therefore have limited-to-no voice in U.S. 
R&D policy. The Office of Management and Budget does not appear to 
understand these realities. The slow erosion of the already paltry oil 
and gas R&D budget creates an instability that is destructive to the 
program, and ultimately harmful to the energy future of the United 
States. Congress must act to halt the annual OMB proposal to eliminate 
Federal oil and gas R&D.
    Budget cuts to the U.S. Department of Energy's Fossil Energy 
Research and Development program have severely limited the amount of 
research being conducted to promote a smooth transition to a natural 
gas, cleaner energy economy. To get to tomorrow's energy future, we 
must meet today's energy demand. Ironically, that means greater 
investment in oil, natural gas, and coal, which make up more than 85 
percent of U.S. energy consumption, with oil and natural gas 
representing 60 percent, so that the bridge to the future is stable.
    There is an overwhelming consensus that oil and natural gas will 
continue to dominate the Nation's energy mix for decades to come. No 
matter how attractive the potential of alternative energy sources may 
appear today, none is seen as a viable alternative to meet the broad 
needs of American consumers before the midpoint of the century. Fossil 
fuels, led by oil and gas, will continue to account for the vast bulk 
of U.S. energy consumption for the near future.
    DOE's latest forecast projects a 35 percent increase in U.S. energy 
demand to 2025. Fossil energy's share of that demand is expected to be 
stable or even increase slightly. Oil and natural gas are predicted to 
gain market share in that time, and DOE just ratcheted up its forecast 
for oil and gas prices in that period.
    The gap between domestic conventional oil supply and demand will 
persist. In 2025, net imports of crude oil and refined products are 
forecast to reach 68 percent of U.S. petroleum consumption. Natural gas 
is following the same trend, with natural gas imports forecast to rise 
to 30 percent, up from 16 percent. In addition, America's trade deficit 
is at a record high, largely owing to soaring oil imports.
    The easy (conventional) oil and gas are largely discovered. The 
future demand must be met by more complex and unconventional resources. 
Only research can bring the advances needed in technology to achieve 
the increased efficiency that makes yesterday's untapped resources 
economical to produce today. Yet, despite ever-increasing demands on 
energy supply, both domestically and globally, the number of trained 
scientists and engineers specializing in energy-related fields 
continues to decline. This is not true of our friends in the Far East, 
where enrollments in science and engineering programs continue to 
increase, and dwarf those in the United States.
    Besides the crisis of diminishing research and development (R&D) 
capability and a declining workforce to address growing energy and 
talent needs, coastal States disproportionately and inequitably bear 
the cost of maintaining an infrastructure to develop energy resources 
without replenishment of funds.
    H.R. 4761 would provide incentive for coastal States to strengthen 
educational programs that will train the next generation of scientists 
and engineers entrusted with our national energy production needs. At 
the same time, it will promote environmental accountability and 
restoration at the State level, where the benefits are greatest--right 
in the States' own ``backyard.'' Renewed investment in energy R&D will 
stimulate a response to the call to discover more economically 
efficient means to supply our Nation's energy needs, both now and in 
the future.
    The revenues returned to the States involved in oil shale and tar 
sands production through H.R. 4761 would promote the development of the 
infrastructure needed to realize this significant component of our 
unconventional natural gas resources. The United States has the 
opportunity to tap into this major resource that has not yet been 
globally exploited. Potential resources include such ``exotic'' sources 
as very deep gas (15,000 to 30,000 feet), natural gas below salt 
formations, natural gas disseminated in saltwater brines, and methane 
hydrates.
    The United States has less than a tenth of Saudi Arabia's 240 
billion barrels of estimated proved oil reserves, but it holds the bulk 
of the world's oil shale resource--at more than 2 trillion barrels--and 
its tar sands resource is pegged at more than 76 billion barrels.
    Natural gas resources traditionally thought of as 
``unconventional'' now account for the fastest growing segment of our 
natural gas supply: coalbed natural gas (CBNG), low-permeability 
(``tight'') formations, and deep gas. In addition, the U.S. Geological 
Survey has estimated that deposits of methane hydrates probably hold 
200,000 trillion cubic feet (Tcf) of natural gas in place within the 
U.S. Exclusive Economic Zone alone. Admittedly, this estimate is poorly 
constrained, but even if it were two orders of magnitude too high, it 
would still represent nearly a 100-year U.S. supply. Although economic 
recoverability of these vast deepwater accumulations has not yet been 
demonstrated, technical recoverability has been established through 
Arctic field tests. As with shale gas, coalbed methane, and tight gas, 
economic production of methane hydrates is perhaps only a matter of 
significant investment and new talent.
    The key to realizing the potential of these resources is 
technological innovation. Despite today's high oil and gas prices, 
America's private sector, largely composed of smaller to mid-sized 
independent producers, is ill equipped to undertake the R&D needed to 
yield such innovations. The oil price collapses of the early 1980's and 
late 1990's decimated the research departments of the major U.S. oil 
companies. Small, independent producers (average company size: 12 
employees) drill almost 90 percent of the wells in the United States 
and produce 60 percent of the Nation's natural gas and 40 percent of 
its oil. Yet these small companies have virtually no R&D capabilities.
    The Federal Government has an important role to play in spurring 
the advanced technologies needed to recover domestic resources. 
Developing these new technologies for domestic use will entail risky, 
long-term R&D that the private sector has not undertaken on its own.
    The Federal Government has already made a huge impact on U.S. oil 
and gas technology. Game-changing technology initiatives--such as 
carbon dioxide enhanced oil recovery (CO2 EOR, which also 
provides an opportunity for CO2 sequestration), CBNG, and 
tight gas--have emerged from DOE-sponsored oil and gas research 
programs. New technology paradigms, such as the Microhole and Deep Trek 
initiatives, are on the brink of commercialization and widespread 
acceptance by America's oil and gas industry.
    At the same time, DOE's Oil and Natural Gas Environmental Solutions 
program offers an opportunity to access and recover, in an 
environmentally responsible manner, the 320 Tcf of gas and 22.2 billion 
barrels of oil that underlie Federal lands. Here, DOE serves a critical 
role as the ``honest broker'' in reconciling the Nation's conflicting 
but equally important energy and environmental needs.
    The costs of not investing in America's energy future are great. 
Lack of Federal support of oil and natural gas R&D could have several 
negative effects:
  --Compromise ongoing efforts to ensure the sustainability and 
        reliability of the Nation's energy infrastructure.
  --Contribute to the trends of ever-rising energy imports and 
        persistently high oil and gas prices.
  --Cost the U.S. Treasury hundreds of billions of dollars in foregone 
        royalties, lease payments, taxes, and related economic ripple 
        effects.
    Another problem vital to national security is maintaining an 
adequate supply of mineral resources and trained professionals to find 
and develop these resources. In a recent article investigating the 
shortage of mining engineers, Peter Knights found that the supply of 
mining engineers from five countries that have a strong mining 
presence, the United States among them, decreased 25 percent from 2000 
to 2002. Moreover, when commodity prices are high and demand peaks, 
competition for this scare talent likewise peaks. During down cycles, 
graduates tend to move to other industry sectors, further exacerbating 
the problem. Knights found further that while university mining 
programs in the United States are being cut, enrollments in existing 
programs are declining.
    A study of active, dormant, and recently closed programs related to 
economic geology in U.S. higher education institutions shows 7 programs 
closed within the last 5 years, leaving only 39 active institutions and 
22 ``dormant'' institutions. Even many of the active institutions were 
found to lack funding to focus research on areas related to mineral 
resources. If programs at top-ranked schools like Stanford and Harvard 
are closing, and ``active'' programs are compromised by funding 
shortages, how will the United States populate a trained workforce to 
meet future needs?
    A task force formed in 2004 by the Society for Mining, Metallurgy, 
and Exploration (SME)--an international professional society of more 
than 11,500 members from the minerals industry in nearly 100 
countries--has focused attention on the critical issue of the shortage 
of mining engineers. Preliminary findings are that U.S. enrollment in 
mining engineering programs may need to be tripled to meet expected 
demand. Retiring faculty are creating another gap in the supply of 
trained professionals. SME estimates that as much as $20 million per 
year of additional funds will be needed to sustain educational programs 
to meet the U.S. demand for mining engineers.
    Funds from H.R. 4761 channeled into a Federal Energy and Mineral 
Resources Professional Development Fund would help sustain mining and 
petroleum schools and encourage growth of this important field.
    The American Geological Institute (AGI), which has tracked 
enrollments in the geosciences since 1952, in its 2001 Report on the 
Status of U.S. Academic Geoscience Departments (http://www.agiweb.org/
career/rsad2001.pdf) showed a 66.8 percent decline in geoscience 
enrollments from 1983 to 2000. AGI attributed the peak enrollment 
levels from 1965 to 1983 to growth in the petroleum sector.
    But funding in support of research declined in all categories--
private foundations, State, industry, other, and Federal--from 1999 to 
2001. During that same period, AGI found the percentages of funding 
support also changed. More than 70 percent of funding came from Federal 
sources, which declined in total dollar amounts by more than 50 percent 
in that short time. That is, greater dependence on Federal funds 
accompanied drastically reduced research budget support. As in the 
mining industry, AGI also found an aging workforce in the geosciences 
that is not being replenished by new talent to meet anticipated needs.
    Clearly, it is in the best interests of the United States for its 
institutions of higher education to have support and incentive to grow 
their programs to train geoscience and engineering professionals to 
sustain the supply of energy and mineral resources necessary to 
maintain a healthy U.S. economy.
    Terminating the DOE's natural gas and oil research programs could 
deal a crippling blow to America's energy future. Today marks an 
unprecedented opportunity to reverse that trend. America has massive 
untapped hydrocarbon resources, whose ultimate combined energy 
potential outstrips that of any other country. And we are on the cusp 
of the technological innovations needed to realize that untapped 
potential.
    America is the birthplace of the oil and gas industry and has long 
been the leader in oil and gas technology. But it also has the world's 
most mature oil and gas industry--and it still needs a technology 
pipeline not only to sustain it but also to let it fulfill its 
potential and thus deliver all the benefits that the Nation can receive 
from that effort. It also needs a commitment to supporting a trained 
workforce to achieve national energy, environmental, and mineral 
extraction goals. Without Federal funding to spur technology 
innovations and attract new professionals to the industry, America will 
relinquish its leadership role--a trend that would be difficult to 
reverse.
                                 ______
                                 
                Prepared Statement of Anthony R. Kovscek

    I write in regard to budget requests and appropriations for Oil and 
Natural Gas Technology within the Department of Energy. Specifically, I 
assert that zeroing out and shutting down DOE's oil and gas research 
and development efforts at this time is both short-sighted and not in 
the national interest. At the very least, I believe that you should 
maintain spending at fiscal year 2006 levels: $32.7 million for natural 
gas R&D and $31.7 million for oil R&D. Given the high prices of 
gasoline at the pump and natural gas at the residential meter, it is in 
the national interest to increase funding for Oil and Natural Gas 
Technology as well as increase funding for the development of other 
energy resources such as geothermal.
    Full, consistent, steady funding of energy R&D efforts and 
especially for oil and natural gas production is essential to meet the 
energy challenge of the future. This research effort needs to continue 
in conjunction with the DOE laboratories, universities, and the private 
sector. Continuing effort is critical in the areas of unconventional 
resources that include: heavy oil, oil shale, fractured low 
permeability reservoirs, tight-gas sands, coalbed methane, and methane 
hydrates.
    You may ask what will be lost without Federal funding? The answer 
has many different facets. First, the government and the public, loses 
entirely its ability to have research conducted in the above 
unconventional resources that are becoming increasingly important on 
the national and international stage. The Nation loses its voice to 
determine research directions and influence outcomes. Second, we lose 
energy-critical programs. For example:
  --microhole technology to drill smaller diameter wells into deep 
        resources;
  --demonstration programs that reduce risk to early adopters and prove 
        environmental conformance;
  --research across the spectrum of oil and gas exploration and 
        production technologies;
  --advanced recovery concepts that allow the conversion of oil and gas 
        resources into producible reserves;
  --programs that benefit independent producers who do not have in-
        house research and technology development efforts nor access to 
        such efforts;
  --the Petroleum Technology Transfer Council that provides critical 
        technology transfer services.
    I have been told that oil and natural gas technology programs 
within DOE have been rated as ``ineffective'' and that this is a major 
piece of evidence cited for zeroing out these programs. I find this 
rating to be counter to what I hear from the energy industry. Let me 
cite three representative success stories that counter directly the 
above rating:
  --DOE Fossil Energy through Oil and Natural Gas Technology programs 
        has supported various institutions to study aspects of 
        ``interfacial phenomena'' related to petroleum recovery. Three 
        institutions that come to mind that received such support are 
        the Petroleum Recovery Research Center in New Mexico, the 
        University of Wyoming, and Lawrence Berkeley National 
        Laboratory. While much of this work was quite fundamental, one 
        conclusion reached is that the composition of fluids injected 
        into oil reservoirs can have a marked effect on oil recovery. 
        While not receiving extensive public fanfare, this work has 
        been followed for a number of years by industry and is now the 
        subject of extensive reservoir conditions testing in company 
        laboratories and field pilot tests. Results look very promising 
        and major capital investment in desalinization plants on the 
        Alaska North Slope are being planned. The process now referred 
        to within the industry as LoSal flooding has the potential to 
        increase oil production by more than 1 billion barrels on the 
        North Slope alone. Once proven successful, I predict that many 
        independents will pick up this technology.
  --There are extensive ``diatomaceous'' or ``diatomite'' reservoirs in 
        California that are very tight, fractured, and consequently 
        difficult to produce. These are so-called unconventional 
        resources as discussed above. Cumulatively, these reservoirs 
        hold from 12 to 18 billion barrels of oil. This is a size that 
        is on-par with the initial estimates for the oil in place at 
        Prudhoe Bay, Alaska. Again, DOE Fossil Energy through Oil and 
        Natural Gas Technology programs supported research that looked 
        into various aspects of production from these diatomaceous 
        reservoirs. Three institutions that come to mind are Lawrence 
        Berkeley National Laboratory, Los Alamos National Laboratory, 
        and Stanford University. They studied well stimulation methods, 
        ground subsidence, and advanced recovery techniques for 
        diatomite. While specific production figures per company are 
        difficult to come by, it is well known that Aera Energy 
        produces oil from the South Belridge Diatomite Reservoir, 
        Chevron produces oil from the Lost Hills and Cymric Diatomite 
        Reservoirs, and Berry Petroleum produces from the Midway Sunset 
        Diatomite Reservoir. This names only a few that I could 
        identify easily. The California Division of Oil, Gas, and 
        Geothermal Resources confirms December 2005 production of about 
        63,760 bbl/day from diatomite reservoirs at South Belridge, 
        32,600 bbl/day from diatomite reservoirs at Lost Hills, and 
        23,000 bbl/day from diatomite/siliceous shale intervals at 
        Cymric. A more careful accounting surely would increase the 
        total production attributed to California diatomite.
  --The last area is enhanced oil recovery and I will cite specifically 
        investment in R&D efforts aimed at thermal recovery that date 
        to the late 1970's and continue through the present. This is 
        mainly pointed at heavy-oil production. These are oils that are 
        very thick and viscous at reservoir temperature and, hence, do 
        not flow well under primary or water injection conditions. The 
        resource base of heavy oil within the United States is 
        significant and in the neighborhood of 200 billion barrels of 
        oil. At current consumption rates, this resource represents 
        about 45 years of total oil supply for the United States. Many 
        institutions have participated in research to unlock these 
        resources using the thermal technologies of steam injection, 
        hot water flooding, and in situ combustion. These institutions 
        include the University of Southern California, Stanford 
        University, and Lawrence Berkeley National Laboratory, among 
        others. According to the Oil and Gas Journal's biennial survey, 
        production from these technologies averaged 345,000 bbl/day in 
        2004.
    These figures alone make the case that the small investment made by 
the DOE through Oil and Gas Technology R&D have paid out. Stories such 
as those above convince me that funding needs to be maintained and 
actually increased to ensure adequate production of important domestic 
resources.
                                 ______
                                 
                   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 2007 budget for 
Energy Efficiency and Renewable Energy; Electricity Delivery and Energy 
Reliability; 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/Vehicle Technologies
    Advanced Combustion Engine R&D--Heavy Truck Engine.--This program 
is critical to the success of engine manufacturers achieving energy 
efficiency enhancements while meeting EPA's near zero 2010 emissions 
regulations. Heavy truck engines consume nearly 25 percent of all 
surface transportation fuels used in the United States. Technologies 
required to achieve EPA 2007 & 2010 emissions (90 percent reduction in 
2007 and near zero emissions in 2010) are likely to decrease fuel 
efficiency. This program supports R&D to increase on-highway engine 
fuel efficiency while meeting future emissions regulations. The 
objective of this program is to demonstrate 50 percent engine system 
efficiency, an increase from an efficiency baseline of approximately 40 
percent. To date, 45 percent engine efficiency has been demonstrated at 
2007 emissions levels. Research is ongoing on advanced combustion 
technologies--homogeneous charge, low temperature and mixed mode 
combustion--which are capable of near zero levels of NOx and PM engine 
out emissions. However, additional research is needed to develop low 
temperature combustion recipes for all engine conditions and provide 
overall engine control and power capabilities for market acceptance. 
Planned research areas include simulation/modeling techniques, improved 
fuel injection systems, technology validation on single cylinder 
engines and controls development. Other major categories of work 
involve vehicle system integration, sulfur management and robust 
particulate filters. Cummins urges that $20 million be appropriated for 
this program in fiscal year 2007.
    Advanced Combustion Engine R&D--Waste Heat Recovery.--This DOE 
program supports broader energy efficiency improvement and emissions 
goals for diesel engines by developing technologies for waste heat 
recovery and engine boosting. Nearly 60 percent of 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, turbo-
compounding and Rankine cycle technologies. Cummins has evaluated a 
Rankine cycle concept which recovers waste heat from charge air and EGR 
gas streams, and converts it into electricity. This electrical energy 
is expected to supplement engine power output. Planned activities in 
fiscal year 2007 include subsystem design, development and testing in a 
laboratory, and system integration in a vehicle. The funding increase 
will adequately fund recent DOE industry R&D funding awards in this 
area. Cummins urges that $5.6 million be appropriated for this program 
in fiscal year 2007.
    Advanced Combustion Engine R&D--Combustion and Emission Control 
R&D.--This program is critically important to the heavy-duty diesel 
engine company efforts to meet stringent emissions requirements in the 
future through better understanding of combustion technologies and 
properties. The research focus for this program is to develop advanced 
combustion regimes (HCCI & LTC) for light duty & heavy duty engine 
applications. A funding split under the program between the 21st 
Century Truck Partnership (21CTP) and the FreedomCAR partnership is 
recommended as follows: 21CTP--$7.0 million (an increase of $3.32 
million); FreedomCAR Partnership--$17.9 million. The 21CTP increase is 
recommended to support 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. The increase will allow DOE to adequately support recent 
industry awards for High Efficiency Clean Combustion research funded 
under this initiative. Cummins urges that $24.9 million be appropriated 
for this program in fiscal year 2007. A funding split under the program 
between the 21 Century Truck Partnership (21CTP) and the FreedomCAR 
Partnership is recommended as follows: 21CTP--$7.0 million and 
FreedomCAR--$17.9 million.
    Advanced Combustion Engine R&D--Off-Highway Heavy Vehicle Engine 
R&D.--The off-highway engine program supports R&D efforts to minimize 
fuel economy penalties while meeting EPA Tier IV emissions requirements 
starting in 2008. Without major technological efforts, emission recipes 
will cause a significant increase in fuel use. While some technologies 
developed for on-road engines can be applied to off-road engines, 
manufacturers face unique off-road challenges, including the lack of 
cooling air flow to the engines, severe conditions of dust, debris, a 
wide range of altitude, temperature and vibrations. Off-road engines 
are applied to hundreds of different types of equipment in a wide range 
of industries, such as agriculture, construction and mining. The 
restricted space for accessories and engine components significantly 
limits emission compliance strategies. These unique requirements 
necessitate the development of new technologies to meet the demand of 
off-highway equipment. Progress has been made in developing combustion 
models to achieve in-cylinder emissions solutions. These have mitigated 
the fuel economy penalty for Tier III emissions engine designs. 
Continued funding of this initiative in 2007 is critical to achieving 
lower fuel consumption, system robustness and lower cost for Tier IV 
architectures. Cummins urges that $3.5 million be appropriated for this 
program in fiscal year 2007.
    Advanced Combustion Engines--Health Impacts.--The objective of this 
program is to expand the knowledge base relating to the heath 
implications of emissions 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) to assess health 
effects of emissions from 2007 compliant heavy-duty engines. The ACES 
program will include emissions characterization, chronic exposure 
animal bioassays, and identification of any unanticipated emissions or 
health effects from new engine technologies. Continuous monitoring of 
air toxics and source apportionment techniques are also proposed. 
Cummins urges that $2.5 million be appropriated for this program in 
fiscal year 2007.

Office of FreedomCAR and Vehicle Technologies/Fuels Technologies
    Non-Petroleum Based Fuels & Lubes: Heavy and Medium Duty Truck 
Programs (Natural Gas Vehicle).--This program funds development efforts 
for biomass and synthetic fuels as blending agents and natural gas 
engines for medium and heavy trucks. The increase is requested to 
develop efficient techniques to remove water from biodiesel and No. 2 
diesel fuel blends and complete ongoing natural gas engine development 
activities. Biodiesel fuel blends are becoming acceptable in the market 
place. Current fuel filters are less effective for separating 
emulsified water in such blends and are likely to cause problems in the 
field. Next generation natural gas combustion technologies can meet 
2010 emissions, with simpler and more durable systems, and reduce fuel 
efficiency losses compared to diesel engines. Natural gas engines are 
practical in urban applications including school and city buses, and 
could significantly reduce exhaust emissions. Natural gas combustion, 
storage and infrastructure development also offers a bridge to the 
hydrogen economy. Cummins urges that $8 million be appropriated for 
this program in fiscal year 2007.
    Advanced Petroleum Based Fuels (APBF).--This important program 
supports the study of fuel properties that can enable engines to 
operate in the most efficient mode while meeting future emission 
standards. This activity is cross-cutting with the Advanced Combustion 
Engine program. The modeling and experimentation activities under this 
effort will include expertise and shared resources between DOE, engine 
manufacturers and energy companies. Engine companies are required to 
prove emissions compliance for over 435,000 miles of useful engine 
life. The goal of this program is also to study the impacts of fuel and 
lube oil sulfur content on durability and reliability of particulate 
aftertreatment systems. Cummins urges that $4.5 million be appropriated 
for this program in fiscal year 2007.

Office of FreedomCAR and Vehicle Technologies/Materials Technologies
    Propulsion Materials Technology--Heavy Vehicle Propulsion Materials 
Program.--This program supports research and development of next 
generation materials to enable diesel engine efficiency improvement, 
improved reliability and reduced aftertreatment system costs. 
Traditional engine materials may not be adequate for the next 
generation of advanced combustion concepts, such as Homogeneous Charge 
Compression Ignition (HCCI). High injection fuel systems are needed to 
support these technologies. Smaller clearances in the fuel system 
require new capabilities to remove submicron particles from the fuel. 
Aftertreatment NOx reduction technologies are not fully developed and 
particulate filters will be implemented in a large scale for the first 
time in 2007. These efforts may require further technology 
enhancements--lighter weight and higher strength materials are needed 
to obtain lighter, more robust and higher cylinder pressure engine 
systems for improvements in fuel consumption. Increased funding will 
support studies on a range of advanced materials technologies, 
including lightweight high strength engine components, composites, 
catalysts and soot oxidation, filtration media modeling and nano-fiber 
filter technologies. Cummins urges that $5.9 million be appropriated 
for this program in fiscal year 2007.

Office of Hydrogen Technologies/Hydrogen Technologies
    Transportation Fuel Cell Systems.--The program supports R&D and 
system integration of energy efficient auxiliary power unit 
technologies for mobile or off-road applications. The goal of this 
effort is to demonstrate a SOFC-based auxiliary power unit (APU) for 
Class 7/8 on-highway diesel trucks. Reduction of idling fuel 
consumption is widely recognized as an important element in reducing 
exhaust emissions from heavy trucks. It would also reduce our overall 
dependence on foreign oil. It is estimated that a reduction of up to 
800 million gallons of diesel fuel is possible if SOFC systems can 
provide the hotel loads of truck fleets. In 2005, Cummins Power 
Generation and our partner, International Truck and Engine Company, 
conducted analysis and design work to accurately define the 
requirements for such an APU, and believe the goal is achievable. R&D 
work planned for 2007 includes the demonstration of a practical SOFC 
prototype, integrated on a typical truck platform. Cummins urges that 
the DOE request of $7.5 million be appropriated for this program in 
fiscal year 2007.

              ELECTRICITY DELIVERY AND ENERGY RELIABILITY

Research and Development/Distributed Energy
    Distributed Generation Technology Development--Advanced 
Reciprocating Engine Systems (ARES).--The goals of this multi-year 
program are to develop high efficiency, low emissions and cost 
effective technologies for stationary natural gas systems between 500 
to 6,500 kW by the year 2010. Natural gas-fueled reciprocating engine 
power plants are preferred for reliability, low operating costs and 
point of use power generation. Traditional natural gas engines are 
approximately 32 to 37 percent efficient and have not kept pace with 
the fuel efficiency of their diesel counterparts. Technologies 
sponsored by the ARES program have demonstrated 44 percent engine 
efficiency, higher power densities and an expected reduction in life 
cycle costs and CO2 emissions. Improved combustion, air 
handling and controls developments have been successfully implemented 
in a field test engine and genset for evaluation at a customer site. 
Further technical challenges include combustion development for system 
efficiency, NOx reductions, advanced sensors and controls, hardware 
durability and lower life cycle costs. The development of point of use 
energy production supports national energy security needs, improved 
protection of critical infrastructure for homeland security concerns, 
and less dependence on the national electrical grid system. Cummins 
urges that $12 million be appropriated for this program in fiscal year 
2007.

                             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 to develop a commercially viable 3 to 10 kW 
solid oxide fuel cell (SOFC) module for RV, commercial mobile, and 
telecommunications markets. The modular nature of SOFCs makes them 
adaptable to a wide variety of stationery and mobile applications. 
SOFCs can play a key role in securing the Nation's energy future by 
providing efficient, environmentally sound electrical energy from 
fossil fuels or hydrogen. Progress on Phase 1 of the program has been 
positive, including low cost ``balance of plant'' and essential control 
systems for achieving the cost targets. An advanced SOFC stack 
technology is planned. This is a 10-year program that combines the 
efforts of the DOE national laboratories, private industry, 
universities, and other research organizations. Federal funding is 
critical to support research needed to keep this technology moving from 
the laboratory to commercial viability. Cummins urges that the DOE 
request of $75 million be appropriated for this program in fiscal year 
2007.
    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 Federation of American Societies for 
                          Experimental Biology

    The Federation of American Societies for Experimental Biology 
(FASEB) is a coalition of 22 independent scientific societies who 
together represent more than 84,000 biomedical research scientists. The 
mission of FASEB is to enhance the ability of biomedical and life 
scientists to improve, through their research, the health, well-being 
and productivity of all people. As your committee begins deliberations 
on appropriations for agencies under its jurisdiction, FASEB would like 
to offer its views on funding for the Department of Energy's Office of 
Science. In keeping with the ``Energy Policy Act of 2005,'' FASEB 
recommends an appropriation of $4.15 billion for the Department of 
Energy's Office of Science in fiscal year 2007.
    The DOE's Office of Science supports research programs that enable 
the scientific discoveries and technological innovations that 
strengthen the U.S. economy and protect our citizens. Its research 
programs have led to discoveries of fundamental importance to the 
economy of the United States and to the improvement of the health of 
its citizens.
    DOE is the single largest supporter of basic research in the 
physical sciences in the United States, providing more than 40 percent 
of the total funding for this area of vital national importance. DOE 
funds fundamental research programs in basic energy sciences, 
biological and environmental sciences, and computational science. The 
Office of Science is the Federal Government's largest single funding 
source for materials and chemical sciences. It supports unique and 
vital programs for U.S. research in climate change, geophysics, 
genomics, life sciences, and science education. This backing enables 
DOE to accomplish its missions in energy security, national security, 
and environmental restoration.
    Each year the national laboratories are used by over 19,000 
researchers from universities, other government agencies, and private 
industry. The emphasis on interdisciplinary research at these state-of-
the-art facilities gives DOE a unique role, allowing it to support and 
extend basic research sponsored by other Federal agencies. Since its 
inception in 1977, 42 DOE funded scientists have won Nobel Prizes in 
Chemistry, Physics, Physiology or Medicine. DOE plays a fundamental 
role at the interface of different sciences and many research 
activities funded by non-DOE agencies could not take place in the 
absence of the highly specialized research infrastructure built and 
managed by DOE. Sustained support for the research programs of DOE is 
vital to the welfare of the citizens of the United States and to the 
scientific enterprise.

           DOE BASIC RESEARCH ENHANCES HEALTH AND WELL-BEING

    Research conducted at DOE facilities has led to the development of 
products and technologies that have improved the quality of American 
life and given researchers better insight into perplexing health 
questions. The following examples of DOE research accomplishments have 
been selected from a list of more than 100 major success stories that 
can be found on DOE's web site: (http://www.science.doe.gov/sub/
accomplishments/Decades_Discovery/decades.htm).

Human Genome Research
    Genome scientists are beginning to unravel the deeper meaning of 
the genetic code through the help of DOE funded research. Scientists at 
Oak Ridge National Laboratory have combined advanced computer 
technology with their knowledge of biology to develop a software 
program called GRAIL (Gene Recognition Analysis Internet Link). GRAIL 
emulates the human learning process as it searches large areas of human 
DNA sequence to define the physical structures of genes and is 
currently being used in more than 1,000 biotechnology companies and 
laboratories to track down genes that play central roles in human 
diseases.

Lyme Disease
    Lyme disease, a bacterial infection transmitted to humans through a 
tick bite, causes nerve damage, arthritis, and fever. Researchers at 
Brookhaven National Laboratory used intense X-rays at the National 
Synchrotron Light Source to solve the three-dimensional structure of a 
key surface protein from the bacterium that causes Lyme disease. This 
discovery has already led to the development of a rapid and highly 
accurate diagnostic test for the disease. Ongoing research at 
Brookhaven has the potential to further improve vaccines. DOE 
synchrotron facilities are essential tools in a high percentage of 
studies of the molecular structures of biological macromolecules.

X-Ray Microscopy Becomes a National Research Resource
    X-rays have shorter wavelengths and higher energy than visible 
light. These properties enable scientists to use X-rays to image 
features in cells that are too small to be seen using optical 
microscopy and other types of imaging. The DOE National Research 
resource for X-ray microscopy enables biologists to study sub-cellular 
structures in bacteria as well as human cells, enhancing our 
understanding of basic molecular and cellular processes and how they 
relate to damage or repair to DNA, disease development, and protein 
interactions.

World's Largest Nuclear Magnetic Resonance Spectrometer
    The world's largest, highest performance nuclear magnetic resonance 
(NMR) spectrometer is now operational at the William R. Wiley 
Environmental Molecular Sciences Laboratory. The 900-MHz NMR 
spectrometer allows scientists to conduct projects of large size or 
complexity that require the additional resolution and sensitivity that 
a 900 MHz field can provide. The very high magnetic field of this 
spectrometer makes it possible for scientists to determine the 3-
dimensional structures of biological macromolecules with high 
resolution.

New DOE Design for Artificial Retina
    The development of a pliable, biocompatible 60 electrode artificial 
retina containing advanced microelectronics has undergone successful in 
vitro and acute safety testing in animals. Long-term testing of the 
device in animals under the conditions that it will be used in human 
patients is ongoing. A Cooperative Research and Development Agreement 
created by DOE's artificial retina program with the Second Sight 
Corporation of California will facilitate the translation of DOE-
supported advanced technology into devices that will satisfy FDA 
testing requirements for use in blind patients.

DOE Allocates Massive Supercomputer Resources to Drive Advances in 
        Combustion, Astrophysics and Protein Structure Research
    DOE has allocated 6.5 million hours of supercomputing time to three 
scientific research projects aimed at increasing our understanding of 
ways to reduce pollution, to gain greater insight into how stars and 
solar systems form, and advance our knowledge about how proteins 
express genetic information. As one of the Nation's leading agencies 
for advancing scientific research, the Energy Department is proud to be 
able to award these major allocations for studying complex scientific 
problems that can transform our energy future and boost scientific 
research. The researchers will use their awards to compute on the IBM 
supercomputer at DOE's National Energy Research Scientific Computing 
(NERSC) Center in Berkeley, Calif. NERSC is the DOE Office of Science's 
flagship facility for unclassified supercomputing. The three awards 
amount to 15 percent of NERSC's annual computing resources.

        ADVANCING SOLUTIONS TO ENERGY AND ENVIRONMENTAL CONCERNS

    Research funded by DOE is advancing solutions to current 
environmental problems, including the cleaning of toxic waste and 
reduction of harmful fuel emissions. Research into alternative fuels 
will help conserve energy, reduce the need for petroleum, and provide 
environmentally sustainable solutions to our energy needs. DOE research 
programs will lead to more cost efficient energy products with fewer 
harmful effects on our environment and reduced dependence on foreign 
oil. The following examples highlight contributions of research 
supported by DOE.

DOE Publishes Roadmap for New Biological Research for Energy and 
        Environmental Needs
    The DOE Genomics: Genomes to Life (GTL) Roadmap outlines a plan to 
explore the unseen world of microbes--starting with information encoded 
in their DNA sequences--to produce the new science needed for achieving 
cleaner and more secure energy resources, remediating toxic wastes and 
understanding the natural roles microbes play in the global climate. 
The 2005 GTL Roadmap builds on and expands the GTL research program 
begun in 2002. Scientific and technological progress achieved during 
the Human Genome Project, initiated by DOE in 1986, and the Microbial 
Genome Program, begun in 1994, provided the foundation for establishing 
the GTL program.

Mobilizing Microbes to Manage Waste
    Recently, DOE-funded scientists have determined the DNA sequence of 
the genome of an organism that may be used to clean environmental 
contaminants. Geobacter sulfurreducens, a microbe commonly found in 
contaminated subsurface environments, can remove radionuclides and 
metals, including uranium, from groundwater. Researchers have found 
that the enrichment of groundwater samples with Geobacter 
sulfurreducens decreased uranium concentrations below the prescribed 
treatment level in some wells. Because this organism can be cultivated 
by adding simple carbon sources such as acetate to the groundwater, it 
may offer an inexpensive and simple way to remove environmental 
contaminants that pose a threat to humans.

Creating Renewable Energy Sources
    The majority of U.S. energy is currently derived from fossil fuels. 
However, because fossil fuel reserves are finite and their continued 
use contributes to global warming by emitting substantial 
CO2, it is essential to develop more sustainable energy 
sources. Biomass, or plant-derived, energy offers an appealing 
alternative to fossil fuels. Plant products are renewable and they have 
the potential to substantially reduce atmospheric CO2 
accumulation. By combining experimental biology with advanced 
computing, DOE's Genomes to Life program seeks to employ microbes to 
increase the production of biomass feed stocks, thereby reducing 
reliance on fossil fuels, decreasing CO2 emission, and 
curbing global warming.

Reducing Our Dependence on Foreign Oil
    DOE research is making it possible to create economically valuable 
products by modifying plants and microbes. By transferring genes from 
certain bacteria to plants, researchers at Michigan State University 
were able to create plants that synthesized biodegradable plastics. 
These plant products have the potential to replace plastics that are 
now derived from petroleum. DOE-funded researchers have also 
streamlined the process of converting cellulose to ethanol and made it 
possible to alter bacterial DNA to modify their production of ethanol 
and promote ethanol production in bacteria that do not normally create 
it. This work has important implications for meeting our Nation's 
energy needs and reducing U.S. reliance on foreign oil.

Increasing Fuel Efficiency
    The recent rise in fuel prices underscores the importance of 
creating more fuel-efficient motor vehicles. Scientists in DOE's 
Materials Sciences and Engineering subprogram, a research program 
dedicated to finding economically feasible ways to increase materials 
performance, have contributed to boosting the fuel economy of 
automobiles. They have developed stronger, lighter weight materials 
that could increase vehicle efficiency by reducing vehicle weight; 
their study of alloys and ceramics has led to the creation of materials 
that retain their strength at high temperatures. These materials could 
potentially be used to increase the efficiency of the combustion 
engine.

                         FUNDING RECOMMENDATION

    The unique, interdisciplinary expertise and unparalleled research 
facilities of the Office of Science merit significantly increased 
funding. With this support, the Office of Science will be able to 
continue to attack major scientific challenges of fundamental 
importance to the security and well-being of our Nation. A significant 
increase in DOE funding is essential to ensure the development of 
necessary collaborations among physical, chemical, engineering, and 
biological scientists and to preserve the vitality of our national 
research enterprise. In keeping with the ``Energy Policy Act of 2005,'' 
FASEB recommends an appropriation of $4.15 billion for the Department 
of Energy's Office of Science in fiscal year 2007.
                                 ______
                                 
         Prepared Statement of the Distributed Energy Coalition

    Distributed Energy Coalition.----The DE Coalition brings together 
the undersigned manufacturers, utilities, propane companies, industry, 
State agencies, and others who firmly believe that the Federal 
Government is an essential partner in the transformation of our 
electric infrastructure to a more secure, flexible, efficient and 
growth-oriented energy resource for the 21st century. Distributed 
Energy is an indispensable element of this transformation, one that 
provides near term solutions with significant positive long-term 
implications. The Coalition believes that DE technologies can 
demonstrate their value and achieve full market readiness and 
recognition only with Federal leadership and support. Industry stands 
ready to invest their portion of the necessary resources in partnership 
with this Federal leadership. Private industry investment already 
exceeds and will ultimately be much greater than this modest request to 
have DOE ``stay the course'' with its current level of research, 
development and demonstration funding, but these programs cannot be 
duplicated by the private sector.
    The Challenge: Following-Through on Distributed Energy.--The 
reliability and security of the Nation's energy infrastructure is 
approaching a crisis situation; our continued prosperity is directly 
linked to secure, reliable, and affordable energy. Fossil fuels are 
increasingly globally traded commodities, facing ever-increasing global 
demand. Electricity supplies are becoming strained in certain areas of 
the country as economic development outpaces expansion. Other regions 
face constraints on the ability to deliver power to where it's needed 
when it's needed. The vulnerabilities of our energy infrastructure were 
highlighted when the Great Lakes and Northeast regions lost power in 
August 2003 and when hurricanes Katrina and Rita struck the Gulf Coast 
in September 2005. And the possibility of terrorist attacks on central 
station power plants and on critical transmission and distribution 
facilities remains a major concern.
    Recognizing that a key element of a sensible response to this 
national crisis is the development and deployment of Distributed Energy 
(DE) systems, Congress included in the Energy Policy Act of 2005 a 
number of provisions authorizing increased Federal focus on distributed 
energy research, development, demonstration and policy support, 
including authorization of $730 million for DE over the next 3 years. 
The President enthusiastically signed EPAct05 into law. Congress and 
the President, with these actions, clearly reaffirmed the critical role 
DE can play in enhancing the efficiency, reliability, security and 
flexibility of the Nation's energy infrastructure through solutions 
applied at the local level.
    What's Needed to Ensure Success.--Despite a very tough budget 
climate, the Federal Government must now align its policy objectives 
with a sustained commitment to invest in the Distributed Energy 
programs that will provide these solutions. At a minimum, Congress must 
act to maintain dedicated funding in the Department of Energy's DE 
program within the Office of Electricity Delivery and Energy 
Reliability at a level consistent with prior years by appropriating $60 
million for fiscal year 2007. The three key focus areas of RD&D need 
are:
  --Alternative Energy Networks and Disaster Response.--Develop long-
        term energy solutions to the Nation's rapidly expanding need 
        for reliable, secure, and efficient energy through the 
        integration of loads and DE sources into local energy networks 
        and microgrids.
  --Advances in DE Technologies and Systems.--Complete the technology 
        development for the diverse array of DE systems that support 
        grid enhancement.
  --Outreach and Technology Transfer at the Local Level.--Ensure 
        maximum impact through technology transfer to local 
        implementers, including those responsible for policies, codes, 
        and standards.
    Benefits of the DE Program.--Distributed Energy includes 
technologies and systems \1\ that, at the point of use, efficiently 
produce electricity, recycle waste heat, and store energy. DE supports 
and supplements the existing power generation and transmission 
infrastructure, and provides critical societal benefits including:
---------------------------------------------------------------------------
    \1\ DE technologies and systems include high efficiency 
reciprocating engines; microturbines; industrial gas turbines; fuel 
cells; thermally activated technologies such as steam turbines, 
absorption chillers and desiccants; advanced storage systems; control 
systems; and integrated systems that incorporate advanced components 
into highly efficient packages for heating, cooling, and useful energy.
---------------------------------------------------------------------------
  --Energy Reliability and Quality.--DE systems can operate in parallel 
        with the grid to provide enhanced power reliability without new 
        transmission or distribution infrastructure. DE technologies 
        deliver the high quality power required of our digital economy.
  --Energy Security.--DE systems can operate independently of the grid 
        to sustain critical services (e.g. healthcare, communications, 
        shelter, public safety) after natural or man-made disasters.
  --Energy Efficiency.--DE systems can recycle waste energy and put it 
        to productive use for heating and cooling, increasing fuel 
        utilization efficiency compared to central power and increasing 
        customer benefit from each cubic foot of natural gas or propane 
        consumed.
  --Environmental Stewardship.--Use of efficient DE technologies 
        decreases emission of criteria pollutants (NOx/CO) and 
        greenhouse gases. DE can use local, renewable fuels (e.g. 
        landfill gas) to provide electrical and thermal energy.
  --Economic Development.--DE directly relieves grid congestion and 
        provides power not only to remote sites but to any constrained 
        area, avoiding investment for new grid wires in cities and 
        beyond the ``end of the line.''
    Energy market forces do not assign full value to recognized but 
externalized DE benefits such as reduced pollution, enhanced energy 
efficiency, improved productivity, and reduced infrastructure costs. In 
fact, today's market provides disincentives for local distributed 
energy systems, technologies, equipment and business models. The above-
described public benefits warrant public support of DE technologies; a 
modest amount of public funding can leverage large amounts of private 
resources by demonstrating value in the market and reducing artificial 
barriers to deployment in industrial, commercial, and residential 
applications.
    America's DE Public/Private Partnership is a Success . . . So 
Far.--The Department of Energy described the goal of the Distributed 
Energy (DE) Program as: ``[b]y 2015, the Distributed Energy Resources 
Program will develop and deploy a diverse array of high efficiency 
integrated distributed generation and thermal energy technologies at 
market competitive prices so that homes, businesses, industry, 
communities, and electricity companies elect to use them.'' DOE's 
leadership of this public/private partnership has brought us through 
the initial stages of component development and system integration. 
However, this is just a beginning. The accomplishments of the DOE/DE 
program to-date include:
  --The initial development phases of advanced prime movers--gas 
        turbines, microturbines, and reciprocating engines--that are 
        more efficient, less polluting, and more affordable.
  --Adaptation of thermal technologies to recycle waste energy to cool, 
        heat, and dehumidify business spaces and industrial processes.
  --First generation packaged DE systems of integrated prime movers and 
        thermal components that are designed to operate safely, 
        reliably, and efficiently without additional onsite 
        engineering.
  --The establishment of eight Regional Application Centers, covering 
        all 50 States, that provide local guidance, tools, and training 
        to successfully apply DE.
    Next Steps for DE to Achieve DOE's 2015 Goals.--DOE must maintain 
its leadership of this public/private partnership in order to achieve 
the goal of a diverse array of DE solutions that enhance the grid in an 
affordable and environmentally-friendly manner. Only with Federal 
leadership and support can DE technologies demonstrate their value and 
achieve full market readiness and recognition. Achieving this goal 
maximizes the public benefits of DE.
    Industry stands ready to invest their portion of the necessary 
resources in partnership with the Office of Electricity Delivery and 
Energy Reliability's leadership to develop advanced technologies, break 
down barriers and realize our common goals. When balancing budgets 
under critical times like these, industry recognizes the need to 
prioritize and focus government support. The DE Coalition represents 
over 1 million workers, holding jobs in every State, seeking to support 
the Nation's electric grid with efficient local energy solutions that 
can withstand hurricanes and ice storms, secure critical needs during 
power disruptions or terrorist attack, and conserve energy supplies by 
efficient generation close to the point of use as well as recycling 
local energy that is otherwise wasted. Our request is simple: stay the 
course and maintain research, development and demonstration funding for 
the Department of Energy's, Office of Electricity Delivery and Energy 
Reliability DE program.
    This is a 10-year program that combines the efforts of the DOE 
national laboratories, private industry, universities, and other 
research organizations.
    The Distributed Energy Coalition urges that $35 million be 
appropriated for the Distributed Energy Technology Research program in 
fiscal year 2007. The Distributed Energy Technology Research program 
improves the energy and environmental performance of distributed 
technologies (turbines, microturbines, engines, desiccants, chillers, 
and heat exchangers) so that the Nation can have more energy choices to 
achieve a more flexible and smarter energy system.
    The Distributed Energy Coalition urges that $25 million be 
appropriated for the System Integration and Cooling, Heating and Power 
(CHP) program in fiscal year 2007. The System Integration and Cooling, 
Heating, Power (CHP) activity develops highly-efficient integrated 
energy systems that can be replicated across end-use sectors which will 
help demonstrate an R&D objective or address a technical barrier. The 
activities integrate power producing prime movers that generate heat 
and utilize it for domestic hot water, steam, and/or thermally 
activated technologies that drive absorption chillers and/or desiccant 
units. These systems will reduce energy costs and emissions by using 
energy resources more efficiently.
    Thank you for this opportunity to present our views on this program 
which we believe is of great importance to the U.S. economy through 
viable on-site power generation solutions.
    The Distributed Energy Coalition companies that support this 
testimony are: ACEEE; Aegis Energy Services, Inc.; Allegiance Energy 
Systems, LLC.; Association of State Energy Research and Technical 
Transfer Institutions (ASERTTI); Atlantic Energy Services; Avalon 
Consulting, Inc.; BroadUSA; Burns & McDonnell; Capstone Turbine Corp.; 
Caterpillar Inc.; Cinergy Solutions; Climate Energy, Inc.; Cummins 
Power Generation; Cummins Power Generation Project Company; DG Power 
Systems, Inc.; Discovery Insights LLC; Elliott Energy Systems; Enercon 
Engineering; Energy and Environmental Analysis, Inc.; Energy Solution 
Center; Energy Spectrum Developers, LLC; Environmental Business 
Association of NY State; EXERGY Partners Corp.; Gas Technology 
Institute; Gas Turbine Association; Greenta.com; Infinia Corporation; 
Ingersoll-Rand; International District Energy Association (IDEA)--
represents nearly 700 company and university members who operate 
district energy systems in 38 of the 50 United States; Maine State 
Energy Program; National City Energy Capital; National Fuel Gas 
Distribution Corporation; National Propane Gas Association--3,500 
companies in all 50 States and 38 affiliated State or regional 
associations, representing every segment of the propane industry; 
Northeast Combined Heat and Power Association; NiSource Energy 
Technologies; North Carolina Solar Center; North East Midwest 
Institute; Northern Power Systems; Pace Energy Project; Power Equipment 
Associates; Primary Energy Ventures; Redwood Power Company, Inc.; 
Rensselaer Polytechnic Institute--Future Energy Systems Center; 
Resource Dynamics Corp.; Sacramento Municipal Utility District; Siemens 
Power Generation, Inc.; Solar Turbines, Inc.; Southern California Gas 
Company; Southwest Gas Company; Spectra Environmental Group Inc. & 
Spectra Engineering, PC; Steven Winter Associates; Sustainable 
Resources Group; Turbosteam Corporation; TVC Systems; United States 
Combined Heat and Power Association; UTC Power (a business unit of 
United Technologies, Inc.); University of Illinois at Chicago; Waukesha 
Engine Division; Woolpert, Inc.
                                 ______
                                 
 Prepared Statement of the State Teachers' Retirement System, State of 
                               California

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 $3.53 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 in installments. Each annual installment of 
compensation is subject to a Congressional appropriation. For each of 
the past 7 fiscal years, Congress has appropriated the annual 
installments of Elk Hills compensation for the State as called for 
under the Settlement Agreement.
    The State respectfully requests an appropriation of at least $9.7 
million in the subcommittee's bill for fiscal year 2007, in order to 
meet the Federal Government's obligations to the State under the 
Settlement Agreement. The Elk Hills appropriation has the broad 
bipartisan support of the California House 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.

State's Claims Settled, as Congress Had Directed
    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.)
    Over 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, under which the State would receive 9 percent 
of the sales proceeds in annual installments over an extended period.
    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 $3.53 
billion in cash, a sales price that substantially exceeded earlier 
estimates.

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. Taking into account the 1 
percent government-wide rescission in the fiscal year 2006 Defense 
Appropriations Act, the Elk Hills School Lands Fund should have a 
positive balance of at least $18.18 million.

Congress Should Appropriate $9.7 Million for the Fiscal Year 2007 
        Installment of Elk Hills Compensation
    As noted above, the State's 9 percent share of the adjusted Elk 
Hills sales price of $3.53 billion is $317.70 million. To date, 
Congress has appropriated seven installments of $36 million and one 
installment of $48 million that was reduced to $47.52 million by the 1 
percent across-the-board rescission under the fiscal year 2006 Defense 
Appropriations Act, for total appropriations to date of $299.52 million 
of Elk Hills compensation owed to the State. Accordingly, the Elk Hills 
School Lands Fund should have a positive balance of at least $18.18 
million.
     The State recognizes that although the equity finalization process 
to determine the final split of the sales proceeds between the Federal 
Government and ChevronTexaco, as the selling co-owners of the Elk Hills 
field, is in its final stages after some 8 years, the process still has 
not been fully completed. DoE has calculated that under the worst case 
scenario for the Federal Government based on the current status of the 
equity finalization, the State's share would fall by a total of $6.03 
million. The State has agreed to a ``hold-back'' of that amount to 
protect the Federal Government's interest and is not seeking an 
appropriation of that amount for fiscal year 2007. This reduces the 
available balance in the Elk Hills School Lands Fund to $12.15 million.
     The other factor affecting the total amount of the State's 
compensation is its share of the direct expenses that had been incurred 
to conduct the sale of the Elk Hills field back in February 1998. This 
is an issue entirely independent of and unaffected by the resolution of 
the equity finalization split just discussed above. The Settlement 
Agreement provides that the Federal Government shall pay the State ``9 
percent of the proceeds from the sale of the Federal Elk Hills 
Interests that remain after deducting from the sales proceeds the costs 
incurred to conduct such sale.'' This reflects the Congressional 
direction that, ``In exchange for relinquishing its claim, the State 
will receive 7 [9 in the final legislation] percent of the gross sales 
proceeds from the sale of the Reserve that remain after the direct 
expenses of the sale are taken into account.'' (House Rept. No. 104-
131, Defense Authorization Act for Fiscal Year 1996, Public Law 104-
106).
     The State agrees that the $27.13 million incurred for appraisals, 
accounting expenses, reserves report, and brokers' commission are 
appropriate sales expenses. (See Letter of the California Attorney 
General to DoE, dated February 10, 2005 (attached)). Accordingly, the 
State's 9 percent share of these proper sales expenses reduces the 
available balance of the Elk Hills School Lands Fund by $2.44 million 
to $9.7 million.
     Costs of conducting the equity adjustment are properly viewed as 
ongoing costs incurred due to the joint operation of the Elk Hills oil 
field by the Federal Government and ChevronTexaco, since the equity 
adjustment already was required under their joint operating agreement 
and related to pre-sale production revenues. Similarly, costs of 
environmental remediation of the Elk Hills field was a cost 
attributable to the prior operation of the field, which created any 
environmental problems that exist. That such environmental remediation 
relates to the ongoing operation of the oil field is underscored by the 
fact that the Federal Government is currently engaged in the phased 
environmental remediation of a Naval Petroleum Reserve that it is not 
selling--NPR-3 (Teapot Dome), as evidenced by its fiscal year 2006 
budget request. Accordingly, the costs of the equity adjustment and 
environmental remediation are not properly treated as direct costs 
incurred to conduct the sale of the Elk Hills field back in February 
1998 and should not be charged to the State's compensation.

                               CONCLUSION

    Therefore, of the current Elk Hills School Lands Fund balance of 
$18.18 million, taking into account the ``hold-back'' for worst case 
scenario under equity finalization and deducting the appropriate direct 
costs of conducting the sale, the State respectfully requests the 
appropriation of at least $9.7 million for Elk Hills compensation in 
the subcommittee's bill for the fiscal year 2007 installment of 
compensation, in order to meet the Federal Government's obligations to 
the State under the Settlement Agreement.
                                 ______
                                 
      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 
administration's fiscal year 2007 budget proposal for the Department of 
Energy (DOE) science programs. The ASM mission is to enhance 
microbiology, to gain a better understanding of basic life processes, 
and to promote the application of this knowledge to improve health, 
economic, and environmental well-being.
    The DOE supports microbiological research through programs 
involving microbial genomics, climate change, bioremediation, and 
analyses of basic biological processes important in the search for 
alternative energy sources. The ASM commends and supports the 
administration's recommended 14 percent increase for a total of $4.1 
billion for the DOE Office of Science. The DOE Office of Science is one 
of the three priority agencies in the President's American 
Competitiveness Initiative (ACI), which supports a wide range of 
research and development related to scientific innovation.

         STRONG SUPPORT IS NEEDED FOR THE DOE OFFICE OF SCIENCE

    Scientific progress and the U.S. economy continue to benefit from 
investments in basic sciences made by the DOE Office of Science. The 
DOE Office of Science, the Nation's primary source of support for 
research in the physical sciences, is also an essential partner in 
several critical areas of biology and environmental science 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 teams of scientists 
focused on such challenges as global warming, genomic sequencing, and 
energy research. The Office of Science is also an invaluable partner 
with the National Institutes of Health (NIH) and the National Science 
Foundation (NSF) through its support for several important 
interdisciplinary research efforts. The Office of Science also supports 
peer-reviewed, basic research at universities and colleges across the 
United States in science areas relevant to the DOE. These programs 
contribute to the knowledge base and training of the next generation of 
scientists.
    The Office of Science will play an important role in the American 
Competitiveness Initiative, which seeks to double Federal spending in 
the sciences during the next decade. In particular, the Federal 
Advanced Energy Initiative aims to reduce American dependence on 
imported energy resources. Many of the DOE scientific research programs 
share the goal of producing and conserving energy in environmentally 
responsible ways. These programs include basic research projects in 
microbiology as well as extensive development of biotechnology-based 
systems to produce alternative fuels and chemicals from biomass, to 
recover and improve processes for refining fossil fuels, to remediate 
environmental problems, and to reduce wastes and pollution. Our 
Nation's future competitiveness and innovation capabilities rely 
inclusively on all basic sciences and technologies.
    The administration's proposed budget for fiscal year 2007 requests 
$4.1 billion for the Office of Science. The ASM recommends that 
Congress support the proposed budget of $4.1 billion for the DOE Office 
of Science in the fiscal year 2007 appropriation, an increase of $505 
million over fiscal year 2006.

          BIOLOGICAL AND ENVIRONMENTAL RESEARCH (BER) PROGRAMS
 
   The proposed budget for the base programs of the Biological and 
Environmental Research (BER) program in fiscal year 2007 is $510 
million, a $59 million increase over fiscal year 2006. For over 50 
years, the BER program has been advancing environmental and biomedical 
knowledge that promotes national security through improved energy 
production, development, and use; international scientific leadership 
that underpins our Nation's technological advances; and research that 
improves the quality of life for all Americans.

                       BER GENOMICS: GTL PROGRAM

    The 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 knowledge into 
how to design biotechnology-based processes that will function in 
extreme conditions and could potentially address national priorities, 
such as energy and environmental security, bioremediation of waste 
sites, global warming and climate change, and energy production. 
Microbes power global carbon and nitrogen cycles, clean up wastes, and 
transform energy. They are an important source of biotechnology 
products, making the 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 key national energy and 
environmental issues. The DOE Genomics: GTL genomic sequencing program 
has an important impact on nearly every other activity within BER. ASM 
supports the administration's request of $135 million for the Genomics: 
GTL program in fiscal year 2007, a $50 million increase over fiscal 
year 2006.
    In addition to this program, a substantial portion of the analytic 
capacity within the DOE Joint Genome Institute (JGI) continues to be 
devoted to the sequencing of individual microbial genomes as well as 
the DNA in mixtures from microbial communities dwelling within 
specialized ecological niches. As part of these efforts, the DOE 
continues to analyze 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 the 
DOE's direct 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 scientists who submit proposals subject to 
merit review. These sequencing projects will be conducted at no 
additional cost for the wider scientific community and are expected to 
have a substantial impact on the BER Environmental Remediation Sciences 
program, with much of this program focused on using microbes to cleanup 
environmental sites. 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 processes for 
sequestering carbon.
    The ASM supports the administration's request for $62 million to 
continue supporting the Joint Genome Institute program in fiscal year 
2007. The ASM applauds the DOE's leadership in recognizing this 
important need in science and endorses expanding these microbial genome 
sequencing efforts, particularly to learn more about the functions and 
roles of the many microorganisms that resist efforts to be grown in 
culture. This program provides a basis for using genomic information 
more broadly to understand life at the cellular and at even more 
complex levels.

                       ENVIRONMENTAL REMEDIATION

    The overall goal of the DOE Environmental Remediation subprogram 
(ER) is to support research that improves the science underpinning the 
cleanup of the DOE's sites and to support related operations. Because 
traditional cleanup strategies may not work or be cost effective, the 
ER subprogram supports basic research that aims to develop and validate 
technical solutions to these complex remediation problems. The goal is 
to develop innovative new remediation technologies that reduce risks 
and provide savings in costs and time. The ASM supports the 
administration's request for nearly $97.2 million for the Environmental 
Remediation subprogram in fiscal year 2007. The DOE environmental 
remediation programs deserve sustained support.

                        CLIMATE CHANGE RESEARCH
 
   Although the ASM is pleased to see that the administration is 
continuing to support Climate Change Research in its fiscal year 2007 
budget, the proposed budget of nearly $135 million for this important 
activity is a $6.5 million decrease from fiscal year 2006. 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 the DOE's 
contribution to the interagency U.S. Global Change Research Program 
proposed by President Bush in 1989 and codified by Congress in the 
Global Change Research Act of 1990 (Public Law 101-106).
    The Ecological Processes portion of this 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. 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. The ASM recommends continued 
support for important Climate Change research within the DOE Office of 
Science.

                         BASIC ENERGY SCIENCES

    The administration request for the Office of Basic Energy Sciences 
(BES) for fiscal year 2007 is $1.4 billion, an increase of $28.6 
million over fiscal year 2006. The ASM is concerned with BES's efforts 
to move away from energy biosciences research. This program is a 
principal sponsor of fundamental research for the Nation in the areas 
of materials sciences, chemistry, geosciences, and biosciences as they 
relate 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 are of strategic 
importance to the U.S. energy portfolio, and the DOE is advancing basic 
research in this critical area. Genomic technologies are a tremendous 
new resource for further advancing the DOE's bioenergy goals.

                 NEW TECHNOLOGIES AND UNIQUE FACILITIES

    New technologies and advanced instrumentation derived from the 
DOE's expertise in the physical sciences and engineering have become 
increasingly valuable to biologists. Beam lines at the DOE's facilities 
and other advanced technologies for determining molecular structures of 
cell components are advancing our understanding of cell functions and 
are being applied to new drug design. The DOE advances in areas such as 
high-throughput, low-cost DNA sequencing, mass spectrometry, cell 
imaging, and computational analyses of biological molecules and 
processes are critical to our national biological research enterprise. 
The ASM supports recommended funding of $15 million for infrastructure 
development of research user facilities under BER.
    The DOE has unique field research facilities for conducting 
environmental research that is important for understanding 
biogeochemical cycles and global change, and for restoring 
environmental sites. The DOE's ability to conduct large-scale science 
projects and to draw on physics, mathematics and the computer sciences, 
and engineering is also critical for biological research.

                               CONCLUSION

    The ASM supports the recommended 14 percent increase for a total of 
$4.102 billion for the DOE Office of Science in fiscal year 2007, and 
recommends strong support for the DOE BER programs.
    The ASM appreciates the opportunity to provide written testimony 
and would be pleased to assist the subcommittee as it considers the 
fiscal year 2007 appropriation for the DOE.
                                 ______
                                 
        Prepared Statement of the Gas Machinery Research Council

    Mr. Chairman and members of the subcommittee, we appreciate the 
opportunity to provide testimony in support of the DOE Natural Gas 
Infrastructure Program and the fiscal year 2007 budget. We are 
concerned that no funds were allotted for this program in fiscal year 
2006 and request support of this program in fiscal year 2007 in the 
amount of $25 million.
    The Gas Machinery Research Council (GMRC) provides its member 
companies and the natural gas industry with the benefits of an applied 
research and technology program directed toward improving the 
reliability and cost effectiveness of the design, construction, and 
operation of mechanical and fluid systems. Membership includes 70 
companies involved in all aspects of natural gas compression, including 
all major natural gas pipelines, production companies, packagers, and 
service companies.
    The first generation compression infrastructure in the 1920's and 
1930's consisted of many small slow-speed compressors to move gas from 
producing regions to markets. To provide the necessary expansion of 
these early pipeline systems in the decades after World War II, a 
second generation of larger and higher-speed machines promised a 
significant reduction in installed cost. As these compressors were 
installed, they experienced many reliability and operational problems. 
To address this challenge, in 1952 the pipeline industry formed what is 
now the Gas Machinery Research Council. Through research done at 
Southwest Research Institute (SwRI), an Analog Simulator was developed 
to optimize the design of pulsation filter bottles and predict 
pulsation performance. This design service has been operating 
continuously since 1955, bringing pulsation problems under control.
    In recent years the promise of dramatic cost reductions has driven 
the industry towards even higher-speed, larger horsepower reciprocating 
compression powered by modern gas engines or large electric motors. 
With this new technology came new challenges. The industry now faces a 
technology transition similar to 50 years ago.
    The last generation of slow-speed machines is no longer 
commercially available because they are perceived as unaffordable. 
While affordable, the current generation of high-horsepower, high-speed 
compression requires advancements in technology to meet their full 
potential to address the pipeline industry's compression needs.
    In fiscal year 2005, GMRC began the Advanced Reciprocating 
Compression Technology (ARCT) project under the DOE Natural Gas 
Infrastructure Program. The objective of the ARCT project was to 
develop the next generation of compression technology to enhance the 
efficiency, reliability and integrity of pipeline operations through 
improved compression. The suite of technologies developed during this 
program would provide pipeline operators with improved and affordable 
choices for new compression and products that can be retrofitted to 
existing machines. These retrofits would reduce the amount of fuel 
consumed to move gas from the producer to market and reduce emissions, 
resulting in savings for both the industry and the consumer.
    We are continuing aspects of this program using industry funds, but 
at greatly reduced levels. A resumption of the DOE partnership would 
allow these technologies to be brought to the market place and to the 
benefit of gas consumers far earlier.
    Natural Gas will continue to be a major source of worldwide energy 
as energy usage increases in the future. The majority of this increase 
will be provided by fossil fuels with the natural gas 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. A joint industry/government research and 
development program can ensure that the industry infrastructure is in 
place for years to come.
    The 70 member companies of GMRC strongly support the DOE Natural 
Gas Infrastructure Program and urge you to re-establish the program 
funding in fiscal year 2007 in the amount of $25 million. This will 
allow development and implementation of technologies critical to 
infrastructure needs.
    We thank you for your consideration of these funding requests.
                                 ______
                                 
              Prepared Statement of FuelCell Energy, Inc.

    FuelCell Energy appreciates the opportunity to submit this 
statement in support of the Department of Energy's Fossil Energy, Fuels 
and Power Systems, Fuel Cell Program. We urge the subcommittee to 
continue to support this breakthrough program by appropriating $75 
million for development of this highly efficient, clean, and secure 
energy technology.
    DOE's Fossil Energy Fuel Cell Program, through the Solid State 
Energy Conversion Alliance (SECA) fuel cell and fuel cell hybrid 
activity, is developing technology to allow the generation of highly 
efficient, cost-effective, carbon-free electricity from domestic coal 
resources with near-zero atmospheric emissions in central station 
applications. The program directly supports the President's FutureGen 
project through the development of cost-effective, highly efficient, 
power blocks that facilitate sequestration in coal-based systems. The 
technology will also permit grid independent distributed generation 
applications by 2010.
    SECA fuel cell/turbine hybrids operating on coal gas are building 
blocks for zero emissions power, the ultimate goal of the President's 
FutureGen Program. These hybrids are projected to be available at a 
cost of $400/kW, a 10-fold reduction in cost from existing fuel cell 
technology. In addition the technology developed in this program will 
produce electricity at up to 60 percent in coal-based systems, produce 
near-zero emissions, and be compatible with carbon sequestration.
    In all applications SECA fuel cells will be both low-cost, with the 
above-stated goals of $400/kW, as well as highly efficient. Integrated 
with coal gasification, such systems will approach 60 percent 
efficiency compared to the existing coal-based power generation fleet 
average of about 33 percent efficiency. In distributed generation 
applications even higher efficiencies may be reached, and cogeneration 
opportunities can further increase efficiency.
    Along with these attributes fuel cells are one of the cleanest 
technologies available in terms of atmospheric emissions, which 
enhances their attractiveness for urban applications or applications in 
areas of non-attainment for Clean Air Act emissions. They also provide 
24-hour, silent operation.
    Finally, coal-based fuel cell systems will increase energy security 
by using domestic resources. In distributed generation applications 
fuel cells can eliminate transmission and distribution system 
infrastructure concerns and issues by providing generation near the 
point of use and by being able to operate in a grid-independent mode.
    The SECA Program consists of six integrated industrial 
manufacturing teams designing fuel cell or fuel cell/hybrid systems, 
developing the necessary materials, and ultimately responsible for 
deploying the technology. These teams are complemented by two to three 
dozen core technology performers providing generic problem-solving 
research needed to overcome barriers to low-cost, high-performance 
technology as identified by DOE and the manufacturing teams. The core 
technology teams are universities, national laboratories, and other 
research-oriented organizations. Historically the manufacturing teams 
receive 60 percent of the program funding and the core technology 
developers receive 40 percent. This unique structure assures that a 
variety of approaches to solving the problems associated with fuel 
cells will be undertaken in a manner that will increase the chances of 
success for this highly complex technology.
    Three of the six manufacturing teams, including FuelCell Energy, 
have recently been awarded contracts to develop fuel cell/hybrid 
technology for application to large central generation systems 
characterized by FutureGen. The remaining manufacturing teams are 
developing fuel cells for possible use in both these large systems as 
well as in distributed generation applications such as auxiliary power 
units, military power applications and remote or on-site power 
generation.
    The DOE budget request for this program is $63.3 million, a slight 
increase from fiscal year 2006 funding. This level of funding, if 
dedicated to the base SECA program would be about $13 million more than 
amounts available to the base program in fiscal year 2006, but still 
below fiscal year 2005 funding levels. In fiscal year 2006 and 2007 the 
program is entering Phase II of development, which involves larger 
scale development work on the part of manufacturing teams in the 
program and which will require more funding to continue to meet the DOE 
proposed schedule. As part of this greater commitment, manufacturing 
teams entering Phase II are required to provide a minimum of 50 percent 
of the funds needed for the program, which is an increase from the 25 
percent cost-sharing required in Phase I. For these reasons additional 
funding is needed to continue progress apace for this exciting new 
technology.
    We believe that the SECA fuel cell/hybrid program has achieved the 
progress to date as anticipated by the program managers, and will 
continue to display such progress given sufficient funding support by 
DOE and the Congress. Hybrid technology has been successfully 
integrated into the program and an emphasis on use with coal-based 
systems has been established. Industry partners in the program have 
continued and increased cost-sharing support. This technology is 
essential to meeting the efficiency and emissions goals of the 
President's FutureGen program and will also provide low-cost, low-
emissions alternatives for distributed generation applications. 
Therefore, we urge you to support our request for $75 million to 
execute the DOE Fossil Energy, Fuels and Power Systems, Fuel Cell 
Program in fiscal year 2007.
                                 ______
                                 
           Prepared Statement of the Alaska Energy Authority

    The Alaska Energy Authority (AEA), the State of Alaska's lead 
agency for energy planning and development, thanks the subcommittee for 
this opportunity to present written testimony in support of U.S. 
Department of Energy (USDOE) appropriations. AEA works in partnership 
with USDOE, the Denali Commission, and other Federal agencies to 
provide reliable and affordable energy to the citizens of our State. To 
sustain this work, we request the subcommittee:
  --Reinstate USDOE funding and support for the national Regional 
        Biomass Energy Program and the Geothermal Program. These 
        modestly funded programs help us develop valuable, locally-
        funded projects such as:
    --A sawmill waste-fired heating system that saves the City of 
            Craig, Alaska $100,000 per year, and
    --A 400 kW geothermal power plant at Chena Hot Springs, Alaska that 
            saves $270,000 per year in diesel fuel costs;
  --Support USDOE funding for the State Energy Program and the Combined 
        Heat and Power Program. These cost-share programs help us 
        identify efficiency projects such as:
    --A waste heat recovery project that saves Kotzebue, Alaska 
            $150,000 per year, and
    --A lighting upgrade project that saves the Iditarod School 
            District $16,000 per year;
  --Support the USDOE's Arctic Energy Office in Fairbanks. The Arctic 
        Energy Office and its partner, the University of Alaska, play 
        crucial roles in the research, development, and deployment of 
        fossil energy technology in remote areas of Alaska. Recognizing 
        that Alaska also holds substantial renewable energy resources, 
        we request that the subcommittee consider support for the 
        Arctic Energy Office in the area of energy efficiency and 
        renewable energy.
    Again, thank you for the opportunity to present these written 
comments to the subcommittee. Your staff may contact me with questions 
or requests for further information.
                                 ______
                                 
  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 2007 appropriations level of $275 
million for the WAP and $74 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 $242.6 million in WAP funds provided by the committee in 
2006 is expected to result in:
  --An additional 97,000 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 20,000 full time, highly skilled, jobs being supported 
        within the service delivery network and in related 
        manufacturing and supplier businesses;
  --Weatherization reduces the need for importing foreign oil by as 
        much as 18 million barrels per year and this number continues 
        rise.
    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 $440, reflecting revised assumptions 
about future natural gas prices. For every $1 spent, the WAP returns 
$2.83 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 5.5 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 5 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 (16 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 2005-2006 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 $600 or more for most families. For middle-
income families, this increase will amount to less than one-half of 1 
percent of the total household income. For many low-income families; 
however, this increase will result in a 4 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 $1 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, small motor efficiency, 
refrigerator replacements) 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. Many of our States have implemented 
refrigerator replacement programs to decrease energy base-load for low-
income families.
    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 green house 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 $275 
        million in the WAP could yield nearly $1.1 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 2006 at $242.5 million--$15 million more than the President's 
request. In a complete reversal of the President's long-standing 
commitment to the program, the administration has significantly reduced 
its 2007 request to $164.2 million, or a 33 percent reduction. We are 
writing to urge your subcommittee to restore funding for the Low Income 
Weatherization Assistance Program to levels no less than $275 million 
for WAP and $74 million for State Energy Programs (SEP) for fiscal year 
2007.
    Weatherization is a clearly proven investment which has helped over 
5.5 million families live in safer, more comfortable living conditions. 
If the President's budget is upheld, 33,000 low-income families will be 
denied critical weatherization services this year. With this funding, 
these families would have saved an average of $440 or more a year on 
energy. This money could have been used for essential needs such as 
food, clothing, and medicine. Instead, these low-income households will 
have to spend more than $200 million from their meager incomes to pay 
for energy that could have been saved if the homes were weatherized in 
2007. At a time when oil and natural gas prices remain high and low-
income families are facing huge increases in their energy costs, it is 
irresponsible for the administration to place added burdens on these 
families by choosing not to help them conserve energy.
    NASCSP is also concerned about the low level of funding provided 
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 2006 level of $36 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 $74 million for fiscal year 2007. 
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 funding invested in WAP and SEP 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 UF-DOE High Temperature Electrochemistry 
                     Center, University of Florida

    Chairman and members of the subcommittee, our quality of life, 
standard of living, and national security depend on energy. The limited 
supply of fossil energy, its accelerated consumption, and the 
dependence on its supply from unstable Middle East countries are major 
U.S. economic and security issues. To address these issues we must have 
a strong balanced energy research program, which is based on the best 
use of our indigenous natural resources while minimizing our dependence 
on imported energy forms. Therefore, our testimony is directed to 
programs in the Office of Fossil Energy of the U.S. Department of 
Energy. Specifically we request that the High Temperature 
Electrochemistry Center (HiTEC) be funded at the fiscal year 2006 level 
of $8 million (including $750,000 at the University of Florida), and 
that the Solid State Energy Conversion Alliance (SECA) be funded at $67 
million for a total SECA-HiTEC appropriation within the Office of 
Fossil Energy, Research and Development, Fuels and Power Systems of $75 
million.
    HiTEC.--The High Temperature Electrochemistry Center (HiTEC) is 
part of the Research and Development Program and provides the research 
necessary to develop enabling technologies for advanced power 
generation systems, including the President's FutureGen, Clean Coal, 
and Hydrogen programs. HiTEC not only supports DOE's mission, but 
through the HiTEC Satellite Centers at Montana State University, the 
University of Florida, and other U.S. universities, creates 
concentrated centers of excellence where the fundamental research 
necessary to meet U.S. energy needs are addressed.
    As an example, at the University of Florida we are developing the 
fundamental understanding of ionic transport in, and electrocatalytic 
(electrochemical catalysis) phenomena on the surface of, ion conducting 
materials. From first-principles calculations and molecular dynamic 
simulations of ionic transport and gas-solid interactions to synthesis 
and characterization (structural, electrochemical, and catalytic) of 
novel ion conducting materials and electrocatalysts. The results of 
these investigations will minimize the polarization losses of fuel 
cells and batteries, maximize the hydrogen production from gas 
separation membranes, and enhance the signal and selectivity of exhaust 
sensors. In so doing this research will improve U.S. energy efficiency 
and security.
    A further benefit of this university-based research program is that 
it provides for the education of the next generation of energy 
scientists and engineers necessary to meet the employment needs of this 
growth industry. As such, this university-based energy research program 
is directly aligned with the goals of the President's ``American 
Competitiveness Initiative,'' the pending Senate legislation 
``Protecting America's Competitive Edge Acts,'' and the National 
Academy's ``Gathering Storm'' report.
    Therefore, we recommend continuation of this program at the fiscal 
year 2006 level of $8 million including $750,000 at the HiTEC center at 
the University of Florida.
    SECA.--Solid State Energy Conversion Alliance (SECA) is the DOE 
Fossil fuel cell program. Fuel cells are a critical technology for 
efficient utilization of our natural resources. What distinguishes the 
SECA program from the Office of Energy Efficiency's fuel cell program 
is the fuel flexibility of the type of fuel cell being developed by 
SECA. Not only can these fuel cells contribute to a future Hydrogen 
Economy, but unlike other fuel cells, they can operate using 
conventional fuels (from natural gas to coal derived gasses, to 
gasoline and diesel fuels) as well as renewable biomass based fuels. 
Thus, development and deployment of the SECA fuel cells can improve 
U.S. energy efficiency and security utilizing our current energy 
infrastructure.
    The SECA program is a successful DOE-industry-university 
partnership involving 6 industry teams, 20 universities and 4 national 
labs. This program is achieving its milestones and goals and as such 
will see market entry in the next few years providing near term U.S. 
energy efficiency gains. However, in order to deploy pre-commercial 
prototypes a funding increase for the SECA program in fiscal year 2007 
to $67 million is necessary.
    Thank you for the opportunity to offer testimony on these important 
programs. We appreciate the support of the subcommittee.
                                 ______
                                 
     Prepared Statement of the Coalition of Northeastern Governors

WEATHERIZATION ASSISTANCE PROGRAM, NORTHEAST HOME HEATING OIL RESERVE, 
                  AND REGIONAL BIOMASS ENERGY PROGRAM

    The Coalition of Northeastern Governors (CONEG) is pleased to 
provide this testimony to the Senate Subcommittee on Energy and Water, 
and Related Agencies regarding fiscal year 2007 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 record high energy prices and heightened attention to 
the security, reliability and efficiency of the Nation's energy 
systems, these conservation and renewable energy programs have taken on 
an increased significance. Modest Federal investment in these programs 
provides substantial energy, economic and environmental returns to the 
Nation--leveraging additional State and private sector investment and 
contributing to sound energy management. To continue the contribution 
of these programs to cost-effective energy strategies, the CONEG 
Governors request that funding for the State Energy Program be 
increased to $49.5 million, and that funding for the Weatherization 
Assistance Program be provided at a level of at least $250 million in 
fiscal year 2007. The Governors support the President's request that 
funding for the Northeast Home Heating Oil Reserve be provided at a 
level of $4.95 million in fiscal year 2007. The Governors also request 
that the subcommittee provide $7.5 million to continue the National 
Biomass Partnership (previously known as the Regional Biomass Energy 
Program).
    Administered by the 50 States, District of Columbia and 
territories, the Department of Energy's State Energy Program and 
Weatherization Assistance Program are a cost-effective way to achieve 
national energy goals. The National Biomass Partnership helps sustain 
public and private sector investment in biomass technologies and 
contributes to expanded biomass energy development. These programs 
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.
    State Energy Program.--The State Energy Program (SEP) is the major 
State-Federal partnership program addressing energy efficiency and 
conservation in all sectors of the economy. Cost-shared by the States, 
the program allows State energy offices to increase the effectiveness 
of the Federal funds by tailoring the energy activities to address 
particular local energy priorities and opportunities.
    Increased SEP funding in fiscal year 2007 will ensure that States 
can continue their work toward the national energy goal of a balanced, 
reliable and secure energy system. SEP provides the vital funds that 
allow State energy offices to move energy efficiency and renewable 
energy technology into the marketplace, assist both the private and 
public sectors in reducing energy use and costs, and conduct extensive 
public information activities. Increased SEP funding will also ensure 
that States can rely on their State energy offices to continue vital 
emergency preparedness activities.
    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 recent 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 results in $7.22 in annual energy cost 
savings and also yields $10.71 in ``leveraged'' funding from the State 
and private sectors. SEP projects have resulted in more than $333 
million in annual energy costs savings.
    Weatherization Assistance Program.--Through a network of 
partnerships with more than 970 local weatherization agencies across 
the country, the Weatherization Assistance Program (WAP) improves the 
energy efficiency of more than 100,000 low-income dwellings a year, 
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 more than 15 percent of their annual income on 
energy, compared to 3.5 percent for other households. The 
Weatherization Assistance Program strives to reduce this ``energy 
burden'' of low-income residents through such on-going 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. According to the 
National Association for State Community Service Programs, based on 
current energy prices, the average family saves approximately $400 per 
year after weatherization services are provided.
    The WAP also provides numerous non-energy benefits. Oak Ridge 
National Laboratory has concluded that for every $1 of DOE investment, 
there are non-energy benefits worth $1.88. For instance, the WAP 
generates more than 8,000 jobs nationwide, creating 52 new jobs for 
every $1 million invested. In addition, the decreased energy use 
resulting from weatherization measures also provides environmental 
benefits through decreased carbon dioxide emissions.
    National Biomass Partnership.--Renewable energy plays an 
increasingly vital role in meeting the Nation's goal of reduced 
reliance on imported fossil fuels. Some of the most promising renewable 
technologies use biomass to achieve that goal. The National Biomass 
Partnership (formerly known as the Regional Biomass Energy Program) is 
a primary link among State, private, and Federal biomass activities. It 
is a vital complement to the research and technology work of the 
Department of Energy and its national laboratories, and can assist 
Federal agencies in carrying out the biomass provisions in EPAct 2005 
and the President's Advance Energy Initiative. The activities are 
tailored to the specific resources and opportunities in each region of 
the country, thus providing a critical link in the chain of research, 
resource production and technology commercialization. The Partnership 
has been successful in promoting the adoption of State policies that 
encourage development of biomass resources, increasing public awareness 
of the benefits and uses of bioenergy; leveraging Federal funding and 
State resources, and increasing the intensity of biomass use. In the 
Northeast, the Partnership has been instrumental in stimulating an 
estimated $24 million in public and private investment in bioenergy 
development; offering technical assistance that contributed to new 
bioenergy and biopower development policies in six States; and 
providing educational assistance to increase public and private sector 
awareness of the potential of regional biomass development. As a 
result, the Northeast has seen an increase in development plans for new 
ethanol and biodiesel production facilities and biomass power capacity, 
as well as a growth in demand for ethanol.
    The Partnership is a recognized source of objective and reliable 
information on biomass. 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 of 
increased renewable energy use and voluntary programs to reduce 
greenhouse gases.
    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.
    In conclusion, we request that the subcommittee provide funding in 
fiscal year 2007 for the State Energy Program at the President's 
requested level of $49.5 million; provide $250 million for the 
Weatherization Assistance Program; provide $7.5 million for the 
National Biomass Partnership; and provide funding at the President's 
requested level of $4.95 million for the Northeast Home Heating Oil 
Reserve. 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 Biomass Energy Research Association

                                SUMMARY

    This testimony pertains to the fiscal year 2007 appropriations for 
biomass energy research, development, and demonstration (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 heading of Energy Supply and Conservation, Energy 
Efficiency and Renewable Energy. BERA recommends a total appropriation 
of $150,000,000 in fiscal year 2007 under Biomass and Biorefinery 
Systems R&D (Energy Supply and Energy Conservation), exclusive of 
earmarks. Specific lines items for the DOE biomass RD&D budget are as 
follows:
  --$60,000,000 for Biochemical Conversion Platform Technology 
        (conversion of corn starch, corn stover and fiber, wood, forest 
        residues and perennial crops);
  --$50,000,000 for Thermochemical Conversion Platform Technology 
        (conversion of wood and forest resources to pyrolysis oils and 
        syngas);
  --$25,000,000 for Integrated Biorefinery Technologies; and,
  --$15,000,000 for Utilization of Platform Outputs: Core Technologies 
        for Chemicals.

                               BACKGROUND

    On behalf of BERA's members, we would like to thank you, Mr. 
Chairman, for the opportunity to present the recommendations of BERA's 
Board of Directors for the high-priority programs that we strongly urge 
be continued or started. BERA is a non-profit association based in the 
Washington, DC area. It was founded in 1982 by researchers and private 
organizations conducting biomass research. Our objectives are to 
promote education and research on the economic production of energy and 
fuels from freshly harvested and waste biomass, and to serve as a 
source of information on biomass RD&D policies and programs. BERA does 
not solicit or accept Federal funding for R&D.
    There is a growing realization in our country that we need to 
diversify our energy resources, develop technologies to utilize 
indigenous fuels, and reduce reliance on foreign oil. Economic growth 
is fueling increasing energy demand and placing considerable pressure 
on our already burdened energy supplies and environment. The import of 
oil and other fuels into the United States is growing steadily and 
shows no sign of abating. Industry and consumers both are being faced 
with rapidly rising costs for fossil fuels, which are vital to our 
economy. A diversified energy supply will be critical to meeting the 
energy challenges of the future and maintaining a healthy economy with 
a competitive edge in global markets.
    Biomass is the single renewable resource with the ability to 
replace liquid transportation fuels. It can also be used as a feedstock 
to supplement the production of chemicals, plastics, and other 
materials that are now produced from crude oil. In addition, 
gasification of biomass or biomass-derived pyrolysis oils produces a 
syngas that can be utilized to supplement the natural gas supply and 
electricity from fossil fuels. Viable fuel and chemical products are 
already being produced from biomass, but on a very small scale compared 
to the potential fuel markets. Research should be expanded to realize 
the full potential of biomass as a component of our energy supply.
    The Energy Policy Act of 2005 has created various incentives for 
diversifying our energy supply. The Act provides a good foundation, but 
to be effective it must be supported by research that will enable the 
United States to take advantage of our abundant, domestic, renewable 
resources in a cost-effective way. The recently announced Biofuels 
Initiative provides for additional funding to support the use of 
cellulosic biomass as a feedstock for ethanol, with the potential to 
replace as much as 30 percent of domestic gasoline demand in 2030. We 
support this Initiative and believe it will help to accelerate the 
development and utilization of this important resource.

               BERA RECOMMENDATIONS FOR DOE BIOMASS RD&D

    BERA's recommendations support a balanced program of mission-
oriented RD&D, including projects to develop and demonstrate advanced 
biochemical and thermochemical biomass conversion processes, 
alternative liquid transportation fuels, and co-production of fuels, 
chemicals, and power in integrated biorefineries. BERA's 
recommendations for funding for DOE biomass RD&D are shown in Table 1 
and outlined below. Note that recommended budgets for demonstration 
projects do not include the required 50 percent industry cost-share.
    Fund both biochemical and thermochemical conversion platforms as 
foundations for integrated biorefineries.--The biochemical and 
thermochemical platforms are both important and BERA urges that both be 
funded to accelerate the development and demonstration of large-scale, 
synergistic integrated biorefinery systems. These large-scale systems 
have the most potential to enable biomass to have a major role in 
displacing fossil fuels. BERA urges that biochemical conversion 
research be funded at the DOE request, and that thermochemical 
conversion R&D for biomass gasification, pyrolysis, and synthesis of 
alternate liquid fuels be expanded and given a higher priority.
    Support development/demonstration of integrated biorefineries.--
Activities should address integration of promising biological and 
thermochemical process steps and processes to improve overall process 
efficiency and reduce product cost, taking into consideration siting, 
plant design, financing, permitting, environmental controls, waste 
processing and disposal, and sustained operations; feedstock 
acquisition, transport, storage, and delivery; and storage and delivery 
of products to market. BERA recommends that industrial partners and 
States should be carefully selected to demonstration mission-oriented 
benefits for participation in this cost-shared program.
    Reduce level of earmarks.--The level of earmarks in the last few 
years has resulted in limiting new initiatives and 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 earmarks are slated for projects that do not contribute 
to DOE's research goals, BERA urges that they be add-ons to the 
baseline funds rather than deductions.

                            TABLE 1.--BIOMASS/BIOREFINERY SYSTEMS R&D (ENERGY SUPPLY)
----------------------------------------------------------------------------------------------------------------
                                                                                    Scale-Up &
             Program Area                  Description of RD&D       Research      Demonstration     All RD&D
----------------------------------------------------------------------------------------------------------------
Biochemical Conversion Platform R&D...  Conversion of corn           $30,000,000     $30,000,000     $60,000,000
                                         starch, stover and
                                         fiber, wood and forest
                                         residues, and perennial
                                         crops.
Thermochemical Conversion Platform R&D  Conversion of wood and        20,000,000      20,000,000      40,000,000
                                         forest residues to
                                         pyrolysis oils or
                                         syngas.
Integration of Biorefinery              Validation of benefits    ..............      15,000,000      15,000,000
 Technologies.                           of integrating
                                         biochemical and
                                         thermochemical
                                         conversion technologies
                                         in integrated
                                         biorefineries.
Utilization of Platform Outputs: Core   Development and co-           15,000,000  ..............      15,000,000
 Technologies for Fuels, Chemicals,      production of fuels,
 and Electricity.                        chemicals and
                                         electricity from
                                         biochemical and
                                         thermochemical platform
                                         output streams.
State and Regional Biomass              Outreach and support for  ..............       5,000,000       5,000,000
 Partnerships.                           regional bioenergy
                                         projects.
                                                                 -----------------------------------------------
      TOTAL...........................  ........................      72,000,000      78,000,000     150,000,000
----------------------------------------------------------------------------------------------------------------

    Build U.S. leadership in biomass science and technology through 
mission-oriented bioenergy research.--BERA recommends 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 the national laboratories should 
facilitate coordinating this research, increased support for U.S. 
scientists and engineers in industry, academe, and research institutes 
will encourage commercialization of emerging technologies and serious 
consideration of new ideas. It will also help to build the skilled 
workforce, scientific community, and state-of-the-art research 
platforms needed to support a future domestic bioenergy industry.
    Utilization of platform outputs R&D, core technologies for fuels, 
chemicals and electricity.--In the past EERE has focused on competitive 
selection of R&D projects based on an analytical effort that identified 
the top 12 building block chemicals that can be produced from sugar 
intermediates via biological or chemical conversions. BERA urges that 
this effort focus instead on efficient and economical production of 
liquid fuels and commodity organic chemicals, which have established 
markets, rather than high-value chemicals, which are either new 
products without established markets or specialty chemicals with niche 
markets. Biomass-derived fuels and chemicals, with the ability to co-
produce electricity, will have a greater probability of reducing fossil 
fuels consumption. BERA urges that this effort include continuing 
research on sugar intermediates and be expanded to include direct 
conversion of other intermediates and biomass to fuels and commodity 
organic chemicals.
    State and Regional Partnerships (Formerly Regional Biomass Energy 
Program).--The State & Regional Partnerships (SRP) was created to 
succeed the Regional Biomass Energy Program (RBEP) which functioned as 
a biomass outreach program for 20 years. The SRP serves an important 
function at the State level in promoting the use of biomass fuels. BERA 
strongly urges that the SRP be continued in fiscal year 2007.

                   BIOMASS AND BIOPRODUCTS INITIATIVE

    The goal of the Biomass and Bioproducts Initiative (BBI), created 
through ``The Biomass Research and Development Act of 2000'' and Title 
IX of the Farm Bill, was to triple the use of bioenergy and biobased 
products. Congress has provided annual funding for the BBI since fiscal 
year 2000. BERA strongly urges that the BBI be continued in fiscal year 
2007 at the funding levels recommended by BERA for the cost-shared 
demonstration projects shown in Table 1.
    BERA congratulates DOE and USDA for the cooperation and joint 
coordination of the programs of each department to increase the use of 
biomass for production of affordable fuels, electricity, and products. 
To meet accelerated goals for biofuels, the BBI must be fully 
incorporated into DOE's and USDA's biomass research programs. Large, 
strategically located, energy plantations are ultimately envisaged in 
which waste biomass and harvested biomass production systems are 
integrated with biorefineries and operated as analogs of petroleum 
refineries to afford flexible slates of multiple products from multiple 
feedstocks and to co-produce electricity.
    BERA also recommends that implementation of the BBI should include 
identification of each Federal agency that provides funding related to 
biomass energy development and their programs and expenditures, as is 
done by DOE and USDA. This on-going activity should be expanded to 
include other Federal agencies and organizations (e.g., Environmental 
Protection Agency, Department of Transportation, Department of 
Commerce, National Science Foundation) to help fine-tune the critical 
pathways to program goals, to coordinate R&D efforts, and to maximize 
the return on RD&D investment.
                                 ______
                                 
             Prepared Statement of Florida State University

    Summary of Request.--Electric Power Infrastructure--Security 
Research & Development; Agency.--Energy and Water (Dept. of Energy); 
Program.--Electricity Transmission and Distribution; Fiscal Year 2007 
Request.--$3,500,000. We respectfully request the committee consider 
directing DOE to continue the funding committed to scientists already 
working on DOE-funded projects in the Ocean Carbon Sequestration 
Program administered by the Office of Biological and Environmental 
Research.
    Mr. Chairman, I would like to thank you and the members of the 
subcommittee for this opportunity to present testimony before this 
committee. I would like to begin by strongly endorsing the President's 
fiscal year 2007 budget proposal that focused on substantial increases 
in research funding for the Department of Energy's Office of Science. 
The research funding provided by that Office for the physical sciences 
and engineering is critical to our Nation's future. The approximately 
14 percent increase proposed by the President as part of his American 
Competitiveness Initiative is sorely needed by the research community 
as an investment in our future security. It is our hope that this 
subcommittee could support this effort in your fiscal year 2007 budget 
plan.
    Next, I would like to take a moment to briefly acquaint you with 
Florida State University. Located in Tallahassee, Florida's capitol, 
FSU is a comprehensive Research I university with a rapidly growing 
research base. The University serves as a center for advanced graduate 
and professional studies, exemplary research, and top-quality 
undergraduate programs. Faculty members at FSU maintain a strong 
commitment to quality in teaching, to performance of research and 
creative activities, and have a strong commitment to public service. 
Among the current or former faculty are numerous recipients of national 
and international honors including Nobel laureates, Pulitzer Prize 
winners, and several members of the National Academy of Sciences. Our 
scientists and engineers do excellent research, have strong 
interdisciplinary interests, and often work closely with industrial 
partners in the commercialization of the results of their research. 
Florida State University had over $182 million this past year in 
research awards.
    Florida State University attracts students from every State in the 
Nation and more than 100 foreign countries. The University is committed 
to high admission standards that ensure quality in its student body, 
which currently includes National Merit and National Achievement 
Scholars, as well as students with superior creative talent. We 
consistently rank in the top 25 among U.S. colleges and universities in 
attracting National Merit Scholars to our campus.
    At Florida State University, we are very proud of our successes as 
well as our emerging reputation as one of the Nation's top public 
research universities.
    Mr. Chairman, let me tell you about our primary interests today.
    Recent large-scale failures in the electrical grid systems of North 
America and Europe have made us aware of the critical nature of our 
dependence on the availability of electrical power. A contributing 
factor to these failures was a lack of detailed understanding of the 
system dynamics in response to an initial minor disturbance. Lack of 
investment in power systems grids over the last 20-30 years has eroded 
the redundancy traditionally built into the system by allowing load 
increases without an equivalent growth in the supporting transmission 
network, control sophistication or distributed generation capability. 
Over the same time, the lack of investment in R&D resulted the closure 
of many power engineering educational programs. Authoritative estimates 
suggest that in 2002 only 500 bachelor's degrees in power engineering 
were awarded in the United States.
    The proposed research activities within this System-wide project 
will build on existing expertise at FSU, other universities within 
Florida, and several of Department of Energy's National Laboratories. 
The research will focus specifically on critical issues associated with 
bringing modernization to the U.S. electric grid. Many of the projects 
will have industrial partners, thereby ensuring rapid technology 
transfer from research-to-practice. These activities include:
  --Employing the real time digital simulator capability--present and 
        future--at FSU/CAPS to be able to simulate the real-time 
        behavior of a portion of a regional grid and its 
        interconnections to better understand the areas of 
        vulnerability for major outages and cascading failures. It is 
        envisioned that this will become a national user facility with 
        remote access capability over high-speed connections.
  --Use of the real-time digital simulator through comparisons of 
        concurrent real time modeling and an actual system to assess 
        new technologies, including energy storage, intelligent agent 
        based controls, operating procedures, improved analytical and 
        simulation techniques, and security assessment of SCADA 
        systems.
  --Advanced materials R&D for superconductivity applications in power 
        systems. Some of the areas of research include the 
        characterization of the engineering behavior of superconducting 
        conductors, and development of advanced insulation materials 
        specifically geared for low-temperature environments.
    In a second area of interest, you are probably aware that 
industrial by-products have increased the concentration of carbon 
dioxide in the atmosphere from 290 to 380 parts per meter over time. 
This increase has been implicated in the rise of global temperature 
because carbon dioxide interferes with the re-radiation of solar energy 
back into space. One way to reduce the rate of increase of carbon 
dioxide in the atmosphere is to collect it from industrial sources and 
store it, for example, in the deep ocean (Intergovernmental Panel on 
Climate Change, 2006). The wisdom of this option is unclear because 
little is known about the environmental consequences. The United States 
Department of Energy (DOE) has been funding research to fill this 
knowledge gap. In one case, DOE funded an initial 3-year grant and a 3-
year renewal for a cooperative effort between Louisiana State 
University and Florida State University. This team is assessing the 
sensitivity of deep-sea animals to carbon dioxide-rich seawater; is 
studying the seafloor area that would be exposed to carbon dioxide-rich 
seawater during full-scale ocean storage and to assess the risk 
extinction; and is investigating its effects of carbon dioxide-rich 
seawater on similar species that live in shallow water, which are 
easier and cheaper to study.
    The DOE fiscal year 2007 Congressional Budget Request eliminates 
funding for the Ocean Carbon Sequestration Program administered by the 
Office of Biological and Environmental Research, which supports the 
research. Many of the benefits from DOE's investment in this important 
area of research will be lost if funding is terminated. We respectfully 
request the committee consider directing DOE to continue the funding 
committed to scientists already working on DOE-funded projects in this 
area.
    Mr. Chairman, we believe this research is vitally important to our 
country and would appreciate your support.
                                 ______
                                 
   Prepared Statement of the University Corporation for Atmospheric 
                                Research

    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 Development.
    UCAR is a 69-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 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' support for the DOE Office of Science, and enthusiastically 
supports the inclusion of the DOE Office of Science in the American 
Competitiveness Initiative within the President's budget request for 
fiscal year 2007. 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 supports unique and vital parts of U.S. 
research in climate change, geophysics, genomics, life sciences, and 
science education. The prospect of halting the recent slide in research 
funding within DOE and actually doubling the agency's research budget 
holds great promise for DOE's investment in and contribution to our 
Nation's future.
    I urge the subcommittee to fund the DOE Office of Science at the 
level of the President's fiscal year 2007 budget request, or $4.1 
billion, and to enable the agency to apply that entire 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. The 
President's BER request for fiscal year 2007 is $510.3 million, an 
approximate increase of $60.5 million over fiscal year 2006 funding 
when fiscal year 2006 congressionally directed programs are removed. 
While this is a healthy increase, it should be seen in the context of 
past appropriations and the decline of BER funding that has taken place 
over the past several years. The fiscal year 2005 final appropriation 
for BER was $502.0 million with add-ons subtracted. The fiscal year 
2007 request therefore makes up much ground lost recently, but does not 
get BER back to level funding when inflation is factored in.
    Peer-reviewed research programs at universities, national 
laboratories, and private institutions play a critical role in the BER 
program by involving the best researchers the Nation has to offer, and 
by developing the next generation of researchers. Approximately 27 
percent of BER basic research funding supports university-based 
activities directly and 40 percent supports basic research at national 
laboratories. 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 2007 budget 
request, or $510.3 million, and to enable BER to apply that entire 
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 
contributes substantially to the Nation's Climate Change Research 
Initiative (CCRI) goals of understanding and predicting climate change, 
including its causes and consequences. The long-term DOE goal is to 
deliver improved climate data and models for policy makers and to 
substantially reduce differences between observed temperature and model 
simulations at regional scales. This work is critical to the ability of 
policy makers and stakeholders to provide stewardship resulting in a 
healthy planet--and it is particularly important as signs of 
increasingly dramatic change in our climate and environment appear. The 
Climate Change Research Request of $134.9 million is a 4.6 percent 
decrease from the fiscal year 2006 appropriated level at a time when 
the request for BER is up 13.4 percent after congressionally directed 
projects are removed. I urge the subcommittee to fund Climate Change 
Research at an fiscal year 2007 level that is consistent with the 
request for BER stated above, and to enable DOE to apply the entire 
amount toward planned national research priorities.

Advanced Scientific Computing Research (ASCR)
    Within DOE's Office of Science, the Advanced Scientific Computing 
Research program delivers leading edge computational and networking 
capabilities to scientists nationwide enabling 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. Development of this capacity is a key component 
of DOE's strategy to succeed in its science, energy, environmental 
quality, and national security missions.
    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 
compiling its Fourth Assessment Report to be completed in 2007, and 
ASCR's contribution to this international document is critical. 
Therefore, it is encouraging to see the increase for ASCR in the 
President's request for fiscal year 2007. I urge the committee to 
support the President's fiscal year 2007 request of $318.6 million for 
DOE Advanced Scientific Computing Research, and to enable DOE to apply 
the entire amount toward planned national priorities.
    Within ASCR, two programs are of particular importance to climate 
change computer modeling work: the National Energy Research Scientific 
Computing Center (NERSC) operated by Lawrence Berkeley National 
Laboratory, and the Energy Sciences Network (ESnet). NERSC is the high 
performance production computing facility for the Office of Science, 
serving thousands of scientists throughout the country at laboratories, 
universities, and other Federal agencies. Computing time is awarded to 
research groups based on peer review of submitted proposals. NERSC 
represents an important element of the administration's American 
Competitiveness Initiative strategy as outlined in the President's 
State of the Union address referencing the doubling of ``the federal 
commitment to the most basic research programs in the physical sciences 
over the next ten years. This funding will support the work of 
America's most creative minds as they explore promising areas such as 
nanotechnology, supercomputing, and alternative energy sources.''
    ESnet enables researchers at laboratories, universities and other 
institutions to communicate with each other using collaborative 
capabilities that are unparalleled. This high-speed network enables 
geographically distributed research teams to collaborate effectively on 
some of the world's most complex problems. Researchers from industry, 
academia and national labs, through this program, share access to 
unique DOE research facilities, support the frequent interactions 
needed to address complex problems, and speed up discovery and 
innovation. The fiscal year 2007 budget request will enable DOE to 
deliver a network with two to four times the capability of today's 
ESnet.
    NERSC and ESnet play complementary roles in advancing the complex 
and challenging science of climate change and other scientific areas of 
extreme importance to the security and quality of life of our citizens. 
I urge the committee to support the President's fiscal year 2007 
requests of $54.79 million for the National Energy Research Scientific 
Computing Center (NERSC), and $22.7 million for the Energy Sciences 
Network (ESnet).
    DOE plays a vital role in sustaining U.S. scientific leadership and 
generating U.S. competitiveness in a time when other countries are 
investing heavily in scientific research and technology. On behalf of 
UCAR and the atmospheric sciences research community, I want to thank 
the subcommittee in advance for your attention to the recommendations 
of our community concerning the fiscal year 2007 budget of the 
Department of Energy. We understand and appreciate that the Nation is 
undergoing significant budget pressures at this time, and support 
absolutely the effort to enhance U.S. security and quality of life 
through the American Competitiveness Initiative, of which the DOE 
Office of Science is a critical component.
                                 ______
                                 
  Prepared Statement of the Association of U.S. Petroleum Engineering 
                            Department Heads

    We are a committee of Department Heads for Petroleum Engineering 
departments in the United States. We are writing to inform the 
committee of the drastic harm that will be done to Petroleum 
Engineering education in the United States unless the appropriation for 
oil and natural gas technologies programs in the fiscal year 2007 
Department of Energy budget is restored to at least its fiscal year 
2006 appropriated level of $64 million. This program provides the 
largest single source of funding for the research and graduate 
education in Departments of Petroleum Engineering and related 
disciplines throughout the United States. It directly benefits the 
Nation in improved recovery from domestic oil and natural gas fields, 
with a particular focus on providing research support for independents, 
who are without their own large research organizations. Beyond that, it 
directly benefits the education of both graduate and undergraduate 
students in Petroleum Engineering, and thereby helps provide the 
technical expertise that will be crucial as oil and natural gas 
supplies become more and more scarce and precious.
    In all estimates made by the Energy Information Administration, oil 
and gas will serve as the major sources of energy to fuel our economy 
for the foreseeable future. Enhancing the domestic production requires 
innovative and advanced technologies to raise the recovery factor from 
the U.S. mature fields to well above 60 percent and to tap 
unconventional oil and gas resources. This is the only way we can buy 
the 50-75 years that it may take to realize economical access to the 
alternatives to oil and gas. Major oil companies, with their main focus 
on their international operations, are gradually pulling out of the 
U.S. oilfields and are not investing sufficiently in the university 
research needed to train the U.S. work force. Scientific training of 
the oil and gas work force is a task best done by the Petroleum 
Engineering departments in this country and requires the continuous 
support of the U.S. DOE.
    One cannot maintain excellence in education at a research 
university without funding for research for faculty to refine their 
skills and for graduate-student education. No other program in the 
Federal Government provides support for the broad range of topics in 
Petroleum Engineering provided by this program. No other discipline in 
the sciences or engineering is expected to fund long-term research 
without help from the Federal Government. The loss of this DOE program 
would cripple Petroleum Engineering education throughout the United 
States.
    The need to support Petroleum Engineering education in the United 
States is severe. The loss of Petroleum Engineering programs in the 
United States has become a critical problem. In 1986 there were more 
than 30 accredited Petroleum Engineering programs in the United States. 
Today the United States is left with only 18. In the mid-1980's, during 
the last oil-price rise, there were over 1,400 graduates per year in 
Petroleum Engineering; today there are only about 375 students 
graduating from Petroleum Engineering programs. The average age of 
petroleum engineers working in the United States is 52; the number of 
students we are graduating from our current programs is not enough to 
replace the retiring engineers, let alone expand the work force. This 
has led to a shortage of petroleum engineers and, hence, fierce 
competition among the oil companies. More important, unlike 1980's, 
when most of the oil companies who could hire other types of engineers 
and train them to be petroleum engineers through internal training 
programs, do not have those training programs. All companies coming on 
campus today prefer to hire petroleum engineers, hence the demand will 
continue to grow. Another key difference from 1980's is that unlike 
most of the oil companies that time, who actively had internal research 
programs, companies today have largely abandoned research activities to 
the universities and service companies. This has further increased the 
need for conducting both fundamental and applied research in Petroleum 
Engineering Departments. We need the support of DOE for fulfilling this 
role.
    Most conventional oil and natural gas reserves have already been 
discovered. We are going to need more expertise and technology to 
explore and exploit the more challenging, unconventional resources that 
still exist, if we are to meet America's future energy needs. If these 
programs so vital to the training of the professionals that provide our 
energy needs are cut, the United States will be even more dependent on 
oil and natural gas supplied from overseas, much of it from unstable 
regions of the world.
    The petroleum and natural gas industries have a multi-billion 
dollar impact on the U.S. economy, and over 400,000 U.S. citizens have 
good-paying jobs because of the petroleum industry. The demands for oil 
and natural gas continue to grow each year, with an expected annual 
increase of at least 2 percent in the foreseeable future. Large amounts 
of oil from mature or unexplored basins in the United States can be 
produced with improved technology that can be developed under the DOE 
oil and gas technologies program.
    We urge you to support this important appropriation that will 
provide the citizens of this great country the needed access to the 
products and services that make the United States the most 
technologically advanced country in the world. We encourage you and 
your fellow Senators on the committee to restore the fiscal year 2007 
appropriation for DOE oil and gas technologies programs to their fiscal 
year 2006 level of $64 million.
            Respectfully,
                                          Dr. Mohan Kelkar,
     The University of Tulsa, on behalf of the Association of U.S. 
                            Petroleum Engineering Department Heads:
                                             Dr. Sam Ameri,
                                           West Virginia University
                                             Dr. Bob Chase,
                                                   Marietta College
                                     Dr. Shari Dunn-Norman,
                                      University of Missouri--Rolla
                                         Dr. Thomas Engler,
                        New Mexico Institute of Mining & Technology
                                         Dr. Iraj Ershaghi,
                                  University of Southern California
                                        Dr. Turgay Ertekin,
                                              Penn State University
                                         Dr. Ali Ghalambor,
                                 University of Louisiana--Lafayette
                                          Dr. Lloyd Heinze,
                                              Texas Tech University
                                        Dr. Steve Holditch,
                                               Texas A&M University
                                          Dr. Roland Horne,
                                                Stanford University
                                          Dr. Mohan Kelkar,
                                            The University of Tulsa
                                     Dr. Santanu Khataniar,
                                    University of Alaska--Fairbanks
                                           Dr. Dean Oliver,
                                             University of Oklahoma
                                        Dr. William Rossen,
                                      University of Texas at Austin
                                           Dr. Steve Sears,
                                         Louisiana State University
                                      Dr. Jalal Torabzadeh,
                            California State University--Long Beach
                                        Dr. Craig Van Kirk,
                                           Colorado School of Mines
                                   Dr. Laurence Weatherley,
                                              University of Kansas.
                                 ______
                                 
 Prepared Statement of the United States Advanced Ceramics Association

    Chairman Domenici, Ranking Member Reid and honorable members of the 
committee, on behalf of the members of the U.S. Advanced Ceramics 
Association (USACA), I would like to thank you for the opportunity to 
submit testimony on the funding for Science Research in the Department 
of Energy's fiscal year 2007 Congressional Budget Request. We would 
like to propose a comprehensive and cost-effective means of defining 
national needs for advanced, high temperature ceramic materials--a 
study during fiscal year 2007 to complete a Technology Investment 
Roadmap for Advanced Ceramics. This would be included under the 
American Competitiveness Initiative. We request $375,000 for an 
independent report to Congress, to be completed by February 15, 2007, 
that would explore and design a competitive, multi-year Federal and 
industry cost-shared program to research, demonstrate and develop 
advanced ceramics. An advisory oversight panel would be formed, and 
USACA would retain an independent contractor to perform the analytical 
work.
    For over 20 years, we have been an association dedicated to 
pursuing the research, development and demonstration of advanced 
ceramic materials in many and varied aerospace, defense and energy 
applications. Our members have plants and facilities in over 45 
Congressional Districts and 20 States.

                                SUMMARY

    My testimony will make the following points that reflect USACA's 
policy priorities:
  --Support for the concepts in the President's American 
        Competitiveness Initiative;
  --Added funding needed for a Technology Investment Roadmap for 
        Advanced Ceramics.
    The U.S. Advanced Ceramics Association (USACA) believes in the 
enduring ability of U.S. technology to create jobs and enhance our 
energy security. We strongly support the President's American 
Competitiveness Initiative announced in the State of the Union address 
and as part of the Department of Energy's fiscal year 2007 Budget 
Request to Congress. As Secretary Samuel Bodman explained, ``We need to 
restore U.S. dominance in the physical sciences . . .'' and ``Materials 
Science'' is an explicit part of this planning.
    We would like to suggest some possible report language for the 
Energy and Water Appropriations bill that: directs the Secretary to 
``initiate a Technology Investment Roadmap for Advanced Ceramics, to be 
completed by February 15, 2007. This study shall explore and design a 
competitive, multiyear cost shared program with industry to research, 
demonstrate and develop advanced ceramic materials.''
    In the past three decades, breakthroughs in advanced ceramics have 
enabled significant new technology capabilities that are now having 
far-reaching impacts on the U.S. economy and defense capability. For 
example, ceramic catalytic converters are responsible for dramatically 
reducing automobile emissions. Long-life bearings are used in a wide 
range of high-performance energy and military applications to improve 
overall system performance and reduce friction, while ceramic armor 
plates are stopping bullets and shrapnel and saving the lives of 
soldiers and police. The technological breakthroughs that have made 
these life-changing innovations possible are the direct result of 
sustained RD&D investment by both industry and government.
    Now, the challenges for advanced ceramics are growing, fueled by 
the need to create alternative energy technologies, more efficient, 
cleaner environmental systems, and higher performance military and 
aerospace systems. The Nation needs more from the industry, but there 
are some critical ceramic technologies that are still left in the early 
stages of product innovation cycles, and promising ideas sit in dark 
closets.

                 WHAT VALUE DO ADVANCED CERAMICS BRING?

    Advanced ceramics are enabling materials and provide added 
performance and value to manufactured products. Ceramics can withstand 
extreme heat, high pressures and corrosive environments. They are 
simultaneously lightweight, strong, and durable. These attributes 
result in more efficient power conversion for many different methods 
and fuels, including hydrogen fuel cells, nuclear power, gas turbines 
and other engines. They also translate into tougher materials that can 
withstand the high temperatures of coal combustion systems, the 
extremes of jet engine turbines, and the force of an enemy bullet or 
roadside bomb.
    There are several key reasons why research, development and 
demonstration of advanced ceramics materials are premium public 
investments, including:
  --Advanced ceramics can increase U.S. industry competitiveness in 
        several key global technology markets. Investments here will 
        reverse the trend toward the movement of U.S. technology 
        offshore to foreign enterprises.
  --Investments will retain and expand U.S. jobs in new product 
        manufacturing.
  --The materials can tolerate the very high temperatures necessary for 
        the most efficient and cleanest energy conversion technologies, 
        whether hydrogen production from abundant domestic coal 
        resources, or advanced nuclear reactors.
  --The direct benefits will help to reduce energy consumption and 
        carbon emissions in markets served over the next 20 years.
  --Investments here would significantly reduce the normal 15-20 year 
        product development and introduction cycle for advanced 
        materials, speeding their use in critical energy and defense 
        applications.
    The Roadmap would have several purposes:
  --examine the history and effectiveness of Federal and industry cost-
        shared investments already made in advanced ceramics research 
        and development;
  --highlight key factors in the success of criteria projects;
  --identify the critical future applications for both civil and 
        military needs;
  --explore new types of partnership arrangements between industry and 
        government, management alternatives and incentives for early 
        market transition and Federal purchase;
  --recommend to the Congress a multiyear, competitive, premium public 
        investment strategy for the research, development, 
        demonstration and deployment of advanced ceramics in critical 
        applications.
    We hope that this proposal warrants your support in the fiscal year 
2007 Federal budget. We thank you for your strong interest in the 
advancement of technology, and its critical role in economic growth and 
national security.
    On behalf of USACA members: Ceramic Tubular Products, LLC; Clariant 
Technologies; COI Ceramics, Inc.; Corning, Inc.; Deere and Co.; Extreme 
Composite Products, Inc.; GE Power Systems Composites, LLC; Goodrich 
Corporation; KiON Defense Technologies; Refractron Technologies 
Corporation; Saint-Gobain High-Performance Materials; Siemens Power 
Generation; Starfire Systems, Inc.; Surmet Corporation; Synterials, 
Inc.; UT-Battelle.
                                 ______
                                 
 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 written perspective on the fiscal year 2007 budget for 
oil and natural gas research and development (R&D) programs within the 
subcommittee's jurisdiction.
    The administration's budget submitted earlier this year contains 
significant reductions for the Department of Energy (DOE), Office of 
Fossil Energy, including the elimination of the oil and gas technology 
programs. AAPG requests restoration of funding for DOE Fossil Energy 
oil and natural gas technology programs as a matter of national policy. 
AAPG endorses restoration of DOE's oil and natural gas research program 
funding to at least 2006 levels of $64 million. AAPG also endorses full 
funding for the Energy Policy Act of 2005 initiative titled Ultra-
Deepwater and Unconventional Natural Gas and other Petroleum Resources 
at $100 million. The AAPG firmly supports funding of the methane 
hydrates technology program (reauthorized in the Energy Policy Act of 
2005) at $20 million.
    AAPG, an international geoscience organization, is the world's 
largest professional geological society representing over 30,000 
members. In the United States we have more than 20,000 members, the 
majority of whom are independents or consultants to the domestic 
petroleum industry. The purpose of AAPG is to advance the science of 
geology, foster scientific research, promote technology and advance the 
well-being of its members. Included among its members are numerous 
CEOs, managers, directors, independent/consulting geoscientists, 
educators, researchers, public servants and students. AAPG strives to 
increase public awareness of the crucial role that geosciences, and 
particularly petroleum and coal geology play in energy security and our 
society.
    AAPG applauds the administration's efforts to enhance research in 
areas that diversify the options to supply energy in our economy. AAPG 
supports the continued efforts to develop technologies to conserve 
energy and technologies that will permit the economy to perform more 
efficiently with reduced energy input. However, as a professional 
organization, AAPG's 30,000 members understand that fossil fuels will 
continue to be a mainstay of the U.S. energy economy and the world's 
energy economy for decades to come. Moreover, oil and natural gas will 
provide many of the raw materials that allow us to function in our 
modern world.
    The Association does not support the oversimplified projection of 
the state of the industry as presented by the administration's budget 
submission. The projection does not accurately reflect the needs of the 
smaller companies and individuals who have supported DOE's efforts and 
have benefited from the historical research conducted under DOE's 
programs. They are the community of independent and small producers 
that drill the preponderance of the domestic wells, and produce the 
bulk of the domestic natural gas and crude oil. They are the community 
who reinvest their profits in the search and development of domestic 
resources. They are the community whose production serves the Nation's 
energy needs directly. They are the community for whom the DOE programs 
provide technology benefits that serve the American public, the Nation 
and its security.
    AAPG sees three vital needs that are supported by the DOE oil and 
natural gas R&D programs. First, the effort sustains long-term 
viability for recovery of the Nation's oil and natural gas endowment. 
Maintenance of domestic industry capability is vital to the security 
and well-being of the Nation. Second, publicly-funded research will 
promote and insure technology capabilities that continue to foster U.S. 
technical and economic preeminence in a rapidly changing global 
economy. Third and often understated is the fact that these programs 
contribute substantially to sustaining the institutions that educate, 
train and nurture a capable and efficient workforce for the Nation's 
energy industry.
    The AAPG believe that the justification for publicly-funded 
research remains strong and largely independent of the price at which 
crude oil and natural gas commodities trade in any particular time 
period. The primary recipients of the technology developed with public 
funds are those companies/individuals who have no accessible 
alternative mechanism for aggregating the resources which would foster 
that research. They are the community of independent and small 
producers, who drill 90 percent of the wells, produce 85 percent of the 
domestic natural gas and 60 percent of the domestic crude oil in the 
United States. They represent a large variety of engineers, geologists, 
and investors that are not represented by any single society or 
association. AAPG, with its extensive membership represents only one 
portion of the diverse community of professionals and skilled technical 
trades involved in producing the oil and gas resources that this Nation 
depends on. If anything is true, research is even more important in 
times of high oil prices, so that users of the technology developed 
from the research can translate in continued domestic production.
    Our Nation is the world's largest consumer and net importer of 
energy. According to the Energy Information Administration, during 
2005, the United States consumed 20.66 million barrels of oil per day, 
with as much as 15.2 million barrels supplied by imports of crude and 
products during November 2005. Our national energy and economic 
security depends on a vibrant domestic oil and gas industry. While the 
price of crude oil is established by a global market, the costs of 
exploration, development, and production are influenced strongly 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--it is important.
    During the recent past, energy companies as well as most companies 
have worked to reduce operating costs by adopting outsourcing 
approaches. This has caused an unfortunate side effect of outsourcing 
technical preeminence in a large number of areas where the United 
States has been a global science and technology leader. The AAPG 
believes that this phenomenon is increasingly recognized as a national 
security issue. While Legislative and Executive Branch initiatives are 
responding to the broad erosion of science and technology capability, 
focused initiatives like the DOE oil and natural gas R&D programs that 
have and will continue to foster our technology preeminence, should not 
be overlooked or sacrificed. Such programs have been successful in the 
past and should be continued for the Nation's energy well-being.
    Many of the more than 40 national and global geoscience-related 
professional organizations have reported shrinking and aging 
memberships over the past 2 decades. In the energy arena this is 
reflected in fewer and smaller, degree-granting, college and university 
departments and loss of technical training institutions associated with 
the industry. Currently, the demand for trained industry professionals 
and qualified trade specialists has grown in response to growing world-
wide demand for oil, natural gas and coal and yet the fossil fuel 
industry is facing serious shortages in trained and experienced 
employees.
    In effect, and for a number of reasons, the pipeline that has 
supplied this workforce is not working well. Historically, a 
significant portion of DOE's oil and natural gas R&D program has flowed 
to and through these educational and training institutions, where funds 
have supported faculty and attracted student researchers. No other 
Federal program contributes effectively to these needs. AAPG believes 
that funding DOE's oil and natural gas technology is absolutely vital 
to sustaining the supply of trained and experienced individuals in the 
petroleum industry workforce into this century. The lack of qualified 
graduates to replace our graying membership may become a national 
security issue within a decade if not addressed in the near term.
    The Association is aware of and endorses the approach to funding 
research and development outlined in the Energy Policy Act of 2005. It 
makes very good sense to our membership. Focusing DOE emphasis on 
longer-term technology development and on research that the industry 
would not ordinarily undertake within its purview, while providing a 
new focus that shifts other operationally-oriented research into the 
arena where the private sector plays a more important role in guiding 
and conducting research.
    AAPG supports funding for DOE R&D programs on natural gas hydrates; 
advanced recovery technologies; next-generation limited-footprint 
exploration and development technologies; fundamental studies that lead 
to better understanding of reservoir architecture, unconventional 
resources and continuous reservoirs; technology transfer to producers; 
and workforce training and university programs that ensure future 
critical national infrastructure capabilities. These programs 
contribute to the basic understanding of the resource, and pave the way 
for cleaner and lower-impact extraction of the energy resources vital 
to National security.
    Public support for technology transfer is an area that AAPG 
considers to be a viable use of public funds. In a number of areas like 
the Illinois Basin, the primary and sometimes the only source of 
information on new technologies is the Petroleum Technology Transfer 
Council. The efforts of the Council, funded under DOE's technology 
program and heavily fortified by academic participation, are easily 
accessed by smaller producers who lack the time, resources and 
knowledge to independently pursue technological improvements in their 
operations. Accelerating technology uptake is seen as a viable approach 
to more efficient discovery, more complete recovery, and reduction of 
the impact and footprint of oil and natural gas operation.
    Thank you for the opportunity to present this testimony to the 
committee.
                                 ______
                                 
         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 2007 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.
    In fiscal year 2006, the Federal Government abandoned its 50-year 
commitment to funding vital nuclear medicine research by eliminating 
funding for the Medical Applications and Measurement Science Program at 
DOE and making no accommodation to transition nuclear medicine programs 
to another Federal department. In past years, nuclear researchers have 
used Federal funding within DOE to make major accomplishments 
benefiting millions of patients with heart, cancer, and brain diseases. 
The loss of Federal funding for nuclear research will adversely impact 
future innovation in the field. For that reason, SNM advocates the 
immediate restoration of $37 million in funding for the Medical 
Applications and Measurement Science Program at the DOE. In the long 
term, SNM also believes that a permanent home and specific funding to 
support basic science research in nuclear medicine are essential; and 
SNM is prepared to work with the committee to identify such a home at 
DOE or another agency, such as the National Institutes of Health (NIH).

                       WHAT IS NUCLEAR MEDICINE?

    Nuclear medicine is an established specialty that performs 
noninvasive 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 20 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.

          LACK OF FEDERAL FUNDING THREATENS FUTURE INNOVATIONS

    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 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:
  --Smaller, More Versatile PET Scanners.--Brookhaven National 
        Laboratory (BNL) has completed a prototype mobile PET scanner, 
        which will record images in the awake animal. The mobile PET 
        will be able to acquire positron-generated images in the 
        absence of anesthesia-induced coma and correct for motion of 
        the animal. The long-term goal is to develop PET 
        instrumentation able to diagnose neuro-psychiatric disorders in 
        children.
  --Highest Resolution PET Scanner Developed.--Scientists at the 
        Lawrence Berkeley National Laboratory (LBNL) have developed the 
        world's most sensitive PET scanner. The instrument is 10 times 
        more sensitive than a conventional PET scanner and became 
        operational in 2005.
  --Imaging Gene Expression in Cancer Cells.--Images of tumors in whole 
        animals that detect the expression of three cancer genes were 
        accomplished for the first time by investigators at Thomas 
        Jefferson University and the University of Massachusetts 
        Medical Center. This advanced imaging technology will lead to 
        the detection of cancer in humans using cancer cell genetic 
        profiling.
  --Modeling Radiation Damage to the Lung.--Treatment of thyroid 
        disease and lymphomas using radioisotopes can cause disabling 
        lung disease. Investigators at Johns Hopkins University have 
        developed a Monte Carlo model that can be used to determine the 
        probability of lung toxicity and be incorporated into a 
        therapeutic regimen. This model will optimize the dose of 
        radioactivity delivered to cancer cells and avoid untoward 
        effects on the lung.
  --New Radiopharmaceuticals With Important Clinical Applications.--The 
        DOE radiopharmaceutical science program has developed a number 
        of innovative radiotracers at the University of California at 
        Irvine for the early diagnosis of neuro-psychiatric illnesses, 
        including Alzheimer's disease, schizophrenia, depression, and 
        anxiety disorders.
  --Rapid Preparation of Radiopharmaceuticals for Clinical Use.--The 
        DOE-sponsored program at the University of Tennessee has 
        developed a new method for preparing radiopharmaceuticals by 
        placing a boron-based salt at the position that will be 
        occupied by the radiohalogen. The method has been used to 
        prepare a variety of cancer-imaging agents.
    With restored DOE funding, essential molecular/nuclear medicine 
research will continue at universities, research institutions, national 
laboratories, and small businesses. Moreover, research with 
radiochemistry, genomic sciences, and structural biology will be able 
to usher in a new era of mapping the human brain and using specific 
radiotracers and instruments, to more precisely diagnose neuro-
psychiatric 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. 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.
    In addition, to gain the full benefits of nuclear medicine, it is 
important to ensure that nuclear medicine researchers have a steady 
supply of radionuclides. One way to accomplish this goal would be to 
create a National Radionuclide Enhancement Production program at the 
DOE that would meet the Nation's medical and homeland security needs.

                               CONCLUSION

    By restoring funding to the Medical Applications and Measurement 
Science Program at the DOE or by making an appropriate provision for 
nuclear research funding within another Federal department, policy 
makers will keep our Nation at the forefront of nuclear medicine 
research and innovation. We thank you for the opportunity to present 
our views on funding for these initiatives at the DOE and would be 
pleased to answer any questions you may have.
                                 ______
                                 
      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). We appreciate the opportunity to submit this statement 
outlining our fiscal year 2007 funding priorities within the Energy and 
Water, and Related Agencies Subcommittee's jurisdiction.

             FEDERAL POWER MARKETING ADMINISTRATIONS (PMAS)

    Power Marketing Administration Interest Rate Proposal.--The 
administration's fiscal year 2007 budget includes a recommendation that 
would raise electricity rates by changing the interest rate charged by 
the Southeastern Power Administration (SEPA), the Southwestern Power 
Administration (SWPA), and the Western Area Power Administration (WAPA) 
on all new investments in projects whose interest rates are not set by 
law. Specifically, the Department of Energy's (DOE) budget calls for 
the these three Power Marketing Administrations (PMAs) to set their 
interest rates at the level that government corporations pay to borrow 
funds from the Federal Government. To implement this proposal, DOE will 
amend the regulation that governs how the PMAs establish their rates 
and will do so administratively, without any consultation with or 
action from Congress.
    The administration's budget proposes to increase the interest rate 
charged on all new investments in these hydroelectric facilities to a 
level that is charged government corporations--the rate that reflects 
the interest cost for the Federal Government to provide loans to 
government corporations. SEPA, SWPA and WAPA are neither government 
corporations nor do they borrow funds from the U.S. Treasury. All rates 
are set to recover the dollars appropriated by Congress for the 
investment in the hydroelectric facilities and to cover the cost to 
operate these projects. If implemented, this proposal could increase 
rates considerably for customers served by most of the Power Marketing 
Administrations.
    This proposal creates a serious precedent and should be rejected, 
because: (1) the process for implementing the proposal can be done 
without congressional involvement or approval; (2) the proposal would 
arbitrarily raise revenue from electric customers for deficit 
reduction; and (3) the proposal reverses decades of rate making 
precedent and accepted cost recovery practices by administrative fiat. 
We urge the subcommittee to block the implementation of this proposal.
    Bonneville Power Administration Rate Proposal.--Also included in 
DOE's fiscal year 2007 budget is a proposed administrative action that 
would direct the Bonneville Power Administration (BPA) to use any net 
``secondary market revenues'' in excess of $500 million per year 
towards accelerated Federal debt repayment. Because the change would be 
made through the rulemaking process, congressional approval is not 
needed for the policy to go into effect. The Office of Management and 
Budget (OMB) calculates that this plan would provide a total of $924 
million from fiscal year 2007-2016 from these ``higher-than-historical 
net secondary revenues.'' OMB believes that this measure is needed to 
free up BPA borrowing authority. However, experts in the Northwest have 
calculated that the proposal would result in a 10 percent wholesale 
rate increase that BPA would be forced to pass on to ratepayers. The 
Congressional Budget Office has calculated that the effect of the 
administration's proposal on the U.S. Treasury would be $300 million 
over 10 years beginning in 2008, which means it will have no impact on 
the 2007 fiscal year budget. We urge the subcommittee to block the 
implementation of this proposal.
    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. We agree with the administration's budget requests for 
PP&W for fiscal year 2007, which are as follows: $274.9 million for 
Western Area Power Administration (WAPA); $34.4 million for 
Southeastern Power Administration (SEPA); and $3 million for 
Southwestern Power Administration (SWPA).
    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, the Bureau initially determined that the costs 
of increased security measures should remain a non-reimbursable 
obligation of the Federal Government. In fiscal year 2005, however, the 
Bureau reversed its position and asked for some of these costs to be 
reimbursed from power customers. That year, Congress disagreed with the 
Bureau's request that these expenses be reimbursable, but in the Energy 
and Water Development Appropriations Act of 2006 (HR 2419, November 7, 
2005), Congress directed that $10 million of the estimated $18 million 
for guards and patrols be provided by reimbursable funding. The bill 
also directed the Bureau to provide a report to Congress within 60 days 
that would delineate the planned reimbursable security costs by 
project. The report (issued in March 2006) is similar to the previous 
(May 2005) report, except that it also includes ``facility 
fortification upgrades'' as a reimbursable cost. Previously, the Bureau 
had assured its stakeholders that only the costs of guards and patrols 
would be reimbursable. This additional obligation in essence makes 
everything reimbursable at some point. Regardless of the details of the 
Bureau's report, APPA continues to believe in the validity of 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. We therefore urge Congress to add language to the Energy 
and Water Development Appropriations Act of 2007 to clarify that all 
costs of increased security at dams owned and operated by the Bureau be 
non-reimbursable.
    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, 
and was recently reauthorized through 2016 in the Energy Policy Act of 
2005 (EPAct05). EPAct05 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 (1.9 cents when adjusted for inflation) from 
electricity generated from a variety of renewable projects. According 
to DOE sources, in order to fully fund all past and current REPI 
applicants, over $80 million would be needed for fiscal year 2007. 
Despite the demonstrated need, however, DOE has asked for only $4.96 
million for fiscal year 2007, 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 either 
at or 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.
    Energy Information Administration.--In order to fulfill the Energy 
Information Administration's (EIA) data collection responsibility in 
regard to the electric power industry, it 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 could be reinstated if EIA chose to 
allocate a portion of its budget to the collection of the EIA-412 data. 
We urge the subcommittee to encourage the EIA to provide funding for 
this form in fiscal year 2007 within the context of its overall 
appropriation. The indefinite 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 $544.5 
million for fiscal year 2007 for the nuclear waste repository at Yucca 
Mountain is a step in the right direction and we encourage the 
subcommittee to provide funding for the project at or above the 
administration's request.
    Advanced Hydropower Turbine Program.--APPA is disappointed with the 
administration's decision to phase out this important program 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 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 2007.
    Weatherization and Intergovernmental Activities.--APPA supports the 
administration's request of $225 million for fiscal year 2007 for 
helping to increase the efficiency of commercial and residential 
buildings, including weatherization assistance, the State and community 
energy conservation programs.
    Clean Coal Power Initiative and FutureGen.--APPA is disappointed 
with the administration's request of only $5 million for fiscal year 
2007 for the Clean Coal Power Initiative. We urge the subcommittee to 
substantially increase the funding for this program to be consistent 
with the President's commitment to fund this program at $2 billion over 
10 years. We also urge the subcommittee to provide $54 million in new 
funding for fiscal year 2007 for the FutureGen program, as opposed to 
drawing from deferred funds from fiscal year 2006 as the administration 
proposes.
    Distributed Generation Fuel Cells.--APPA is disappointed with the 
administration's request of $63.35 million for fiscal year 2007 for 
distributed generation fuel cell research and development, and urges 
the subcommittee to allocate additional funding for this program.
    Hydrogen Fuel Initiative and Vehicle Technologies.--APPA supports 
the administration's efforts to improve the feasibility of making 
available low-cost hydrogen fuel cells, and support its request of 
$289.5 million for hydrogen research and development in fiscal year 
2007. APPA also supports the administration's request for $166 million 
for vehicle technologies that would apply hydrogen fuel cell technology 
to vehicles as well as provide for research for hybrid and electric 
vehicle technologies to facilitate widespread deployment of these 
technologies.
    Navajo Electrification Demonstration Program.--APPA supports full 
funding for the Navajo Electrification Demonstration Program at its $15 
million authorized funding level for fiscal year 2007. 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 only requested $1 
million for fiscal year 2007 for the policy office of the National 
Climate Change Technology Initiative. We encourage the subcommittee to 
consider allocating additional funds for this program.
    Federal Energy Regulatory Commission (FERC).--DOE has requested 
$230.8 million for the overall operations of the Federal Energy 
Regulatory Commission (FERC) for fiscal year 2007. APPA supports this 
request, which is an appropriate increase over fiscal year 2006 given 
FERC's additional responsibilities under EPAct05.
                                 ______
                                 
           Prepared Statement of the 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 Mark Pryor 
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 100 companies and organizations currently support the 
Alliance as Associates. The Alliance recommends increases of $17.9 
million in several existing energy-efficiency deployment programs, $15 
million for newly authorized programs, and increased funding for 
building energy-efficiency research in fiscal year 2007, compared to 
last year's appropriated levels.

                               BACKGROUND

    Rationale for Federal Energy-Efficiency Programs.--We understand 
that budgets are tight, but we have seen that the costs of not 
addressing energy waste are just too high. Gasoline and natural gas 
prices have doubled in the last few years, and electricity prices also 
reached all-time highs. All told, recent energy price increases cost 
American families and businesses over $300 billion last year. These 
high prices have caused plant closings and loss of manufacturing jobs, 
and have made many low-income homeowners unable to pay their heating 
bills. President Bush recognized that our long-term energy security and 
environmental issues due to our wasteful use of fossil fuels are 
equally serious when he called for ending our ``addiction'' to oil. The 
Energy Information Administration projects that without further action 
our fossil fuel use will rise by a third by 2030, and our imports will 
rise by a half.
    Improved energy efficiency is the best near-term strategy to begin 
balancing demand and supply and bring energy prices down, and is a key 
component of a long-term energy strategy. Energy efficiency is the 
Nation's greatest energy resource--we now save more energy each year 
from energy efficiency than we get from any single energy source, 
including oil, natural gas, coal, or nuclear power. The Alliance to 
Save Energy estimates that if we tried to run today's economy without 
the energy-efficiency improvements that have taken place since 1973, we 
would need 43 percent more energy supplies than we use now.
    A Record of Success.--DOE programs play a key role in these savings 
through the research and development (R&D) of new energy-efficiency 
technologies, and by helping these technologies achieve widespread use. 
These programs reduce energy consumption, dependence on foreign oil, 
and energy costs. They also help create jobs in the United States and 
decrease harmful pollution. A 2001 National Research Council report 
found that every $1 invested in 17 DOE energy-efficiency 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.
    Budget Authorizations and Studies.--A series of reports and bills 
have supported a major increase in funding for DOE energy-efficiency 
programs. The Energy Policy Act of 2005 (EPAct 2005) authorized $783 
million for energy-efficiency R&D in fiscal year 2007, an additional 
$240 million for distributed energy and other electric R&D, and $820 
million for various deployment programs. This follows calls for 
expanding energy-efficiency research by the National Commission on 
Energy Policy, the President's Committee of Advisors on Science and 
Technology, the Energy Futures Coalition, and the President's National 
Energy Policy.
    Summary of the President's Request.--The President's overall fiscal 
year 2007 budget request for energy-efficiency programs at DOE's Office 
of Energy Efficiency and Renewable Energy is $517 million, down $111 
million (18 percent) from the fiscal year 2006 appropriation, and $78 
million below the administration's fiscal year 2006 request. This large 
cut follows a gradual slide from $694 million appropriated for these 
energy-efficiency programs in fiscal year 2002. Funding for these 
programs is down one-third (34 percent) since 2002 after inflation. In 
addition, the request for electricity R&D programs, many of which focus 
on efficiency, is $96 million, down $41 million (30 percent) from the 
fiscal year 2006 appropriation. After accounting for some program 
transfers, funding for buildings, industry, and vehicles R&D also is 
reduced. But some of the biggest cuts are to deployment programs, 
including weatherization of low-income homes, support for State 
building codes, industrial energy audits, and Federal energy 
management.

                        ALLIANCE RECOMMENDATIONS

    In order to address the critical energy problems facing our Nation, 
the Alliance recommends funding for DOE energy-efficiency programs in 
line with the authorized levels. However, given fiscal realities, we 
have included much smaller specific funding requests below.
    The impact of DOE energy-efficiency programs has been multiplied by 
the combination of research to develop 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 programs that focus on near-term energy-
efficiency deployment are especially critical right now to meeting our 
Nation's natural gas and electricity needs. The administration's 
proposed elimination of the Gateway Deployment function and cuts to 
other key deployment programs are not consistent with achieving our 
national energy policy goals of reducing high energy costs 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 and biofuels programs, 
they do not take the place of core programs that can have broader, more 
certain, and more near-term energy savings impacts. In particular, the 
Alliance opposes repeated cuts that now threaten the viability of 
Industrial Technologies research programs and the dramatic proposed 
cuts to the distributed energy R&D program and the Weatherization 
Assistance Program.

Existing Deployment Programs (Office of Energy Efficiency and Renewable 
        Energy)
    Building Codes Training and Assistance (formerly Weatherization and 
Intergovernmental Programs).--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 
estimate that building energy codes could save 7.2 quads of energy by 
2025. The new 2006 IECC model residential code includes measures to 
simplify the code and ease implementation, and thus presents exciting 
opportunities to increase code adoption and compliance. EPAct 2005 
authorized $25 million a year for building codes, including a new 
program to improve compliance. Yet the administration has proposed 
eliminating funding for Building Codes Training and Assistance. The 
Alliance recommends a $4.5 million increase above the fiscal year 2006 
appropriations level, for total funding of $9.0 million.
    Industrial Assessment Centers and 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 Best Practices outreach saved 82 trillion Btu in 2002, 
worth $492 million. University-based Industrial Assessment Centers 
(IAC) 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. Yet the administration has proposed to 
cut IAC by 30 percent. The Alliance recommends the following increases 
above the fiscal year 2006 appropriations levels:
  --a $2 million increase for Industrial Assessment Centers, for total 
        funding of $8.4 million,
  --a $3 million increase for Best Practices, for total funding of 
        $10.9 million.
    Federal Energy Management Program.--This program 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. But funding has steadily decreased for this 
program, even though large savings remain untapped. EPAct 2005, in 
addition to setting aggressive new energy saving targets, requires DOE 
to implement rules, guidelines, and reports on the targets, Federal 
building standards, Federal procurement, and metering. A needed funding 
increase for this program will actually save taxpayer money in lower 
Federal energy bills. The Alliance recommends a $3 million increase 
above the fiscal year 2006 level, for total funding of $20.0 million.
    Equipment Standards and Analysis (Building Technologies).--
Appliance standards have already reduced U.S. electricity use by an 
estimated 2.5 percent (88 billion kWh/year) and reduced peak power 
demand by approximately 21,000 MW, at a minimal Federal cost and with 
major energy bill savings to consumers. But the program is already 
years behind on about 20 standards. EPAct 2005 adds rulemakings on 
three new products, and requires DOE to issue updates on several new 
legislated standards. DOE has issued an ambitious plan to catch up, and 
requested a $1.7 million increase. But more is needed to implement the 
plan. The Alliance recommends a $2.5 million increase over the fiscal 
year 2006 appropriations level for total funding of $12.7 million.
    Energy Star (formerly 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. In 2004 alone, Energy Star helped Americans 
save enough energy to power 25 million homes and avoid greenhouse gas 
emissions equivalent to those from 20 million cars--all while saving 
$10 billion on their utility bills. Every Federal dollar spent on the 
Energy Star program results in an average savings of more than $75 in 
consumer energy bills and the reduction of about 3.7 tons of carbon 
dioxide emissions. With additional funding, the Energy Star program can 
update its criteria, label additional products, and provide Americans 
with more information on how to save energy. The Alliance recommends a 
$1 million increase over the fiscal year 2006 appropriations level for 
total funding of $6.9 million.

New Deployment Programs Authorized in EPAct 2005
    Energy Efficiency Public Information Initiative (Program 
Support).--The quickest way to reduce energy demand and bring high 
energy prices down is through consumer education. EPAct 2005 (Sec. 134) 
authorizes $90 million per year for a public education program to 
provide consumers the information and encouragement necessary to reduce 
energy use. Such programs have a proven track record of success, as in 
the 2001 ``Flex Your Power'' campaign in California, which 
significantly reduced consumer electricity demand and assisted in 
avoiding further black-outs. DOE has contributed a little to effective 
education campaigns, but much more funding is needed. The Alliance 
recommends at least $10 million for this new program.
    Energy Efficiency Pilot Program (Office of Electricity Delivery and 
Energy Reliability).--State and utility energy-efficiency programs have 
been remarkably successful at reducing electricity demand, strain on 
the grid, and the need for costly new power plants. However, they have 
been starved for funds due to electric restructuring. A few States are 
experimenting with innovative performance-based policies to use the 
efficiency resource. EPAct 2005 (Sec. 140) authorizes $5 million per 
year for a new program to provide funding to several States to assist 
in the design and implementation of energy-efficiency resource programs 
that will lower electricity and natural gas use by at least 0.75 
percent a year. The Alliance recommends $5 million for this new 
program.

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. Of all the DOE energy-efficiency programs, Building 
Technologies continues to yield perhaps the greatest energy savings. 
The 2001 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 7 percent. Buildings R&D should be a priority 
for funding increases, especially for Windows and Insulation and 
Materials R&D.
    Energy Information Administration (EIA) Energy Consumption 
Surveys.--EIA's Energy Consumption Surveys provide unique and 
invaluable data to policy makers, congressional staff, researchers, and 
industry. The administration's budget request includes $3.65 million, 
just enough to continue the Residential, Manufacturing, and Commercial 
Buildings Energy Consumption Surveys (RECS, MECS, and CBECS) every 4 
years. The Alliance recommends an increase of $1.9 million, for total 
funding of $5.5 million, in order to reinstate the residential 
transportation 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.

               ALLIANCE TO SAVE ENERGY ENERGY AND WATER APPROPRIATIONS FISCAL YEAR 2007 PRIORITIES
----------------------------------------------------------------------------------------------------------------
                                                                           Fiscal Year
                                                              Fiscal Year      2007       Alliance     Increase
                                                              2006 Approp    Request        Rec.      Over 2006
----------------------------------------------------------------------------------------------------------------
Key existing deployment programs (in order of priority):
    Building Codes Training and Assistance..................          4.5  ...........          9.0         +4.5
    Industrial Assessment Centers and Best Practices
     (Industrial--Crosscutting):
        Industrial Assessment Centers.......................          6.4          4.0          8.4         +2.0
        Best Practices......................................          7.9          8.8         10.9         +3.0
    Federal Energy Management Program.......................         17.0         14.9         20.0         +3.0
    Equipment Standards and Analysis (Buildings)............         10.2         11.9         12.7         +2.5
    Energy Star.............................................          5.9          5.8          6.9         +1.0
New deployment programs authorized in EPAct 2005 (in order
 of priority):
    Public Information Initiative (Program Support).........  ...........  ...........         10.0        +10.0
    Energy Efficiency Pilot Program (Electricity)...........  ...........  ...........          5.0         +5.0
Additional priorities:
    Building Technologies R&D (Buildings)...................         83.4         77.3      ( \1\ )  ...........
    EIA Energy Consumption Surveys..........................          3.6          3.6          5.5         +1.9
----------------------------------------------------------------------------------------------------------------
From testimony of Kateri Callahan, President, Alliance to Save Energy. All figures in millions of dollars. Also
  oppose cuts to Industrial Technologies R&D, Distributed Energy R&D, and Weatherization Assistance Program.
\1\ Increase.

                                 ______
                                 
    Prepared Statement of the National Association of State Energy 
                               Officials

    Mr. Chairman and members of the subcommittee, I am Peter Smith of 
New York 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. We are in 
the midst of an energy emergency and the programs described below help 
the American people respond. Specifically, we are testifying in support 
of no less than $74 million for the State Energy Program (SEP). Forty 
members of the Senate have written to this subcommittee supporting $74 
million in SEP funding for fiscal year 2007. The 20 percent cut in SEP 
in the fiscal year 2006 bill is devastating. SEP is the most successful 
program operated by DOE in this area. The administration's proposed 
increase to $50 million is an important first step. SEP is focused on 
direct energy project development, where most of the resources are 
expended. We also support $275 million for the Weatherization 
Assistance Program (WAP). In addition, dramatic successes have been 
achieved through the State Energy Programs Special Projects (SEP 
Special Projects), which should receive at least funding of $15.1 
million, equal to the fiscal year 2006 level. The administration has 
proposed no funds for this program in fiscal year 2007. 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 increases of $1.6 million above the President's budget request 
for the Energy Information Administration (EIA) of $89.8 million for 
EIA's State Heating Oil and Propane Program, and to preserve EIA Forms 
182, 856 and 767. EIA funding is a critical piece of energy emergency 
preparedness and response. NASEO continues to support funding for a 
variety of critical deployment programs, including Building Codes 
Training and Assistance ($5.6 million), Rebuild America ($3.8 million), 
Energy Star ($5.9 million) and Clean Cities ($7.9 million). NASEO 
supports funding for the Office of Electricity Delivery and Energy 
Reliability at least at the fiscal year 2006 request of $161.9 million, 
with specific funding for the Division of Infrastructure Security and 
Energy Restoration of $18 million, which funds critical energy 
assurance activities. We strongly support the R&D function, Operations 
and Analysis and Distributed Energy activities within this office. The 
industries program should be funded at a $74.8 million level, equal to 
the fiscal year 2005 levels, 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.
    Over the past 4 years, both oil and natural gas prices have been 
rising in response to international events, increased international and 
domestic use and the result of last year's hurricanes, etc. The $3.00/
gallon gasoline prices will be with us for some time. We also expect 
$70 oil to continue for an extended period of time, with an expanded 
crisis situation as summer approaches. The State energy offices are in 
the forefront of energy emergency response, and this will be a 
challenge a year after 20 percent cut in SEP funding. In addition, we 
now have quantifiable evidence of the success of the SEP program 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.CO2
    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) $10.71 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--1,000 metric tons.
    State Energy Program Special Projects and Other Deployment 
Programs.--SEP Special Projects provided 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. The administration has proposed no 
direct funding in fiscal year 2007 for SEP Special Projects. SEP 
Special Projects grants are awarded competitively and thus complement 
the SEP formula grant, with almost all the States submitting winning 
proposals in 2005. These projects have provided successes in virtually 
every congressional district. The other deployment programs, including 
Rebuild America, Building Codes Training and Assistance (which the 
administration proposed to zero out), Clean Cities and Energy Star 
should receive funding of $23.2 million. The administration proposed 
eliminating the Gateway Deployment Program by name, and shifted 
resources to other activities.
    Industrial Energy Program.--A funding increase to a level of $74.8 
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.
    EIA.--Additional funding is required to preserve EIA Forms 182, 856 
and 767. The funding is only $1 million per year. The Domestic Crude 
Oil Report (182) and Foreign Crude Oil Report (856) are not reliably 
available elsewhere, and tracks our importation and distribution of 
oil. As we are facing increased international tensions, there could 
never be a worse time to eliminate these forms. The 767 form tracks 
central station generation emissions, critical to State regulatory 
programs. The State Heating Oil, Natural Gas and Propane Program 
requires $600,000 for adequate sampling.
    Examples of Successful State Energy Program Activities.--The States 
have implemented thousands of projects. Here are a few representative 
examples.
    California.--The California Energy Commission has operated energy 
programs in virtually every sector of the economy. The State has 
upgraded residential and non-residential building codes, developed a 
school energy efficiency financing program, industrial partnerships in 
the food and waste industry, instituted a new replacement program for 
school buses utilizing the newest natural gas, advanced diesel and 
hybrid technologies. The buildings program has reduced consumption by 
enormous amounts over the past few years, through alternative financing 
programs and outreach.
    Hawaii.--The State is considering comprehensive energy legislation 
at the present time. A comprehensive program of energy efficiency for 
commercial and residential buildings has saved $9.3 million annually. 
The State recently moved forward with energy code revisions projected 
to save tens of millions of dollars. The Hawaii ``Green Business 
Program'' saves $175 in water, energy and waste minimization for every 
$1 in SEP funds invested.
    Idaho.--In Idaho the State has rated homes utilizing the Energy 
Star tools and signed-up 77 new builders to participate in the program. 
An aggressive energy efficiency financing program has produced 2,428 
loans, totaling $15.8 million for significant energy savings. The 
agricultural energy program has focused on reducing irrigation costs 
and usage to improve agricultural productivity and costs.
    Kentucky.--The programs supported by SEP have assisted in 
construction of high energy performance K-12 schools, developed $45 
million in energy savings performance contracts, and funded energy 
efficiency and renewable energy projects at universities and local 
governments.
    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 $72 million each year, with more than 400 projects. The 
State energy office has also worked with the Public Utility Commission 
and the utilities within the State to get $20 million invested in 
residential and commercial energy efficiency programs. A new revolving 
loan for biodiesel has also been initiated.
    Mississippi.--The State operates an energy investment loan program 
targeted to schools, hospitals and manufacturers. Mississippi has been 
very active in the Energy Star program and has been attempting to 
conduct post-Katrina reconstruction in an energy efficient manner.
    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.--The State has focused on energy code training and 
technical assistance to ensure that new housing construction is 
conducted in an energy efficient manner, as well as a large expansion 
in renewable energy programs.
    New Mexico.--With new State legislation, the State energy office is 
supporting and expanding renewable energy usage, tax incentives for 
hybrid vehicles, school energy efficiency programs, technical 
assistance to the wind industry and expansion of geothermal resources. 
The State has arranged approximately 40 energy performance contracts 
with annual energy savings in the millions. There has also been an 
expansion in the use of ethanol and biofuels.
    North Dakota.--The State energy office is supporting programs for 
ethanol and biodiesel promotion. The State has also funded energy 
efficiency programs for local builders, schools and for lower income 
households.
    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 $172 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. The State has initiated the Texas 
Emissions Reduction Plan/Texas Energy Partnership in 41 urban counties 
to reduce emissions through cost-effective energy efficiency projects.
    Utah.--SEP funds have been utilized to support solar and wind 
programs, as well as implementation of a stronger energy building code. 
The State has also supported local government energy efficiency.
    Washington.--The State energy agency works with the Northwest 
Energy Efficiency Alliance to target $20 million in funding for energy 
efficiency and renewable energy projects. The State is also closely 
involved in energy emergency preparedness and response. The Resource 
Efficiency Managers Program, supported by SEP, conducts on-site 
training for energy savings. For example, working with Ft. Lewis and 
Puget Sound naval facilities, the program has saved over $2.5 million.
    West Virginia.--The energy office has focused on industrial energy 
savings, including identified savings of $2.4 million in 2005 alone. 
Energy projects in the industrial sector have totaled $29 million 
during the past 9 years. The State has also supported dramatic 
expansion of renewable energy programs and is projecting $3 million in 
school energy cost savings each year through energy efficiency 
programs.
                                 ______
                                 
Prepared Statement of the Mid-West Electric Consumers Association, Inc.

    The Mid-West Electric Consumers Association (``Mid-West'') 
represents hundreds of rural electric cooperatives, public power 
districts and municipally-owned utilities in the nine States of the 
Missouri River Basin, including: Colorado, Iowa, Kansas, Minnesota, 
Montana, Nebraska, North Dakota, South Dakota and Wyoming. This 
testimony supports fiscal year 2007 funding for the Western Area Power 
Administration (``WAPA''): (1) $275 million for purchase power and 
wheeling; and (2) a total of $193,482 million for operations, 
maintenance ($45,734 million) and program direction ($147,748 million), 
utilizing the ``net-zero'' approach. Mid-West opposes: (1) the 
administration's proposal to increase electric rates of the Power 
Marketing Administrations (``PMAs'') by changing the interest rate on 
new Federal power investments; and (2) reallocating certain irrigation 
costs in the Pick-Sloan Missouri Basin Program.

                      PURCHASE POWER AND WHEELING

    Mid-West supports the proposed budget for purchase power and 
wheeling. WAPA and other PMAs are responsible for marketing and 
delivering hydropower generated at Federal dams to eligible consumer-
owned utilities. In light of soaring energy costs and record low 
reservoir levels, funding is required for purchase power and wheeling. 
The administration's budget request of $275 million for purchase power 
and wheeling is minimally adequate. These costs are paid for by Federal 
power customers. The persistent drought in the Missouri River Basin 
means that the 2006 generation estimated by the Corps of Engineers will 
be 61 percent of normal. Present projections could be further reduced 
if the navigation season is shortened.
    The language in the fiscal year 2002-2006 appropriations bills 
should be retained so that the PMAs could continue to utilize customer-
generated receipts to help fund their purchase power and wheeling 
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 costs. The language 
regarding purchase power and wheeling included in the fiscal year 2007 
budget request should be inserted in the fiscal year 2007 Energy and 
Water Appropriations bill. Mid-West supports this language.

              ``NET ZERO'' APPROPRIATIONS FOR FEDERAL PMAS

    The administration's fiscal year 2006 budget proposed a ``net-
zero'' funding approach for the annual cost of the PMAs' operations, 
maintenance and program direction. Unfortunately, this provision was 
not included in the fiscal year 2007 budget request. 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. Mid-
West supports this proposal, which is already used to fund other 
Federal energy agencies. The PMAs' budgets cover all the costs of their 
operations. A budget scoring adjustment is required to make this ``net-
zero'' approach truly effective. Receipts collected by WAPA to repay 
program direction and operation and maintenance expenditures should be 
reclassified from ``mandatory'' to ``discretionary.''

                          INTEREST RATE CHANGE

    Historically, the interest charged on Federal power investment has 
been the U.S. Treasury's long term yield rate. Each year, the Treasury 
provides to the PMAs the interest rate to be charged for investments 
made in that year. Those investment costs plus interest are repaid to 
the Treasury through power rates charged to Federal power customers.
    Now, the administration has stated that it intends to change that 
practice and charge the ``agency rate,'' which is the rate charged to 
governmental corporations. The difference between this rate and 
Treasury's long term yield rate is described as ``small,'' averaging 
about 0.4 percent, which would garner about $2-$3 million per year from 
Federal projects where the interest rate is not set by law.
    The PMAs--WAPA, Southeastern, and Southwestern are not government 
corporations. They do not have borrowing authority or other authorities 
available to government corporations. The PMAs are Federal agencies 
within the Department of Energy and are funded annually by 
congressional appropriations.
    The current practice of using Treasury's long-term yield rate has 
worked well for decades. It is wrong to assign an interest rate formula 
for a government corporation to Federal agencies that are not 
government corporations.

                    REALLOCATION OF IRRIGATION COSTS

    The proposed reallocation and acceleration of Pick-Sloan Missouri 
Basin investment is apparently a rehash of a similar proposal in last 
year's budget request. It is hard to tell exactly what is proposed 
since there is no legislative language or even a detailed explanation 
of the proposal.
    The short ``explanations'' that have been offered are inconsistent. 
One section of the budget calls for repayment of vaguely defined 
construction costs--``Power customers will be responsible for repayment 
of all construction from which they benefit.'' (p. 188 Department of 
Interior: Mandatory Proposal Recover Pick-Sloan Project Costs). 
However, Bureau of Reclamation Highlights (BH-36) calls for ``repayment 
of construction and operations costs . . . ''.
    The budget request erroneously states that Pick-Sloan power 
customers have not heretofore been responsible for repaying these 
costs. Pick-Sloan power customers are responsible for repaying all the 
costs of the power investment, joint costs allocated to the power 
function, and a huge portion of investment related to irrigation. These 
repayment obligations have been organized under the ``ultimate 
development'' concept.
    Most simply put, the administration's budget request would destroy 
the ultimate development concept that allocates costs among the various 
project purposes and determines repayment practices.

          CORPS OF ENGINEERS ``CONSTRUCTION GENERAL'' ACCOUNT

    As part of its Operations and Maintenance budget, the Corps of 
Engineers is requesting $85 million for recovery of the pallid sturgeon 
on the Missouri River. In fiscal year 2006 the Corps is spending 
roughly $54 million from its Construction General account. Mid-West 
sees no reason to change the budget classification of these dollars in 
fiscal year 2007. Monies related to pallid sturgeon recovery should be 
transferred to the Corps Construction General account, where they more 
properly belong, and where they have been accounted for in past years.

                               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.
                                 ______
                                 
         Prepared Statement of the Hospital for Special Surgery

    Mr. Chairman, and members of the subcommittee, thank you for the 
opportunity to submit testimony to the hearing record regarding 
Hospital for Special Surgery (HSS) in New York, New York. Since its 
founding over 140 years ago, HSS has been the hospital of choice for 
countless individuals of all ages--from infants to older adults--
suffering from musculoskeletal conditions. Today, HSS is considered the 
premier specialty hospital for orthopedics and rheumatology in the 
United States and abroad.
    As you know, funds to support the establishment of the National 
Center for Musculoskeletal Research at Hospital for Special Surgery 
were included in Energy and Water Appropriations in fiscal year 2001 
and fiscal year 2005. First, I would like to take this opportunity to 
thank the subcommittee for its support and to report on the excellent 
progress that has been made in achieving this goal.
    With a combination of institutional, private, and government 
support, HSS has transformed its research enterprise over the past 6 
years, from the physical plant to the depth and focus of its scientific 
expertise. HSS has conducted the largest recruitment drive in its 
history. Expanded, state-of-the-art laboratories have increased the 
quality and quantity of investigations. Today, 70 percent of HSS' basic 
research activity is federally funded, meeting national benchmarks. Our 
critical mass of expertise is composed of 34 bench scientists and 129 
full-time laboratory fellows, technicians, and support. Of course, the 
most important measure of success is HSS's capacity to improve quality 
of life through treatments derived from a greater understanding of 
disease. This has been fortified by the scientific talent and new 
resources made possible by the Hospital's generous supporters. Today, 
the National Center for Musculoskeletal Research at HSS is an 
internationally recognized leader whose pioneering scientists are 
making significant contributions to understanding diseases like 
arthritis, osteoporosis, and lupus, and advancing progress toward the 
development of better treatments and cures.
    The Hospital's groundbreaking basic, translational, and clinical 
research efforts are unique in that they are informed by its very 
sizeable patient base, which is the largest of any musculoskeletal 
hospital in the world. HSS's surgical techniques, rehabilitation 
practices, orthopedic imaging, anesthesiology and pain management, and 
non-surgical interventions are the ``best practices'' in the field. To 
continue to advance the state-of-the-art, while meeting the needs of 
increasing numbers of patients, HSS is now working to create an 
entirely new platform of patient care for the 21st century. The 
centerpiece of this initiative is the expansion and modernization of 
its clinical facilities to provide the highest level of care to the 
increasing number of patients seeking the expertise of the Hospital's 
extraordinary medical staff. HSS has requested a fiscal year 2007 
appropriation of $4 million to advance this important project.
    The Hospital last expanded in 1996 when facilities meant for polio 
patients and lengthy hospitalizations were redesigned and modernized. 
In the succeeding years, pioneering advances in musculoskeletal 
medicine have taken place, many of them using biosynthetic materials, 
molecular diagnostics, innovative surgical tools and techniques, and 
computer guidance and modeling. Since 1996, HSS has added 65 medical 
staff and numerous specialized centers dedicated to research and 
clinical care in orthopedics, rheumatology, complementary medicine, 
sports medicine, non-surgical interventions, imaging, and pain 
prevention.
    New medical staff have the opportunity to learn from surgeons and 
physicians who have practiced at HSS for decades, embracing a great 
breadth and depth of experience, historical knowledge of the field, and 
insight into patients' needs, expectations, and potential for recovery. 
Building on experience, we have increased our efficiencies and ability 
to help increasing numbers of patients from all over the world. For 
example, the average length of stay for joint replacement has been 
reduced from 6 days (1996) to less than 4.5 days. For patients who 
qualify for minimally invasive surgery, many can leave the hospital 
within 2-3 days. In the future, we feel certain some joint replacement 
surgery will be carried out on an ambulatory basis.
    The major demographic and sociological trends observed worldwide 
are fueling a demand for care at HSS that is unprecedented. There has 
been an extraordinary increase in the over-60 population and their need 
for musculoskeletal medicine; and there is a more active, younger 
population desiring to remain mobile and play sports as they grow 
older. From 1996 to 2005, Special Surgery's annual surgical volume rose 
from 10,700 to 17,500 and its annual outpatient visits rose from 
147,000 to 230,000, a total increase of approximately 60 percent. 
Special Surgery is also a magnet referral center for complex surgeries, 
with growing numbers of patients requiring extensive, high-level care.
    Meeting demand is only part of the equation. Bringing improved 
treatments and interventions to patients is of utmost importance. HSS 
continues to be a leader in advancing clinical treatments that enable 
patients to recuperate more quickly and regain mobility. HSS-led 
innovations on the horizon include:
  --Minimally invasive knee, hip, and shoulder implants for younger 
        patients. ``Baby boomers'' are our fastest growing patient 
        segment.
  --Spinal disc replacement surgery for degenerative disc disease, and 
        spinal stabilization without fusion.
  --Effective treatments for early arthritic patients when there is a 
        ``window of opportunity'' to slow and perhaps halt the 
        progression of disease.
  --Biosynthetic materials that mimic everyday movements to repair 
        sports injuries to ligaments, tendons, meniscus, and cartilage.
  --Biological solutions with minimal side effects to treat and prevent 
        the progress of a wide range of inflammatory conditions.
  --New diagnostics to predict the efficacy of medical treatments.
  --Advanced imaging techniques that can diagnose disease at the pre-
        clinical stage, enabling earlier and more effective treatment.
  --New medications to intervene before nerve injury and remold pain 
        pathways, minimizing post-operative pain.
  --Computer-assisted surgical procedures.
    An expanded clinical facility will enable the countless patients 
who seek our help to have the benefit of these medical innovations.
    Our new clinical facilities and extraordinary volume of patients 
will also provide an unparalleled opportunity to create a robust 
clinical research program. The potential for new knowledge in joint 
replacement is significant, since HSS performs the greatest number of 
hip and knee replacements in the world, more than 4,000 annually. The 
clinical research program will be built on a strong basic research 
foundation, which was strengthened over the past several years with the 
vital support of the Energy and Water Subcommittee.
    In our ``new hospital'' every patient would have an opportunity to 
partner with us as a research patient in the effort to gain a deeper 
understanding of bone and joint disease to perfect treatment for future 
generations. With advanced technology, patients will help create their 
own research records, containing uniform, prospective data on the 
nuances of their treatment and progress. Each specialty service will 
have its own clinical research coordinator, and patients will have 
``real time'' access to information about clinical trials. Clinical 
research analysis, coupled with our knowledge of disease at the basic 
science level--particularly arthritis and inflammatory disease--will 
provide a powerful resource for advancing musculoskeletal health and 
restoring patients' mobility. We are currently recruiting new 
leadership for this program and developing the required infrastructure 
to successfully launch this initiative in our expanded facilities.
    The Hospital's new facilities will be completed by 2009 and 
encompass 201,000 square feet of new construction and 75,000 square 
feet of renovated existing space. On-site patient services will be 
significantly expanded and redesigned for greater efficiency and 
comfort. Highlights include a modernized, expanded ambulatory surgery 
center; enhanced rehabilitation facilities; new imaging, pain 
management, and minor procedures facilities; and an enhanced sports 
medicine rehabilitation center. In addition, the Hospital is 
refurbishing the lobby of the Main Building to better serve patients 
and their families. HSS took a unique approach to the design of this 
project, forming a collaborative team of physicians, nurses, 
architects, and planners to develop an optimum healing environment that 
flows efficiently for both patients and medical staff.
    Mr. Chairman, the objectives of Hospital for Special Surgery's 
Clinical Facilities Expansion and Modernization Project are consistent 
with those historically funded by the Department of Energy in the 
Energy & Water Appropriations Bill. We hope that the subcommittee will 
provide $4 million in fiscal year 2007 toward this capital expansion, 
which will benefit countless patients as they grow older and seek help 
for a range of musculoskeletal conditions. The chances are, no matter 
where patients live, they will be helped by a medical advance pioneered 
at HSS or by an HSS-trained physician. To keep this promise alive, we 
must be able to expand clinically and lead the way, as we have done 
since opening our doors as America's oldest existing orthopedic 
hospital.
                                 ______
                                 
   Prepared Statement of the GE Energy Advanced Technology Operation

    The following testimony is submitted on behalf of GE Energy (GE) 
for the consideration of the committee during its deliberations 
regarding the fiscal year 2007 budget requests for the Department of 
Energy (DOE). GE urges the committee to provide funding to initiate the 
Western IGCC Demonstration Program, as authorized in the Energy Policy 
Act of 2005. Additional resources also are needed for the Advanced 
Turbines program, DOE's major research effort focusing on gas turbines 
for electricity production which also addresses key needs for hydrogen 
turbines. GE further recommends $10 million in additional funding for 
the SECA program to support further advances in fuel cell technologies 
for power production. Investments in these and the other important 
programs discussed below will help to meet the challenges of assuring a 
diverse portfolio of domestic power generation resources for the 
future.

                         FOSSIL ENERGY PROGRAMS

    Western IGCC Demonstration Program.--As the committee is aware, 
there has been a substantial resurgence in interest in coal-fired 
electricity generation. Integrated gasification combined cycle (IGCC) 
is a leading technology for the next generation of coal plants. IGCC 
reduces emissions of sulfur dioxide by 75 percent, nitrogen oxides by 
33 percent, 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. Development of 
several large-scale commercial IGCC plants is underway. These ``first-
of'' plants are a critical step towards reaching IGCC's entitlement in 
performance and cost.
    If the full national environmental and energy benefits of IGCC are 
to be achieved, the ability of IGCC technology to efficiently use low 
rank coals, such as those from the Powder River Basin that are 
increasing in importance as a low cost, domestic fuel source, must be 
addressed. Engineering design for the first-of-a-kind plant capable of 
commercial operation on low rank coals is a key requirement. Unlike 
natural gas plants, the first-of-a-kind advanced coal plant for low 
rank coal will require significant preliminary engineering and 
technology integration. Section 413 of the Energy Policy Act of 2005 
authorized the Western Integrated Coal Gasification Demonstration 
Program. This cost-shared program would provide the framework for the 
Federal Government and industry to work together to expand the envelope 
of efficient, low emissions IGCC technology to economically use these 
coals. This important initiative is deserving of the committee's 
consideration.
    IGCC.--GE recommends that the budget for DOE's Advanced IGCC 
program be increased by $12 million in fiscal year 2007 to be used to 
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.
    Clean Coal Power Initiative.--The budget request includes only 
minimal funding for the Clean Coal Power Initiative (CCPI) in fiscal 
year 2007, which will presumably delay future solicitations for the 
program. While GE understands the administration's desire to increase 
the effectiveness of the program, the need for a commercial 
demonstration program for advanced coal power technologies is 
undiminished. Federal investment in clean coal technology has produced 
a profound improvement in coal-based generation technology. The pre-
commercial demonstrations of IGCC technology at TECO Polk and Wabash 
through the predecessor Clean Coal Technology Program proved the 
economic viability of IGCC and served as a catalyst for the industry to 
develop IGCC into commercial power generation offerings.
    While the development of several large-scale commercial IGCC plants 
is underway, preliminary development at the pilot stage already is 
ongoing for the next generation of IGCC technology. GE sees a 
continuing need for the CCPI to serve as the vehicle for the scale-up, 
plant integration, and initial deployment of advanced IGCC 
technologies. The CCPI also would serve as means to support the 
deployment at commercially-relevant scale of technologies that the 
FutureGen initiative is likely to develop. Any failure to continue 
funding for the CCPI program at prior year levels should not be seen as 
a weakening of the commitment to this program.
    Turbines.--GE recommends that funding be increased by $22 million 
to a total of $35 million for the Advanced Turbines program, within the 
Fossil Energy/Coal/Fuels and Power Systems budget line. This program 
represents the Department's primary research effort focusing on gas 
turbines for coal-based electricity production, such as FutureGen, 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 is needed to address DOE's efficiency and 
emissions goals for power generation from coal, the Nation's most 
abundant domestic energy resource.
    Gas turbine R&D is focused on advanced combustion and high 
temperature turbine technology for syngas/hydrogen fuels that will 
result from IGCC and FutureGen type power plants. The program addresses 
those gas turbine elements where the technology required for the use of 
syngas/hydrogen fuels differs from the requirements for natural gas 
fueled gas turbines. Work in this area is proceeding under DOE-awarded 
cost-share contracts resulting from a March 2005 solicitation entitled 
``Enabling Technologies for High-Hydrogen Fuels.'' Unless the fiscal 
year 2007 budget for the Advanced Turbines program is increased, 
funding will be inadequate for this promising work, and the progress 
and benefits of this research will be delayed accordingly.
    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.
    Continued funding of DOE's program is essential for FutureGen to 
meet its goal of substantial improvement in the cost of carbon capture. 
FutureGen is intended to serve as a demonstration for the technical 
feasibility of achieving nearly carbon-free power with IGCC. FutureGen 
is being structured to serve as a test bed for advanced technology that 
is needed to reduce the performance penalty and improve the economics 
of carbon capture. If it is to meet its goals, the FutureGen program 
will need to draw on advancements resulting from the hydrogen turbine 
program.
    GE recommends the committee's attention to the testimony submitted 
by the Gas Turbine Association relative to the allocation of additional 
funding above the budget submission within the Advanced Turbines 
program budget. In particular, GE encourages the committee to assure 
adequate funding for the University Turbine Systems Research Program.

Solid-Oxide Fuel Cell (SOFC) Development, Solid State Energy Conversion 
        Alliance (SECA) Program
    SOFC utilize an electrochemical process to cleanly convert a range 
of fuels into electricity. A SOFC/gas turbine hybrid 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.
    DOE's SECA program supports the development of high temperature 
SOFC fuel cell technology for stationary power generation. This 
technology offers the potential for a step change improvement in 
efficiency and reduction in emissions for power generation from coal. 
Successful development of large scale (e.g., 500 MW) SOFC-turbine 
hybrid based power plants would provide highly efficient, cost-
effective, near-zero atmospheric emissions in coal-based central power 
generation applications capable of reaching the DOE target for 
efficiencies up to 60 percent. The systems also would be compatible 
with carbon-free concepts as planned for FutureGen.
    GE successfully completed SECA Phase I SOFC system testing in 2005. 
This success contributed to the DOE SECA program's achievement of its 
key 2005 milestones, which is an important indicator that the program 
is making good technical progress. Key technology challenges remain and 
are being addressed as the DOE program proceeds. Continued joint DOE-
industry investment in SOFC-hybrid technology will position U.S. 
industry as leaders in the rapidly growing worldwide ``ultra-clean'' 
energy market, in which other governments, including the Japanese and 
European governments, are investing heavily.
    An increase of $10 million above the administration's budget 
request, for total funding of $73 million, is needed in fiscal year 
2007 to fully fund the SECA program. GE recommends that DOE be given 
the flexibility to apply funding as best needed to meet DOE's and the 
program's goals.

                       RENEWABLE ENERGY PROGRAMS

    Wind Energy.--Sustainable generation of clean energy from wind is 
imperative to realizing the objectives of the President's Advanced 
Energy Initiative, as well as the goals of the Energy Policy Act of 
2005. The milestones established by the Department of Energy to reach 
100 GW of wind energy capacity by 2020 demand a coordinated effort to 
develop favorable long term policy, energy infrastructure, and product 
technology advancement to continue to drive the cost of electricity 
down for both on-shore and off-shore applications. Reaching the DOE 
goals would result in 10 percent of U.S. power generation being 
produced from renewable wind power. The emissions reduction benefit 
would be the equivalent of removing 20 million automobiles from the 
highways.
    DOE's internal Wind R&D programs and cost-share programs with 
industry are instrumental in accelerating technology advancement and 
cost of electricity reduction. Unfortunately, constraints on fiscal 
year 2006 funding caused DOE to slow some programs and cancel others. 
In support of the DOE goals, for fiscal year 2007 these programs need 
to be accelerated, and stopped programs restarted. Consistent with the 
recommendations of the American Wind Energy Association, GE recommends 
that DOE's fiscal year 2007 Wind program funding be increased by $30 
million to a total of $74 million.

         OFFICE OF ELECTRICITY DELIVERY AND ENERGY RELIABILITY

    Microgrids.--GE Global Research is collaborating with the Office of 
Electricity Delivery and Energy Reliability (OE) in a $4 million 
program initiated in 2005 to design and demonstrate an Advanced Energy 
Management System for Microgrids. The DOE's vision of the future 
electric power infrastructure, GRID 2030, identifies microgrids as one 
of three major technical cornerstones for a more reliable and 
congestion-free energy delivery system, and describes distributed 
intelligence and clean power as key technologies needing development. 
GE supports an additional $10 million in funding to support the 
realization of the GRID 2030 vision by bringing microgrid technologies 
to market and also to better leverage into this effort the integration 
of the Department's Distributed Energy Program into the OE 
organization.
    Cross Cutting Technologies--Ceramic Matrix Composites.--Work on 
ceramic matrix composites (CMC) has been an important research 
component of the budget for Distributed Energy Programs. As DOE's 
budget request acknowledges, advanced materials research, such as 
research on composites, is designed to enhance the efficiency and 
environmental performance of gas turbines. CMCs offer greater than 300 
to 500 F capability when compared to metallic materials currently used 
in gas turbine products. A 50 F improvement in materials capability is 
normally considered one generation of materials development. The 
increased temperature capability of CMCs provides potential benefits in 
power output, efficiency, emissions, and part life, depending on the 
component and how it is utilized in power generation equipment. Other 
potential energy-related opportunities for CMCs include aircraft 
engines for commercial and military applications and aerospace 
applications.
    CMCs are a high-risk, high-payoff technology with great promise for 
energy savings. GE Energy is committed to cost-sharing with DOE in a 
multi-year effort to further the development of this critical 
technology. Funding of $2 million is necessary for fiscal year 2007 for 
CMC crosscutting technology material development, through the 
Distributed Energy Technology Research program.
                                 ______
                                 
  Prepared Statement of the Electric Drive Transportation Association

    Last year when Congress was assembling the DOE budget, the cost of 
a barrel of oil was just surpassing $50; today the price hovers above 
$70 and the administration and Congress have declared greater oil 
independence a priority. The committee has the opportunity, in the 
fiscal year 2007 budget, to make substantial inroads in addressing oil 
dependence through aggressive support for electric drive technology 
programs at the Department of Energy.
    The Electric Drive Transportation Association (EDTA) is a multi-
industry trade association whose mission is promotion of electric drive 
technology in all its applications. Our members include a diverse 
representation of vehicle and equipment manufacturers, energy 
providers, component suppliers and end users who recognize the 
potential for reduces petroleum consumption and decreased emissions of 
greenhouse gases and pollutants that electric drive offers. A list of 
our membership is provided with this statement.
    Multiple technologies, including hybrids, battery electric and fuel 
cells, as well as diverse fueling options, will be necessary to meet 
the transportation needs of the Nation efficiently. Advances in these 
technologies are supported in a number of existing programs in the DOE 
Office of Energy Efficiency and Renewable Energy (EERE), including the 
Hydrogen and Fuel Cells Technologies Programs and the Vehicle 
Technologies Programs. Important new programs, authorized in the Energy 
Policy Act of 2005 (EPAct 05), will enable even greater progress in 
reducing the transportation sector's reliance on petroleum.
    Unfortunately, the administration's request does not fully invest 
in the programs that will move the Nation toward its petroleum goals. 
Specifically, the administration's fiscal year 2007 request for 
FreedomCAR and Vehicle Technologies is $166 million--a more than 8 
percent decrease from the fiscal year 2006 appropriation and flat 
funded with the fiscal year 2006 request.
    Regarding the Fuel Cell and Hydrogen Technology Programs, the 
administration request ignores the thoroughly vetted directives of 
EPAct 2005. The $195 million requested for the Hydrogen Technology 
Program is a welcome increase over the current appropriation but does 
not address the funding and programmatic direction of EPAct 2005. We 
are concerned that failure to adequately fund the program may undermine 
the ability to meet program 2015 and 2020 milestones and postpone 
achievement of commercial options for petroleum free transportation.
    The request also omits funding for EPAct 2005 Loan Guarantees for 
Innovative Technologies, which will expand the domestic infrastructure 
for efficient technologies while minimizing the government's financial 
exposure. We urge the committee to provide adequate resources to ensure 
that this program can get underway as expeditiously as possible.
    We support the administration's request for $14 million for 
research and development of plug-in hybrid technologies. It is an 
investment that will assist in proving out this new electric drive 
option. It will also provide support for battery and other technology 
advances that will advance all electric drive options: hybrid, battery 
electric and fuel cells.
    EDTA also encourages appropriate funding for the fleet-based 
programs that support technology developments. In particular, the EPAct 
2005 includes an important modification to the EPAct 92 fleet 
requirements, directing the creation of an alternative compliance 
waiver option for State and alternative energy provider fleets that 
will permit the use of hybrid and other technologies to comply with 
fleet fuel reduction requirements.
    Although the request includes $11 million for Technology 
Introduction subprogram, which is charged with implementing this 
option, none are specifically directed to implementation of the waiver 
option. With multiple, higher profile program responsibilities, we are 
concerned that insufficient resources will be allocated to waiver 
implementation.
    Another important fleet-oriented petroleum reduction program, Clean 
Cities works with voluntary coalitions to build clean and efficient 
local fleets, including schools, airports, and municipal bus fleets. 
The request for this program would cut already limited funding by a 
third, to $4.4 million.
    As the compounding consequences of oil dependence are being made 
acutely clear, we urge the committee to take full advantage of the 
solutions that are possible through the EERE vehicle programs. We 
respectfully request that you fund these programs at the levels 
commensurate with their benefits to the Nation: increased U.S. 
security, a cleaner environment and a stronger economy.
    Thank you for your consideration.
    EDTA Members: A123 Systems; Advanced Transportation Technology 
(ATTI); Air Products & Chemicals; American Honda Motor Company; 
American Public Power (APPA); Austin Energy; Azure Dynamics 
Corporation; Ballard Power Systems; CEREVEH; Chamber of the Americas; 
CITELEC; City of New York; Curtis Instruments; DaimlerChrysler 
Corporation; Edison Electric Institute; eGO Vehicles; Electric Power 
Research Institute (EPRI); Electricite de France; Electrovaya; Energy 
Conversion Devices, Inc./Ovonic; Enova Systems; Fallbrook Technologies; 
General Motors Corporation; Georgetown University; Global Electric 
MotorsCars (GEM); Greater Oslo Public Transport; Hyundai-Kia America 
Tech Center; Independent Energy Efficiency (IEEP); Long Island Power 
Authority; Massachusetts Division of Energy Resources; Maxwell 
Technologies; Methanex, Inc.; Michelin North America; Mid-Del Lewis 
Eubanks (AVTS); National Alternative Fuels Training Consortium (NAFTC); 
National Golf Car Manufacturers Association; New York Power Authority; 
New York State Energy-NYSERDA; Nissan North America; Northeast 
Sustainable Energy Association; Opal-RT; Pacific Gas & Electric (PG&E); 
Raser Technologies; Sacramento Municipal Utility District (SMUD); Saft 
America, Inc.; San Diego State University; Southern California Edison; 
TM4, Inc.; Tokyo Electric Power Company (TEPCO); Toyota; Tri-Met; 
University of California, Davis/ITS; UQM Technologies, Inc.; U.S. 
Department of Energy; Volkswagen; Voltage Vehicles/ZAP.
                                 ______
                                 
     Prepared Statement of the American Society of Plant Biologists

    The American Society of Plant Biologists (ASPB) appreciates this 
opportunity to submit testimony on the fiscal year 2007 budget request 
for the Department of Energy Office of Science. We urge the committee 
to approve the President's proposal in the American Competitiveness 
Initiative, Advanced Energy Initiative and fiscal year 2007 budget 
request for an increase of 14 percent to $4.1 billion for the DOE 
Office of Science. Included with the President's budget request is $255 
million for the Chemical Sciences, Geosciences and Energy Biosciences 
Division. A total of $35.8 million within the division is requested by 
the President for the Energy Biosciences program. We urge you to 
support the President's request for Basic Energy Sciences, the Chemical 
Sciences, Geosciences and Energy Bioscience Division and the Energy 
Biosciences program within the division.
    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.
    We fully support the President in his State of the Union Address in 
which he called for the Nation to conduct energy research for bio-fuels 
to help break the Nation's addiction to foreign oil. The President 
explained in the State of the Union Address and in subsequent talks in 
Tennessee, Minnesota and Colorado soon after, that research on plant 
cellulose to produce ethanol, on switch grass, wood chips and other 
sources of bio-energy could help transition a significant portion of 
the Nation's transportation sector away from imported gasoline to 
domestically produced bio-fuels.
    Research the committee supported within the Energy Biosciences 
program led to the landmark discovery of how to break down plant 
cellulose into ethanol. We applaud the committee for its support of 
basic research on plants and microbes within the Energy Biosciences 
program and within the Office of Biological and Environmental Research 
to help make possible the President's achievable proposal to make 
domestically produced bio-fuels directly cost competitive with 
gasoline.
    As ASPB President, Michael Thomashow, University Distinguished 
Professor at Michigan State University, a member of the National 
Academy of Sciences, noted, with the development of ``genomic 
sciences'' and sophisticated new instrumentation, we can now probe the 
life of plants at levels that just a few years ago seemed, at best, to 
be wishful thinking. Indeed, given the distance that we have come since 
the plant sciences entered the modern ``molecular genetic era,'' 
ushered in with the advent of plant transformation systems during the 
1980's, the goal of understanding plant processes at a ``systems'' 
level would not appear to be just a trendy pipedream, but a real, 
attainable goal within the not-too-distant future, Thomashow noted.
    How will we use these powerful new approaches and the insights that 
we gain about basic plant biology? The answer is that they will be used 
in many ways and have many applications ranging from the nutritional 
enhancement of food products to the production of bio-fuels and 
feedstocks for the chemical and pharmaceutical industries. One area 
that is particularly exciting is the development of renewable energy 
sources.
    We are all well aware of the geopolitical challenges that are posed 
by our current dependence on non-renewable sources of energy. In 
addition, we are well aware of the negative impacts that using many of 
these energy sources can have on the environment, such as emissions of 
greenhouse gasses attendant with the use of petroleum-based 
transportation fuels. It would be wonderful if we could replace 
petroleum-based transportation fuels with more environmentally friendly 
``bio-fuels'' produced from renewable ``energy crops.'' For some within 
the oil and related industries, the doubt arises whether this is even 
within the realm of possibility. Could the United States, for instance, 
grow and harvest enough ``biomass'' on an annual basis to produce 
enough ethanol and bio-diesel to significantly decrease our dependence 
on petroleum-based transportation fuels without jeopardizing the 
production of food to feed the Nation and to meet export demands?
    This general issue was addressed in a joint study by the U.S. 
Department of Energy and U.S. Department of Agriculture released in 
April 2005. The results were published in a report entitled ``Biomass 
as Feedstock for a Bioenergy and Bioproducts Industry: The Technical 
Feasibility of a Billion-Ton Annual Supply'' (http://
www.eere.energy.gov/biomass/pdfs/final_billionton_vision_report2.pdf). 
In particular, the study committee asked whether the land resources of 
the United States would be capable of producing a sustainable supply of 
biomass sufficient to displace 30 percent or more of our current 
petroleum consumption, a goal that would require the production of 
approximately 1 billion dry tons of biomass feedstock per year. In 
short, the study committee concluded that the answer to this question 
is ``yes''; that annually, U.S. forest and agricultural lands have the 
potential to produce, respectively, over 360 and 990 million dry tons 
of biomass feedstock. Reaching these levels of biomass production, 
however, will require a number of developments including changes in 
production practices and significant increases in crop yields. For 
example, crop land would likely be managed with no-till methods and a 
50 percent increase in the yields of corn, wheat and other small grain 
crops would be required.
    Using biomass feedstocks to provide significant levels of renewable 
energy is an exciting, inspiring vision for the future of America and 
the greater world community. The goal set by John F. Kennedy of putting 
a human being on the moon by the end of the 1960's served as a unifying 
theme that helped nucleate efforts that led to spectacular advances in 
science and technology and, equally importantly, helped attract young 
people to these areas of study. Setting national and international 
goals for producing renewable, environmentally friendly energy sources 
also has the potential to stimulate important advances in science and 
technology and to attract young people to these areas of study. In 
regard specifically to plant scientists, such goals also provide a 
framework for integrating much of plant biology research. Understanding 
plant growth and development at a systems level feeds into increasing 
biomass, as does understanding basic mechanisms of abiotic and biotic 
stress tolerance. Understanding how cell walls are synthesized and 
their composition determined is not only fundamental to our knowledge 
of basic plant biology, but also is a central issue in biomass 
production and conversion. The same can be said of understanding how 
plants synthesize and regulate the production of lipids and oils as 
well as many other plant constituents and processes.
    Plant scientists have a fundamental role to play in developing 
clean, renewable energy sources thanks in large part to the history of 
strong support for the Energy Biosciences program of this committee.
    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.
    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.
    ASPB is a non-profit society of nearly 6,000 scientists based 
primarily at universities. ASPB publishes the two most-frequently cited 
plant science journals in the world, Plant Physiology and The Plant 
Cell. We deeply appreciate the continued strong support of the 
committee for innovative research on plants and microbes sponsored by 
the Office of Science, Office of Basic Energy Sciences through its 
Energy Biosciences program and Office of Biological and Environmental 
Research. Please let us know if we could provide any additional 
information.
    Disclosure Statement on Federal Grant Support.--The American 
Society of Plant Biologists (ASPB) received Federal grants from USDA-
CSREES in the amount of $7,000 in each of fiscal years 2005 and 2006 to 
help coordinate the USDA-CSREES Plant and Pest Biology Stakeholders' 
Workshop and print the subsequent workshop report. Many associations 
representing growers of commodity crops; science societies representing 
the research community; and officials administering Federal research 
programs participated.
                                 ______
                                 
        Prepared Statement of the American Geological Institute

    Thank you for this opportunity to provide the American Geological 
Institute's perspective on fiscal year 2007 appropriations for 
geoscience programs within the subcommittee's jurisdiction. The 
President's budget requests significant cuts in the Department of 
Energy (DOE) research programs related to energy resources. In 
particular, the President's request would eliminate the Office of 
Fossil Energy's oil and natural gas technology research programs and 
the Office of Energy Efficiency and Renewable Energy's geothermal 
technology research program. Given the interest of the administration 
and Congress to reduce the Nation's foreign oil dependence and reduce 
gasoline prices, it seems like an inopportune time to eliminate 
programs that could help with these objectives. We hope that Congress 
will restore funding for these programs. AGI applauds the requested 14 
percent increase for the largest supporter of physical science research 
in the United States, DOE's Office of Science, and encourages the 
subcommittee's full support for this increase. We also support the 
President's Advanced Energy Initiative which includes increased funding 
for clean energy research. The request focuses spending on solar, 
biomass/biofuels, hydrogen fuel, FutureGen and nuclear power, however, 
other clean energy alternatives, such as geothermal, could be included 
in appropriations while remaining consistent with national needs and 
objectives.
    AGI is a nonprofit federation of 44 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 2007 Energy and Water and Related Agencies Appropriations bill. 
Over the past 5 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 developing new 
technologies concentrated on our domestic resources. However, without 
Federal 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. 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 program's 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 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 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 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 grown by 14 percent from about $3.6 billion last year to $4.1 
billion. AGI asks that you support this much needed increase.
    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.
    The Basic Energy Sciences (BES) would remain the largest program in 
the office with an increase of 25 percent from $1.134 billion in fiscal 
year 2006 to $1.420 billion in fiscal year 2007 in the President's 
request. Within the BES, Chemical Sciences, Geosciences and Biosciences 
would receive a $47.9 million increase over their fiscal year 2006 
budget. About half of this increase would go toward the President's 
Hydrogen Initiative ($6 million increase) and basic research related to 
energy technologies ($22.4 million increase) and the other half would 
go toward nanoscale science research ($22.2 million increase). Other 
programs would be reduced by $3.2 million to make up the difference 
between these increases and the overall budget.
    AGI strongly supports the requested increases for these programs.
    Thank you for the opportunity to present this testimony to the 
subcommittee.
                                 ______
                                 
          Prepared Statement of the Energy Sciences Coalition

    Chairman Domenici, the Energy Sciences Coalition (ESC) expresses 
its great appreciation for the leadership you have shown as Chairman of 
the Energy and Water Development Appropriations Subcommittee. We 
applaud your vision of how the programs of the Department of Energy's 
Office of Science will lead to research discoveries and technological 
developments benefiting this and future generations.
    The Energy Sciences Coalition is a broadly-based organization 
representing scientists, engineers and mathematicians in universities, 
industry, professional societies and national laboratories. We share 
your belief that the research supported by the Office of Science has 
and will make significant contributions to our Nation's security and 
standard of living.
    ESC strongly and enthusiastically supports the President's fiscal 
year 2007 budget request of $4.1 billion for the Department of Energy's 
Office of Science. This historic level of funding, outlined in the 
President's American Competitiveness Initiative, will allow the DOE to 
move forward with the tremendous scientific opportunities outlined in 
the Office of Science Strategic Plan and in its 20-Year Scientific 
Facilities Plan. It is also consistent with your PACE legislation and 
with the recommendations made by the National Academies' in its report, 
``Rising Above the Gathering Storm.''
    ESC believes that this landmark request is solid and necessary to 
keep United States science and engineering at the forefront of global 
research and development in the physical and biological sciences, 
computing and many other critical scientific fields. It is an 
investment in our future.
    Our Nation benefits not only from the discoveries that will be made 
with this support, but also from the training of America's next 
generation of researchers. Such training will be instrumental in 
maintaining our Nation's technological superiority in the international 
marketplace. The Office of Science also plays an extremely important 
and unique role in the design, construction, and operation of large-
scale user facilities used by researchers supported by the Department 
of Energy, the National Institutes of Health and the National Science 
Foundation, as well as private industry researchers.
    In closing, I again express the Coalition's gratitude for the 
leadership that you and your colleagues have demonstrated in supporting 
the important work of the Office of Science. Please do not hesitate to 
contact me if the Coalition can be of any assistance.

    ATTACHMENT: FISCAL YEAR 2007 ENERGY SCIENCES COALITION FUNDING 
                               STATEMENT

Support the President's Request for $4.1 Billion for the Department of 
        Energy (DOE) Office of Science
    The Energy Sciences Coalition (ESC) strongly and enthusiastically 
supports the President's fiscal year 2007 budget request of $4.1 
billion for the Department of Energy (DOE) Office of Science, a 14.1 
percent increase above the fiscal year 2006 funding level. This 
historic level of funding outlined in the President American 
Competitiveness Act will allow the DOE to move forward with the 
tremendous scientific opportunities outlined in the Office of Science 
Strategic Plan and in its 20-Year Scientific Facilities Plan. It is 
also consistent with bipartisan legislation introduced in Senate (the 
``Protecting America's Competitive Edge'' Act, or PACE legislation) and 
by recommendations made by the National Academies in its report, 
``Rising Above the Gathering Storm''.
    ESC believes that this landmark request is solid and necessary to 
keep United States science and engineering at the forefront of global 
research and development in the physical and biological sciences, 
computing and many other critical scientific fields. It is an 
investment in our future.
    The mission of the Office of Science is to deliver the discoveries 
and scientific tools that transform our understanding of energy and 
matter and advance the national, economic and energy security of the 
United States. The DOE Office of Science is one of the primary sponsors 
of basic research in the United States, leading the Nation in its 
support for the physical sciences and critical to other fields such as 
computing and biology. Strong support for DOE scientific research is 
essential to advancing a broad array of research subjects in order to 
improve our energy, economic and national security and in addressing 
the ancillary issues such as super computing, nanotechnology, 
environmental remediation, climate change, genomics and life sciences.

                    ATTACHMENT: STATEMENT ENDORSEES

Fiscal Year 2007 ESC Funding Statement Endorsements
    Alliance for Science & Technology Research; American Institute for 
Medical and Biological Engineering; American Institute of Physics; 
American Physical Society; American Society for Microbiology; American 
Society of Agronomy; American Society of Plant Biologists; American 
Society of Mechanical Engineers; Association of American Universities; 
Biophysical Society; Crop Science Society of America; Federation of 
Materials Societies; Florida State University; Fusion Power Associates; 
General Atomics; Indiana University; International Society for Optical 
Engineering; Iowa State University; Michigan State University; National 
Association of State and Land-Grant Universities; Ohio State 
University; Oregon State University; Princeton University; Rensselaer 
Polytechnic Institute; Soil Science Society of America; Southeastern 
Universities Research Association; Stanford University; University of 
California; University of Chicago; University of Tennessee; University 
of Wisconsin-Madison.
                                 ______
                                 
 Prepared Statement of the Independent Petroleum Association of America

    Members: 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; 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; and the 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 82 percent of domestic natural 
gas, and produce about 68 percent of domestic oil--well above that 
percentage of the oil in the lower 48 States.
    Thank you for the opportunity to provide input on the critical need 
for the Department of Energy's Office of Fossil Fuels Oil and Natural 
Gas Technologies programs. The Independent Petroleum Association of 
America (IPAA), represents over 5,000 producers of domestic oil and 
natural gas. Independents drill 90 percent of the Nation's oil wells 
and produce 82 percent of the Nation's natural gas and 68 percent of 
domestically-produced oil. IPAA urges the subcommittee to maintain 
funding for the Department of Energy's (DOE), Office of Fossil Fuels 
Oil and Natural Gas Technologies programs at $64 million, the 
appropriated level for fiscal year 2006. In addition, IPAA urges the 
subcommittee to fund the non-conventional onshore/ultra-deepwater/small 
producer program and the methane hydrates technology program at the 
authorized levels included in the Energy Policy Act of 2005 ($100 
million and $20 million respectively.)
    IPAA is concerned that the administration's ``zero'' budget request 
for the Department of Energy's oil and natural gas technologies 
programs for fiscal year 2007 will diminish the development of key 
exploration and production technologies designed to improve domestic 
oil and natural gas production.
    This is the second year that the administration has proposed to 
terminate funding for these vitally important programs, 85 percent of 
which historically have focused on exploration and production 
activities associated with independent producers. In most instances, 
these companies do not have access to the in-house technology 
development capabilities of the larger, integrated, multi-national oil 
companies. Therefore, federally funded research and development (R&D) 
should be considered essential to maintain a viable, robust, domestic 
producing sector.
    With respect to both the non-conventional onshore/ultra-deepwater/
small producer program and the methane hydrates program the 
administration included language in its budget request to repeal the 
former, and to provide no funding for the latter, though both are 
authorized in the Energy Policy Act of 2005. IPAA believes that these 
programs will play a crucial role, if we are to reduce our energy 
dependence in the years to come.
    Full, consistent funding for development of all these programs is 
essential to meet the President's objectives to reduce our dependency 
on foreign sources of energy. In the case of the existing oil and gas 
technologies programs, they have provided a variety of functions, 
primarily focusing on domestic exploration and production research and 
development activities, resulting in sustaining and in most instances, 
increasing domestic oil and gas production. Such research and 
development activities, conducted by universities, DOE laboratories and 
the private sector have culminated in the development of exploration 
and production (E&P) technologies, which have resulted in an increase 
in production of product, in a more environmentally sensitive manner, 
with a much smaller environmental footprint.
    In a statement issued on October 17, 2005, in conjunction with 
DOE's announcement of 13 new oil and gas technologies/R&D projects, 
Secretary of Energy Samuel Bodman said, ``This administration continues 
to seek out and develop new energy options to support our growing 
economy.'' He continued, ``The projects we are funding today are an 
investment in our Nation's energy security and economic security, and 
will help us obtain the maximum benefit of our domestic energy 
resources in an environmentally sensitive way.''
    The statement went on to point out that the sources of 
unconventional natural gas that these projects would assist in the 
development of contain an estimated 700 trillion cubic feet (Tcf), 
compared to an industry estimate of 190 Tcf in conventional natural gas 
reserves.
    The statement also attempted to put into context the significance 
of accessing these reserves, noting that ``natural gas accounts for 
nearly one quarter of total domestic supply, a share that will rise 
with future technological advancements such as those being investigated 
by the funded projects.''
    Similarly, development of methane hydrates and non-conventional 
onshore/ultra-deepwater represents tremendous potential for supplying 
America's growing natural gas needs. In the case of methane hydrates, 
the U.S. Geological Survey (USGS) estimates the United States to have 
about 200,000 trillion cubic feet of methane hydrate. Meanwhile, the 
ultra-deep area alone will tap 1,300 trillion cubic feet of technically 
recoverable reserves--enough to meet 60 years of demand at current 
rates of consumption.
    DOE's programs play an essential role in the training and 
development of qualified people for the oil and gas sector, a challenge 
which continues to grow at an alarmingly rapid rate. The DOE oil and 
natural gas programs provide vital support to petroleum engineering 
departments across the country. According to a letter dated April 4, 
2005 from the University of Texas' Department of Petroleum and 
Geosystems Engineering to the Subcommittee on Energy and Water 
Development Appropriations, ``. . . our ability to retain the best 
faculty who are needed to train Petroleum Engineers for the coming 
decades depends entirely on our being able to provide research funding 
to the faculty.'' The letter goes on to say, ``Lacking this 
opportunity, there will not be many viable petroleum engineering 
programs left in the U.S.'' Ironically, this statement is reflective of 
goals that are outlined in the recently introduced Protecting America's 
Competitive Edge Act (PACE), and the President's American 
Competitiveness Initiative.
    IPAA commends the President's laudable goal expressed in his recent 
``State of the Union'' address, in which he laid out a ``game plan'' of 
appreciably reducing our dependency on foreign sources of oil by 2025. 
However, our Nation's economy is currently fossil fuel ``dependent''--
65 percent of domestic energy supply coming from oil and natural gas--
and will continue to be for the foreseeable future. Therefore, the 
Nation finds itself at a time when concern over increasing dependence 
on foreign oil is at an all time high, escalating fuel prices are 
running roughshod over the American consumer in the form of home 
heating bills and gasoline prices, and businesses are relocating and 
taking valuable jobs overseas with them in the pursuit of affordable 
fuel costs. The administration's failure to recognize the importance of 
investing in oil and natural gas R&D to develop critically-needed 
recovery technologies is all the more perplexing. Domestic oil and 
natural gas reserves should be front and center in any balanced 
national energy policy, treated comparably with renewable energy 
sources, coal and nuclear. Yet, the administration would essentially 
eliminate oil and natural gas from DOE's energy portfolio.
    IPAA urges the committee to support full funding for these vital 
programs.
                                 ______
                                 
Prepared Statement of the Center for Advanced Separation Technologies, 
          Virginia Polytechnic Institute and State University

    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 2007 Fossil Energy Research and Development budget, 
U.S. Department of Energy, to support CAST. Research in advanced 
separations is an integral part of the President's Hydrogen from Coal 
Research Fuels Initiative, and is critical for the continued supply of 
energy for economic growth and strategic minerals for national 
security.
    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; Richard A. Bajura, West Virginia University; Peter H. 
Knudsen, Montana Tech of the University of Montana; Richard J. 
Sweigard, University of Kentucky; and, Jan D. Miller, University of 
Utah.

  FUNDING REQUEST FOR THE CENTER FOR ADVANCED SEPARATION TECHNOLOGIES

    The Center for Advanced Separation Technologies (CAST) is a 
consortium of the seven universities listed above. It was formed in 
2001 to develop advanced technologies that can be used to efficiently 
produce cleaner fuels in an environmentally acceptable manner and to 
study the basic sciences and engineering involved. The new technologies 
developed as a result of CAST research and the highly skilled personnel 
trained during the course of its activities will help the United States 
meet the challenges of energy independence. These missions are 
consistent with President Bush's American Competitiveness Initiative, 
announced in his 2006 State of the Union Address. The President's new 
program includes doubling R&D commitments to basic research, supporting 
universities for world-class education and research opportunities, and 
training a work force with skills that can be used to better compete in 
the 21st century.

                              ORGANIZATION

    The Center for Advanced Separation Technologies (CAST) was formed 
initially between Virginia Tech and West Virginia University with the 
objective of developing advanced solid-solid and solid-liquid 
separation technologies that can help the U.S. coal industry produce 
cleaner solid fuels. In 2002, five other universities listed above 
joined the consortium to develop crosscutting technologies that can 
also be used in the U.S. minerals resources industry. As a result, the 
scope of CAST research was expanded to studies of chemical/biological 
separations and environmental control.
    As a consortium, the Center can take advantage of the diverse 
expertise available in the member universities and address the 
interests of the different geographical regions of the country. Working 
together as a consortium is consistent with the recommendations of a 
recent National Research Council (NRC) report on the U.S. Department of 
Energy's fossil energy research, which states that ``consortia are a 
preferred way of leveraging expertise and technical inputs to the 
mining sector,'' and recommends that DOE should support ``academia, 
which helps to train technical people for the industry.''

                         PROGRESS AND NEXT STEP

    At present, a total of 45 research projects are being carried out 
at the seven CAST member universities. Of these, 12 projects are in 
solid-solid separation, 5 in solid-liquid separation, 12 in chemical/
biological separation, 7 in modeling and control, and 6 in 
environmental control. The project selection was made by an industry 
panel according to the priorities set forth in the CAST Technology 
Roadmap developed in 2002 by industry representatives. Research results 
have been presented at two workshops, the first in Charleston, WV, 
November 19-21, 2003, and the second in Blacksburg, VA, July 26-27, 
2005. Both meetings enjoyed strong participation from industry. The 
third workshop will be held in July 2007 in Blacksburg.
    CAST research has been focused on removing impurities (e.g., ash, 
sulfur, mercury and other toxic elements) from coal. Various solid-
solid and solid-liquid separation technologies are used to remove these 
impurities. In general, the efficiency of separation diminishes sharply 
with decreasing particle size. As a result, coal companies discard coal 
fines to impoundments. In the United States, approximately 70 to 90 
million tons of coal fines are being discarded annually according to a 
National Research Council report. The report was issued as a result of 
a congressional directive to investigate a major failure of a fine coal 
impoundment in Kentucky in October, 2000, which caused 300 million 
gallons of coal sludge to flood an active mine and neighboring creeks 
and rivers. There are more than 713 active water and slurry 
impoundments in the eastern United States, many of which are rated 
``high risk.'' The report suggested a study to identify appropriate 
technologies that can eliminate the need for slurry impoundments.
    CAST has been developing advanced separation technologies that can 
help U.S. coal companies recover fine coal rather than discard it to 
impoundments. One company, Beard Technologies, Inc., is currently 
building a plant designed to recover fine coal from a large impoundment 
in Pineville, WV, using the technologies developed by CAST. The plant 
will be the first to recover practically all of the coal from a waste 
impoundment without the benefit of a tax credit. If the project is 
successful, it is anticipated that many other companies will follow 
suit. The enabling technology used in the Pineville recovery plant is 
the use of chemical additives that can remove moisture from fine coal 
during vacuum filtration. CAST is developing several other dewatering 
technologies, which include hyperbaric centrifuge, hyperbaric 
horizontal belt filter (HHBF), and a flocculant injection system. In a 
recent pilot-scale test conducted with the hyperbaric centrifuge, it 
was possible to reduce the moisture of a fine coal (smaller than 0.15 
mm) to below 10 percent by weight without using chemical additives. The 
technology has been licensed to Decanter Machine Company, Johnson City, 
TN, which plans to construct a prototype unit for onsite testing. 
Development of the HHBF technology is also making progress. 
Construction of a pilot-scale test unit has been completed, and is 
ready for a trial. This new dewatering technology is also designed to 
reduce fine coal moisture to less than 10 percent. The flocculant 
injection system is already in use by many coal companies to minimize 
the loss of fine coal associated with the use of screen-bowl 
centrifuges, which represent the most widely-used conventional 
dewatering technology in the U.S. coal industry. In addition, Arch Coal 
Company is seriously considering installation of a deep-cone thickener, 
as a result of the work conducted at CAST, to obviate the need to build 
a fine coal impoundment.
    Despite the importance of fine coal cleaning, the bulk of the coal 
being cleaned today is coarse coal, most of which is being cleaned of 
impurities using density-based separation methods. Therefore, there is 
an interest in determining separation efficiencies using density 
tracers. Typically, plastic blocks of known densities are added to a 
feed stream, collected manually from product streams, and counted to 
determine the efficiency of separation--a process which is cumbersome 
and entails inaccuracies. Therefore, a new method has been developed in 
which each tracer is tagged with a transponder so that the destination 
of each tracer can be monitored electronically. The new technique has 
been tested successfully in several plants and is ready for commercial 
deployment. Precision Testing Laboratory, Beckley, WV, plans to market 
the new technology. Its use can help coal companies maximize the 
efficiency of cleaning coarse coal.
    Much of the basic scientific principles and technologies involved 
in coal cleaning also apply to processing ores. Therefore, CAST has 
been developing crosscutting technologies that can be used in both coal 
and minerals industries. As an example, a joint Krebs Engineers-CAST 
research resulted in the development of a novel hydrocyclone that can 
efficiently remove clay (slimes) from coal. The same technology can 
also be used in processing many industrial minerals. For instance, 
removal of clay minerals is an a priori requirement in processing the 
potash (KCl) ores in New Mexico. Laboratory experiments showed that 
more efficient desliming can increase potash recovery by 4 to 6 percent 
downstream. Implementation of these new technologies being developed at 
CAST will help the industry remain competitive against foreign 
producers and retain high-paying jobs in the country.
    The United States is the second-largest copper producer in the 
world. However, much of the ores being mined are low grade, which makes 
it difficult for U.S. companies to compete internationally. 
Traditionally, copper is extracted from an ore through a series of 
processes, including grinding, flotation, smelting, and refining, which 
are energy-intensive and hence costly. CAST is currently developing new 
technologies to facilitate the application of alternative leaching/
impurity removal/electrowinning processes that can replace the costlier 
steps of grinding, flotation, smelting, and refining. The alternative 
processes should require substantially lower capital costs and reduce 
energy consumption by 50 percent.
    The mining industry has been extracting gold using cyanide, which 
is toxic. Therefore, CAST has been developing an environmentally benign 
extraction method using alkaline sulfide. Bench-scale continuous tests 
conducted using this new lixiviant showed that the extraction 
efficiency is as good as those obtained using cyanide.
    In addition to the more practical projects described above, CAST 
has also conducted fundamental research. As an example, a mathematical 
model has been developed to describe the flotation process, which is 
the most widely-used and versatile solid-solid separation process used 
in both the coal and minerals industries. The model is based on first 
principles so that it has predictive and diagnostic capabilities. In 
another project, a computational fluid dynamic (CFD) simulation 
technique has been used to design optimal flotation machines. This 
project is co-funded by Dorr-Oliver EIMCO, Utah. In addition, the 
surface forces acting between two microscopic surfaces immersed in 
water have been measured using the atomic force microscope (AFM) and 
the surface force apparatus (SFA). The results show that strong 
attractive forces are present between hydrophobic surfaces, the origin 
of which is not yet known. The newly-discovered surface forces, which 
are referred to as ``hydrophobic force'' play an important role in the 
separation of hydrophobic energy ``minerals'' such as coal, oil, 
bitumen, and kerogen from hydrophilic waste minerals such as clay, 
silica and others.

                     FUNDING REQUEST AND RATIONALE

    The United States is by far the largest mining country in the 
western world, followed by South Africa and Australia. In 2004, the 
U.S. mining industry produced $63.9 billion of raw materials, including 
$19.9 billion of coal and $44 billion of minerals. Australia is a 
smaller mining country but has five centers of excellence in advanced 
separations as applied to coal and minerals processing. Last year, 
Australia established the Mineral Science Research Institute, a 
consortium of four mining schools, with a funding of $22.6 million for 
the initial 5-year period. In the United States, CAST is the only 
federally-funded consortium serving the mining industry. According to a 
congressional testimony by K. Mark Le Vier, President of the Mining and 
Metallurgical Society of America, 50 percent or more of the faculty in 
the U.S. mining schools will retire in the next 5 years. Continued 
funding of the CAST program is critical for producing a trained 
workforce for the industry.
    CAST has been developing a broad range of advanced separation 
technologies. Although it is a relatively new research center, some of 
the projects have yielded technologies that are already in use in 
industry. Many other promising research projects are on-going and 
require continued support. Working as a consortium is an effective way 
of exchanging ideas and utilizing diverse expertise required to solve 
major problems. Continued funding will allow CAST to develop advanced 
technologies that can be used to produce cleaner coal in an 
environmentally acceptable manner. Furthermore, the advanced 
technologies can be used not only to clean up the troublesome waste 
impoundments that have been created in the past but also to eliminate 
the need to create them in the first place.
    For fiscal year 2007, CAST is requesting $3 million to (i) develop 
crosscutting separation technologies, (ii) better understand the basic 
sciences involved, and (iii) produce highly-skilled engineers and 
scientists. Although the aim of the proposed research is to benefit the 
U.S. mining industry, its results should also help the President's 
initiatives to develop a hydrogen economy and to produce biofuels more 
efficiently (e.g., separating ethanol from water without distillation). 
Further, the results can be used to develop technologies for extracting 
kerogen from oil shale, of which the United States has 72 percent (1.2 
trillion barrel equivalent of oil) of the world's reserves. A steady 
supply of fuels and strategic minerals is critical for the continued 
growth of the economy and for national security.
                                 ______
                                 
             Prepared Statement of Fusion Power Associates

    In marking up the fiscal year 2007 budget for the Dept. of Energy, 
NNSA, Inertial Confinement Fusion Program, I strongly urge you to 
provide funds, unrequested by the DOE, for Z-pinch repetitively pulsed 
power program (approximately $15 million) at Sandia National 
Laboratories and for High Average Power Laser efforts (approximately 
$25 million). The Congress has supported the High Average Power Laser 
program for several years. The Z-pinch repetitively pulsed power 
program was funded by Congress in fiscal year 2005 but was not 
specifically funded in fiscal year 2006 and hence was drastically 
reduced this year.
    These programs are needed to capitalize on the successes of the 
NNSA single pulse inertial confinement fusion efforts for weapons 
research so that the technology will be available in a timely manner 
for energy applications.
    Thank you for your consideration.
                                 ______
                                 
  Prepared Statement of the Great Basin Center for Geothermal Energy, 
                       University of Nevada, Reno

    Senate Energy and Water Subcommittee, our need for energy 
independence and indigenous energy sources has never been greater, yet 
the U.S. DOE funding for geothermal energy research appears to be in 
jeopardy in fiscal year 2007. As part of a comprehensive energy plan, 
geothermal energy, among other renewable energy resources, must be 
utilized to help offset fossil fuel uses, diversify the Nation's power 
supply, and provide base load power. Geothermal energy should be one 
component of a well-balanced implementation of the National Energy 
Policy. As the National Research Council concluded (Renewable Power 
Pathways, 2002), given the enormous potential of the geothermal 
resource base, research by the U.S. DOE should be increased, 
particularly into technologies that can reduce risk, reduce costs, or 
expand the accessible geothermal resource base.
    As a personal supporter of geothermal and renewable energy sources, 
and as a long-time researcher in geothermal energy, I urge your support 
of renewable energy sources in the coming budget cycles. We need to 
increase, not decrease, geothermal energy support in the Department of 
Energy. I express my support here for funding DOE's geothermal research 
efforts in fiscal year 2007 and beyond at no less than $30 million. The 
currently funded research at the Great Basin Center for Geothermal 
Energy has found, and continues to find, new geothermal resources in 
the Great Basin and we have developed new technologies to locate, 
characterize and assess these resources with a relatively small 
investment from the DOE geothermal technologies program. These programs 
should be continued, and development of geothermal resources 
accelerated. We should also continue evaluating geothermal energy for 
the production of hydrogen, for which there is currently an actively-
funded research program here at UNR. Continued geothermal research will 
benefit the industry, and a robust geothermal industry will greatly 
contribute to alleviating national security energy concerns.
    Thank you for consideration of this matter.
                                 ______
                                 
                 Prepared Statement of David J. Bardin

    Mr. Chairman and members of the subcommittee, as a private citizen 
who served at DOE during its formation, I urge you to:
  --(A) Restore Office of Fossil Energy funding, that the 
        administration proposed to zero out, for petroleum research and 
        development (including CO2-EOR) and petroleum 
        technology transfer to independent oil producers and others, 
        and
  --(B) add $4 million, half to OFE and half to the Energy Information 
        Administration:
    --(1) to enhance OFE and EIA capabilities to assess domestic oil 
            resources and recovery potentials--especially for 
            production of liquid fuels from ``continuous-type'' 
            formations that are scarcely touched today--and,
    --(2) to stand up a ``Red Team'' (a) to challenge conventional-
            wisdom ``Blue Team'' projections that lower-48 States 
            onshore production will inevitably decline from year to 
            year and (b) to identify in timely fashion critical 
            infrastructure issues that significant growth potentials 
            will likely raise.
    A new crude oil production ``play'' in Montana and North Dakota 
(depicted this month by the Wall Street Journal[1]) illustrates 
compelling reasons for these recommendations.

                BAKKEN FORMATION OF THE WILLISTON BASIN

    Montana's production from the Bakken formation has more than 
doubled each year since discovery of the Elm Coulee Field in 2000, 
averaging 43,000 bbl per day during 2005, and exceeding 50,000 bbl per 
day by year end.[2] This is already the largest onshore discovery in 
the lower-48 States in half a century; it is still growing. ND Bakken 
production is also up. OFE recently released a report[3] noting that 
studies have suggested as much as 150 billion barrels (perhaps more) of 
total resources in place in just the North Dakota portion of the 
Williston Basin's Bakken. The Wall Street Journal reported an 
unpublished estimate of more than 200 billion barrels of recoverable 
oil in place.[4]
    The 13 operators involved in MT's Elm Coulee field are 
independents.[5] None of the oil industry giants is involved in the 
Bakken play; those giant companies concentrate their efforts on multi-
billion-dollar projects overseas, in Canada, or in the deep waters of 
the Gulf of Mexico. Today's MT and ND play, where a well may cost a few 
million dollars, can produce enough to affect an independent's ``bottom 
line''--but not a giant's.

                           RESTORE OFE BUDGET

    Dry holes are virtually unknown in the continuous-type Bakken 
Source System, but profitable production depends on applying 
technologies that will work for this resource. Some of the technologies 
are ready today--if brought to the attention of the operators.
    The Petroleum Technology Transfer Council engages in just that 
valuable work, for the Bakken resources (and others), yet the 
administration unwisely proposes to zero out Federal support for the 
PTTC (which is primarily funded through OFE's budget).[6]
    Moreover, more R&D is still needed to adapt technologies to the 
circumstances of the Bakken--with plenty of trial and error in all 
likelihood. Otherwise 80-98 percent of the oil may remain stranded in 
the rocks.[7] Yet the administration would zero out R&D.
    Congress should make funds available to OFE, at least at last 
year's level, to sustain technology transfer and help solve R&D 
challenges, on a matching basis. Federal funding to support onshore 
innovations is justified, particularly where independents are leading 
the way.
    Ideally, Congress should assure dedicated funding for onshore oil 
and associated gas R&D (as well as non-associated gas funding, such as 
the Gas Research Institute used to provide). Past industry and DOE 
efforts succeeded in showing how to produce more domestic non-
associated gas resources--notably including such continuous-type 
resources as coal bed methane and the Antrim Shale of the Michigan 
Basin; and most recently the Barnett and Bossier Shales.[8] The MT and 
ND Bakken resources invite similar breakthroughs for continuous-type 
crude oil resources.

                      ENHANCE EIA AND OFE BUDGETS

    Congress should also make new funds available to EIA and OFE in 
order to enable DOE to provide critically important information--to the 
investment community as well as independent producers. Restoration of 
EIA capabilities might produce dividends of strategic importance to our 
country over the next half century. A ``Red Team'' of OFE and EIA (and 
possibly others) might help avoid painful surprises--e.g., by exposing 
risks that transportation infrastructures may be inadequate to serve 
increases in production.
    Frankly, EIA projections (in all cases examined) now discourage 
investments--both in production and in transportation facilities--by 
seeming to show that domestic, on-shore, lower-48 production must 
decline steadily over 25 years from close to 3 million barrels a day to 
barely 2 million. Is that necessarily so?[9]
    EIA models for crude oil production rely on extremely cautious 
assessments of technically-recoverable resources by the USGS. In 
contrast, EIA independently (and less cautiously) models non-associated 
natural gas resources and recoverability. Some OFE assessments 
(integral to research program efforts) may also have been modestly more 
progressive than USGS's.
    The estimate of total U.S. technically recoverable crude oil 
resources on which EIA relies (175 billion barrels) includes barely 2 
billion barrels in continuous-type deposits such as the Bakken.[10] 
Contrast Leigh Price's estimate (held back by USGS) of over 200 billion 
barrels of technically recoverable resource in the Bakken continuous-
type deposit alone. The discrepancy begs for frank acknowledgement and 
rigorous investigation.
    It is too many years since DOE prepared its own crude oil resource 
assessment. The Bakken Source System offers a fine opportunity to try 
out a DOE alternative to USGS. The current MT and ND Bakken play has 
already increased domestic oil production at an important time for our 
country and demonstrated that the 1995 USGS estimate (still used by 
DOE) is far too low.[11]
    Congress should direct OFE, working with EIA, to perform a resource 
appraisal of the Bakken Source System of the MT and ND portions of the 
Williston Basin as an example of continuous crude oil resources in a 
self-sourced reservoir. Such reservoirs:
  --represent a large portion of what is left to be found on-shore in 
        the lower-48 States generally and in the Rocky Mountain region 
        particularly;
  --are under-studied; and
  --have a significant potential that may not have been adequately 
        characterized in the past.
    OFE has performed similar appraisals as part of its research 
program. EIA used to perform such appraisals for foreign resources in 
Russia, the Middle East, and other areas.
    A new appraisal of these ND and MT resources here at home could be 
important in and of itself as well as an exciting experiment that may 
be applicable elsewhere in the lower-48 States, especially the Rocky 
Mountain region. I envisage a series of reports:
  --Step one, the easiest, would simply rerun EIA long-term projections 
        substituting an assumed increment of Rocky Mountain technically 
        recoverable Bakken oil resource over and above the USGS 
        assessment.
  --Step two would arrive at an EIA/DOE estimate (or range) weighing 
        various studies suggesting over 150 billion barrels of Bakken 
        oil in place, including Price's 5-year-old estimate of 413 
        billion barrels in place of which half is technically 
        recoverable. This step will want a ``Red Team'' assigned to 
        challenge and debate conventional ``Blue Team'' views within 
        DOE.
  --Step three would consider how EIA's existing models would handle a 
        huge increase in assessed lower-48 resources.
  --Step four would ask whether EIA's existing models deal adequately 
        with issues such as expansion of crude oil pipeline capacity 
        and competition between USA oil production and syn-crude and 
        other crude oils exported by Canada. EIA would do well to 
        enlist expertise of USGS and others on such issues.
  --Step five might lead to modifications of EIA models.
  --Step six could entail OFE assessments of technically recoverable 
        resources using ``next generation'' CO2 and other 
        enhanced oil recovery technologies to more fully recover vast 
        Bakken oil resources.
  --Seventh, and most important, would be DOE leadership to identify, 
        in cooperation with the States of Montana and North Dakota and 
        industry (and our Canadian friends), potential prerequisites 
        for bringing barely tapped resources to market (e.g., 
        increasing availability of geologic and other data, learning 
        lessons from Bakken well histories, deploying advanced 
        production technologies, planning for expanded infrastructure 
        on a timely basis) and to foster effective basin-specific moves 
        to get on with the job.
    Congress should fund restoration of EIA's capacity to monitor and 
inform about technology innovations in the oil and gas production 
industry. Such information could improve EIA's take on recoverability 
of resources for its long-term projections.
    Technology goes to the heart of energy performance. Yet no one can 
really evaluate USGS technology assumptions because USGS won't disclose 
estimates of resources in place. An alternative DOE assessment of the 
Bakken should certainly be transparent as to resources in place, 
thereby challenging people inside and outside the industry to invent 
ways to enhance recovery factors.
    The bottom line goes far beyond assembling information. We want (a) 
to understand more fully the value of our Nation's untapped oil 
resources in the overall public interest in the broadest sense--
including oil resource in the Bakken (very little of which involves 
federally-owned land)--and (b) to anticipate downstream issues, such as 
today's impact of Canadian upgraded syn-crude, diluted bitumens, and 
heavy oils.

                               CONCLUSION

    In the face of energy uncertainty and insecurity, Congress should 
fund and demand more R&D, technology transfer, and information about 
domestic crude oil potentials and challenges because:
  --so much domestic oil remains stranded;
  --supporting R&D and technology transfer can help mobilize those 
        resources;
  --giant oil companies, on whom the administration would rely, don't 
        do enough;
  --too much of our domestic resources are unknown to Congress and the 
        public;
  --we now project undue helplessness to ourselves, our friends, and 
        our enemies.
    Thank you.[12]

                               END NOTES

    [1] ``Second Look: WILDCAT PRODUCER SPARKS OIL BOOM ON MONTANA 
PLAINS: After Majors Pulled Out, Mr. Findley Drilled Anew; Size of Find 
Still Unclear'', WSJ Apr. 5, 2006, p. A1.
    [2] On April 9 the American Association of Petroleum Geologists 
conferred its Outstanding Explorer Award on Richard L. ``Dick'' Findley 
of Billings, MT, in recognition of outstanding achievement in 
exploration for petroleum--citing him as ``an intrepid oil finder, 
accomplished stratigrapher, and entrepreneur for his efforts and 
imagination in discovering the `sleeping' giant Elm Coulee oil field in 
the Bakken Formation, Williston Basin, Richland County, Montana.''
    [3] Advanced Resources International, February 2006, Basin Oriented 
Strategies for CO2 Enhanced Oil Recovery: Williston Basin, 
prepared for the Department of Energy Office of Fossil Energy, part of 
a series on increasing domestic oil production.
    [4] A comprehensive geological report by Leigh C. Price (a USGS 
scientist for 27 years), documented his estimate of 413 billion barrels 
in place and suggested why over half could be recovered. After Price's 
untimely death in August 2000, USGS ``misplaced'' that document, but 
the Energy and Environmental Research Center of the University of North 
Dakota has posted it as a free download at www.undeerc.org, and the 
Petroleum Technology Transfer Council has posted a link among its rich 
collection of Bakken case studies. See www.mines.edu/research/PTTC/
(``Seminal Bakken Paper''). Price, L.C. ``Origins and Characteristics 
of the Basin-Centered Continuous Reservoir Unconventional Oil-Resource 
Base of the Bakken Source System, Williston Basin''.
    [5] Source.--Jim Halvorson, MT Oil & Gas Conservation Board.

                         BAKKEN CRUDE OIL--ANNUAL PRODUCTION--ELM COULEE FIELD [BBL/YR]
----------------------------------------------------------------------------------------------------------------
        Company Name             2000        2001        2002          2003            2004            2005
----------------------------------------------------------------------------------------------------------------
Armstrong Operating, Inc....  ..........      11,281      21,774          22,562          29,748          35,018
Burlington Resources Oil &    ..........  ..........  ..........  ..............         218,066       1,323,852
 Gas Company LP.............
Chaparral Energy, LLC.......  ..........  ..........  ..........  ..............  ..............          96,654
Continental Resources Inc...  ..........  ..........  ..........          90,101         853,228       2,810,965
EOG Resources, Inc..........  ..........  ..........  ..........          73,824         660,040       1,018,896
Headington Oil LP...........  ..........      20,788     145,610       1,293,039       2,554,072       3,675,139
Lyco Energy Corporation.....      21,164     245,715     630,691       1,147,021       2,406,618       4,035,471
Nance Petroleum Corpor-       ..........  ..........  ..........          34,665         241,559         807,487
 ation......................
Petro-Hunt, LLC.............  ..........  ..........  ..........          48,883         308,299         376,506
Slawson Exploration Company   ..........  ..........  ..........  ..............          99,900         815,272
 Inc........................
Staghorn Energy, LLC........  ..........  ..........  ..........  ..............          53,342          20,942
Stone Energy Corporation....  ..........  ..........  ..........  ..............  ..............         214,252
Westport Oil And Gas Co.,     ..........  ..........  ..........  ..............         140,254         483,059
 L.P........................
----------------------------------------------------------------------------------------------------------------

    [6] See www.pttc.org and PTTC's Rocky Mountain regional page, cited 
in note 4, for examples of presentations on Bakken oil geology and 
technology at Rocky Mountain forums. See ``World Oil'' 's March 2006 
issue for important hands-on technology information that the PTTC helps 
to publish and spread. T. Lantz and C.B. Wiley, ``Learning process 
optimizes horizontal drilling and completion techniques'' also posted 
at http://www.pttc.org/case_studies/PTdigest03-06.htm.
    [7] The current play started with one horizontal well (10,000 feet 
deep vertically extending 4,000 feet laterally) completed in Richland 
County, MT, in the year 2000. That well aimed at brittle, dolomite 
rocks adjacent to the more plastic Bakken shale and used a brand-new 
technology to fracture the lateral part of the well (a method of 
stimulation that the operator recently repeated). These 13 operators 
invested successfully, seeking oil in the most prolific part of the 
Bakken Source System (the adjacent brittle rocks) while avoiding the 
shale itself (at which a previous, disappointing horizontal play had 
aimed). With the help of service companies, they apply new technologies 
that are readily transplanted to their wells (notably fracturing a 
lateral well bore). But the next step demands costly trial and error 
experiments to figure out how best to enhance production of different 
parts of the over-pressured Bakken Resource System oil. For example, 
maximum crude oil recovery calls for injecting a fluid, such as carbon 
dioxide, into rocks in order to maintain reservoir pressures and flow 
of the oil. During trial and error, some operators have to give up a 
part of their land holdings, some of their wells, surrendering their 
production today to experiment for the future of everyone in the 
industry--with no certainty of success.
    [8] National Research Council, 2001, Energy Research at DOE: Was It 
Worth It?--Energy Efficiency and Fossil Energy Research 1978 to 2000.
    [9] Cf. McCabe, P.J., 1998, Energy Resources--Cornucopia or Empty 
Barrel? AAPG Bulletin, v. 82, p. 2110-2134, and Caruso, G., 2005, When 
Will World Oil Peak? 10th Annual Asia Oil & Gas Conference, Kuala 
Lumpur, Malaysia.
    [10] U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Reserves 
2004 Annual Report, App. G, p. G-3. This nationwide 2 billion barrels 
of continuous-type resources includes USGS estimate of 150 million 
barrels of undiscovered, technically-recoverable Bakken oil.
    [11] The USGS baseline, released in 1995 for the entire Bakken 
system in MT and ND combined, totaled 150 million barrels of 
undiscovered, technically-recoverable oil for three sub-areas, with 70 
million of those barrels in an ``intermediate'' area that includes the 
current MT Bakken play--which has already produced 30 million of those 
70 million barrels since 2000. Bakken wells are expected to produce for 
25 years or more. Tens or hundreds of billions of barrels of Bakken oil 
may reside in place--making recovery factors (and technology to enhance 
recovery) strategically critical.
    [12] Mr. Bardin is Of Counsel to Arent Fox Kintner Plotkin & Kahn, 
PLLC (as a retired member) where he specialized in public utilities, 
energy and environmental law. Before joining Arent Fox in 1980, he 
served as Deputy Administrator of the Federal Energy Administration 
(1977) and Administrator of the Economic Regulatory Administration in 
the Department of Energy (1977-79).
                                 ______
                                 
          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 2007 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;
  --Waste Heat Recovery (21CT).--$4.806 million funding recommended;
  --Combustion and Emission Control (21CT).--$7.680 million funding 
        recommended;
  --Advanced Petroleum Based Fuels (21CT).--$4.511 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 to fruition the 
intended results, 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 the 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.
    As a founding member of the 21st Century Truck Partnership, DDC 
supports Department of Energy efforts described in Energy Secretary 
Bodman's comments to the SAE Government Industry meeting on May 10, 
2005 that ``through the 21st Century Truck Partnership, and similar 
initiatives, our Department is expanding the use of clean diesel, and 
helping to reduce our dependence on foreign oil, improve energy 
efficiency, and develop new, environmentally friendly fuels to power 
our economy in the 21st century.'' 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 urge the committee to consider further enhancements to the 
following three line items under the proposed fiscal year 2007 Advanced 
Combustion Engine R&D program element: Heavy Truck Engine, Waste Heat 
Recovery, and Combustion and Emission Control, as well as the Advanced 
Petroleum Based Fuels line item under the Fuels Technology program 
element.
    The Heavy Truck Engine has a fiscal year 2007 request of $14.490 
million. The 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 
estimates 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 aftertreatment 
systems, and smart control strategies within an integrated powertrain. 
We urge the committee to consider increasing the Heavy Truck Engine 
line item by an additional $5.51 million above the fiscal year 2007 
budget request (Total = $20 million) to assert and support the urgency 
of accelerated development of these related high-risk emerging 
technologies.
    The 21CT portion of the Waste Heat Recovery has a fiscal year 2007 
request of $3.806 million. This line item has a potential of making a 
significant contribution to the overall efficiency of the heavy-duty 
diesel engine by utilizing the thermal energy of the exhaust gases 
which is currently lost. DOE's attention to this subject is supported 
by a number of new collaborative R&D contracts in this area. We believe 
that the budget should be reflective of the fuel-saving potential of 
this research, and recommend increasing this line item by $1 million to 
$4.806 million in fiscal year 2007.
    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 aftertreatment and integration of a total 
technically viable system. The administration's $3.680 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 = $7.680 million) to handle the 
urgent technical issues of the relevant emerging technologies.
    The Fuels Technologies is a separate OFCVT program element that 
includes Advanced Petroleum Based Fuels line item request of $3.511 
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 
2007, 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 $1 
million (Total = $4.511 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 2007 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 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 Southern Company

    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 the 
committee's continued 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 Power 
Generation, Inc. (Siemens), 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. 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), Deland, FL (filter fabrication), 
and Holly Springs, MS (gasifier 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 un-integrated 
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 Roadmaps developed by DOE, EPRI, and the Coal Utilization 
Research Council (CURC). These Roadmaps identify 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\ 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 sub-bituminous, 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 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 Siemens has 
allowed system automation and controls development.
    Syngas Recycle.--Added a syngas compressor in order to use syngas 
instead of air or N2 for aeration to promote recycle solids 
flow in the Transport Gasifier and produced a higher heating value 
syngas that more closely matched commercial operating conditions.

                        PSDF FUTURE TEST PROGRAM

    Future testing at the PSDF is focused on supporting FutureGen and 
the Technology Roadmaps. These programs aim to eliminate 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.
    Plans for FutureGen recognize that some promising technologies will 
not be ready initially for installation in the back-bone plant. 
Therefore, a series of slip-stream installations to test new 
technologies is also visualized. DOE has identified the PSDF as a key 
location for support testing of the new technologies prior to inclusion 
in FutureGen. With adequate funding, work at the PSDF will include:
    Transport Gasifier.--Continue transport gasifier development to 
further optimize performance, explore feedstock flexibility, and 
provide syngas for testing of downstream systems.
    Coarse Ash Handling.--Continue testing of a coarse ash 
depressurization system, with no moving parts, which has been developed 
at the PSDF. Like the fine ash removal system successfully developed 
earlier, this system reduces capital and maintenance cost and improves 
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 for use in both advanced combustion 
and gasification technologies.
    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.
    Water Gas Shift Enhancements.--A variety of water gas shift reactor 
configurations and sizes can be tested at the PSDF. Optimizing the 
operation of shift catalysts when exposed to syngas at the PSDF and 
evaluating their economics will provide valuable input for the 
FutureGen project.
                                 ______
                                 
       Prepared Statement of the American Iron & Steel Institute

    The basis for this testimony is to urge Congress to restore funding 
of the Industrial Technologies Program (ITP) line item for Steel within 
the Energy Efficiency and Renewable Energy section at the Department of 
Energy [DOE] to the original level of $10 million dollars.
    The stated goal of the ITP is to reduce the energy intensity of the 
U.S. industrial sector through coordinated research and development, 
validation, and dissemination of energy-efficiency technologies and 
operating practices. The Department of Energy and domestic steelmakers 
co-fund cutting-edge research that addresses the needs of the Nation 
and our industry. The goal of these projects is to reduce energy 
consumption [thereby diminishing the Nation's dependence on foreign 
sources of oil], lessen environmental impact and increase the 
competitiveness of domestic manufacturers. Furthermore, what makes the 
ITP program so unique and appropriate is that only those projects with 
``dual benefits'' [i.e., a public benefit such as reduced emissions or 
petroleum use, which justifies the DOE investment; and an industry 
benefit such as a more efficient steelmaking process, which justifies 
the industry investment] are initiated. It is important to note that 
Federal funding does not go to steel companies, it is pooled with steel 
industry funds and awarded to qualified universities, national labs, 
and private research organizations through a competitive process.
    Government involvement and increased funding is crucial to the 
continuation of this beneficial research. While it is plausible that 
U.S. steelmakers could conduct similar collaborative research among 
themselves without DOE funding, the ITP program accelerates technology 
development by allowing the industry to make great strides in these 
areas, rather than just steps. Greater energy reduction developments 
are produced sooner, more environmentally-friendly methods realized 
today, and domestic steel companies remain at the cutting edge of the 
global technology race [which assures competitiveness]. Likewise, the 
steel industry co-funding accelerates achievement of the DOE goals.
    In 2003, Congress appropriated $10 million to fund the Steel 
component of ITP. Unfortunately, in recent years the program [and the 
projects it supported] suffered deep budget cuts. This is the case once 
again, as for fiscal year 2007, the administration requested 
approximately $3.5 million.
    The decision to under-fund this program is peculiar, considering 
President Bush--in his State of the Union address--declared that, 
``Keeping America competitive requires affordable energy. America is 
addicted to oil, which is often imported from unstable parts of the 
world. The best way to break this addiction is through technology.'' 
The President went on to say that, ``By applying the talent and 
technology of America, this country can dramatically improve our 
environment, move beyond a petroleum-based economy, and make our 
dependence on Middle Eastern oil a thing of the past.'' ITP, with its 
federally-mandated objectives of reducing dependence on foreign oil, 
lessening environmental impact, and increasing job growth and 
retention, seems to be the type of program that the President and his 
administration is seeking. Therefore, as the ITP produces such an 
outstanding return on the government's and industry's investment, it 
seems appropriate to restore the program to optimal funding.
    An example of one of the major breakthroughs developed through ITP-
Steel [which demonstrates the program's ability to satisfy both its 
public and private objectives] is the advancement of advanced high 
strength steels or AHSS. Ten ITP projects investing $6.3 million of 
Federal and steel industry funding have been focused on AHSS, which 
permit the design of automobiles that are lightweight [thus greatly 
reducing fuel consumption and consequently emissions] but also retain 
all the safety and affordability of basic carbon steel. AHSS are 
rapidly being adopted by automakers. The following benefits are 
calculated using a market penetration of only 7 percent of AHSS-type 
vehicles, a low hurdle given the rapid adoption already evidenced in 
the new Ford 500 and Chrysler Pacifica:

----------------------------------------------------------------------------------------------------------------
                                                                                                   $ Savings Per
                                                                                                   Year at $60/
                     Item                         Savings Per    Savings Per Year/Per Federal $     Barrel (In
                                                     Year                     Spent                 millions of
                                                                                                     dollars)
----------------------------------------------------------------------------------------------------------------
Barrels of oil................................       4,071,429  0.84 barrel.....................          $244.4
CO2 emissions reduction (tons)................       2,100,000  0.50............................         ( \1\ )
----------------------------------------------------------------------------------------------------------------
\1\ N.A.

    The benefits of ITP-Steel--in terms of savings [large quantities of 
oil per Federal dollar spent along with large amounts of CO2 
and other emissions for that same Federal dollar]--are evidence that 
funding cuts to the program were ill-advised and should be reversed.

                                SUMMARY

    The Industrial Technology Program selects projects that have both 
public and private benefits, justifying the investment of both DOE and 
industry, and it conducts research at the most qualified facilities in 
North America with over 80 percent of funding supporting tasks at 
universities, national labs and technology developers, many of which 
are small businesses. The ITP Program is a unique and successful 
program that is not only beneficial to the domestic steel industry; it 
is beneficial to the Nation as we attempt to curtail our dependence on 
foreign sources of energy. Please consider restoring ITP-Steel funding 
to the original level so that its public and private benefits can reach 
even further into our economy.
                                 ______
                                 
             Prepared Statement of the US Fuel Cell Council

    Chairman Domenici, Ranking Member Reid and honorable members of the 
committee, on behalf of the 120 organizations of the US Fuel Cell 
Council (USFCC), I want to thank this subcommittee and its predecessors 
for supporting fuel cell funding over the years. We respectfully ask 
the subcommittee to continue its leadership in this area by funding the 
fuel cell and hydrogen programs at the U.S. Department of Energy at 
$555 million--the level established in the Energy Policy Act of 2005--
for research and development, technology validation, and market 
transition programs at DoE, through the Offices of Energy Efficiency 
and Renewable Energy (EERE), Fossil Energy (FE), Nuclear Energy (NE), 
and the Science (SC).
    This figure represents a $204 million increase over the 
administration request. The urgency of our energy challenge, the 
promise of fuel cells, and the gains achieved to date by our public-
private partnership all justify funding these programs at the level 
authorized by Congress in 2005. The increase we propose represents less 
than 2 days' worth of imported oil, which costs the Nation more than $1 
billion every week.
    Fuel cells are perhaps the ultimate energy generation device. Fuel 
cells rely on chemistry and not combustion; no fuel is burned. As a 
result, fuel cells are efficient, exceptionally clean, quiet, scalable 
and adaptable to virtually every energy need. The fuel for fuel cells 
can come from an amazing range of sources. Thus, fuel cells offer 
energy diversity in the short term and ultimately, true energy 
independence. Congress's support for fuel cell and hydrogen research 
has brought significant gains in fuel cell cost, performance, and 
durability. Fuel cells are a family of technologies; members of the 
family have reached the point of commercialization in some high value 
markets. By one count, more than 14,000 fuel cells are in operation 
worldwide. The pace of development suggests that with additional 
funding, fuel cells can deliver on their extraordinary promise across a 
wide spectrum of applications.
    Congress acknowledged this in 2005 with passage of the Energy 
Policy Act. The legislation prescribed additional investment, and a 
long-term strategy, that include continued research, learning 
demonstrations and technology validation, and market transition to 
support early purchases.
    Congress approved just such a comprehensive program in EPACT05, 
because it recognized that accelerating the commercialization of this 
technology carries extraordinary benefits:
  --Reducing our reliance on Middle East oil while moving towards 
        energy independence;
  --Improving air quality and combating greenhouse gas emissions; and
  --Providing a reliable, efficient, high-quality source of power that 
        decreases dependence on a vulnerable energy infrastructure.
    In the first year of EPACT, Congress authorized $555 million. 
President Bush's request for fuel cell and hydrogen programs falls far 
short by about $204 million.
    The President's budget request for low temperature fuel cell and 
hydrogen programs is in line with his original 5-year, $1.2 billion 
commitment, while the request for high temperature fuel cell programs 
(SECA) is in line with the fiscal year 2006 appropriation. These levels 
do not fully reflect the will of the Congress in research and 
development. Worse, from the perspective of an emerging industry, the 
President and his Department of Energy have chosen not to propose full 
funding of the programs Congress authorized last year in technology 
validation and proposed no funding at all for system purchases. We 
request that Congress correct this error and appropriate funds to the 
level authorized in the Energy Policy Act of 2005.
    Over the past 3 years, shortfalls in fuel cell and hydrogen core 
program funds have slowed and in some cases stopped high-priority 
research and development. Full funding can restore program momentum, 
and give the country some hope that we can break the cycle of energy 
dependence. Competition for energy supply and security of supply are 
both urgent concerns, and the Nation's investment, we believe, ought to 
match that urgency.
    By and large, the programs that have been most deeply affected by 
funding re-allocations are non-automotive fuel cell programs. We 
believe this approach is short-sighted. The path to commercialization 
is a continuum across all applications. Many fuel cell systems share 
similar components; as fuel cells move to the marketplace in 
stationary, portable and micro-applications, they will stimulate cost 
reduction, energize the supply chain, facilitate infrastructure 
development and make consumers aware of the technology, its operation 
and its benefits. All these accomplishments will help us achieve our 
automotive goals on an accelerated timetable.
    Arguably the best way to bring down fuel cell costs is to allow 
State and Federal agencies to join the ranks of other satisfied early 
adopters. The Market Transition program is limited in size and scope; 
but it is a critical path to commercialization. What's more, the Market 
Transition provision by no means forces Federal and State agencies to 
make fuel cell purchases; instead, it simply provides a financial 
mechanism for acquisition where fuel cells fill an agency's need. The 
legislation establishes the market transition program with a first year 
authorization of $20 million.
    Finally, we recognize that this subcommittee has a Constitutional 
obligation to review and modify the budget as you understand the 
Nation's energy development priorities. The fuel cell and hydrogen 
programs are programs of national purpose. They benefit from a 
centrally coordinated effort, openly conducted and competitively bid. 
Indeed, this committee has instructed that it be so. This approach 
assures accountability and reduces duplication and waste. 
Congressionally-directed programs have become an important part of the 
overall investment in fuel cells and hydrogen. Ideally, these 
congressionally-directed projects would be additive to the core DoE 
program, or in a fiscally constrained environment, closely track 
program priorities and development timetables.
    There is growing support for ethanol and other biofuels, and for 
hybrid vehicles as responses to our energy challenge. These programs 
would not, by themselves, solve our problem. They would, however buy us 
time to make the transition to hydrogen. The best news is that they are 
also fully consistent with a hydrogen future and would facilitate the 
transition. But it would be short-sighted to reduce our investment in 
the long-term solution. The public/private partnership in fuel cells is 
working; full funding will continue this progress, and bring closer the 
transition to a secure, environmentally clean, low-carbon energy 
future.
    Thank you for considering our requests.
                                 ______
                                 
        Prepared Statement of the Geothermal Energy Association

    On behalf of the members of the Geothermal Energy Association, we 
urge the subcommittee on Energy and Water Appropriations to support 
restoration of funding in fiscal year 2007 for the U.S. Department of 
Energy's (DOE) Geothermal Energy Research Program. Continued geothermal 
research by the Department of Energy is urgently needed and clearly 
justified.
    The National Research Council's review of the DOE renewable energy 
programs found that the geothermal research program was undervalued 
(Renewable Power Pathways, 2000). According to that report, the 
resource has significant potential to contribute to our Nation's energy 
needs. It states, ``Many analysts believe that a substantial fraction 
of U.S. baseload power could potentially be supplied by a variety of 
geothermal resources.''
    The Geothermal Task Force Report prepared for the Western 
Governors' Association's Clean and Diversified Energy Advisory 
Committee (CEAC) has recently made similar recommendations. The Task 
Force's January, 2006 Report recommends that ``geothermal research by 
the U.S. Department of Energy should be increased, particularly into 
technologies that can reduce risk, reduce costs, or expand the 
accessible resource base.''
    Today, some 25 States use geothermal resources for power or direct 
use purposes, but they are tapping only a small fraction of the 
potential. For example, there is 2,800 MW of geothermal power in use in 
the United States today, but the U.S. Geological Survey (USGS), in its 
Circular 790, estimated a hydrothermal resource base of between 95,000 
and 150,000 MW! Further, this estimate does not include the full range 
of geothermal resources, nor does it assess what could be possible with 
advances in engineered geothermal systems or other technological 
breakthroughs.
    GEA projects that with continued Federal and State support 
geothermal power could expand beyond providing 5 percent of 
California's electric power to providing 6 percent of the entire 
Nation's electric power by 2025. (See Chart 1). We estimate that over 
30,000 MW of geothermal power could be developed in the next 20 years, 
representing an investment in new domestic energy supplies of over $70 
billion. This level of production and new investment in geothermal 
energy would mean 130,000 new full-time jobs and 500,000 person-years 
of construction and manufacturing employment. Yet, at this level of 
geothermal production, we would only be utilizing a small fraction of 
the ultimate geothermal potential.

         CHART 1.--PROJECTED GEOTHERMAL POWER PRODUCTION BY 2025
------------------------------------------------------------------------
                                                            Percent of
                Resource                  Power Capacity     Resource
                                               (MW)          Potential
------------------------------------------------------------------------
Hydrothermal............................          16,825           10-15
Oil Well co-prod........................           6,000              <5
Geopressured............................           1,000              <1
Distributed Gen.........................             500              <1
EGS.....................................           4,000              <1
                                                         ---------------
      Power Subtotal....................          28,325              <1
Direct Use..............................       \1\ 2,400              <5
                                                         ---------------
      Total Geothermal..................          30,725              <1
------------------------------------------------------------------------
\1\ Equivalent.

    The benefits of achieving this would be substantial. This power 
capacity would produce 240,976 GWhrs of electricity annually \1\ and 
add important reliability to the system. This generation is roughly 
equal to 100 percent of the electricity generated in California, Nevada 
and Idaho combined in 2004.
---------------------------------------------------------------------------
    \1\ Power production assumes 95 percent availability, direct use 
equivalent at 50 percent.
---------------------------------------------------------------------------
    Achieving this potential would provide millions of consumers 
reliable, cost-effective power at stable prices. Also, this amount of 
electricity could displace as much as one-third of the natural gas 
currently used in power production, benefiting consumers by relieving 
pressure on spiraling natural gas prices.
    However, while State renewable laws and Federal tax incentives will 
propel the expanded use of geothermal energy, this level of production 
in 2025 will not be achieved without DOE program support. We estimate 
that of the projected 30,000 MW one-half is highly dependent upon 
continued research and technological development supported through 
DOE's program. The loss of DOE's program would be a major setback to 
both the pace and extent to which we can expand our use of this 
important renewable energy resource.
    The Federal Government has made a significant investment in 
developing a laboratory and university research community that is 
leading the world in developing the technologies needed to utilize this 
vast resource. This is not the time to abandon this effort. The 
budget's short-sighted proposal to close out the geothermal research 
program would significantly set-back progress towards national energy 
goals and jeopardize new technology development for decades.
    Therefore, we urge the Energy and Water Appropriations Subcommittee 
to continue supporting DOE's Geothermal Research Program in fiscal year 
2007 and, specifically, to appropriate $32.5 million for the programs 
defined in more detail in this statement.

                    BACKGROUND ON GEOTHERMAL ENERGY

    While only a small fraction of the geothermal resource base is 
utilized today, it already provides significant energy for our Nation. 
The United States, as the world's largest producer of geothermal 
electricity, generates an average of 16 billion kilowatt hours of 
energy per year--more than wind and solar combined. Geothermal power 
provides more than half of all renewable electricity used in 
California, about 9 percent of northern Nevada's electricity, and about 
25 percent of the island of Hawaii's electricity. Farms, spas, 
businesses and schools in over 24 States utilize geothermal resources 
as an energy source.
    The energy, environmental, and economic benefits of geothermal are 
substantial. Geothermal electricity produces 11,500 full-time jobs 
annually, not including the hundreds of jobs created by direct use 
applications. The United States' current geothermal generation is 
equivalent to burning close to 25 million barrels of oil or 6 million 
short tons of coal per year. Geothermal electricity displaces the 
emissions of 16 million tons of carbon dioxide, 78 thousand tons of 
sulfur dioxide, 32 thousand tons of nitrogen oxides, and 17 thousand 
tons of particulate matter every year, compared with production of the 
same amount of electricity from a state-of-the-art coal-fired plants.
    With continued Federal and State support, much more geothermal 
generation is possible. The U.S. Geological Survey (USGS), in its 
Circular 790, reported that the geothermal resource base was vast, 
involving hundreds of thousands of megawatts. But, much of this 
resource is hidden, and we do not have commercially available 
exploration technologies that can effectively identify geothermal 
reservoirs without drilling. But, drilling is expansive and risky, and 
often involves permitting and other obstacles.
    Continued improvements and the development of new technologies to 
identify, develop and produce energy from geothermal resources is 
critical if most of the very large resource base is ever to become 
economically feasible to use. This includes developing the techniques 
necessary for engineering geothermal systems that could some day allow 
so-called hot dry rock power production. Beyond hydrothermal resources, 
there is significant new geothermal production potential from co-
production in oil and gas fields, geopressured gas resources in Texas 
and Louisiana, and distributed power generation. Notably, both oil 
field and geopressured production have significant potential to expand 
U.S. oil and natural gas production. All of these efforts need support 
through DOE's program and are at a critical point in their development.
    Beyond electric power generation, expanding the direct use of 
geothermal resources by businesses, farms, and communities needs to be 
addressed more vigorously in DOE's programmatic efforts. Expanded 
direct use geothermal has widespread application across the Nation, and 
would largely displace fuels used for heating and industrial and 
commercial processes. By displacing fossil fuels, developing the 
technologies and techniques to expand direct use would have a direct, 
positive impact on national security.
    Utility scale power production under the 2025 projection above 
would expand geothermal generation beyond four States today 
(California, Nevada, Utah and Hawaii) to also include Alaska, Wyoming, 
Idaho, Oregon, Washington, Alaska, Arizona, Colorado, New Mexico, Texas 
and Louisiana. In addition, distributed generation and expanded direct 
use of geothermal resources could provide new energy in a larger number 
of States including: Alabama, Arizona, Arkansas, California, Colorado, 
Hawaii, Idaho, Illinois, Kansas, Louisiana, Mississippi, Montana, 
Nebraska, Nevada, North Dakota, New Mexico, Oklahoma, Oregon, South 
Dakota, Texas, Utah, Washington, West Virginia, and Wyoming.

                    FISCAL YEAR 2007 RECOMMENDATION

    We agree with the January 2006 WGA Geothermal Task Force Report. It 
recommends: ``a strong, continuing geothermal research effort at the 
Department of Energy that addresses the full range of technical 
problems encountered in achieving full production from the identified 
and undiscovered resources in the West.'' The report also supports ``. 
. . continuation of advanced technology programs and outreach through 
GeoPowering the West.'' In addition, the report urges DOE to expand its 
program in critical areas ``particularly the identification and 
development of new resources'' and ``support for exploration and 
exploratory drilling.'' Finally, it asks DOE to ``examine whether 
existing Federal loan guarantee authority in law can be used to 
supplement these activities to reduce risk and encourage development of 
new resource areas.'' (http://www.westgov.org/wga/initiatives/cdeac/
geothermal.htm.)
    Consistent with the Energy Policy Act of 2005's recommendation that 
``The Secretary shall conduct a program of research, development, 
demonstration, and commercial application for geothermal energy . . . 
'' for fiscal year 2007 we recommend that Congress appropriate $32.5 
million for DOE's geothermal program. Of this amount:
  --$8.5 million should support work by the Intermountain West 
        Geothermal Consortium (IWGC), which was authorized by the 
        Energy Policy Act of 2005 to support national energy security 
        through research into and development of under-utilized 
        geothermal resources in cooperation with industry. Partner 
        institutions include Boise State University, University of 
        Idaho, Idaho National Laboratories, GeoHeat Center at Oregon 
        Institute of Technology, Desert Research Institute with the 
        Nevada System of Higher Education, and the Energy and 
        Geosciences Institute at the University of Utah.
  --$2 million should support the continuing work of the University of 
        Nevada's Great Basin Center for Geothermal Energy, which is 
        critical to developing the very substantial and untapped 
        resources of the Great Basin. UNR has been doing pioneering 
        work in expanding our knowledge of the Great Basin resource 
        while advancing both science and near-term development 
        possibilities through its work and collaboration with industry.
  --$4 million should support the work of Sandia National Laboratories 
        (SNL) to develop advanced technologies for drilling and related 
        research that will reduce the cost and risk of exploration and 
        new projects. Drilling cheaper, smarter, and with less impact 
        is a critical component of identifying and making expanded use 
        of the geothermal resource economically feasible.
  --$4 million should support cost-shared, exploratory drilling 
        consistent with OMB's cost-sharing guidelines. This program 
        should be coordinated with the USGS to support their efforts to 
        produce a new national geothermal resource assessment. These 
        funds could alternatively be used to support a targeted loan 
        guarantee program as recommended to DOE by Sentech in its March 
        2005 report.
  --$4 million should support local information, outreach, and project 
        development efforts through the State working groups of DOE's 
        GeoPowering the West (GPW) initiative. GPW has active State 
        working groups in Alaska, Arizona, California, Hawaii, Idaho, 
        Oregon, Nevada, New Mexico, Texas, Utah, and Washington, and is 
        working in Colorado, Montana, South Dakota and Wyoming. This 
        award-winning program is recognized as essential to expanding 
        geothermal usage.
  --$10 million should be designated for other activities administered 
        by the Department of Energy, including peer-reviewed, 
        partnered, and cost-shared industry-applied research; and, 
        longer-range research including DOE's Enhanced Geothermal 
        Systems (EGS) research effort designed to develop advanced 
        technology capable of tapping the virtually limitless heat 
        content of the Earth.

                            FUTURE BENEFITS

    For the Nation, the return on the investment in new geothermal 
technology would be substantial. As the WGA Geothermal Task Force 
recently reported, ``With sustained support from the Department of 
Energy, Geothermal power can be a major contributor to the power 
infrastructure and economic well-being of the Western States.''
    The U.S. Department of Energy's Geothermal R&D program benefits the 
entire U.S. economy. Research shows that for every million dollars 
invested in geothermal energy, $2.5 million will return to the United 
States economy. The program's success can turn the thousands of 
megawatts of untapped geothermal potential into a clean, reliable, 
sustainable, indigenous, distributed electricity source; produce 
thousands of new direct-use applications serving communities, farms and 
businesses; and spur other beneficial uses of the natural heat of the 
earth.
    Finally, achieving the level of production possible by 2025 would 
have substantial environmental benefits. Compared to state-of-the-art 
coal plants, this would annually offset 266 million tons of carbon 
dioxide emissions. This is equal to the annual CO2 emissions 
from 41 million automobiles--30 percent of all automobiles in use in 
2003 according to the Department of Transportation. Or, in an 
international perspective, emissions avoided by geothermal generation 
in 2025 would represent more than the combined total CO2 
emissions from Austria, Hungary, Iceland, Ireland, Lithuania, New 
Zealand, Sweden, and Switzerland in 2002.

                          OMB'S JUSTIFICATION

    With a highly selective reading of the Energy Policy Act of 2005 
(EPAct), the Office of Management and Budget appears to justify its 
proposal to terminate the DOE Geothermal Research program on the fact 
that Congress included important provisions in this legislation to 
stimulate new geothermal development. EPAct included important tax 
incentives for new geothermal plants, an extensive revision of the 
Geothermal Steam Act, and directives for an expanded DOE renewable 
research program that specifically includes geothermal energy. OMB 
ignores the devastating impact that terminating the geothermal program 
would have on the potential contribution of this industry to national 
energy needs and its international competitiveness. Further, their 
justifications do not appear to be based upon metrics that are applied 
consistently across technologies, nor do they appear to be based upon 
documented and objective analysis. Quite simply, it's difficult to 
argue with their analysis, when there doesn't appear to be any. Both 
the process and results of their decision making are a mystery.
    Thank you for considering the views of the Geothermal Energy 
Association. Please feel free to contact us if you have any questions 
or need additional information about recommendations made in this 
statement.
                                 ______
                                 
     Prepared Statement of the American Forest & Paper Association

    The Agenda 2020 Technology Alliance, a Special Project of the 
American Forest & Paper Association (AF&PA) welcomes this opportunity 
to thank the committee for its fiscal year 2006 support in providing 
sustained funding to our industry's key public-private partnerships 
within the Office of Energy Efficiency and Renewable Energy (EERE) and 
to urge increased funding to adequately address industry's challenges 
in fiscal year 2007. The Industrial Technologies Program (ITP) and the 
Office of Biomass Programs (OBP) provide vital funding for research, 
development, and demonstration (RD&D) of technologies that dramatically 
reduce the forest products industry's energy intensity and transforms 
our industry into producers of carbon-neutral biofuels--thus addressing 
strategic national needs associated with energy efficiency, energy 
security, diversified energy supply, and environmental performance. We 
strongly recommend funding of $6 million for forest products industry 
in ITP. We support the President's request for $150 million for Biomass 
and Biorefinery Systems R&D in OBP and ask that the committee work to 
ensure eligibility of forest biorefineries in these programs and keep 
the appropriations unencumbered to allow for full funding of 
competitive biorefinery RD&D grants. Furthermore, we recommend that the 
committee restore OBP funding of $10 million for competitive R&D for 
black liquor gasification, a key enabling technology of the forest 
biorefinery.
    The Agenda 2020 Technology Alliance is an industry-led partnership 
with government and academia that holds the promise of reinventing the 
forest products industry through innovation in processes, materials and 
markets. The collaborative, pre-competitive research, development, and 
deployment supported through Agenda 2020 provide the foundation for new 
technology-driven business models that will enable our industry to meet 
competitive challenges, while also contributing solutions to strategic 
national needs. The technology solutions developed through Agenda 2020 
are aligned to provide solutions to the competitive challenges faced by 
the U.S. forest products industry, which 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 $60 billion.
    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. The volatility of energy 
markets, especially for natural gas, has made our competitive position 
even more precarious and heightened the need to develop new energy 
efficient technology. Each year without new investments, new 
technologies and new revenue streams, we lose ground to our overseas 
competitors.
    Currently, energy is the third-largest manufacturing cost for the 
forest and paper industry at 18 percent for pulp and paper mills--up 
from 12 percent just 3 years ago. For some of our mills, the cost of 
energy is about to eclipse employee compensation.
    Since 1994, the forest products industry has been one of DOE's 
``Industries of the Future,'' partnering with ITP through the Agenda 
2020 Technology Alliance in RD&D that has yielded successful advances 
towards out national energy and environmental goals. Agenda 2020 stands 
as an example of successful industry-government collaboration to 
develop technologies that hold the promise of reinventing industry, 
while providing real solutions for strategic national energy needs. 
Every Federal $1 spent on ITP saves $7.06 in annual energy costs and 
1.3 million in annual source BTUs (2004 estimates). As recently as 
2003, the ITP/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.
    Today, after 5 years of continuous and substantial cuts, the ITP/
Agenda 2020 budget has been reduced by over 65 percent since fiscal 
year 2002. This undermines our progress in achieving crucial energy 
efficiencies at a time when energy is a major factor in the survival of 
the U.S. forest products industry. Projects re-scoped or cut in fiscal 
year 2005 due to budget shortfalls resulted in a lost energy savings 
potential of 5 trillion BTUs/yr. With substantially less funding in 
fiscal year 2006, we will be unable to pursue projects in key priority 
areas such as advanced water removal and high efficiency pulping, which 
represents a lost savings potential of 100-200 trillion BTUs/yr. A 
further reduction is proposed in fiscal year 2007 ($2.878 million), 
barely sufficient for only one collaborative project and 1 or 2 concept 
studies. By comparison, in the early 2000's, the portfolio included 
nearly 40 collaborative research projects across the country with 
varying sizes and scopes, but with a common goal of developing 
breakthrough technologies and processes that produce dramatic 
improvements in energy efficiency in an environmentally-sound manner.
    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 and seeking solution as 
diverse as fuel switching, finding new energy sources, and developing 
options for reducing energy consumption. Although we are nearly 60 
percent self-sufficient (using biomass), the volatility of natural gas 
prices has translated 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 greater 
need than ever for the technology-based energy efficiency solutions 
that could be provided through our Agenda 2020 partnership with ITP. 
The AF&PA's recommended ITP funding for forest products research ($6 
million) would help our industry partially recover its capacity to 
develop and deploy vital energy efficiency technologies. Restoring 
Agenda 2020 funding to pre-fiscal year 2005 levels will not only help 
the competitive position of American industry, but will also serve 
national strategic goals for reduced dependence on foreign oil.
    The Integrated Forest Products Biorefinery (IFPB) is a key Agenda 
2020 technology platform and a top technical and economic priority for 
our industry. The objective is to develop and deploy core technologies 
that can be integrated into existing processing infrastructure, which 
would be transformed into geographically distributed production centers 
of renewable ``green'' bioenergy and bioproducts. This can be done 
while co-producing existing product lines, creating higher skilled and 
better paying jobs, strengthening rural communities, and opening new 
domestic and international markets for U.S. forest products companies.
    The IFBP technology has the potential to integrate agricultural 
wastes, agricultural producers, forest landowners, agricultural 
landowners, forest product producers, and the petrochemical industry to 
produce clean renewable bio-fuels to support our local economies and 
the Nation. Widespread application of this technology would not only 
reduce environmental impact of burning fossil fuels, it would also 
increase the viability of agricultural, forest products, and other 
industries that use waste heat. It will create new high paying jobs, 
both direct and indirect, increasing tax revenue. From an energy 
perspective, the IFPB has the benefit of making the forest products 
industry even more energy self-sufficient, serving 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, 
contributing to DOE strategic goals to dramatically reduce dependence 
on foreign oil and to create new domestic bioindustry.
    AF&PA supports the President's announced $150 million budget 
initiative in fiscal year 2007 for biorefinery research and 
demonstration. This initiative provides much needed funding to advance 
core enabling IFPB technologies, as well as providing major capital 
cost-share for commercial scale biorefinery demonstration. The forest 
products industry is an ideal partner to develop and commercialize 
integrated biorefineries. We have much of the infrastructure and 
expertise--wood harvesting, transportation and storage, manufacturing 
and conversion infrastructure, waste handling and recovery--needed to 
achieve the goals of integrated biorefineries. By and large, they are 
located in rural communities where they can help realize important 
synergies between agricultural and forest-based feedstocks.
    Our industry currently is poised to field several projects to 
advance key IFPB technologies for biofuel production, and even 
demonstrate biorefineries at the commercial scale. In order to achieve 
the promise of IFPB technologies for the industry and for the Nation, 
we need greater stability and availability of funds provided through 
the OBP budget. The trend of increasing OBP earmarks, over 50 percent 
of the fiscal year 2006 appropriation, has contributed to a marked 
reduction in real availability of funds for biorefinery RD&D. We urge 
the committee to preserve and leave unencumbered the proposed $150 
million funding of Biomass and Biorefinery Systems R&D, so that there 
will be sufficient appropriations to fund FOA No. DE-PS36-06GO96016, 
the recently released solicitation for biorefinery demonstration and 
commercialization. We also urge the committee to ensure that forest-
based materials are eligible for this and future biorefinery research 
and demonstration funding. Forest-based materials can sustainably 
produce enough biofuels to displace up to 10 percent of the country's 
petroleum production. They are a vital feedstock for achieving reduced 
dependence on foreign oil and facilitating bioindustries domestically 
and should be included in programs for biomass and biorefinery RD&D.
    A core enabling technology for part of the IFPB is black liquor 
gasification (BLG), which converts 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, BLG has the potential to produce a net 22 gigawatts of 
power, 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.
    In fiscal year 2006, DOE eliminated funding for BLG and related 
research, despite recent technical progress to bring the technology to 
pre-commercial demonstration. BLG is a core enabling technology for the 
IFPB, and is identified as a priority technology area for biorefineries 
in technology roadmaps created by industry, as well as in research 
plans developed by OBP to accelerate biorefineries and development of 
national bioindustry. Critical research areas identified by OBP 
include: integrated biorefinery support for thermochemical 
biorefineries, products core R&D in chemicals and fuels from syngas; 
thermochemical platform core R&D in BLG and syngas cleanup. AF&PA is 
recommending that $10 million be restored in the OBP budget for 
competitive research in these critical areas and to complete BLG core 
research and projects that were eliminated in recent cuts. This funding 
will provide the groundwork needed for next vital steps leading to 
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 Geo-Energy Partners

                           EXECUTIVE SUMMARY

    Eliminating the DOE geothermal budget will have a serious, negative 
effect on developing America's premier renewable energy resource. The 
DOE/GRED cost-sharing program, in particular, has provided a great 
incentive for small independents to undertake exploration activities 
that otherwise would be beyond their financial reach. If development of 
geothermal resources is to be significantly expanded in the future, 
exploration for yet unproven resources will be required. The DOE/GRED 
cost-sharing program is essential if these exploration activities are 
to continue.

                               BACKGROUND

    During the 1960's and continuing into the early 1980's the U.S. 
geothermal industry flourished, with major petroleum and mining firms 
in addition to numerous independent geothermal companies scouring the 
western United States for geothermal resources. During that period, 
nearly all of the currently existing geothermal electrical production 
was constructed.
    Since then, geothermal exploration has essentially been non-
existent and the geothermal industry is currently dominated by four 
large corporations (Calpine, Ormat, Caithness and CalEnergy). Except 
for CalEnergy's discovery and development of the Coso, California 
geothermal resource in the 1980's, these companies have only purchased 
already-explored/discovered operating facilities, focused on increasing 
the efficiency of their own operating plants or expanded already-proven 
fields. These four companies no longer conduct grass roots exploration. 
However, without exploration, always largely by independents (and 
solely by independents now), not a single one of the currently 
producing geothermal fields in the western United States would have 
come into existence. Exploration and discovery of new geothermal 
resources is solely in the hands of small independent geothermal 
enterprises. Fortunately the ``independents'' are primarily comprised 
of experienced geothermal professionals who have been in the industry 
since the boom days of the 1960's, 1970's and 1980's.
    The U.S. geothermal industry is in desperate need of a new wave of 
exploration and discovery to respond to the current burgeoning demand 
and growing need for secure, domestic renewable energy resources. It is 
a sad fact that not since 1992 has a new geothermal field been brought 
on-line for power production in the United States: Brady's Hot Springs 
in Nevada. Since then all additions to U.S. geothermal capacity has 
been accomplished through incremental expansions in already-developed 
fields. The last new field brought on line in California was Honey Lake 
in 1989; in Utah the last was the Cove Fort geothermal plant in 1985; 
and in Hawaii it was Puna in 1984.
    Geothermal energy is the only true base-load renewable energy 
source and has a decades-long track record of being on-line over 95 
percent of the time using proven, dependable technology. Wind and solar 
are wonderful technologies, however, they only produce power when the 
wind blows or the sun shines. Electrical generation from a geothermal 
plant is 24/7/365.
    The DOE Geothermal Resource Exploration and Definition program 
(``GRED'') has provided funding to encourage exactly the type of 
exploration necessary to promote the discovery of new geothermal 
resources for the next wave of geothermal development. GRED I in 2000, 
GRED II in 2002 and the ongoing GRED III programs have encouraged 
exploration in previously unexplored areas and has already resulted in 
the identification of over 80 MW of new geothermal resources. More GRED 
III drilling will take place this summer at our Emigrant leasehold. The 
Emigrant Slimhole Drilling Project is an 80 percent DOE/20 percent 
Esmeralda Energy Company (``EEC'') cost-shared exploration slimhole. 
EEC is negotiating for a power purchase agreement (``PPA'') for 
Emigrant and recently signed such a PPA with San Diego Gas & Electric 
for our Truckhaven lease applications in Imperial County, California.
    The experienced independents are the only ones in the geothermal 
industry willing and capable of making the next wave of geothermal 
development a reality. However, initial exploration efforts are costly 
and have a high degree of risk. DOE geothermal funding has historically 
been minimal but it remains a critical element in developing untapped 
geothermal resources. Eliminating the DOE geothermal budget, in 
particular the DOE GRED program, will have a serious, negative effect 
on developing America's premier renewable energy resource.
                                 ______
                                 
           Prepared Statement of the American Gas Association

    Mr. Chairman and members of the subcommittee, the American Gas 
Association (AGA) represents 197 natural gas distribution utilities 
that serve more than 56 million homes and businesses in all 50 States. 
We appreciate the opportunity to assist you with consideration of the 
U.S. Department of Energy's (DOE) fiscal year 2007 budget request.
    Natural gas meets one-fourth of U.S. energy needs. Almost all of 
this natural gas is produced in the United States or Canada, making 
natural gas a vital, clean, and domestic form of energy. Local natural 
gas utilities deliver natural gas through more than 1 million miles of 
underground pipelines. The terrorist acts of September 11, 2001 and the 
war with Iraq have made clear the need for continued investment in U.S. 
energy infrastructure, both to facilitate greater reliance on domestic 
energy resources and to ensure reliable delivery. Energy is the 
lifeblood of the U.S. economy, and innovative technologies such as 
distributed energy will help ensure a reliable and efficient supply of 
electricity--even if a central power station or the electric grid were 
to be compromised.
    AGA continues to support DOE research programs such as natural gas 
vehicles and industrial research and development (R&D). AGA wishes, 
however, to outline three top priorities of particular benefit to 
natural gas consumers and the utilities that serve them:
  --The Office of Fossil Energy's Natural Gas Infrastructure Technology 
        research program for which AGA urges Congress to appropriate 
        $15 million.
  --The Office of Fossil Energy's Gas Storage Technology Consortium 
        (GSTC) for which AGA urges Congress to appropriate $2.0 
        million.
  --The Office of Fossil Energy's Natural Gas Exploration, Production 
        and Hydrates research programs.
          office of fossil energy: natural gas infrastructure
    At present the natural gas industry operates more than 1 million 
miles of underground pipe of varying sizes. The industry and DOE 
estimate that $19 billion of investment will be needed over time to 
replace this infrastructure in the ordinary course. Additionally, due 
to projected new natural gas demand (increasing by 40 percent by 2025), 
another $42 billion will be needed in the coming years for expansion of 
the natural gas delivery system.
    AGA strongly supports DOE's natural gas industry Infrastructure and 
Operations program, which was established in fiscal year 2001 with an 
initial appropriation of $4.9 million. The goal of the program goal is 
to make mid- to long-term investments in improving the reliability and 
efficiency of the Nation's natural gas infrastructure. Projects funded 
by DOE include development of more corrosion-resistant material that 
can transport gas at higher pressure, fuel-efficient compressors 
capable of flexible operation, technologies to detect and assess 
corrosion and mechanical damage, improved automated data acquisition, 
system monitoring and control techniques, no-dig technologies, 
innovative excavation and restoration systems, and plastic pipe 
technology. This research has played a critical role in assuring that 
the Nation's energy supply reaches consumers.
    Natural gas industry response to this program has been 
enthusiastic, as evidenced by the submission of more than 100 cost-
sharing proposals by industry partners in the first year alone. These 
early proposals, totaling more than $75 million, exceeded the available 
dollars by a 9-to-1 factor.
    In fiscal year 2005, Congress appropriated $8.47 million for this 
program but eliminated this funding in fiscal year 2006. DOE's natural 
gas infrastructure and operations program is the only Federal program 
focused on mid- to long-term natural gas pipeline research. Without 
this vital research, many technologies needed to increase the 
deliverability and reliability of the existing pipeline network will 
not come to fruition.
    Given the importance of expanding the Nation's natural gas 
infrastructure in anticipation of significantly growing demand for 
natural gas, the American Gas Association requests that Congress 
appropriate $15 million for the DOE's Fossil Energy natural gas 
infrastructure research program in fiscal year 2006.
    The natural gas industry provides substantial cost sharing in 
developing the technologies necessary for this new infrastructure. 
Major and novel system improvements are needed for natural gas to be 
delivered in the volumes that DOE believes will be required in the 
future. These improvements depend on new, highly efficient 
technologies.

             DOE'S GAS STORAGE TECHNOLOGY CONSORTIUM (GSTC)

    The mission of the DOE Gas Storage Technology Consortium is to 
assist in the development, demonstration and commercialization of 
technologies to improve the integrity, flexibility, deliverability, and 
cost-effectiveness of the Nation's underground natural gas/hydrocarbon 
storage facilities. The Consortium is on target to deliver technology 
advancements to industry and has co-funded 18 projects totaling $2.567 
million Federal dollars. Projects can be categorized under two major 
headings: (1) Integrity--which function to improve safety and 
reliability of the underground storage operations; (2) Deliverability 
Enhancement--which focus on identifying ways to increase existing 
storage capacity and deliverability.
    The American Gas Association actively supports the DOE Gas Storage 
Technology Consortium and requests Congress to provide $2.0 million for 
natural gas storage in fiscal year 2007.

 THE OFFICE OF FOSSIL ENERGY'S NATURAL GAS EXPLORATION, PRODUCTION AND 
                           HYDRATES RESEARCH

    Research investment is a key tool for producing more gas from 
marginal wells that would otherwise be shut-in prematurely now and for 
producing more gas in the future from very long-term, high-risk, but 
potentially promising frontier areas such as methane hydrates.
    The DOE Exploration and Production research program is aimed 
directly at small producers working on high-risk deep drilling 
operations and stripper wells and marginal wells in Appalachia. 
Technological advances in these areas are conveyed to small gas 
producers through the Multi-Lab/Industry Partnership and the technology 
transfer program.
    AGA supports continued funding for the DOE Exploration and 
Production research program.

                               CONCLUSION

    Mr. Chairman, AGA is giving great emphasis to developing 
comprehensive programs that enhance economic and national security, 
provide cheaper energy to the end-user, reduce emissions, and improve 
energy efficiency. AGA greatly appreciates your past support and 
consideration of these proposals.
                                 ______
                                 
                  Prepared Statement of Austin Energy

    This testimony supports funding for development and deployment of 
plug-in hybrid vehicles (PHEVs) within the Department of Energy's 
fiscal year 2007 budget request. Specifically, Austin Energy supports: 
(1) $10 million for Section 706 of the Energy Policy Act of 2005 
(``EPACT'')--Joint Flexible Fuel/Hybrid Commercialization Initiative; 
(2) $15 million for Sections 711/911 of EPACT--Hybrid Vehicles for 
system and component development for plug-in hybrid vehicles; and (3) 
$2.5 million for Title 8 of EPACT--Advanced Vehicles for a fuel cell 
vehicle developed with a plug-in hybrid drive platform. Funding of 
$27.5 million within these three areas should be included within the 
Hybrid and Electric Propulsion section of the Vehicle Technologies 
Program of the Energy Efficiency and Renewable Energy budget.
    Austin Energy, the Nation's 10th largest community-owned electric 
utility, serves 360,000 customers within the City of Austin, Travis and 
Williamson Counties, Texas. Austin provides electricity to the capital 
city of Texas through a diverse generation mix of nuclear, coal, 
natural gas and renewable resources. Austin Energy has been nationally 
recognized for its Green Choice renewable electricity program. Austin 
sells more renewable electricity, primarily wind, than any other 
utility in the country.
    Austin Energy has also been a national leader in energy efficiency. 
Austin's Green Building program for both commercial and residential 
buildings has been a national model for use of sustainable building 
technologies.
    As the President remarked in his State of the Union Address, and 
repeated again this week, the United States needs to break its 
addiction to imported supplies of petroleum. The principle use of 
imported petroleum is to produce gasoline to power the transportation 
sector, particularly automobiles. With $3.00 gasoline the American 
public is ready to embrace new technology. Congress and the DOE can 
move forward to help right now. Already popular hybrid vehicles 
demonstrate that there is now a technologically feasible way to power 
automobiles with both an internal combustion and an electric engine. 
The plug-in hybrid vehicle is a modification of current hybrids. Plug-
in hybrids can be charged from the existing electrical grid by plugging 
the car into an ordinary wall socket while the internal combustion 
engine can be a flexible fuel engine that will run on domestically 
produced biofuels.
    PHEVs will run on a dedicated electric charge for a number of miles 
(20-60 depending on the size of the battery pack) then shift to liquid 
fuel.
    PHEVs have the ability to significantly increase mileage over both 
conventional cars and existing hybrids. Instead of the constant 
switching between gasoline and electric power as is done in a hybrid 
today, the PHEV runs on electric power until the batteries are drained, 
only then does the fuel engine engage to power the car. If the driver's 
daily commute is within the electric range (20-60 miles), or if driving 
is within a small geographical area (city delivery trucks), then 
gasoline consumption is minimized thus starting us down the road to 
reduced imports.
    Austin Energy is convinced that PHEVs will be a significant 
contributor to reducing our Nation's reliance on imported oil. Unlike 
other transportation alternatives, PHEVs require neither new fueling 
infrastructure nor driver behavioral changes. The infrastructure for 
PHEVs, standard electric sockets, already exists and Americans have 
already become accustomed to plugging-in Blackberries, cell-phones and 
lap-top computers. In the instance that one forgets or is unable to 
plug-in the car, it will run as usual on gasoline or flexible fuel.
    The funding initiatives recommended by the President in the DOE 
fiscal year 2007 budget submission will speed the day when PHEVs are 
widely available to American citizens. Other DOE programs support plug-
in hybrid technology developed as part of flexible fueling operations 
for cars as well as integrated within the advanced fuel cell vehicle. 
PHEV technology will complement any existing automobile fueling system 
or one envisioned for the future. The DOE budget submission will 
provide for deployment of PHEVs in demonstration activities to allow 
for different commercial applications of the vehicles. PHEV technology 
is adaptable to all vehicle platforms--from large trucks to commuter 
cars.
    Austin Energy supports Congressional appropriations to increase the 
availability of PHEVs and demonstrate its capacity as a solution to our 
``oil addiction.'' Austin Energy is also willing to support the Federal 
effort by overseeing a national grass-roots campaign to demonstrate the 
consumer market for PHEVs.
    Austin Energy's ``Plug-In Partners'' is an initiative to 
demonstrate to the automobile manufacturers that a consumer market 
already exists for PHEVs. Utility rebates and incentives, State, county 
and municipal government endorsements, and citizen petitions are 
evidence of an expanding interest in PHEVs. A key aspect of the Plug-In 
Partners campaign is the ``soft'' fleet orders. Fleet owners, both 
private and governmental, sign a pledge to strongly consider purchasing 
a certain number of PHEVs when available from an original equipment 
manufacturer. While the fleet owner understands that the cars are not 
presently on line, the belief in the concept of a PHEV is sufficient 
for them to make the soft fleet order. This helps demonstrate a market 
to automakers. A number of such orders have been obtained.
    Austin Energy's Plug-In Partners campaign was announced nationally 
on January 24, 2006 at the National Press Club in Washington, DC. 
Senator Orrin Hatch of Utah spoke of the importance of PHEVs to ending 
our reliance on foreign oil. On behalf of Governor Pataki of New York, 
Charles Fox, Deputy Secretary for Energy & Environment offered support 
for the campaign. The Plug-In Partners campaign has been joined by the 
cities of Austin, Baltimore, Boston, Dallas, Denver, Kansas City, Los 
Angeles, Oakland, Philadelphia, Phoenix, Salt Lake, San Francisco and 
Seattle. The New York State Energy & Research Development Authority 
(NYSERDA), American Corn Growers Association, Soybean Producers of 
America, Alliance To Save Energy, American Council on Renewable Energy, 
Energy Future Coalition, Environmental and Energy Study Institute, 
Center for American Progress and Set America Free are among the many 
public interest groups that are members of the coalition. Finally, 
Plug-In Partners have been endorsed by the American Public Power 
Association and many of its members around the country as well as the 
Edison Electric Institute.
    Austin Energy has also committed $1 million for rebates to Austin 
Energy customers who purchase plug-in hybrids when they become 
available.
    The Congress, by funding DOE initiatives to develop and deploy 
PHEVs, will help ensure the success of the Austin Energy Plug-In 
Partner campaign and will be a significant step in lessening American 
dependence on imported oil.
                                 ______
                                 
      Prepared Statement of the Coal Utilization Research Council

    CURC submits this testimony in support of increasing the DOE's 
fossil energy budget by the following: coal R&D $31.8 million; CCPI 
$145.0 million; FutureGen $54.0 million, in new appropriations.
    Technology has facilitated a successful environmental 
transformation of the coal-based power industry, and all of this has 
been accomplished while maintaining the benefits of reliability and 
affordability. Improvements in technology have allowed dramatic 
reductions in emissions while providing consumers with some of the 
lowest cost electricity in the world. Many of these technology 
solutions emerged through an unprecedented collaboration between the 
public and private sectors, commonly cited as the ``Clean Coal 
Technology Program.'' For the past 20 years, this program has included 
two fundamental components:
  --A basic research and development activity that was primarily 
        government funded, and that took new ideas in the use of coal 
        to a ``proof of concept'' level, and
  --A program which has been approximately two-thirds private sector 
        funded, that took these concepts and demonstrated their 
        viability in first-of-a-kind commercial scale facilities, 
        through a program currently labeled the ``Clean Coal Power 
        Initiative'' and formerly referred to as the Clean Coal 
        Technology demonstration program.
    These two programs have created new generations of technologies 
that are cheaper and more effective in addressing the environmental 
concerns that pose barriers to continued or expanded use of coal in the 
United States. The benefits of these programs have been large. For 
example, just one technology--low NOX burners--went from a 
concept in the 1980's to commercial demonstration in the 1990's and is 
now installed on almost all coal-fired power plants in the United 
States. The National Academy of Sciences concluded that nitrogen oxide 
and sulfur dioxide control technology programs had achieved significant 
success: ``The resulting environmental savings translated to more than 
$60 billion in damage and mitigation costs that were avoided''.\1\ The 
General Accounting Office concluded that: ``This [Clean Coal 
Technology] program serves as an example to other cost-share programs 
in demonstrating how the government and private sector can work 
effectively together to develop and demonstrate new technologies.'' \2\
---------------------------------------------------------------------------
    \1\ News Release by the National Academies, accompanying 
publication of NAS report reviewing the DOE research program, July 17, 
2001.
    \2\ Statement of Jim Wells, Director, Natural Resources and 
Environment, GAO, before the Subcommittee on Energy, Committee on 
Science, House of Representatives, June 12, 2001.
---------------------------------------------------------------------------
    The technology development program at the Office of Fossil Energy 
has received broad recognition for its contributions to the Nation, 
including numerous ``Power Plant of the Year'' awards from Power 
magazine, ``Top 100'' awards from R&D magazine, and citations from the 
National Society of Professional Engineers. Power magazine called the 
development of fluidized bed coal combustors ``the commercial success 
story of the last decade in the power generation business.''
    The benefits that will flow to the Nation from the use of coal for 
power production have been projected at over $400 billion in gross 
output in 2010.\3\ Other benefits are less easily quantified but are no 
less real, and include energy security, national security, and a degree 
of freedom for the U.S. Government to make geopolitical policy 
decisions not based, in part, upon the political preferences of oil 
exporting nations. Two hundred years' supply of currently recoverable 
coal (at current rates of consumption) gives the United States a high 
degree of security if we choose to fully exploit this advantage.
---------------------------------------------------------------------------
    \3\ ``The Economic Impact of Coal Utilization in the Continental 
United States'', A. Rose, PhD, Pennsylvania State University, 2002.
---------------------------------------------------------------------------
    The potential for coal to help in meeting the Nation's future 
energy needs is almost unlimited. Coal can continue to provide clean, 
low-cost electricity. Coal can also provide a feedstock for production 
of chemicals and transportation fuels, and helps provide a low cost 
bridge to a hydrogen-based future economy. However, coal faces new 
environmental challenges: mercury control and carbon control. The 
formula that worked for previous environmental challenges--developing 
cost-effective technologies to address emissions control--will work in 
overcoming these new challenges as well. But it will be difficult for 
coal's benefits to reach their potential without a continuing 
partnership between the government and the private sector.
    As discussed below, CURC believes that the administration's fiscal 
year 2007 budget request for research, development and demonstration of 
needed coal technologies is insufficient to allow the Nation to reap 
the benefits that can flow from expanded use of coal to meet our energy 
needs.

                   THE CLEAN COAL TECHNOLOGY ROADMAP

    The CURC and the Electric Power Research Institute (EPRI) in 
consultation with the DOE, 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, 
recognizing the ongoing concerns regarding global climate change, the 
roadmap includes a technology development program for carbon 
management, defined as the capture and sequestration (long-term 
storage) of carbon dioxide. In the event public policy requires 
CO2 management at some future time, pursuit of the RD&D 
program outlined in the Roadmap will best ensure that cost-effective 
technologies will be under development or already developed. CURC is 
not alone in the belief that these carbon management technologies merit 
continued Federal support. In a report concluded in 2005, the National 
Research Council of the National Academies concluded that prospective 
benefits of the DOE carbon sequestration research program would likely 
total $35 billion, if the Nation decided that carbon mitigation 
measures were necessary.\4\
---------------------------------------------------------------------------
    \4\ ``Prospective Evaluation of Applied Research and Development at 
DOE'', NRC, p. 43, 2005.
---------------------------------------------------------------------------
    Importantly, CURC and EPRI use a ``portfolio'' approach and 
advocate several technology development ``pathways'' that should be 
pursued concurrently to achieve the roadmap goals. As an example, the 
Nation should pursue both gasification and combustion-based technology 
paths.

                    CONCLUSIONS AND RECOMMENDATIONS

    Using the roadmap as a tool to guide our Nation's coal research and 
development (R&D) efforts, CURC has examined the fiscal year 2007 
budget request for coal and submits the following recommendations.
  --The funding proposed for the Clean Coal Power Initiative (CCPI), $5 
        million in fiscal year 2007, is wholly inadequate to meet the 
        needs that this program was created to address. The most 
        critical challenges facing coal use today are near- and longer-
        term environmental constraints, particularly mercury control 
        and the possible requirements to capture and store 
        CO2. The CCPI is needed to ensure the demonstration 
        of advanced mercury control technologies, the demonstration of 
        advanced power cycles that provide significantly greater 
        efficiency in the conversion of coal to useful energy or 
        products (thereby preventing CO2 emissions) and the 
        demonstration of first generation CO2 capture and 
        storage technologies, both for conventional coal systems and 
        advanced combustion and gasification based systems. 
        Oxycombustion, advanced scrubbers and chemical looping are 
        examples of some of the important combustion-related carbon 
        management systems under development.
      With respect to mercury control technologies, thanks to an 
        extremely successful program to develop and field test a number 
        of improved mercury control technologies, we are now in a 
        position to conduct commercial-scale, multi-year demonstrations 
        of those technologies. Time for this activity is critical, as 
        technologies will be needed to comply with the second phase of 
        EPA's mercury emission limits in 2018, and will probably be 
        needed on some new coal-based power plants prior to that date.
      It should be noted that the administration's budget documents 
        justified cuts in the CCPI program by alleging mismanagement by 
        the Department. Frankly, we do not understand this opposition 
        by OMB, particularly when the accomplishments of the 
        demonstration program have been so substantial, and when global 
        accolades for DOE's program successes have been so prevalent. 
        Funds appropriated for the CCPI program have been committed, 
        perhaps not all under contract or spent, but committed to clean 
        coal projects. Complex projects with estimated costs exceeding 
        tens of millions of dollars will require significant periods of 
        time to negotiate; none of this should be surprising. Indeed, 
        one of the largest CCPI awarded projects, the Southern Company 
        Transport Gasifier (IGCC) project with a total estimated cost 
        of more than $550 million and a DOE cost share of $235 million 
        was negotiated in 16 months and the project is underway.
    CURC recommends that the funding for CCPI in fiscal year 2007 be 
        increased to $150 million. Combined with other resources 
        available to the program, this could be sufficient to allow a 
        solicitation for technology proposals in late 2006 or early 
        2007.
  --The roadmap recognizes the benefits to technology development that 
        the FutureGen project can provide and the CURC supports this 
        important R&D program that can serve as a test bed for 
        demonstrating technologies developed out of the DOE's R&D 
        projects. To succeed as originally envisioned, basic R&D 
        activities must continue to provide the technology components 
        needed in FutureGen, like lower cost oxygen production systems, 
        cheaper synthesis gas cleanup, and hydrogen-capable combustion 
        turbines. This world class project will require a long term and 
        substantial financial commitment from the Federal Government. 
        The administration seeks to use ``old'' and previously 
        appropriated funds to support FutureGen in fiscal year 2007. 
        These previously appropriated funds ($54.0 million) along with 
        $203 million in other appropriations also previously 
        appropriated should be set aside for use in later years when 
        the critical and expensive construction stage of the project is 
        undertaken. The $54.0 million requested in fiscal year 2007 
        should be provided as new appropriations.
  --Recognizing that the current fiscal situation is extremely 
        difficult and that many worthy government programs have been 
        reduced, some dramatically, the basic R&D funding levels 
        identified within the CURC/EPRI Roadmap can generally be met 
        within the totals that the Congress enacted and the President 
        signed into law as part of the fiscal year 2006 appropriations 
        bill for energy and water. The Congressional amounts (minus 
        appropriations for ``program direction'') enacted in fiscal 
        year 2006 for the DOE's coal R&D program was $297.1 million. 
        CURC is recommending a total increase of $31.8 million to the 
        amounts requested in the fiscal year 2007 budget. Adoption of 
        these recommended increases would result in a total fiscal year 
        2007 budget of $302.8 million which is slightly above amounts 
        enacted in fiscal year 2006. In those coal R&D programs not 
        recommended for additional funding in fiscal year 2007, CURC 
        emphasizes that funding is adequate and that no funds should be 
        taken from these programs. The specific recommendations are:
    --Advanced Turbines.--This program, funded at $12.8 million in the 
            DOE's fiscal year 2007 request, should be funded at $25.0 
            million. The additional resources are needed to ensure that 
            the development of the hydrogen turbine remains on schedule 
            as well as development of other advanced turbines. In both 
            instances, such turbines are essential if carbon 
            constraints are imposed. It should also be noted that 
            hydrogen turbines are an important component of FutureGen.
    --Innovations for Existing Plants.--Much progress has been made in 
            developing and deploying technologies to reduce emissions 
            from existing coal-fired power plants. However, we need to 
            focus additional attention on mercury emissions control, 
            fresh water consumption, solid waste generation, and 
            overall efficiency improvements at these plants. Efficiency 
            improvements achieved through application of advanced 
            technologies will reduce carbon dioxide emissions as well 
            as other emissions. An additional $6.4 million is 
            recommended for the Innovations for Existing Plants budget 
            line. The additional funds would allow continued and 
            accelerated progress particularly on mercury control 
            technologies.
    --Advanced Research.--This program should receive an additional 
            $8.4 million to support the on-going ultra-supercritical 
            materials consortium as well as DOE support to university 
            coal research programs.
    --Coal-derived Fuels and Liquids.--CURC supports the DOE hydrogen 
            program as coal will be a major fuel source if we 
            transform, in part, to a hydrogen-based economy. However, 
            we believe that the fossil energy fuels and liquids program 
            should also focus on methods to reduce the cost of 
            facilities to manufacture coal to fuels or liquids. A total 
            of $5.0 million in additional funding for this area is 
            recommended. These additional funds should be made 
            available for development of advanced catalysts and 
            processes, reactor design, fuel property modification as 
            well as system and design studies focused upon coal-to-
            liquids plant economics, operability and size of facilities 
            to achieve widespread application of coal-to-liquids 
            conversion technology in all regions of the United States. 
            In addition, we are very concerned that on-going hydrogen 
            studies at DOE are not being fully coordinated with the 
            fossil energy office. Congress should insist that fossil 
            energy be fully consulted and that any outside peer review 
            of hydrogen R&D programs include reviewers designated by 
            the fossil energy office.
    In summary, CURC believes that coal can play a vital role in 
helping America meet its needs for reliable and affordable energy, but 
only if a continuing commitment to technology development allows coal 
to overcome remaining environmental challenges. The fiscal year 2007 
budget request does not reflect such a commitment. Congress must 
restore funding to the CCPI technology demonstration program and also 
ensure that the FutureGen program is adequately and fully funded. In 
addition, modest adjustments to the basic R&D program are appropriate. 
A table summarizing these recommendations by CURC is attached to this 
statement.
                                 ______
                                 
           Prepared Statement of the Nuclear Energy Institute

    On behalf of the nuclear energy industry, thank you for your 
oversight of the Federal Government's used nuclear fuel management 
program and funding for the Department of Energy's (DOE) nuclear 
technology-related programs. My statement for the record addresses 
three key points:
  --Congress should fully fund the Yucca Mountain program to provide 
        secure, environmentally responsible management of used nuclear 
        fuel.--NEI recommends that the program be funded at the 
        President's request of $544.5 million to enable DOE to submit a 
        license application for Yucca Mountain to the Nuclear 
        Regulatory Commission (NRC) next year.
  --The industry urges continued support for DOE's nuclear energy 
        programs at $560 million.--NEI supports higher funding for 
        DOE's Office of Nuclear Energy, Science and Technology to 
        support the new Global Nuclear Energy Partnership and sustain 
        existing programs. To achieve its objectives, DOE must have 
        additional funding for Nuclear Power 2010, Generation IV 
        reactor programs and the Nuclear Hydrogen Initiative. We 
        strongly recommend full restoration of the University 
        Infrastructure and Assistance Program along with continued 
        funding for the Nuclear Energy Research Initiative and 
        initiating the Nuclear Energy Systems Support Program.
  --The NRC's budget request of $777 million should be reviewed for 
        efficiencies.--NEI urges Congress to thoroughly examine the 
        NRC's budget increased budget request to ensure proper resource 
        allocation and to recognize reduced demands due to delays in 
        Yucca Mountain licensing.
    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. 
utility 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 nuclear industry generates electricity for one of every five 
U.S. homes and businesses, and is taking steps to develop affordable, 
reliable and clean electricity for the future. Nuclear energy is a 
vital component of a diverse energy portfolio that enhances America's 
energy security and fuels economic growth. We applaud the efforts and 
actions of this committee in recognizing nuclear energy as an important 
part of a diverse, competitive and secure energy policy for generations 
to come.

 INDUSTRY SUPPORTS BUDGET REQUEST OF $544.5 MILLION FOR YUCCA MOUNTAIN

    The nuclear industry appreciates the strong support and leadership 
that the Congress has provided on the Yucca Mountain repository 
program. The Federal Government is already 8 years behind on its 
commitment to start moving used nuclear fuel from temporary storage at 
nuclear power plants across the Nation to a Federal repository. Under 
the most optimistic scenario, it will be several more years before the 
repository is licensed and operating. Since 1983, consumers of 
electricity from nuclear power plants have committed nearly $23 billion 
in fees and interest to cover the costs of this program, and the 
Nuclear Waste Fund balance is more than $20 billion.
    The Federal Government taking title to and moving used fuel away 
from reactor sites, along with quantifiable progress on Yucca Mountain, 
are top priorities for the nuclear industry. Continued progress toward 
a used fuel management solution is important for building new nuclear 
plants that will maintain nuclear energy as a key component of our 
Nation's energy production mix throughout the 21st century.
    DOE recently completed a thorough review of the Yucca Mountain 
program and has outlined needed improvements in the program. The 
agency's recent re-organization and lead laboratory designation are 
steps in that direction. We are encouraged that the department's 
leadership now has the necessary focus to move the program forward. The 
program shift toward a new fuel handling approach has promise to better 
facilitate licensing and operation of the facility.
    The Secretary of Energy recently testified before Congress that the 
agency this summer will provide a schedule for submitting a license 
application for Yucca Mountain to the Nuclear Regulatory Commission, 
and for repository construction and operation. The industry strongly 
believes that it is critical that DOE meet this commitment. In 
particular, it is imperative that a high-quality license application be 
submitted as soon as practicable to demonstrate measurable progress on 
this critical program. There will be ample opportunity going forward 
for additional detail to be provided by DOE.
    In order for this progress to be accomplished, we fully support the 
administration's $544.5 million request for the Office of Civilian 
Radioactive Waste Management. This funding level is necessary for DOE 
to complete a high quality license application and prepare to defend it 
in the NRC licensing process, to improve existing Yucca Mountain site 
infrastructure and develop new infrastructure, and for repository 
facilities design. We also welcome Secretary Bodman's statement that he 
reserves the right to adjust the funding request in light of the 
program schedule plan that will be completed over the next few months.
    The industry also supports legislative action by Congress to 
address regulatory, long-term funding and other issues to allow the 
department to move forward with this project. We look forward to 
working with the committee now that the administration has forwarded 
its legislative recommendations to Congress.
    The nuclear industry has consistently supported, including in 
testimony before this committee, research and development of advanced 
fuel cycle technologies incorporated in the Advanced Fuel Cycle 
Initiative (AFCI). In anticipation of a major expansion of nuclear 
power in the United States and globally, it is appropriate to 
accelerate activities in this program. The renaissance in development 
of nuclear energy requires advanced fuel cycles in the future.
    President Bush has presented a compelling vision for a global 
nuclear renaissance through the Global Nuclear Energy Partnership 
(GNEP). This initiative provides an important framework to address 
challenges for nuclear power development related to fuel supply, long-
term radioactive waste management and proliferation concerns.
    We recognize that the Congress has important questions regarding 
this program. The industry believes that the near term focus for GNEP 
is for DOE to determine, by 2008, how to proceed with demonstration of 
advanced recycling technologies and other technological challenges. 
Consequently, the industry fully supports increased funding for the 
Advanced Fuel Cycle Initiative in fiscal year 2007. However, neither 
AFCI, nor GNEP reduces the immediate near-term imperative for progress 
on Yucca Mountain.

       RESEARCH AND DEVELOPMENT NECESSARY FOR NEW NUCLEAR ENERGY

    The Nation needs new electricity capacity. The Energy Information 
Agency forecasts that demand for electricity will grow by more than 40 
percent over the next 25 years. Simple maintaining nuclear energy as 20 
percent of U.S. electricity supply (its current share) will require 
construction of 50,000 megawatts (40-50 large plants) of new nuclear 
plants by 2030. DOE and the industry are working on cost-shared 
programs that will ready new nuclear energy technology for the 
marketplace midway through the next decade. Within the Nuclear Power 
2010 program, funding should be allocated for demonstrating NRC 
licensing processes for new nuclear plants, including those for early 
site permits and the combined construction and operating license. The 
industry remains fully committed to this initiative and strongly 
recommends increasing funding to $110 million \1\ to meet the schedule 
for completion.
---------------------------------------------------------------------------
    \1\ The $110 million is necessary to sustain progress with the NP 
2010 program, and is exclusive of any projected carry-over of the DOE 
fiscal year 2006 budget that may or may not be available for fiscal 
year 2007.
---------------------------------------------------------------------------
    The industry believes that the government has a limited, early role 
in bringing advanced reactor concepts--Generation IV reactors--to the 
marketplace. NEI urges the committee's support for the development of a 
next-generation nuclear plant at the Idaho National Laboratory, funded 
through the Generation IV Nuclear Energy Systems Initiative program at 
$100 million. The industry also supports the Nuclear Hydrogen 
Initiative at $30 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 DOE nuclear energy programs. The industry 
believes a collaborative basic science program between national 
laboratories, industry and universities like NERI should be continued 
in fiscal year 2007.
    Congress authorized the Nuclear Energy Systems Support program as 
part of the Energy Policy Act of 2005, but DOE proposed no funding for 
the program in fiscal year 2007. The industry supports this new program 
and suggests $15 million to fund an analysis of high performance fuel 
at the Idaho National Laboratory. Future budgets for this program could 
focus on developing technology to predict and measure the effect of 
aging on plant systems and components; and introducing new metals and 
other materials to assure the safety of key systems and components.
    The industry also strongly recommends restoration of DOE's 
University Infrastructure and Assistance Program, which provides for 
vital research and educational programs in nuclear science at the 
Nation's colleges and universities. The global nuclear renaissance will 
demand highly educated and trained professionals in the engineering 
sciences. NEI also encourages the committee to consider supporting a 
new program within the Office of Science that encourages support for 
undergraduate and graduate programs in health physics, radiochemistry 
and other disciplines important to medical, energy and other 
applications of commercial nuclear technology.

               NRC BUDGET AND STAFFING SHOULD BE REVIEWED

    The NRC's proposed fiscal year 2007 budget totals $777 million, an 
increase of $35 million from the fiscal year 2006 budget, and the 
highest ever for this agency. Six years ago, the NRC's budget was $488 
million. This is an appropriate time for Congress to review the budget 
request and resource allocations in light of current demands and the 
other resources available.
    The NRC's fiscal year 2006 budget request of $702 million was 
increased by $41 million by Congress for two purposes. The commission 
was allocated an additional $20 million to fund an investment ``over 2 
years'' to support the preparatory activities and pre-application 
consultations for the expected combined construction and operating 
license applications beginning in fiscal year 2008. The NRC also was 
provided $21 million to be used to conduct ``site specific assessments 
of spent fuel pools at each of the nuclear reactor sites.'' Although 
Congress clearly established a limited period for funding in these two 
categories, the NRC has incorporated these amounts into its budget 
baseline.
    As a result of the significant increases in the NRC's budget, 
licensee fees have increased dramatically. Generic licensee fees for 
each reactor will increase from $3.1 million to more than $3.6 million. 
When other NRC fee increases specific to each reactor are included for 
licensees, NRC fees for power reactors will increase by over 20 percent 
in 1 year.
    The NRC's fiscal year 2007 budget request includes $35.3 million 
for generic homeland security costs. Section 637 of the Energy Policy 
Act of 2005 modified the NRC's user fee to exclude the costs of generic 
homeland security from fees recovered from licensees, except 
reimbursable costs of fingerprinting and background checks and the 
costs of conducting security inspections. The NRC's budget proposal 
includes more than $70 million for homeland security functions. Section 
637 requires that only a portion of the NRC's budget for this function 
be supported by general funds. The industry agrees that certain NRC 
security functions are for the common defense of the Nation and should 
be funded from general funds.
    America's nuclear power plants were the most secure U.S. industrial 
facilities before the Sept. 11, 2001, terrorist attacks, and are even 
more secure today. Over the past 5 years, the nuclear industry has made 
significant improvements in security at nuclear power plants. The NRC 
substantially upgraded its security requirements in 2002 and again in 
2004. The industry has invested more than $1.2 billion in security-
related improvements and has increased its security guard forces from 
around 5,000 to more than 7,000. Security at commercial nuclear 
facilities is unmatched by any other private sector or area of the 
critical infrastructure, and the nuclear industry has been a leader in 
working with the Department of Homeland Security and other Federal and 
State resources on security issues.

               INDUSTRY SUPPORT FOR ADDITIONAL ACTIVITIES

    Nuclear Nonproliferation.--The industry urges the committee to 
support the President's request for the MOX project, which is a vital 
element of U.S. nonproliferation activities. This year is particularly 
crucial to the project because construction is scheduled to begin.
    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 about the 
declining number of nuclear research facilities, and urges the 
committee to fully fund DOE's lead laboratory 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 each year to the Decontamination and 
Decommissioning Fund for government-managed uranium enrichment plants. 
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 External Advisory Committee to the Department 
 of Petroleum and Geosystems Engineering, University of Texas at Austin

    The External Advisory Committee to the University of Texas at 
Austin Department of Petroleum and Geosystems Engineering is gravely 
concerned that the administration's fiscal year 2007 budget request 
eliminates funding for the Department of Energy's oil and natural gas 
technologies budget. We respectfully urge you to restore funding to at 
least the fiscal year 2006 appropriated level of $64 million.
    Many have tried to label this appropriation as corporate welfare 
for ``big oil.'' Nothing could be further from the truth. DOE's oil and 
natural gas technologies budget ensures that all Americans benefit from 
the technological advances necessary to produce America's ever more 
marginal oil and natural gas reserves.
    This Draconian cut has a severe negative effect on the University 
of Texas' ability to produce quality petroleum engineers that this 
Nation so desperately needs. Department Chairman Bill Rossen informs me 
that more than half of the university's petroleum engineering research 
dollars would be eliminated if the program's budget were to be zeroed 
out. I can attest that the cut's effect on the Nation's other 15 
petroleum engineering schools would be similar.
    The External Advisory Committee that I chair is made up of oil and 
gas leaders throughout the country. We already provide significant 
support to the University of Texas at Austin and other similar research 
institutions. But more help is needed.
    We are advised that the Department of Energy office of fossil 
energy already has in place safeguards to ensure that its research 
dollars are not giveaways or welfare checks to oil and gas companies, 
but rather support critical research and development efforts that are 
not otherwise taking place. We respectfully suggest that Congress could 
mandate the development of similar safeguards as a condition of this 
appropriation.
    Public domain oil and natural gas technology research is a vital 
public policy interest of the United States that merits a Federal 
appropriation. Such research ensures the continued vitality of our 
academic institutions. It provides the technology development needed to 
supply America's energy into the future. It strengthens the American 
economy and our way of life, and it upholds America's energy security.
    Thank you for your support of this critical appropriation request.
                                 ______
                                 
         Prepared Statement of the National Mining Association

                          NMA RECOMMENDATIONS

Department of Energy
    Office of Fossil Energy.--$54 million in new funds for the 
FutureGen Initiative; $257 million in previously appropriated funds 
should be designated for the FutureGen Initiative; $303 million for 
base coal research and development programs; and, $150 million for the 
Clean Coal Power Initiative (CCPI).
U.S. Army Corps of Engineers
    Civil Works Program.--See table below for NMA's list of priority 
projects and recommendations.

                               BACKGROUND

    Office of Fossil Energy.--The NMA strongly supports the $54 million 
in new funds for the FutureGen Initiative; recommends the rescission 
and advance appropriation of the entire $257 million in prior year 
Clean Coal Technology Program funds for FutureGen's use in the out 
years; and recommends at least $303 million be appropriated for base 
coal research and development programs. In addition, the Clean Coal 
Power Initiative (CCPI) should be funded at a level of $150 million; 
the Advanced Turbine program should be funded at $25 million; and the 
Advanced Separation Technologies should receive $3 million.
    The FutureGen Initiative will design and build, in the United 
States, a first-of-a-kind commercial-scale power plant that will 
provide the technological capability to: (1) capture and permanently 
store 90 percent or more of the plant's CO2 emissions; (2) 
power about 150,000 American homes with the clean electricity it 
generates from coal; and, (3) co-produce hydrogen and potentially other 
useful by-products from coal.
    Technological advancements achieved in the base coal research and 
demonstration programs such as gasification, advanced turbines, and 
carbon sequestration, provide the component technologies that will 
ultimately be integrated into the FutureGen project. NMA believes these 
programs should be funded at a level of at least $303 million. Within 
this amount, the advanced turbine program should be funded at $25 
million instead of the requested level of $13 million. The increase in 
funding will ensure the FutureGen project meets intended goals.
    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.

                      U.S. ARMY CORPS OF ENGINEERS

    Civil Works Program.--NMA reviewed the proposed fiscal year 2007 
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 2007 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 
        2007 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 the use of 
        performance-based budgeting, and specifically the performance 
        budgeting tool Remaining Benefit/Remaining Cost (RB/RC) ratio, 
        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. NMA does not support the 
        administration's proposals for zero funding for the Kentucky 
        River Lock and J.T. Myers Lock and Dam projects that are 
        currently under construction. In the case of the Kentucky lock, 
        more than 25 percent of the total project cost has been spent.
    The fiscal year 2007 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 2007 proposed funding in the amount of $2.258 
billion for the Corps' Operations and Maintenance (O&M) functions 
should be increased. 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. The current 
backlog of critical maintenance for navigation is estimated to be more 
than $600 million. 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 2007 Priority 
Projects.

                                     NMA FISCAL YEAR 2007 PRIORITY PROJECTS
----------------------------------------------------------------------------------------------------------------
                                                                                                    Fiscal Year
                                                                    Fiscal Year     Fiscal Year   2007 Efficient
                                                                   2006 Enacted   2007 Requested   Funding Level
----------------------------------------------------------------------------------------------------------------
Construction:
    Robert C. Byrd Locks and Dams Ohio River, OH/WV.............        $914,000      $1,800,000      $1,800,000
    Kentucky River Lock Addition, Tennessee River, KY...........      23,000,000  ..............      55,000,000
    Marmet Locks and Dams, Kanawha River, WV....................      73,500,000      50,800,000      50,800,000
    McAlpine Locks and Dams, Ohio River, IN/KY..................      70,000,000      70,000,000      70,000,000
    Locks and Dams 2, 3, 4, Monongahela River, PA...............      50,800,000      62,772,000      62,800,000
    J.T. Myers Locks and Dams, Ohio River, IN/KY................         700,000  ..............       9,000,000
    Olmsted Locks and Dams, Ohio River, IL/KY...................      90,000,000     110,000,000     110,000,000
    Winfield Locks and Dams, Kanawha River, WV..................       2,400,000       4,300,000       4,300,000
    Emsworth Dam, Ohio River, PA................................      15,000,000      17,000,000      17,000,000
Investigations:
    Greenup Locks and Dam, KY and OH............................         225,000  ..............       4,000,000
    Emsworth, Dashields & Montgomery (Upper Ohio River).........       1,275,000  ..............       4,000,000
----------------------------------------------------------------------------------------------------------------

    Regulatory Program.--NMA supports the administration's request of 
$173 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. In addition, NMA recommends 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.
    The National Mining Association (NMA) represents producers of over 
80 percent of the coal mined in the United States. Coal continues to be 
the most reliable and affordable domestic fuel used to generate over 50 
percent of the Nation's electricity. NMA members also include producers 
of uranium--the basis for 20 percent of U.S. electricity supply. NMA 
represents producers of metals and minerals that are critical to a 
modern economy and our national security. Finally, NMA includes 
manufacturers of processing equipment, mining machinery and supplies, 
transporters, and engineering, consulting, and financial institutions 
serving the mining industry.
                                 ______
                                 
     Prepared Statement of the National Community Action Foundation

    Mr. Chairman, and members of the subcommittee, the National 
Community Action Foundation represents the 760 local Community Action 
Agencies (CAAs) that deliver most of the Weatherization Assistance 
Program investments.
    We are requesting that the subcommittee reject the President's 
request that slashes the program by 33 percent in fiscal year 2007 and 
shuts it down over the next 3 years. We urge you, at the very least, to 
maintain the program at its fiscal year 2006 level. (The program could 
quickly ramp up its work if the subcommittee decides to provide a 
substantial and sustained increase, but we certainly recognize the 
budgetary realities Congress faces for fiscal year 2007.)
    We were astonished that the administration retreated from 5 years 
of advocating for increased Weatherization funding just when oil and 
natural gas prices reached record highs. The 2007 budget request 
reduces Weatherization and other programs but increases subsidies to 
long-term technology development by corporate-academic-government 
research partnerships. We cannot dispute the need for engineering and 
basic research, but we seriously question whether it can only proceed 
if funding can be taken from low-income homes.
    The cut will deny about 26,000 households the lasting and immediate 
bill reductions they expected to receive next year, after being wait-
listed for ``their turn'' for several years. The planned termination of 
the program by 2010 will mean the difference between sickness and 
health and between stability and homelessness for millions of consumers 
now eligible for this important assistance. These sad effects will be 
realized decades before the new energy economy provides any relief. It 
is an unnecessary sacrifice.
    The planned termination of the program means a cadre of thousands 
of skilled workers which is ready now to put the best available tools, 
new techniques and state-of-the art insulating materials and equipment 
in hundreds of thousands of buildings, will be diverted to the 
conventional construction work they perform when not delivering 
Weatherization today. Two decades of Federal investment in training and 
new materials may be lost.
    As you are aware, even the administration has not retreated from 
its conviction that Weatherization operates efficiently and produces 
solid results in energy savings, safer homes and lower bills. In fact, 
the Secretary issued the following statement on April 3, 2006:

    ``Washington, DC.--U.S. Department of Energy (DOE) Secretary Samuel 
W. Bodman today announced $140.3 million in weatherization program 
grants to 31 States and the Navajo Nation to make energy efficiency 
improvements in homes of low-income families; weatherization can reduce 
an average home's energy costs by $358 annually. Total fiscal year 2006 
funding is $243 million and will provide weatherization to 
approximately 96,560 homes. `Weatherizing your home is a valuable way 
to save energy and money,' Secretary Bodman said. `The Department of 
Energy's weatherization program will help nearly 97,000 families make 
their homes more energy efficient.'
    ``For every dollar spent, weatherization returns $1.53 in energy 
savings over the life of the measures. DOE's weatherization program 
performs energy audits to identify the most cost-effective measures for 
each home, which typically includes adding insulation, reducing air 
infiltration, servicing heating and cooling systems, and providing 
health and safety diagnostic services. Other benefits of weatherization 
include increased housing affordability, increased property values, job 
creation, lower owner and renter turnover, and reduced fire risks.''

    There was strong Senate support for the Energy Policy Act when it 
passed not even 1 year ago; it not only preserved, it more than 
doubled, the authorized size of the Weatherization program by 2008. 
That Act signaled to the hundreds of thousands of low-income Americans 
on waiting lists for our energy services that the Congress is not only 
committed to incentives for long-term technological advances that 
transform our infrastructure; it sent the message that Congress intends 
to offer them effective permanent relief by reducing improving their 
dilapidated, wasteful housing as soon as possible.
    Those weatherized in the past can expect their fiscal year 2006 
household energy bills will be $400 to $462 lowers than they would have 
been without the DOE program's investment. These average savings alone 
represent nearly a month's income to many of the elderly participants 
who rely solely on Supplemental Social Security, and are about one-
quarter of the energy bills that will drain the resources of the 
average un-weatherized low-income consumer over the course of this 
fiscal year. The Department of Energy figure of $358 is the multi-year 
average expected based on long-term price forecasts. In years like this 
one, extreme prices mean better protection for that Weatherized. 
Community Action Agencies are fully aware that the $600 million fiscal 
year 2008 authorization is really an indicator of the direction the 
Congress is committed to follow, not a funding level. We urge the 
subcommittee to stay the policy course laid out last summer by, at the 
very least, sustaining the Weatherization program.
    When our Nation first took controls off oil prices, and again when 
Americans were promised that electricity competition would drive the 
price of residential power down, an accompanying policy promise was 
that the poor would be protected from the risk of un-affordable energy. 
The promises have not been honored fully, but the Weatherization 
program, expanded as part of the original ``social bargain'' on energy 
in 1979, has evolved as a small but steady source of investment in 
lasting relief. The poor need Weatherization program investments for 
their houses because they lack the credit card, the savings, or the 
income to buy the home improvements that pay off steadily, year after 
year.
    This year, nearly all American consumers have needed relief from 
energy prices, and millions of homeowners installed more insulation, 
repaired air leakage, and upgraded to more efficient equipment to stay 
warm and to keep their electrical devices running at lower cost. We all 
know conservation is the best and quickest bill reduction strategy, and 
most of us can use our energy more carefully. However, the low-income 
consumers already use less than 80 percent of the home energy that the 
average American uses even though their homes burn about one-third more 
gas or heating oil per sq. ft. because of their age and poor quality. 
There is not as much margin for the poor to cut back before indoor 
temperatures become dangerously low or high in summer.
    Community Action's mission is to change the causes of poverty; 
wasteful and unhealthy housing can indeed be transformed by 
Weatherization, and CAAs consider it one of our most effective 
programs; it makes a lasting change for the family; it produces 
immediate reduction in energy bills, upgrades the building stock, and 
broadens the technical competence of the local building trades.
    We also request that the subcommittee take two further initiatives 
that impose no cost. They are to:
  --Request reporting from DOE that indicates how the Department is 
        fulfilling the many responsibilities it is assigned under the 
        statute following dramatic staffing reductions of the past 3 
        years and the reorganization expected on July 1, 2006, and
  --Consider proposing a role for the skilled Weatherization workforce, 
        when and if you review budgets for other Federal or State 
        programs that bring energy efficient materials and technology 
        to the residential market as a whole or to the task of building 
        affordable housing in the Gulf Coast communities. Weatherizers 
        are ready respond to energy-related consumer needs using other 
        funds, and they can do more. For example, tens of millions of 
        LIHEAP funds are spent to replace broken, dangerous and 
        wasteful furnaces and other equipment. A program to subsidize 
        more Energy Star equipment for low-income housing would soon 
        result in many safer, warmer homes and transform the market for 
        Energy Star equipment.
    Many Weatherization providers are already partners in community 
development projects that are using renewable funds and new efficient 
green construction techniques. Funding comes from private partners, 
State and Federal housing programs and State utility system benefit 
funds. In fact, Weatherization programs are able to win non-Federal 
funds and partners because of their capacity and their strict 
accountability, both products of the DOE program. We estimate our 
network of Weatherizers will have delivered $700 million in energy and 
housing services to the poor by the end of program year 2006, of which 
just over one-third comes from the core DOE program. This means 
Weatherization has the capacity to grow in response to the urgent 
national need to use energy more responsibly. The subcommittee's past 
support has already allowed the program to get more done in this 
program year and Weatherization providers look forward to as much 
responsibility as you can possible assign in the coming fiscal year.
                                 ______
                                 
        Prepared Statement of the National Hydrogen Association

    Chairman Domenici, Ranking Member Reid and honorable members of the 
committee, on behalf of the 100 members of the National Hydrogen 
Association (NHA), I would like to thank you for the opportunity to 
enter into the record testimony on the funding for hydrogen programs in 
the Department of Energy's fiscal year 2007 congressional budget 
request. For over 17 years, we have been an association dedicated to 
pursuing the research, development and demonstration of hydrogen and 
fuel cell technologies, leading to a firm basis for establishing and 
growing a commercial Hydrogen Economy.

                                SUMMARY

    My testimony will make the following points that reflect the NHA's 
policy priorities:
  --Full funding of the Technology Validation Program;
  --Full funding of the hydrogen provisions in the Energy Policy Act of 
        2005 (EPAct 05--Public Law 109-58);
  --Support for other enabling legislation and appropriations.

                     TECHNOLOGY VALIDATION PROGRAM

    The validation program has ambitious and critical goals concerning 
durability, vehicle range, storage, attainable hydrogen fuel cost, data 
reporting, technology evolution, renewable hydrogen feedstock 
generation, codes and standards coordination and public outreach. Teams 
combine the efforts of both vehicle manufacturers and energy companies 
in 5-year partnerships, along with several other research firms, 
universities and National Laboratories. Here is why DoE's validation 
program is so important:
  --The team projects involved in these ``Learning Demonstrations'' 
        include detailed concepts for diverse and flexible approaches 
        to vehicles, supply and infrastructure.
  --Unique, historic partnerships have been formed between fuel, auto, 
        and research firms--critical to reinventing new corporate 
        relationships and making new markets succeed.
  --The operational relationship between system components (hydrogen 
        supply, on-board storage, vehicle, fuel cell, drive train) has 
        to be learned in practice--it cannot be fully evaluated by 
        simulations or bench testing. Successful integration of new 
        components is difficult, and real problems must be solved in a 
        commercial operating environment.
  --Evolution of new technology is greatly assisted by bringing systems 
        out of the lab, punishing them under real conditions, remedying 
        the failures, and sending intractable problems back to the 
        lab--while redesigning new demos. The quest toward 
        commercialization will occur in many iterative steps.
  --If funding were to lag, the Federal Government might become a less 
        reliable partner, key parts of the partnerships could soften, 
        and the scale of U.S. activity could shrink toward marginal 
        ideas. The centroid of hydrogen development may move away from 
        the United States.

                      ENERGY POLICY ACT PROVISIONS

    Although the fiscal year 2007 budget request continues to build on 
the strong foundation of the President's Hydrogen Fuel Initiative--a 5-
year commitment expiring in 2008--EPAct 05 gave the entire hydrogen 
program permanent authority. As a consequence, DoE has much work to do 
to implement the Act.
    We certainly concur with the letters sent to Secretary Bodman and 
President Bush by the House and Senate (respectively) in late 2005 that 
asked for full funding of the hydrogen provisions in EPAct 05, without 
adverse impacts on the other energy efficiency and renewable energy 
programs in DoE. Specifically, the Dec. 21, 2005, bipartisan Senate 
letter highlights how the EPAct 05 makes the Federal Government a more 
reliable partner in building the Hydrogen Economy:

    ``The Secretary's scope of action has been expanded in key areas, 
and the hydrogen and fuel cell program has acquired considerable 
stability by its permanent authorization. Renewed focus on research, 
development, demonstration and state and Federal purchase for early 
market transition will give the Secretary and industry higher quality 
technical options sooner.''

    Further,

    ``Technology validations, the heart of the learning demonstration 
partnerships with industry, need to grow to include fleets of advanced 
vehicles, particularly light duty vehicles, transit buses, agricultural 
industrial and heavy duty vehicles.''

    And,

    ``To achieve the acceleration of our efforts to build a hydrogen 
economy, we specifically recommend that the fiscal year 2007 budget 
request reflect the authorized levels of spending that have been 
approved by Congress in Titles VII and VIII of the Energy Policy Act of 
2005.''

                         DOE HYDROGEN PROGRAMS

    The President's Hydrogen Fuel Initiative continues its strong run, 
with increased funding over fiscal year 2006. The hydrogen programs in 
EPAct 05 built on the success of that initiative, which began in 2004 
and might have ended in fiscal year 2008, but it has some ambitious 
2015 goals that were being actualized by appropriations only 1 year at 
a time. This annual approach would have had a slim chance of realizing 
such long range goals and designs into the program an inherent lack of 
stability, particularly for the critical learning demonstrations.
    As a baseline, the actual Title VII and Title VIIII request for 
hydrogen is $246 million (EERE + Science), or only 47.5 percent of 
EPAct 05's $517.5 million. Additional hydrogen funding is included for 
the nuclear and fossil energy programs. Plus, the authorized activities 
under Title VII Vehicles and Fuels, have not been addressed in program 
planning, let alone in the funding request. Although the Senate Energy 
Committee agreed in October 2005 to forego activities for fiscal year 
2006 under Title VII at DoE's request, DoE agreed that this did not 
apply to fiscal year 2007. Nevertheless, there is much to do under 
sections 782 and 783 that does not require funding, but DoE's 
dedication to the principles contained in the law. These shortfalls 
need explanation.
    Additionally, there are three important studies in Sections 1819, 
1820 and 1825 that deserve to be completed soon by DoE and would help 
inform industry and the Congress--that deal respectively with resolving 
international participation in the hydrogen program, economic 
development and employment aspects of a hydrogen economy, and a long-
term Federal funding roadmap plus the carbon effects from a fully-
realized hydrogen economy. These sections originated with Senators 
Alexander, Dorgan and Levin respectively, had strong industry and 
bipartisan support and were adopted by unanimous consent in the 
Senate's Energy Bill, S. 10, and in the Conference Report for Public 
Law 109-58. We applaud DoE's foresight in issuing a solicitation for 
the Section 1820 study, which is to be completed in late October.
    On a positive note, DoE budget displays show that Technology 
Validation does receive about an 18 percent increase in fiscal year 
2007 over fiscal year 2006 appropriations ($33.6 million vs. $39.6 
million). The favorable increases in the Fossil Energy budget request 
for hydrogen activities are worth noting--but we would especially like 
to see more emphasis on hydrogen production from advanced, safe nuclear 
power. And given the magnitude of our national coal resources, 
FutureGen will simply need more stable funding over a longer time span.

                               CONCLUSION

    We urge the committee to preserve these gains in the appropriations 
process, and add to them to be more consistent with EPAct 05. Continued 
funding growth is designed into EPAct 05 that is intended to accelerate 
the programs' achievements, and create a far larger benefit pool than 
could be realized by R&D alone. After all, the job is to commercialize 
the results of R&D, along with that careful technical exploration.
    We would like to see member requests moderate somewhat, and 
especially be tied more closely to DoE's planning goals for technology 
development. DoE's administration of these member requests also needs 
improvement, so that accommodating them does not mistakenly worsen the 
adverse impact to existing and mortgaged multiyear projects.
    We thank you for the opportunity to submit this testimony. We look 
forward to continuing a fruitful working relationship with the 
committee, its staff, and all our stakeholders in building a successful 
Hydrogen Economy.
                                 ______
                                 
          Prepared Statement of the American Chemical Society

    The American Chemical Society (ACS) would like to thank Chairman 
Peter Domenici and Ranking Member Harry Reid for the opportunity to 
submit testimony for the record on the Energy and Water Appropriations 
bill for fiscal year 2007. For fiscal year 2007, ACS requests the 
Department of Energy Office of Science be fully funded at President 
Bush's request of $4.102 billion.
    ACS is a non-profit scientific and educational organization, 
chartered by Congress, representing more than 159,000 individual 
chemical scientists and engineers. The world's largest scientific 
society, ACS advances the chemical enterprise, increases public 
understanding of chemistry, and brings its expertise to bear on State 
and national matters.
    As Congress and the administration seek to bolster the economy, 
economists agree that investments in basic research boost long-term 
economic growth more than other areas of Federal spending. Numerous 
recent reports cite the growing challenges American faces from global 
competitors, including the National Academies of Science report 
``Rising Above the Gathering Storm''.
    Basic physical science investments foster the new technologies and 
train the scientific workforce which drive the Nation's public health, 
defense, energy security, and environmental progress. Although industry 
funds the bulk of national R&D, the Federal Government provides 60 
percent of basic research funding and, remarkably, 40 percent of 
patents cite Federal research as their source. Yet Federal research in 
the physical sciences and engineering has been cut in half since 1970 
as a percentage of GDP. Fortunately, the President, top Congressional 
leaders, and members of science and industry have all recognized the 
need to boost investment in physical sciences and engineering research. 
This investment has never been more important given its central role in 
advancing the Nation's economic, energy, and homeland security.

                       ACS BUDGET RECOMMENDATIONS

    Current Federal efforts to advance energy efficiency, production, 
and new energy sources while reducing air pollution and other 
environmental impacts will demand increased investment in long-term 
energy research. By supporting people, research, and world-class 
science and engineering facilities, the Department of Energy's Office 
of Science expands the frontiers of science in areas critical to DOE's 
energy, environment, and national security missions.
    The President's budget request represents visionary leadership to 
ensure American competitiveness and innovation by providing the largest 
investment in DOE Office of Science in over two decades. Many in 
Congress have joined with the President in calling for expanded 
investment in basic physical science research. The President's request 
for $4.102 billion is consistent with authorized spending levels in 
Public Law 109-57 and is essential to ensuring the strength of our 
innovation economy.
    Increases in the Office of Science will help reverse the declining 
Federal support for physical science and encourage more students to 
pursue degrees in these fields. The Office of Science is the largest 
Federal supporter of research in the physical sciences, funding almost 
40 percent of research in these fields. The Office of Science fosters 
the new discoveries and technical talent that will continue to be 
essential to advances in coal, hydrogen, biomass, genomics, and many 
other technology areas. Additional funds should be directed to increase 
the number of grants, especially in core energy programs, and to 
improve research facilities. The Office is the primary source of 
Federal support in many research areas essential to our energy security 
and economy, such as catalysis, carbon cycle research, photovoltaics, 
combustion, and advanced computing. Increased investment is also 
important given the declining private support for long-term energy 
research.

                    INCREASE GRANTS IN CORE PROGRAMS

    ACS recommends that increases for the Office of Science be directed 
to advancing core energy research across disciplines, which enables DOE 
to respond rapidly to new challenges. For example, DOE capitalized on 
long-term atmospheric chemistry research, particularly in aerosols, and 
quickly developed a single anthrax-bacterium detector. DOE must 
strengthen its ability to attract scientists and train the next 
generation of scientists and engineers by increasing the number of 
grants in its core programs without reducing their size and duration. 
Current appropriations allow the DOE Office of Science to fund one-
third the proposals as the National Institutes of Health and the 
National Science Foundation. This rate is considerably lower than those 
of other agencies and amounts to lost opportunities for both 
significant discoveries and the education of the next generation of 
scientists and engineers.
    Within the Office of Science, ACS particularly supports the Basic 
Energy Sciences and Biological and Environmental Research programs. As 
the cornerstone of the Office, the Basic Energy Sciences (BES) program 
supports an array of long-term basic research to improve energy 
production and use and reduce the environmental impact of those 
activities. The BES program manages almost all of DOE's scientific 
user-facilities, and provides leading support for nanotechnology and 
advanced computing research--two priority research areas that will have 
important implications for energy efficiency and security. The 
Biological and Environmental Research (BER) program advances 
fundamental understanding in fields such as waste processing, 
bioremediation, and atmospheric chemistry to better understand 
potential long-term health and environmental effects of energy 
production and use and identify opportunities to prevent pollution. 
Progress in these fields is also needed to develop and advance new, 
effective, and efficient processes for the remediation and restoration 
of DOE weapons production sites. ACS supports a strong role for DOE in 
Federal efforts to advance pollution prevention and climate change 
research.

                    DOE AND THE SCIENTIFIC WORKFORCE

    As the largest supporter of research in the physical sciences, DOE 
can greatly affect the training and number of scientists in industry, 
government and academia. Inadequate investment in any research field 
constricts the supply of trained scientists and engineers who apply 
research and develop new technology. For instance, declining support 
for nuclear science and engineering will greatly affect the nuclear 
sector as a majority of today's nuclear scientists and engineers near 
retirement. Another example is the synergistic relationship between the 
need for radiochemists and NIH's ability to conduct clinical trials. 
Advances in diagnosis and treatment in nuclear medicine are dependent 
on the synthesis of highly specific radiopharmaceuticals that target 
biological processes in normal and diseased tissues. The Office of 
Science, through BER supported research, occupies a critical place in 
the field of radiopharmaceutical research. The NIH relies on the Office 
of Science's basic research to enable clinical trials.
    Another way for DOE to help attract students and retain talented 
scientists and engineers is to renew investments in scientific 
infrastructure. The Office of Science operates one of the most 
extensive and remarkable collection of scientific user facilities in 
the world, providing tools for research for more than 18,000 scientists 
funded by DOE, other Federal agencies, and industry. Many facilities 
are in poor condition or have outmoded instrumentation. Additional 
funding would allow for increased operating time, upgrades, 
instrumentation, and technical support. The proposed cuts could result 
in established facilities lying idle, allowing taxpayer investments to 
go unused.
    National laboratories also play an important role in providing 
research and training opportunities to enhance the university 
curriculum. ACS supports the initial plan by DOE to utilize its 
national laboratories to help mentor and train science teachers. 
Students at all levels clearly learn better when their teachers have a 
deep understanding of the subject, and the first-rate multidisciplinary 
research and scientific professionals at the national laboratories 
certainly could be a rich resource for science and math teachers. ACS 
urges stronger coordination among agencies with significant K-12 math 
and science programs in order to maximize the Federal investment in 
this area.
    ACS praises the work of Department of Energy leadership, and 
particularly Office of Science Director Ray Orbach, to establish a 
vision of America's scientific future with the 20-year facilities plan 
and a forward-thinking departmental strategic plan. ACS views these 
documents, along with the Secretary of Energy's Advisory Board report 
``Critical Choices: Science, Energy, and Security'' as key elements of 
America's research and development portfolio. Growth in DOE Science 
funding is essential to realizing the goals in these documents, and ACS 
urges Congress to act to ensure this vision of a technologically 
advanced and safe America comes to fruition.
                                 ______
                                 
Prepared Statement of the National Research Center for Coal and Energy, 
                        West Virginia University

    Chairman Domenici, Ranking Member Reid, and members of the 
subcommittee, coal supplies over half of our Nation's electricity and 
provides a viable alternative to produce transportation fuels, 
chemicals, and gaseous fuels. Previous coal research programs supported 
by Congress resulted in reduced emissions of criteria pollutants and 
increased efficiency in electricity generation at coal-fired central 
stations. Congressional support for energy efficiency programs has led 
to increased efficiency in our energy-intensive industries and in our 
transportation sector. This statement is offered to urge continued 
strong investments in the Nation's fossil fuel and key energy 
efficiency programs. My testimony consists of general recommendations 
to maintain critical levels of funding in major energy programs and 
specific requests for support of projects in selected energy sectors. I 
have also included recommendations regarding the benefits of supporting 
academic research as a part of our national energy programs.

                         FOSSIL ENERGY PROGRAMS

    We require continued investments in finding ways to use our 
indigenous fossil energy resources in an economical and environmentally 
friendly manner. While the administration speaks supportively for 
increased research for fossil fuel programs, I believe critical energy 
programs are under-funded in the fiscal year 2007 budget request.
Coal Programs
    Clean Coal Power Initiative.--The administration has proposed only 
$5 million for the Clean Coal Power Initiative (CCPI) for fiscal year 
2007. Many owner-operators are hesitant to install new clean coal 
technologies unless they have been successfully demonstrated at 
commercial scale. The CCPI program is designed to conduct 
demonstrations in technology areas such as mercury control and advanced 
power cycles, both of which are of great national interest. We must 
also demonstrate coal-to-liquids technologies as part of the Clean Coal 
Power Initiative. Funding should be provided to the CCPI program at 
levels which would allow a solicitation for new proposals in early 2007 
so that we can continue needed work to deploy advanced technologies for 
power generation and alternative fuels production.
    Innovations for Existing Plants.--A robust research program is also 
needed for existing plants. The national installed coal power 
generation capacity of over 300 gigawatts will be in service far into 
the future since their premature replacement cost is expensive. 
Environmental concerns dictate that we make improvements in the 
existing fleet while we await the opportunity to install newer 
technologies when the existing plants are retired. The funding 
recommended by the administration in the budget line for Innovations 
for Existing Plants has been severely reduced for the fiscal year 2007. 
We recommend that an additional $8 million be added to the Innovations 
for Existing Plants line, including full restoration ($2.5 million) of 
the By-Products and Water Management sub-element. This sub-element 
funds critical programs for reducing mercury emissions and finds new 
ways to use the byproducts generated by combustion, both key elements 
in reaching the goal of a zero-emissions coal plant. Water shortages in 
some parts of the Nation are beginning to limit the installation of new 
power plants. We also recommend funding for programs to minimize the 
use of water in power generation and coal conversion applications.
    Coal-to-liquids Research/Fuels Program.--Transforming coal into 
liquids would enable our Nation to reduce our dependence on imported 
petroleum. Polygeneration plants--those plants which produce a suite of 
products beside electricity--will hasten the deployment of advanced 
gasification technologies since co-producing value-added products such 
as hydrogen, liquid transportation fuels, synthetic natural gas, and/or 
chemicals improves the economics of the overall system. We recommend 
the addition of $10 million to the Fuels Program for coal-to-liquids 
research to improve current conversion technologies and to develop new 
conversion processes, for computer-based design studies, and for 
systems modeling. A national program to reinstate our earlier coal-to-
liquids programs is urgently needed to enable our country to maintain 
stable transportation fuel costs. We request that the work initiated in 
fiscal year 2006 to study the development of coal liquefaction 
facilities in China be continued at the level of $0.7 million. This 
program is a minimal investment compared to the $1.4 billion cost of 
the Chinese facility and will provide valuable information relevant to 
the deployment of advanced fuel production technologies in the United 
States.
    Solid Fuels and Feedstocks Research/Fuels Program.--Successful 
deployment of coal conversion technologies depends in part on the 
quality of the feedstock in the input coal stream. Advanced research is 
needed to reduce levels of mercury emitted from pulverized coal 
combustion systems and to remove other pollutants upstream of the 
combustor. Often the preparation process results in discarding a large 
percentage of the coal mined because of the difficulty of dewatering 
and separating the coal fines from refuse material. These discards 
result in environmental pollution, the possibility of a catastrophe due 
to failures of water impoundments that retain the coal fines for 
settling, and increased costs for electricity. We request that the 
current funding for advanced separations research be increased to $3 
million for fiscal year 2007. Another important aspect of the solid 
fuels research program relates to producing value-added products such 
as carbon materials from coal. Lightweight carbon materials produced 
from coal, if used in applications such as the transportation sector to 
reduce vehicle weight, also serve to reduce our dependence on imported 
petroleum. We request that the lightweight composite materials program 
initiated in fiscal year 2006 be continued.
    Focus Area for Computational Energy Science.--The President has 
identified supercomputing as critical to America's national security 
and essential to U.S. competitiveness, both technologically and 
scientifically. The President has called for increased funding to 
enhance this important tool and expand its use across a broad range of 
applications that enhance the U.S. position in the world's scientific 
community. Through modeling, various designs can be evaluated on 
computers at a much lower cost than for actual experimental research. 
The Computational Energy Sciences (CES) program in Fossil Energy 
supports supercomputing research both within the National Energy 
Technology Laboratory and for external researchers who receive grants 
for blocks of time on high-speed resources such as the Pittsburgh 
Supercomputing Center. However, the administration has recommended 
drastic cuts in the CES program for fiscal year 2007. We recommend that 
funding for Computational Energy Sciences be restored to its historic 
level of $5 million, of which $2 million should be allocated to 
continue the program of the SuperComputing Science Consortium (SC 
Squared) which supports high speed computer access for the fossil 
energy research community in academic institutions nationwide.
Oil and Natural Gas Programs
    We are disappointed that the administration has chosen to recommend 
closing out the programs for oil and natural gas research in 
exploration and production. These programs provide important 
contributions to small producers, who can not afford the major expense 
of developing new technologies to recover a dwindling supply of these 
precious reserves. We recommend that Congress restore the oil and 
natural gas programs to at least the fiscal year 2006 levels. We 
request that funding be provided to continue important programs like 
the Petroleum Technology Transfer Council (PTTC), a nationwide program 
implemented through ten regional centers which reach user communities 
in our major oil and gas basins. The PTTC identifies and provides 
upstream technologies and technical assistance to small domestic 
producers. Without the resources available through the PTTC program, 
many small producers would become uncompetitive, further decreasing 
domestic oil and natural gas production.

            ENERGY EFFICIENCY AND RENEWABLE ENERGY PROGRAMS

    The United States is increasingly becoming dependent on imported 
energy. Significant amounts of natural gas and electricity are 
delivered from Canada. Oil is supplied from Canada, Mexico, and other 
regions world-wide, some of which have unstable governments or 
philosophies which differ from our national best interests. The 
following comments are offered regarding programs considered key to 
maintaining our energy security and energy independence.
Industries of the Future
    High energy prices have been a major reason for the loss of 
competitiveness of many of our energy-intensive industries over the 
past several years. Glass, aluminum, steel, chemical, coal and metals 
industries face stiff competition on the global market and are 
increasingly losing ground to international competition. Much of our 
chemical industry has already moved offshore.
    The Industries of the Future (IOF) program provides one avenue for 
increasing the efficiency of production and reducing costs in energy-
intensive industries. However, the administration has reduced its 
recommendations for funding the IOF (specific) program from the enacted 
level of $37 million in fiscal year 2005 to a request of only $17 
million for fiscal year 2007. These reductions severely impact our 
ability to assist energy-intensive industries. We recommend that 
funding be restored to the fiscal year 2005 level. In particular, 
funding for the Mining sector program should be restored to $4 million 
to enable completion of previously-awarded projects and the initiation 
of new research. With our Nation poised to be ever more reliant on coal 
for our energy needs, newer technologies must be developed to mine the 
harder-to-get coal as our resource base is depleted.
Electricity Distribution
    Despite the unpleasant experience of the mid-summer East Coast 
energy blackout several years ago, the electric grid remains fragile 
and in danger of overloading in times of high demand. Improvements to 
the electric grid would ensure operational reliability, reduce costs to 
the general public, and make our industries more competitive. 
Congressional support for continued investments in improving the 
reliability of the electric grid is recommended. Particular emphasis 
should be placed on maintaining and expanding the electricity 
transmission, distribution, and energy assurance R&D at the National 
Energy Technology Laboratory (NETL). We request that the Gridwise 
project on Integrated Control of Next Generation Power Systems 
initiated in fiscal year 2006 be continued at the level of $1 million.
Transportation Research/Office of Vehicle Technologies
    The research conducted under the Vehicle Technologies program will 
lead to the development of more energy-efficient and environmentally-
friendly highway transportation technologies that will reduce the use 
of petroleum. The ability to test the performance of cars and trucks 
under field operating conditions is an essential part of this program. 
West Virginia University's Transportable Emissions Testing Laboratory 
has partnered with the Office of Vehicle Technologies for many years to 
conduct emissions measurement testing programs at locations nationwide. 
We recommend continued congressional support for this partnership and 
request that $2 million of the Vehicle Technologies budget be directed 
to continue the transportable emissions testing laboratory program in 
fiscal year 2007.

        CLOSING COMMENTS ON NEED FOR ACADEMIC RESEARCH PROGRAMS

    Budget constraints for fiscal year 2007 will give rise to difficult 
decisions regarding which programs to fund. Fossil Energy and Energy 
Efficiency programs merit high consideration from the subcommittee 
because of their importance to our national security and our economic 
interests.
    In your deliberations, I urge the subcommittee to give 
consideration to supporting or creating programs directed to academic 
research institutions. During the debate leading to the passage of the 
Energy Policy Act of 2005, several initiatives were introduced to 
support centers of excellence in coal technology, mining technology, 
and power systems technology. Energy research is high on the agenda for 
most, if not all, academic institutions. Current opportunities for 
academic researchers to compete for funding in fossil energy and energy 
efficiency areas are limited in the budget requests. For example, the 
Fossil Energy advanced research program has a budget of only $3 million 
to support coal research nationwide and no comparable programs in oil 
and natural gas. Mining research opportunities will be eliminated if 
the administration budget request for the Industries of the Future 
program is supported by Congress. With the elimination of the U.S. 
Bureau of Mines, there is no standing program for advanced mining 
research.
    Funding to support academic research has many benefits. Advanced 
research ideas are generated from such studies. Of almost equal 
importance is the aspect of maintaining the human capital to conduct 
advanced research in key areas. The dearth of support for mining 
technology research is responsible in part for the smaller number of 
mining engineering departments nationwide. We face a critical shortage 
of mining engineering graduates, an aging cadre of professors, and a 
smaller number of institutions which offer mining programs. Researchers 
skilled in coal geology/petrology and in coal conversion technologies 
such as direct and indirect liquefaction are becoming older and we face 
a potential shortage of such expertise once these individuals retire. 
Once this expertise of human capital is lost, we will be in danger of 
having to import our technologists or possibly redoing older research 
since the corporate body of expertise is lost. Supporting academic 
research also leads to spin-off technologies which support economic 
development and, in the case of energy, can assist the United States in 
staying the leader in promoting advanced technologies to address the 
challenges we face in meeting a global demand for energy.
    I urge Congress to consider the benefits of supporting fundamental 
research at academic institutions as part of our national plan for 
energy and economic security.
    Thank you for considering the recommendations offered in this 
testimony.
                                 ______
                                 
                   Prepared Statement of IBACOS, Inc.

    IBACOS (Integrated Building And Construction Solutions) urges the 
Subcommittee on Energy and Water to provide $23 million for the 
Department of Energy's (DOE) fiscal year 2007 Residential Buildings 
Integration Program (formally Building America). We further urge that 
the following language is included to ensure that the competitively 
selected Building America teams are funded at a percentage comparable 
to their historic funding: ``Of these funds, $15 million shall be 
provided for the research activities of the competitively selected 
Building America research teams and the Building America lead research 
laboratory''.
    IBACOS, through DOE, performs significant research into achieving 
new levels of energy efficiency in our Nation's housing stock.--IBACOS 
began working with the DOE's Building America Program as the founding 
team in 1993. The work of IBACOS and the other Building America teams 
has allowed industry leadership to drive cost-effective solutions that 
increase the baseline energy efficiency of the Nation's housing stock, 
and most recently, to begin to move us towards Zero Energy Homes (homes 
that produce as much energy as they use). Building America partners 
have shown that homes with significantly improved efficiency levels can 
be built at equal or lower purchase prices than conventional homes, 
with much lower energy bills and operating costs. These homes also 
exhibit increased building durability as well as improved occupant 
safety, health, and comfort. The research needed to develop systems and 
strategies to achieve the long-term goal of Zero Energy Homes is not 
simply applying lessons learned; rather, fundamental research is still 
required. This R&D, performed by the Building America teams is truly 
high-risk, high-payoff research. The research required to meet the goal 
of Zero Energy Homes is high-risk for the following reasons:
  --Significant basic research is required to develop and integrate new 
        technologies and systems into homes before they are proven 
        effective enough to be applied in the field.
  --This research is costly and risky and will obsolete several current 
        products, systems and processes, and therefore will not be 
        undertaken by the industry alone.
  --The life cycle of this research is significantly longer than that 
        of comparable industries.
  --The homebuilding industry is extremely fragmented, with 
        homebuilders having little ability to drive research, and a 
        lower-than-average financial commitment to investment.
  --Mechanisms do not currently exist within the homebuilding industry 
        to integrate new technologies and strategies effectively.
    However, the research required to meet the goal of Zero Energy 
Homes is also high-payoff for the following reasons:
  --Once constructed, homes have the longest lifespan of any consumer 
        product, providing the opportunity for a durable long-term 
        reduction in energy use.
  --Effective strategies to reduce energy use will positively impact 
        consumers, as well as the Nation's energy demand.
  --Successful research into integration strategies will allow new, 
        high-risk, market-leading technologies and systems to be 
        adopted more quickly and effectively.
    IBACOS, through DOE, supports the improvement of the residential 
construction industry and provides support and recommendations to 
critical Federal programs.--The Building America Program consists of 
five industry consortia (teams). Along with the four other teams, we 
partner with more than 300 residential builders, developers, designers, 
equipment suppliers, and community planners throughout the United 
States. 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 overall homeownership costs. 
Many of the systems used actually result in a lower cost, while others 
create only marginal increases in first cost and absolute overall 
reductions in annual homeowner cash flow. The five Building America 
teams pursue a collaborative agenda that will ultimately assist all 
homebuilders and benefit the Nations' homebuyers. In addition to 
performing the fundamental research needed to advance the energy 
efficiency of our Nation's housing stock, IBACOS and the Building 
America teams provide recommendations to a broad range of residential 
deployment partners including the EPA's ENERGY STAR Homes Program, 
HUD's Partnership for Advancing Technologies in Housing Program, and 
many industry associations and universities. Furthermore, the Teams are 
perhaps the best resource for DOE to educate the builder community on 
technology and integration breakthroughs. This education has been, in 
part, demonstrated through successful projects, where high-efficiency 
housing is being built and bought, such as Summerset at Frick Park 
(Pittsburgh, PA); Noisette (North Charleston, SC); Civano (Tucson, AZ); 
Pulte Home Sciences in VA; Forest Glen (Carol Stream, IL); Hunters 
Point Shipyard (San Francisco, CA); Stapleton (Denver, CO); Habitat for 
Humanity (GA, CO, TN, FL, MI, TX and throughout the United States); 
Summerfield (San Antonio, TX); Sun City (Las Vegas, NV); Premier 
Gardens (Rancho Cordova, CA) and others throughout the Nation as 
documented on www.buildingamerica.gov. The more than 300 private sector 
partners who work with the teams are experts in home construction, 
building products and supply, architecture, engineering, community 
planning, and mortgage lending. All construction material and labor 
costs for homes and communities constructed by Building America Teams 
are provided by DOE's private sector partners.
    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 building product 
manufacturer, trade association, and non-profit partners 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 Conyers, GA; Georgia Pacific of Atlanta, GA; The Portland 
Cement Association of Skokie, IL; Whirlpool Corporation of Benton 
Harbor, MI; Cardinal Glass Industries of Eden Prarie, MN; Florida Heat 
Pump of Fort Lauderdale, FL; Owens Corning of Toledo, OH; E-Star 
Colorado of Denver, CO; and e-colab of Urbana, IL. Our range of builder 
and developer partners includes Pulte Homes of Bloomfield Hills, MI; 
Tindall Homes of Trenton, NJ; Aspen Homes of Loveland, CO; Hedgewood 
Homes of Atlanta, GA; Pine Mountain Builders of Pine Mountain, GA; 
Summerset Development Partners of Pittsburgh, PA; Noisette Development 
Partners of North Charleston, SC; Forest City Stapleton of Denver, CO; 
Solar Strategies of Philadelphia, PA; Civano Development Partners of 
Tucson, AZ; Washington Homes (a division of K. Hovnanian) of VA; 
Landmark Building and Renovation of Apex, NC; and Bozzuto Homes of 
Greenbelt, MD. Other builder and developer partners are located in CA, 
CO, FL, GA, IN, MA, ME, MN, NC, NJ, NY, NV, PA, and UT. Through these 
and other partners, the Building America Program has had direct 
influence in increasing the efficiency of nearly 30,000 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. All work done in 
these projects is part of the critical path toward achieving Zero 
Energy Homes.
    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 have been reflected in both DOE and HUD roadmapping sessions, 
development of research priorities for National Labs, and cooperation 
on programs within DOE. One example is Building America's cooperative 
work with DOE's Windows research program to field test advanced window 
products with builders. Additionally, collaborative research activities 
with the National Labs, including NREL, ORNL, and LBNL results in the 
sharing of knowledge and resources to bridge the gap between Federal 
research programs and the industry. The Building America Program 
improves the affordability of homes by reducing energy use, and 
increasing the useful life of the homes, resulting in better use of 
capital and natural resources. The energy saved by a new home built to 
be 50 percent more efficient than average new construction is the 
equivalent of the energy used by a sports utility vehicle for 1 year. 
Investing in residential construction technology makes economic and 
market sense. By using improved materials and techniques, the Building 
America 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.
    Building America teams, such as IBACOS, help develop and implement 
widespread innovation in the fragmented residential construction 
industry.--Residential Buildings currently account for over 20 percent 
of the primary energy consumed by the United States. Each year, more 
than 1.5 million new homes are constructed (over $70 million in 
revenue) and over a million are remodeled. Despite its size and impact, 
the industry is exceptionally fragmented. It comprises over 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.
    There has also been little incentive for builders to improve on 
energy efficiency for a number of reasons. Energy and resource 
efficiency does not necessarily contribute to the bottom line of the 
builder; instead, it benefits the homeowner and the Nation, and because 
builders do not pay the annual energy bills, they have little incentive 
to add to the first cost of their product. Adopting new technologies 
and training staff and trades to properly install new systems and 
products is costly and challenging for builders. Finally, since 
builders are not good at sharing knowledge among competitors, 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 at low or 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. A long-term and consistent commitment must be made to work in 
partnership with the housing industry. DOE's Building America Program 
is a proven industry-driven research approach that can reduce the 
average energy use in new housing by 50 percent by 2015, providing 
significant benefits to homeowners while benefiting the U.S. economy by 
maintaining housing as a major source of jobs and economic growth. 
Without building in significant energy savings now, the Nation risks 
using an extravagant amount of energy in the future. We must invest 
appropriately in technology, systems integration research, and builder 
operational processes needed to upgrade the performance of our housing 
stock, otherwise, we are mortgaging our future.
    Building America is the key element in the DOE's strategy to reduce 
residential energy consumption.--Research, development, and outreach 
activities performed by the competitively-selected industry Teams in 
the Building America Program are the key element in the Department of 
Energy's strategy to reduce energy consumption in residential 
buildings. The Teams' activities focus on increasing the performance of 
new and existing homes that can be implemented on a production basis, 
while meeting consumer and building performance requirements. The Teams 
have been working on improving efficiency in housing since 1992, with 
successes being embodied in ENERGY STAR Home program and adoption by 
many production builders. We are now focused on the more difficult goal 
of creating strategies to achieve Zero Energy Homes. Current DOE-led 
research activities include:
  --Systems integration, technology, and process research to ensure 
        quality and performance;
  --Indoor air quality, safety, health, and durability of housing;
  --Thermal distribution efficiency, mechanical systems efficiencies 
        and appropriate sizing;
  --Incorporation of passive and active solar techniques;
  --Techniques that increase productivity and product quality and 
        reduce material waste;
  --Use of recycled and recyclable materials; and,
  --Building materials improvements and envelope load reduction and 
        durability.

                             RECOMMENDATION

    IBACOS (Integrated Building And Construction Solutions) urges the 
Subcommittee on Energy and Water to provide $23 million for the 
Department of Energy's fiscal year 2006 Residential Buildings 
Integration Program (formally Building America.) We further urge that 
at least 60 percent or $15 million of the appropriated funding be 
directed towards the industry-led core Building America Teams and the 
Building America lead research laboratory 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) to 
develop advanced tintable window systems. The National energy savings 
potential of high performance electrochromic windows is approximately 
0.9 Quad--equivalent to the energy use of 10,000,000 homes per year.
    We at SAGE urge you to increase the current DOE annual investment 
in the total windows program from $4,900,000 per year to $15,000,000--
Energy and Water appropriations bill for Department of Energy, Energy 
Efficiency and Renewable Energy, Building Technologies Program, 
Windows. Within this program the specific budget for dynamic and super 
insulated windows should be expanded to $4,000,000, up from the 
$500,000 currently being pursued by DOE. This funding will allow the 
Department to reach the goal of zero energy buildings. Activity will 
take place at Lawrence Berkeley National Laboratory and SAGE 
Electrochromics, Inc.

                     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.

            ACHIEVING ZERO ENERGY HOMES AND BUILDINGS (ZEB)

    Zero Energy Buildings, a goal set forth by DOE, takes the whole 
building concept to the next level by integrating advanced building 
technologies. ZEB will result in self-sufficient buildings that produce 
as much energy as they use.
    Achieving DOE Energy Efficiency and Renewable Energy's (EERE) goals 
of Zero Energy Homes and Buildings by 2030 will require a new 
generation of high performance windows. An aggressive, expanded RD&D 
program with private and public partnerships has a high probability of 
successfully developing and deploying the technologies, systems, and 
tools needed to achieve ZEB levels of energy performance. Increasing 
the current DOE annual investment from $5,000,000 per year to 
$15,000,000 per year for a 5-year period would kick-start this effort 
and stimulate the much larger private sector investment needed to 
achieve these goals. High performance windows incorporating highly 
insulating properties, switchable glazings, and/or other energy 
efficiency features could save 0.9 Quads/year as part of the ZEB effort 
if the technologies can be fully developed and achieve widespread 
market penetration by 2030. This information is based in part on 
information from DOE's Lawrence Berkeley National Laboratory. The 
energy savings potential is equivalent to the energy use of 10,000,000 
homes per year.

       CREATING A DYNAMIC AND SUPER INSULATED WINDOWS R&D PROGRAM

    Window systems cost American homeowners and building operators 
about $40 billion per year due to the heating and cooling loads they 
impose on our buildings. But windows can become net energy gainers 
rather than losers if buildings are well designed and their energy 
flows can be dynamically controlled.
    The fundamental science and engineering supporting such goals is 
understood. An aggressive 5-year RD&D effort is needed to solve the 
critical technical market barriers, thereby reducing risks, clarifying 
benefits and stimulating enhanced private investment in manufacturing 
and marketing.
    The groundwork for such a program has already been laid. In the 
1980's DOE and the window and glass industry worked together to bring 
low-E to the market, an innovation that according to the NAS study has 
generated $8 billion in benefits for a modest DOE R&D investment 
followed by much larger private investment. In the 1990's DOE and the 
industry successfully promoted the development and widespread use of 
spectrally selective glazings and window rating systems, each 
leveraging large private investments and contributing to additional 
savings. The challenge now for the next decade is to develop the cost-
effective superinsulating and switchable technologies needed to achieve 
ZEB performance targets.

                           POTENTIAL SAVINGS

    As an example of the potential impacts of an enhanced RD&D program 
we consider the energy savings impacts of a highly insulating, 
switchable window in both residential and commercial buildings. These 
are the windows that must be developed and deployed in order to meet 
the EERE goal of creating practical Zero Energy Buildings. The highly 
insulating window has a U value or heat loss rate of 0.1 BTU/hr-F-
sqft, about 65 percent lower than today's Energy Star window. The 
tintable window has the ability to control solar heat gain over a 
dynamic range of 5 to 1--from 0.5 in winter to allow sunlight to offset 
heating, to 0.1 in summer to minimize cooling, or over an even larger 
range of light transmission on cloudy and sunny days to control glare 
and daylight.
    The specific energy savings will depend on the final performance 
values offered and on the market penetration, which in turn will depend 
on cost. An aggressive RD&D program would optimize thermal properties 
and support breakthroughs in materials science that would lower 
production costs, thus expanding market impacts.

                           RESIDENTIAL SECTOR

    In homes, switchable superwindows save energy three ways. In winter 
at night the low heat loss reduces heating loads. During the day the 
switchable coating allows solar heat to enter, reducing heating loads 
further. In summer the switchable coating keeps the sun out on hot days 
and modulates as needed for night view and cloudy days. The details of 
heat transfer vary with the climate region but this versatile, high 
technology package supports the EERE ZEB goal in all U.S. climates.
    Large national energy savings could be obtained over the next 30 
years. In northern climates like Boston and Chicago these window 
technologies alone would virtually eliminate the energy loss from 
windows and reduce overall home energy use by an additional 25 percent 
compared to homes with Energy Star windows, which themselves would use 
20-30 percent less energy than today's typical homes. In southern 
climates such as Phoenix the largest savings come from reductions in 
cooling loads due to the switchable glazings. In these climates the 
improved glazings virtually eliminate the heating load and greatly 
reduce the cooling impacts.
    Widespread deployment after 30 years in homes in both northern and 
southern climates would generate average annual savings of 0.55 Quads 
compared to a building stock, which would otherwise have improved to 
meet the performance levels of Energy Star windows today.

                           COMMERCIAL SECTOR

    In the commercial sector the switchable superwindows provide three 
benefits in virtually all climates: (1) they reduce the net heating 
loads from the windows to very low values or convert the windows to net 
gains; (2) they minimize the cooling loads due to the windows, and (3) 
by carefully modulating daylight, they provide savings of about 50 
percent of the lighting energy in zones with windows or skylights.
    This technology package is versatile and adaptable to fenestration 
designs in virtually all climates and commercial building types. It 
makes it easier for architects to design buildings that provide 
daylight and view without imposing added thermal loads. By modulating 
daylighting and controlling glare, it helps create productive work 
environments that are thermally comfortable and energy efficient, 
lowering electric lighting use in the process by 30-60 percent. 
Widespread deployment after 30 years would generate average annual 
savings of 0.35 Quads compared to buildings with more conventional 
fenestration solutions.

         ADDITIONAL WORK TO BE DONE REQUIRES FURTHER INVESTMENT

    Materials and Processing Research and Development.--Activities must 
focus on continued optimization of the device and the individual thin 
film layers. Improved optical performance is needed to insure 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, solar powered EC windows with wireless 
control systems will be developed for ease of installation--especially 
in retrofit applications.
    Large Area Manufacturing Technology/Engineering.--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.
    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 to 
ascertain 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.
    Advanced Window Development.--As we move to Zero Energy Buildings, 
increasing levels of window performance will be required. Work must be 
initiated to produce highly insulated windows in which heat loss is 
reduced by at least a factor of 2 over currently available products. 
These windows will be integrated with EC glazings to produce the high 
R-value dynamic windows needed for ZEB. R&D activities include the 
investigation of gas filled and evacuated window cavities as well as 
improved edge and frame materials. Work will also be carried out to 
support design tools and rating systems to evaluate window efficiency.
                                 ______
                                 
Prepared Statement of the National Coalition for Food and Agricultural 
                                Research

    Dear Mr. Chairman, Ranking Member Reid and members of the 
subcommittee, 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.
    National C-FAR urges the subcommittee and committee to approve the 
President's proposal in the American Competitiveness Initiative, 
Advanced Energy Initiative and fiscal year 2007 budget request for an 
increase of 14 percent to $4.1 billion for the DOE Office of Science. 
Included with the President's budget request is $255 million for the 
Chemical Sciences, Geosciences and Energy Biosciences Division. A total 
of $35.8 million within the division is requested by the President for 
the Energy Biosciences program. We urge you to support the President's 
request for Basic Energy Sciences, the Chemical Sciences, Geosciences 
and Energy Bioscience Division and the Energy Biosciences program 
within the division.
    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. 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 endorses the President's call in his State of the 
Union Address for the Nation to conduct energy research for bio-fuels 
to help break the Nation's addiction to foreign oil. Research on plant 
cellulose to produce biofuels from on crop residues, switch grass, wood 
chips and other sources could build on current production of ethanol 
and biodiesel from crops help transition a significant portion of the 
Nation's economy away from imported petroleum products to domestically 
produced bio-fuels.
    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.
    National C-FAR applauds the Energy Biosciences program's active 
involvement in inter-agency cooperation and collaboration. By working 
closely with the U.S. Department of Agriculture, programs in both 
agencies benefit by leveraging funds where missions converge to advance 
vitally important research.
    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 discovering new knowledge leading to home-grown products and 
chemicals now derived from petroleum.
    The DOE Office of Science's Office of Biological and Environmental 
Research, through its Genomics GTL Roadmap, is undertaking an 
aggressive systems biology plan to accelerate the scientific discovery 
needed to support the development of practical applications to fulfill 
DOE energy and environmental missions.
    The DOE-BER Plant Feedstock Genomics for Bioenergy program 
conducted jointly with USDA-Cooperative State Research, Education, and 
Extension Service-National Research Initiative supports genomics-based 
research that will lead to the improved use of biomass and plant 
feedstocks for the production of fuels such as ethanol and renewable 
chemical feedstocks.
    National C-FAR commends the committee for its ongoing support of 
basic research on plants and microbes within the Energy Biosciences 
program and within the Office of Biological and Environmental Research. 
Past research sponsored by the Energy Biosciences program led to the 
landmark discovery of how to break down plant cellulose into ethanol. 
Other research sponsored by the Biosciences program led to new findings 
on the capture of energy from photosynthesis. 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.

                       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.\1\
---------------------------------------------------------------------------
    \1\ As part of its mission, National C-FAR seeks to increase 
awareness about the value of food and agricultural research, extension 
and education. For example, National C-FAR is hosting an educational 
series of ``LunchNLearn'' 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. More information about National C-FAR and its programs is 
available at http://www.ncfar.org.
---------------------------------------------------------------------------
    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 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.
    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 the Department of Petroleum and Geosystems 
             Engineering, The University of Texas at Austin

    Committee members, your committee is considering the budget for the 
Department of Energy, including the appropriation for the Oil and Gas 
technology program, which has been eliminated in the administration's 
proposed budget. I am writing to describe the impact the loss of this 
program would have on the teaching of Petroleum Engineering in the 
United States.
    My department receives 40 percent of its funding for graduate 
research from this one program. I believe the figure is similar at 
other Departments of Petroleum Engineering in the United States. 
Research funding is critical to graduate education in Petroleum 
Engineering, of course. In the short term it is the means by which 
graduate students attain the level of expertise necessary to advance 
the technology for efficient production of oil and gas. The research 
sponsored by this program is also crucial to undergraduate education. 
Over the long term it provides the means by which junior faculty attain 
tenure and all faculty maintain and sharpen their skills. At a modern 
research university it is simply impossible to maintain an 
undergraduate educational program without a vital graduate research 
program.
    No other Federal program funds research in the broad field of oil 
and gas production. No other branch of science or engineering, 
including those that have substantial private funding (microelectronics 
or pharmaceuticals, for instance), is expected to fund university 
research entirely from private sources.
    The loss of the lead the United States now enjoys in oil and gas 
technology would be a tragedy for the country. U.S. production would 
decrease, U.S. fields would increasingly be exploited by foreign 
companies, and producers in unstable parts of the world would turn to 
other countries for the expertise they need to exploit their own 
resources.
                                 ______
                                 
            Prepared Statement of National Wind Watch, Inc.

                              INTRODUCTION

    National Wind WatchTM, Inc. is a non-profit organization 
dedicated to raising awareness of the risks and related impacts of 
industrial wind energy development on the environment, economy, and 
quality of life. The organization represents local citizen groups and 
individuals seeking to protect their property rights and community 
values, maintain nationally significant scenic resources and protect 
America's wildlife. The organization advocates an intellectually honest 
and scientifically sound assessment of the benefits and costs of 
industrial wind development with the objective of becoming a resource 
of information and assistance for individuals, local groups, and 
decision-makers seeking the facts about industrial wind power. Far too 
often, debates about wind power have over-stated its potential benefits 
and ignored its tremendous costs.

                          SUMMARY OF POSITION

    National Wind Watch does not oppose funding of research and 
development for wind energy, but stresses that any increases in monies 
allocated be correctly focused. Most of any future research and 
development should now be focused on the detrimental impacts and 
mitigation techniques of wind development including, but not limited 
to: actual impacts on property values in areas where wind development 
occurs; actual net impacts on employment; life cycle analysis of 
environmental impacts (positive and negative); grid system stability 
and reliability under increasing penetration of wind, and within lower-
quality wind sites. Given the inherent and perceived conflict of 
interest, National Wind Watch recommends that the National Renewable 
Energy Laboratory NOT hold responsibility for such analysis but only be 
permitted to participate.

                          SUPPORTING COMMENTS

    During the debate leading up to passage of the Energy Bill in 2005 
there was discussion as to whether the United States should adopt a 
Renewable Portfolio Standard or RPS. The Senate passed the RPS as an 
amendment, but the House voted it down. Senator Lamar Alexander 
correctly noted at the time that the RPS was ``all about wind'' citing 
factors that would limit implementation of other renewable sources 
including solar, hydro, and geo-thermal.
    Senator Alexander also noted that, according to testimony before 
the Energy Committee and other sources, in order for the United States 
to achieve the standards in the RPS, it could ``require building more 
than 100,000 of [the] new, massive wind turbines''. Today, there are 
less than 7,000 such wind turbines in the United States. The U.S. 
Treasury Department is on record stating the wind subsidy, if renewed 
each year for the next 5 years, would reimburse wind investors for 25 
percent of the cost of wind production and cost taxpayers $3.7 billion 
over those 5 years.\1\ General Electric Wind, one of the largest 
manufacturers of wind turbines, experienced a 500 percent growth in its 
wind business in 2005 due to the renewal of the wind production tax 
credit in 2004. On a unit production basis, wind is subsidized more 
than 10 times any other energy source, yet contributes least to our 
energy security. Further, as the amount of wind generation increases, 
negative grid stability impacts grow exponentially.
---------------------------------------------------------------------------
    \1\ http://www.windwatch.org/documents/126, Remarks Of Senator 
Alexander--Windmill Legislation Introduction.
---------------------------------------------------------------------------
    National Wind Watch has watched the recent surge in wind 
development throughout New York, Pennsylvania, Virginia, and elsewhere 
in the United States and the impacts of this development on rural 
communities. Town boards and local officials are ill-equipped to 
evaluate the true impacts of these facilities. At the State level, some 
form of RPS has already been put in place in 23 States. This translates 
into additional State pressure on the community to embrace the wind 
plant, quiet opposition, and degenerate the permit process.
    In the face of this development, the September 2005 GAO Report 
titled ``Impacts on Wildlife and Government Responsibilities for 
Regulating Developing and Protecting Wildlife'' stated ``. . . that the 
impact of wind power facilities on wildlife is more studied that other 
comparable infrastructure, such as communication towers, important gaps 
in the research remain. First, relatively few pre-construction 
monitoring studies have been conducted and made publicly available. It 
appears that many wind power facilities and geographic areas in the 
United States have not been studied at all.'' Where they have been 
studied (e.g. Altamont Pass in California) the studies find significant 
work to do to reduce continued and on-going decimation of wildlife, 
including endangered and protected species.
    While requests for additional pre-construction studies may be made, 
the local communities often do not have the money to pay for original 
research at a site. In many cases, the research should not be confined 
to the limited hundreds of yards area where the turbines are located, 
but would involve a regional review to cover secondary impacts related 
to erosion, impacts to water quality, tourism and the economy, and bird 
migration patterns. In the absence of local funding, National Wind 
Watch has found multiple cases where wind companies have agreed to 
conduct such studies, but also assume authority over the parameters of 
the studies and, in so doing, predetermine the outcome.
    Continued installation of wind turbines throughout our rural and 
mountainous landscapes without scientific, impartial review of the 
impacts of this industrialization would have devastating effects of 
some of the most precious ecosystems in the world. After decades of 
government-subsidized research and implementation, it is time for the 
wind industry to no longer be treated as an ``infant industry''. 
Rather, it is time for the industry to start paying for much of its 
way, consistent with the maturation of the technology. Any money now 
should go to research, once and for all, the impacts of these massive 
turbines on our wildlife, open spaces, property values, health and 
safety of residents living in the vicinity of turbines, and the quality 
of rural life.
    National Wind Watch respectfully requests that you deny further 
funding for wind energy research and development, and direct this 
funding to the detrimental impacts and mitigation techniques of wind 
turbines. We also recommend the National Renewable Energy Lab NOT be in 
charge of such analysis but only allowed to participate.
                                 ______
                                 
    Prepared Statement of Southeastern Federal Power Customers, Inc.

    Mr. Chairman and members of the subcommittee, on behalf of the 
Southeastern Federal Power Customers (``SeFPC'' or ``Customers''), I am 
pleased to provide testimony in reference to the administration's 
fiscal year 2007 budget request for the Southeastern Power 
Administration (``SEPA'') and the U.S. Army Corps of Engineers 
(``Corps''). SEPA and the Corps operate the Federal Power Program in 
the Southeast which benefits millions of electric ratepayers throughout 
the States in the South that are served by SEPA Power. I will elaborate 
in my testimony on each of the following items of interest to the 
SeFPC: supporting the administration's request for $34.4 million for 
Purchased Power and Wheeling activities and $5.7 million in program 
direction for SEPA; funding of construction and operations and 
maintenance needs related to Corps projects that provide power marketed 
by SEPA; and lastly our grave concerns regarding the administration's 
proposed Agency Rate Change provision.
    SEPA purchases, transmits, and markets the power generated at 
Federal reservoirs to municipal systems, rural electric cooperatives, 
and other wholesale customers throughout the Southeast. The SeFPC has 
enjoyed a long and successful relationship with SEPA that has greatly 
benefited over 6 million ultimate retail customers that are SeFPC 
members. As the subcommittee is aware SEPA markets the energy and 
capacity that is generated from the Federal reservoir projects in the 
Southeast. The SeFPC represents some 238 rural cooperatives and 
municipally-owned electric systems in the States of Alabama, Georgia, 
Mississippi, Kentucky, North Carolina, South Carolina, Florida, and 
Virginia, which purchase power from SEPA.
    In some cases, SEPA supplies as much as 25 percent of the power and 
10 percent of the energy needs of SeFPC customers.

      SUPPORTING THE ADMINISTRATION'S REQUEST FOR THE SEPA PROGRAM

    The administration's fiscal year 2007 budget proposes to 
appropriate $34.4 million for Purchased Power and Wheeling (``PPW'') 
activities and $5.7 million for program direction. Because the funds 
appropriated for these programs are returned to the Treasury through 
rate payments made by SeFPC members in the same year in which the 
appropriations are spent, these programs have a neutral impact on the 
U.S. Treasury. All of these funds will be returned to the Treasury in 
2007. We thank the subcommittee for following the administration's 
recommended funding levels last year and once again, encourage the 
subcommittee to follow the administration's proposal for SEPA's program 
direction and PPW funding levels this year.

           CORPS PROJECTS PROVIDE THE POWER MARKETED BY SEPA

    The SeFPC membership is dedicated to providing reliable and 
economic power for its consumers. We therefore are concerned with the 
lack of specific information in Operations and Maintenance (``O&M'') 
funding proposed in the President's fiscal year 2007 budget request.
    This year the Corps' fiscal year 2007 Civil Works budget included a 
new layout for Operations and Maintenance funding. Historically, 
project funding was divided by State with specific funding amounts 
given to each project listed; however, this year O&M projects are 
categorized by Water Resource Regions and there are no specific funds 
cited for those projects mentioned. We are deeply concerned with the 
lack of specific information available on the requested O&M funds. As 
it stands now, over half of the hydroelectric generating facilities 
operated and maintained by the SAD in the SEPA Georgia-Alabama-South 
Carolina (``GA-AL-SC'') System are slated to receive ``minimal 
operations and maintenance'' funding within the President's fiscal year 
2007 budget request.
    The Jim Woodruff Lock and Dam project within the Jim Woodruff 
System and the Cordell Hull Dam & Reservoir in the Cumberland System 
are both mentioned as projects needing minimal O&M funding, as well. We 
urge Congress to seek more specific information from the Corps on how 
much they propose to spend on O&M activities at each site. Until we 
know what the specific dollar amounts are and can define the actual 
amount referred to as ``minimal'' by the Corps, we, and members of 
Congress, can not be confident that significant infrastructure failures 
may occur due to insufficient O&M funding.
    The age of many of the hydroelectric generating facilities operated 
and maintained by the Corps in SEPA's service area are nearly 50 years 
old. Major rehabilitations of generating units are critical if projects 
of this age are to continue in service. It is important to note that 
when a generating unit becomes inoperable, SEPA may be forced to pursue 
the purchase of expensive replacement power. This could result in a 
reduction of energy provided to customers, forcing the SeFPC members to 
purchase expensive energy elsewhere. Thus, we are pleased to see the 
Wolf Creek, KY project in the Cumberland System scheduled to receive 
$31 million in construction funds for dam safety purposes within the 
President's fiscal year 2007 budget; however the GA-AL-SC System, as a 
whole, will suffer due to significant decreases in requested 
construction dollars. Within the Kerr-Philpott System of projects, we 
also understand that rehabilitation work on the turbines and generators 
at the Kerr project has been threatened due to a lack of funding. 
However, this has not been a result of SEPA failing to collect 
sufficient funds in the rates. In fact, SEPA has collected over $240 
million in rates for Corps repairs that has not been provided to the 
Corps.

                      AGENCY RATE CHANGE PROVISION

    The SeFPC is concerned about a proposal within the President's 
fiscal year 2007 budget that, if not stopped, would impose 
administratively a higher level interest rate on new investment 
allocated to hydropower production. This proposal would raise rates 
with no apparent benefit to the hydropower customer; it is simply a 
back-door tax on the ultimate consumers of power marketed by SEPA. This 
proposal to increase interest rates to the ``agency rate'' level has 
emerged with virtually no public discussion. Congress should provide 
much more active oversight over the Corps' activities due to the 
magnitude of the proposed change and the precedent that could result 
from it.
    The PMAs are the rate-making agencies charged with marketing 
electricity from Federal hydroelectric facilities operated by the Corps 
and the Bureau of Reclamation (``Bureau''). In the Southeast, when the 
Corps makes an investment in a hydro-electric facility, SEPA must 
recover the cost of that investment in the rates charged to its 
customers. For a half century, the PMAs have set interest rates either 
following explicit instructions from Congress or by charging a rate 
that collects the Federal Government's cost of appropriated dollars.
    Now, the administration's budget seeks to increase the interest 
rate charged on all new investments at projects whose interest rate is 
not set by law. This ``agency rate'' is higher than the current 
interest rate paid by SEPA. This ``agency rate'' reflects the interest 
cost to loan needed funds to government corporations. However, SEPA, 
the Southwestern Power Administration (``SWPA'') and Western Area Power 
Administration (``WAPA'') are not government corporations and do not 
borrow funds from the U.S. Treasury. As I have stated before, their 
rates are set to recover the appropriations established by Congress for 
the investment in the hydro-electric facilities and for costs to 
operate these projects.
    We understand that the administration has suggested that the 
government corporation rate is more appropriate for the PMAs because of 
the risk of default. This argument simply ignores the statutory 
authority under which the PMAs operate and long-standing history of 
repaying the Federal investment in these projects. SEPA must collect 
all of the costs of generating hydropower at Federal facilities in the 
Southeast.
    By law (the Flood Control Act of 1944), SEPA must recover all of 
the costs of producing power. Rate schedules are developed by SEPA 
after a notice and comment period and submitted to the Secretary of the 
Department of Energy for further review and implementation on an 
interim basis. Once the Secretary approves the rates on an interim 
basis, the Federal Energy Regulatory Commission (``FERC'') has the 
responsibility to confirm on a final basis the rate schedule developed 
by SEPA. SEPA, the Secretary of the Department of Energy, and FERC must 
set a rate that by law recovers the Federal taxpayer's investment in 
the Federal Power Program. If an existing rate is insufficient to meet 
repayment obligations, SEPA must file a new rate and include 
appropriate increases to ensure all repayment obligations are met. In 
other words, there is a multi-layered review process and legal 
obligation that ensures that the PMAs will not default on outstanding 
obligations.
    With no real threat to PMA defaults on outstanding debt, the 
subcommittee is left with little substantive reason why the interest 
rate on new investment should be increased. As the proposed change will 
only serve as a revenue enhancement measure and provide no additional 
benefits for PMA customers, the members of the SeFPC wholeheartedly 
encourage members of the Energy and Water Development Subcommittee and 
full Appropriations Committee to stop the administration from 
implementing this budget proposal.
    We appreciate the opportunity to present our views and will gladly 
respond to any inquiries that the subcommittee may have.
                                 ______
                                 
        Prepared Statement of the Cascade Community Partnership

    Ladies and gentlemen of the committee, thank you for the 
opportunity to submit written testimony regarding the U.S. Department 
of Energy's fiscal year 2007 budget as it pertains to geothermal 
research funding.
    I represent a group of citizens in Cascade, Idaho--the Cascade 
Community Partnership, supported by the Valley County Board of County 
Commissioners, the City of Cascade, the Cascade School District and the 
Cascade Medical Center Hospital District--who are working toward a 
fairly lofty goal, but given the current state of petroleum supply, 
demand and cost in the world today, a fairly sensible one, that of 
achieving some level of energy self-sufficiency here in Valley County.
    We, as a group, are somewhat chagrined that, given the current 
world situation regarding oil and energy in general, research funding 
for what is a viable form of alternative energy in the West--
geothermal--would be zeroed out in the U.S. Department of Energy's 
budget for the coming fiscal year. I should add here, that the proposal 
outlined below has very strong support from all of the principals 
involved, and strong bi-partisan support at that.
    We are in the midst of several studies involving Chevron Energy 
Solutions and IdaTherm LLC, an Idaho geothermal energy development 
company, and expect final reports within the next couple of months. We 
will then have additional seismic surveying and geochemical testing to 
conduct in order to further refine the information in those reports. 
However, preliminary indications are that we may have the potential for 
a geothermal resource in Valley County, Idaho, that could generate up 
to 100 megawatts of electricity. While that is a small amount of energy 
in the global picture, it is a project that could inspire other 
communities with similar resources to pursue the same type of 
development. Enough of those pieces could add up to something very, 
very significant, something that could help this Nation wean itself 
from the oil spigot. Beyond energy production, the partnership is also 
finalizing a strategic plan that includes use of geothermal water for a 
heating district, to heat greenhouses and conduct aquaculture, among 
other uses, all of which should benefit our rural economy.
    We have uncovered a number of potential sources of funding for 
capital construction, and for further research to narrow down our 
potential drilling site. But, the big gap in getting any such project 
off the ground is the risky business of drilling an exploratory 
geothermal well. The DOE funding for such activities in the past has 
been a great contributor to geothermal exploration.
    We would urge that you, members of the Senate Subcommittee on 
Energy and Water, find a way to restore some of that funding, 
specifically that relating to the drilling of geothermal exploratory 
wells, which in recent years has amounted to about $4 million every 
budget cycle. But, we would also urge that the funding be restored with 
a new innovative approach.
    Another member of the partnership's steering committee and I 
recently met in Boise, Idaho, with representatives of 
IcelandAmericaEnergy, a Reykavik-based firm that is interested in 
exporting its vast geothermal expertise to other parts of the world. We 
had a very fruitful discussion, perhaps the most important aspect of 
which was the exchange concerning the geothermal exploration fund that 
was established in Iceland in the early 1970's to encourage geothermal 
exploration. It is essentially a revolving loan fund that is tapped to 
provide matching funds for other private/public sources of money for 
exploratory drilling. Comparing the geothermal picture in Iceland with 
that in the Western United States is, to a great extent, a case of 
apples and oranges, but the basic concept of a self-sustaining 
revolving loan fund, with incentives to encourage continued 
exploration, seems valid.
    With restoration of funds for geothermal research, we would 
encourage you to direct that it be used as ``seed money'' to establish 
a self-sustaining revolving loan fund for geothermal exploration. As 
for the administration of the fund, we would suggest the DOE's 
geothermal energy division, or perhaps the Intermountain West 
Geothermal Consortium based at Boise State University, as two 
possibilities. There is certainly the expertise in either program to 
screen applications to make sure that applicants have done their ``due 
diligence,'' the homework and preliminary work necessary to ensure that 
the fund's resources are indeed going toward drilling an exploratory 
hole that has at least a 50/50 chance of success. Should the fund work 
as a number of us believe it can, there will be no need to approach 
Congress in the future with requests for additional funding for 
geothermal exploratory well drilling.
    Attached to this testimony is more detail about the proposed loan 
fund in the form of an ``explainer'' that includes some assumptions 
concerning risk and probabilities-numbers that we're told are valid in 
the geothermal industry in the United States--along with a sample 
spreadsheet about how the fund might operate. A number of much better 
financial minds than mine have examined this and agree that it's an 
approach that has merit.
    We, as a community, thank you for your time and serious 
consideration of this matter. If you have further questions about my 
written testimony or proposal, please don't hesitate to contact us. 
Thank you again for your time and consideration.

                      REVOLVING LOAN FUND PROPOSAL

Assumptions
    That geothermal wells are drilled at a success rate of 50 percent--
some experts in the field believe 60 percent is achievable. In Iceland, 
the rate is 90 percent, but that is in Iceland. It is expected that 
success rate will increase as more is learned about subterranean 
resource.
    That private industry (partners) will be willing to participate in 
the program as a matching partner. Discussions, and an already existing 
track record pertaining to the grant program, indicate that willingness 
may exist.
    That a proven geothermal resource is worth more than just the cost 
of drilling a well.
    That projects proposed for funding under the program would be 
heavily scrutinized--that the science and research leading up to site 
selection has been done, been done well, and then reviewed by 
knowledgeable experts.
Basic Proposal
    Money presently granted by Congress for exploratory geothermal well 
drilling through the United States. Department of Energy--money that 
has, in the past, been granted to geothermal explorers--would be 
converted to a revolving loan fund.
    If successful, the borrower would repay the fund at twice the 
amount that was borrowed.
    If unsuccessful, the loan would be forgiven, and the private 
partner would also be reimbursed out of the loan fund an amount equal 
to 50 percent of that private match. This step is to encourage 
continued geothermal exploration. Because of that feature, the fund 
would actually be paying for 75 percent of the cost of drilling an 
unsuccessful exploratory geothermal well.
    At this point, there is nothing in the pro forma spreadsheet to 
cover costs of administering the program, nor money included there to 
cover the costs of reviewing the data developed by the loan applicant.
    However, in reviewing the spreadsheet, it seems that there should 
be money available for those purposes.
    For the past few years, DOE has been budgeted $4 million each 
funding cycle for exploratory drilling.

----------------------------------------------------------------------------------------------------------------
                                                                        If
               Revolving loan fund                     Loans       unsuccessful,  If successful,   Fund balance
                                                                     cost \1\      repayment \2\
----------------------------------------------------------------------------------------------------------------
Beginning fund balance..........................  ..............  ..............  ..............      $4,000,000
First project...................................        $400,000        $600,000  ..............       3,400,000
Second project..................................         350,000         525,000  ..............       2,875,000
Third project...................................         400,000  ..............        $800,000       3,675,000
Fourth project..................................         300,000         450,000  ..............       3,225,000
Fifth project...................................         500,000  ..............       1,000,000       4,225,000
Sixth project...................................         400,000         600,000  ..............       3,625,000
Seventh project.................................         350,000  ..............         700,000       4,325,000
Eighth project..................................         400,000         600,000  ..............       3,725,000
Ninth project...................................         500,000  ..............       1,000,000       4,725,000
Tenth project...................................         300,000         450,000  ..............       4,275,000
Eleventh project................................         400,000         600,000  ..............       3,675,000
Twelfth project.................................         350,000  ..............         700,000       4,375,000
Thirteenth project..............................         500,000         750,000  ..............       3,625,000
Fourteenth project..............................         400,000  ..............         800,000       4,425,000
Fifthteenth project.............................         350,000         525,000  ..............       3,900,000
Sixteenth project...............................         400,000  ..............         800,000       4,700,000
Seventeenth project.............................         500,000         750,000  ..............       3,950,000
Eighteenth project..............................         400,000         600,000  ..............       3,350,000
Nineteenth project..............................         400,000  ..............         800,000       4,150,000
Twentieth project...............................         500,000  ..............       1,000,000       5,150,000
----------------------------------------------------------------------------------------------------------------
\1\ In unsuccessful ventures, cost to fund is total of loaned amount plus 50 percent of the private sector/local
  match is repaid that investor.
\2\ In successful ventures, the loan is repaid at 200 percent (can be repaid over time at additional interest).

    And on and on . . . 
  --Of course, this simple spreadsheet doesn't factor in costs 
        associated with administration of the fund, nor costs for peer 
        review of data.
  --The above spreadsheet also shows a less than 50 percent success 
        rate, with 9 successes to 11 failures.
  --Depending on timing, it appears the fund could also absorb a few 
        more failures.
                                 ______
                                 
  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 
Department of Energy's Office of Fossil Energy. My testimony represents 
the views of the 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. As 
stewards of these resources, the States strongly support restoring the 
appropriation to, at the very least, the current budget level for 
research and development (R&D) for oil and natural gas projects 
administered by the Office of Fossil Energy. Taxpayers are very 
supportive of Federal investments in energy security, and there is no 
better investment than in R&D.
    As I prepare this testimony we stand as a country very close to yet 
another ``energy crisis.'' Crude oil prices reached more than $75 a 
barrel--a price level not experienced 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 and natural gas industry 
today supplies about 40 percent of our Nation's 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.
    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 were established and 
        enforced by the States.
  --Domestic resources create high-quality jobs here at home and 
        provide the energy that powers our standard of living. 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.
    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 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 2007 eliminates oil and 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: 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 increased 
funding in oil and gas research as a first step in implementing an 
energy plan that makes sense for our country's future.
                                 ______
                                 
     Prepared Statement of the Solar Energy Industries Association

                              INTRODUCTION

    The Solar Energy Industries Association (SEIA) appreciates this 
opportunity to offer written testimony regarding the solar energy 
research and development programs of the Department of Energy. SEIA is 
the national trade association of solar energy manufacturers, dealers, 
distributors, contractors, installers, architects, consultants, and 
marketers, working work to expand the use of solar technologies in the 
global marketplace.

             SECURITY, PROSPERITY, ENVIRONMENTAL PROTECTION

    We anticipate that the annual global growth rate of the 
photovoltaics market--30-50 percent--will continue to be the norm for 
many years into the future (though near-term silicon supply shortages 
will limit growth for the next year or two.) By 2015, PV will provide 
5-10 GW of electric capacity (enough to power 1-2 million homes); avoid 
10 million metric tons per year of CO2 emissions; and employ 
30,000 new workers. An additional 5-10 GW of concentrating solar power 
has been forecast for the American Southwest by the Western Governor's 
Association and several consultancy reports.
    No other technology can match solar's environmental benefits, 
ability to reduce natural gas demand, high employment intensity, and 
high-tech manufacturing benefits. However, all of these aggressive 
deployment forecasts assume continued progress on the industry's 
technical challenges at a rate at least matching historical norms; and 
the current soaring growth of the industry means the United States must 
make substantial investments if it is to maintain this progress--and 
stay ahead of other nations.

                                THE GOAL

    It now appears possible to have all solar technologies broadly 
competitive on a simple economic basis with their conventional fuel 
competition in the United States before 2015--with steady progress in 
certain high value markets leading up to that date. This target appears 
achievable both for photovoltaic electricity and solar thermal 
displacement of conventional energy (in the retail market) and 
concentrating solar power (in the wholesale market.)

            SURGING GLOBAL INDUSTRY, TENUOUS U.S. LEADERSHIP

    The last few years have been a period of exceptional growth and 
change for all sectors of the industry.
    Since 2001, the global market for photovoltaics has quadrupled in 
size--from just under 400 megawatts of new annual capacity to more than 
1,600 last year--approximately 412 billion worth of new product. 
Meanwhile the United States' global market share, formerly more than 50 
percent, dipped below 10 percent.
    2005 saw the first new construction of utility-scale Concentrating 
Solar Power plants in more than a decade.
    Solar water heating experienced surging growth in the presence of 
unusually high prices for all conventional fuels.
    Across all three technologies, surging demand and increasing 
economies of scale have driven a continuous feedback loop--each solar 
panel or power plant coming off of the line makes the next one cheaper. 
In fact, solar electricity costs on average less than half as much as 
it did in the 1990's--with the recent runup in natural gas prices, this 
is for the first time within striking distance of many retail electric 
rates.
    Wall Street and Silicon Valley have taken notice, as well. 
Investment capital is surging into the industry at an unprecedented 
rate from publicly-traded stocks and venture capital funding; analysts 
estimate more than $1.5 billion of capital went into photovoltaic 
manufacturing expansion last year alone, and currently planned utility 
investments in concentrating solar power run to over $150 million per 
project.

                     CONTINUING INDUSTRY CHALLENGES

    However, there are also severe challenges facing the industry as a 
whole.
    The unprecedented growth of the photovoltaic sector has placed a 
severe strain on global supplies of silicon. (While as late as the 
1990's, the global solar industry subsisted on waste and off-spec 
silicon from the microprocessor industry, it now demands more than half 
of global supply.) This has bottlenecked production and created a 
supply/demand imbalance that threatens the steady progress of cost 
reductions that have driven this industry within the realm of 
conventional ``grid'' electricity pricing. There is a real sector-wide 
need for improved manufacturing processes to relieve this bottleneck 
and continue price stability.
    Responding to soaring conventional energy prices and policies 
enacted by the Energy Policy Act of 2005, Concentrating Solar Power 
manufacturers have effectively restarted this long-dormant industry 
``from scratch.'' They face considerable hurdles in scaling up their 
production by orders of magnitude and presenting investors with proven 
technologies sufficiently advanced to enable rapid deployment.
    Solar water heating continues its history of slow, steady growth in 
the United States. However, the United States still employs this 
technology at less than one-tenth the rate of major European nations, 
and must move aggressively to develop novel lower-cost and more 
integrated systems if this technology is to realize its potential for 
near-term natural gas usage reduction.
    In all cases, there is a continued need for Federal research--not 
to supplant the increasing role of private investment in expansion and 
research and development, but to provide a framework and pathway for 
bringing solar truly into the mainstream of U.S. energy resources, and 
provide broadly-used tools to continue rapid growth. Given the current 
energy situation, and the escalating concern of most Americans 
regarding energy issues, it is no longer acceptable merely to continue 
solar R&D programs at the current level.

              PHOTOVOLTAICS--THE SOLAR AMERICA INITIATIVE

    Accordingly, we strongly support the Solar America Initiative (SAI) 
as laid out in the administration's 2007 budget request. This budget 
proposes a new $139.47 million photovoltaic research program--an 
increase of more than 78 percent over fiscal year 2006. Additionally, 
the SAI represents a substantial shift in how DOE's solar programs 
administer and direct their research.
    Where previous photovoltaics research focused on DOE laboratory 
R&D, with an emphasis on incremental cost reductions and potential 
future breakthroughs, we anticipate that the SAI will bring a more 
rigorously selective and goal-centered philosophy more focused on the 
near-term barriers to the real possibility of large scale solar 
deployment. In keeping with this philosophy, an increased emphasis on 
industry/university/DOE partnerships will leverage Federal funding 
through the increasing availability of private sector capital to the 
industry.

                       CONCENTRATING SOLAR POWER

    The 2007 budget request also continues research into Concentrating 
Solar Power (CSP) devices at $8.9 million, and we are pleased to see 
the restoration of this Congressional priority in the initial request.
    These utility scale, heat-driven solar generators currently provide 
hundreds of megawatts of clean electricity to the southwest, and the 
first new plants in more than a decade are now under construction, 
promising to bring enough electricity on line in the next several years 
for several thousand new homes--all without further straining our 
stressed supplies of conventional fuels. Current contracts extend to 
several hundreds of megawatts of installed capacity.
    In large part, this is only possible due to continued improvements 
in price and performance that have been developed under DOE guidance. 
The initial large-scale commercial deployment of many technologies 
refined in the laboratory will inevitably require initial support from 
many of the researchers that made them possible, and we believe that 
this budget should prove adequate to ensure that this process occurs, 
smoothing the transition to multi-gigawatt commercial deployment over 
the 2006-2015 timeframe.

                       SOLAR HEATING AND LIGHTING

    Unfortunately, the administration request would zero out this 
program item, an omission which we believe is not in line with the 
stated goal of the Solar America Initiative: ``To accelerate widespread 
market acceptance of clean solar energy technologies across all U.S. 
market segments by 2015, reducing our dependence on natural gas and 
increasing our energy resources.''
    This resource is already cost-effective in many cases, and it could 
have truly significant impact on U.S. energy consumption if a serious 
deployment program were undertaken: Fewer than 123,000 residential 
water heaters consume the capacity of one LNG tanker per year, and if 
just 40,000 American households purchased solar water heating systems 
in the next 5 years, it would displace 5 million cubic feet of natural 
gas consumption.
    In the past years, demand for solar thermal has grown 
substantially. However, there remain two principal barriers to the 
mass-market penetration:
  --(1) Cost.--The DOE SH&L program, in partnership with industry, 
        recently achieved a significant breakthrough by developing a 
        new low-cost polymer-based solar water heater with a 50 percent 
        cost reduction. Unfortunately, this cutting-edge technology 
        will not be available for deployment in most areas of the 
        country until DOE and NREL's expertise can be harnessed to 
        resolve cold climate durability and system design issues.
  --(2) Perceived Reliability.--The potential loss of SH&L program 
        funding for the non-profit Solar Rating and Certification 
        Corporation (SRCC), which has certified solar thermal 
        collectors and systems for performance and quality since 1980, 
        will severely diminish the impact of the new Federal tax credit 
        for solar water heaters. SRCC certification is required for 
        solar water heating systems to be eligible for the tax credit, 
        so the loss of funding creates a bottleneck for the industry 
        and consumers alike. It is also possible that de-funding SRCC 
        could open the door for un-rated and un-certified systems to 
        enter a tax credit-stimulated market--a repeat of the quality 
        issues that plagued the industry in the 1970's.
    Accordingly, we request that this program be continued at the $5 
million dollar annual level.

                              CONCLUSIONS

    In an era of highly increased concern regarding the United States' 
energy security, it is time to make a significant commitment to 
research and development of renewable energy sources. The 
administration's proposed budget is a first step in the right direction 
of substantially increased funding, and a more rigorous and results-
driven approach to research, development, and deployment, for these 
extremely promising resources.
                                 ______
                                 
         Prepared Statement of Pratt & Whitney Rocketdyne, Inc.

                           EXECUTIVE SUMMARY

    America faces several complex and interrelated energy challenges. 
Three of the most pressing are: (1) excessive dependence on oil 
imports; (2) escalating energy prices; and (3) increasing greenhouse 
gas emissions. Advanced technologies will be required to solve these 
problems.
    Gasification can address all of these challenges. Gasification 
converts coal, either by itself or blended with biomass and combustible 
wastes, into syngas, a valuable mixture of hydrogen and carbon 
monoxide. Syngas can be used to produce electricity, synthetic liquid 
fuels (such as ultra-clean diesel fuel, gasoline, and ethanol), 
hydrogen, synthetic natural gas, and chemicals.
    These products can all be produced with near-zero emissions, as 
gasification enables efficient sequestration of carbon dioxide. 
Gasification can also increase domestic oil and natural gas production, 
if byproduct carbon dioxide is used for enhanced recovery of oil and 
coal bed methane (natural gas). Synthetic and alternative fuels 
produced via gasification can be carbon-neutral when the feedstock is a 
mixture of coal and biomass, and when the coal-derived carbon dioxide 
is sequestered.
    Recognizing the importance of gasification, the Department of 
Energy (DOE) is working with industry partners to develop a portfolio 
of advanced gasification technologies. Pratt & Whitney Rocketdyne 
(PWR), America's leading rocket engine company, is pleased to 
participate in this cooperative program. We are adapting rocket engine 
technologies to develop a compact gasification system that could 
significantly reduce plant cost and downtime, improve efficiency, and 
economically gasify all ranks of coal.
    Advanced gasification technologies are strategically important to 
America's economic competitiveness and national security. However, 
projected DOE funding is inadequate for timely development of these 
technologies. We therefore respectfully request that the Senate take 
the following actions:
  --Fully fund the President's fiscal year 2007 budget request of $54 
        million under the DOE ``Advanced Integrated Gasification 
        Combined Cycle'' line item.
  --Direct DOE to fund continued development of the PWR compact 
        gasification system with at least $7 million in fiscal year 
        2007. (This project is identified in the President's budget 
        request.)
  --Request DOE to prepare a plan (with proposed budget) to expand 
        development of advanced gasification technologies in fiscal 
        year 2008 and future years.

                               BACKGROUND

    There are currently 116 gasification plants in operation around the 
world. These plants produce electricity, synthetic natural gas, ultra-
clean diesel fuel, hydrogen, fertilizer, chemicals, and many other 
products from abundant, low cost feedstock such as coal, biomass, and 
combustible wastes.
    These plants are important--but they provide less than 1 percent of 
the world's energy. Widespread commercial application of the technology 
has been constrained by economic and technological factors. Existing 
gasification plants suffer from high capital cost, excessive downtime, 
and inability to economically gasify all ranks of coal and other 
available feedstock.
    Significant technological advances are required to realize the full 
potential of gasification. With improved technologies, future 
gasification plants could produce a substantial fraction of America's 
electricity, gaseous fuels, and liquid transportation fuels from 
domestic resources, with near-zero emissions.

                   DOE ADVANCED GASIFICATION PROGRAM

    The Department of Energy and its industry partners are currently 
developing new technologies that could dramatically reduce the cost of 
gasification and improve plant reliability and performance. Congress 
funds this work under the line item ``Advanced Integrated Gasification 
Combined Cycle.''
    Pratt & Whitney Rocketdyne (PWR), a world-leading rocket engine 
company, is pleased to participate in this important work. We built the 
rocket engines that took Americans to the Moon, and brought them safely 
home. Today, PWR makes the liquid rocket engines that power the Space 
Shuttle, Delta and Atlas launch vehicles.
    With DOE support, PWR is developing a compact gasification system 
using low-cost rocket engine technologies to reduce gasifier size, 
capital cost, and downtime, while improving performance, efficiency and 
feedstock flexibility. This is just one of several technologies 
supported by DOE under this line item. The four key projects are:
  --Southern Company and KBR (Kellogg, Brown, and Root) are developing 
        an advanced Transport Gasifier to reduce the cost of 
        gasification.
  --Air Products is developing an ITM (Ion Transport Membrane) air 
        separation system to reduce the cost and improve the efficiency 
        of producing pure oxygen from air.
  --Research Triangle Institute (RTI) is developing an advanced, low-
        cost gas cleanup system, in collaboration with Eastman 
        Chemical.
  --PWR is developing the compact gasification system described above, 
        in collaboration with GTI (Gas Technologies Institute) and EERC 
        (Energy and Environmental Research Institute).
    These are all potential high-payoff technologies. They are also 
complementary. For example, the PWR compact gasification system fully 
utilizes the benefits of Air Product's ITM air separation system and 
RTI's advanced gas cleanup system, while complementing Southern's 
Transport Gasifier by gasifying all ranks of coal.
    These advanced gasification technologies, in combination with 
advanced gas turbines, could reduce the cost of Integrated Gasification 
Combined Cycle (IGCC) power plants from $1,600 per kilowatt today, to 
less than $1,300 per kilowatt, and improve plant efficiency to near 50 
percent. If these goals are achieved, IGCC power plants could save U.S. 
electric power consumers up to $20 billion annually, reduce coal power 
plant emissions over 90 percent, and facilitate efficient carbon 
dioxide sequestration.
    These technologies could also enable cost-competitive production of 
liquid transportation fuels, hydrogen, synthetic natural gas, and 
chemicals--all from abundant domestic fossil fuels (such as coal and 
petroleum coke) which can be blended with renewable resources (such as 
biomass wastes and purpose-grown biomass). Although it is difficult to 
estimate the cost savings achievable from synthetic and alternative 
fuels, the payoff could be huge: (1) reduced oil imports; (2) improved 
national security; (3) reduced air pollution and carbon dioxide 
emissions; (4) less volatile energy prices; and (5) sustainable 
economic growth.
    The advanced gasification technologies funded by DOE feed into 
FutureGen and the Clean Coal Power Initiative (CCPI), and are essential 
to the success of these programs. As an example of this process, the 
Southern Company is currently scaling up its Transport Gasifier from 
pilot scale (at Wilsonville, Alabama) to commercial scale in a CCPI 
project in Orlando, Florida.

                        PWR GASIFICATION SYSTEM

    The PWR compact gasification system uses rapid-mix rocket engine 
technology to achieve the following advantages over conventional 
gasification systems:
  --90 percent reduction in gasifier size;
  --50 percent lower capital cost;
  --3-10 percent higher cold gas efficiency;
  --50-90 percent reduction in downtime;
  --Feedstock flexibility (potential to gasify all ranks of coal, 
        either by themselves or blended with renewable biomass and 
        combustible wastes);
  --Product flexibility (economical production of multiple products, 
        including electricity, hydrogen, liquid fuels, and chemicals);
  --Low-cost hydrogen production and carbon dioxide sequestration.
    With PWR gasification technology, Integrated Gasification Combined 
Cycle (IGCC) power plants will be able to produce electricity for about 
4 cents per kilowatt-hour. Capital costs will be reduced by as much as 
$300 million for a 1,000 megawatt plant. This capital cost reduction, 
combined with improved plant availability, can save $1 billion during 
the first 15 years of operation of such a plant.
    The PWR technology is also well-suited for production of hydrogen 
and sequestration of carbon dioxide, with an expected plant efficiency 
of about 70 percent and cost approximately $2.00 per thousand cubic 
feet. (This is equal to 80 cents per gallon of gasoline equivalent.) 
Low-cost hydrogen can replace natural gas as fuel for existing 
combined-cycle power plants and refineries. The resulting decrease in 
natural gas consumption and carbon dioxide emissions could be 
substantial. This technology can also provide low-cost, near-zero 
emission hydrogen for stationary fuel cells, and power the Hydrogen 
Economy when (and if) practical fuel cell vehicles are developed.
    If the price of oil remains high, and if oil imports and global 
warming continue to be major issues, advanced technologies such as the 
PWR gasifier will be needed to produce affordable carbon-neutral 
synthetic fuels from non-petroleum resources. Combining the PWR 
gasification system with existing Fischer-Tropsch technology enables 
production of ultra-clean synthetic diesel fuel (and other alternative 
fuels) for less than the current price of crude oil.
    Many industries in the United States are struggling with high 
natural gas cost, and are therefore interested in industrial 
gasification to produce syngas and electricity for industrial purposes. 
The compact, low-cost features of the PWR technology makes it well-
suited for industrial gasification, especially when combined with other 
advanced gasification technologies under development on the DOE 
program, such as Air Product's ITM air separation system.
    PWR started development of the compact gasification system in late 
2004, after a competitive procurement sponsored by the DOE. We are 
currently testing components and materials, and constructing a cold 
flow test facility at the Energy and Environmental Research Center 
(EERC) at the University of North Dakota. Testing at this facility will 
begin in late 2006. We have also defined a pilot plant, to be located 
at the Gas Technology Institute (GTI) in Des Plaines, Illinois.

                             FUNDING STATUS

    The President's 2007 budget request includes funds for this project 
(as well as the 2006 budget). The steps necessary to complete 
development of the technology include: (1) constructing and operating 
the pilot plant at GTI; and (2) developing and testing the dry solids 
pump at EERC. The total government cost share for this entire project 
is about $30 million over 5 years, including sunk costs of $4 million. 
This is a cost-shared program, and PWR funds a portion of technology 
development, and all related commercialization activities.
    In January 2006, the DOE conducted a peer review of our proposed 
plan to complete this program. The peer reviewers recommended 
continuation of the project. In parallel, DOE funded an independent 
contractor to evaluate the potential economic advantages of our 
gasification system, and their results confirmed the economic 
advantages of the PWR compact gasification system.
    Nevertheless, in April 2006, DOE informed us that they do not plan 
to fund the pilot plant and dry solids pump, because DOE does not have 
adequate funds to develop a new gasification system. We understand that 
the administration and Congress are under immense pressure to reduce 
the budget deficit, and to fund other important priorities. However, we 
believe that this country can--and should--allocate the resources 
needed to address America's energy problems.

                            RECOMMENDATIONS

    We urge the Senate to provide DOE with adequate resources to 
develop advanced gasification technologies. Specifically, we request 
the Senate to take the following actions:
  --Fully fund the President's fiscal year 2007 budget request of $54 
        million under the DOE ``Advanced Integrated Gasification 
        Combined Cycle'' line item.
  --Direct DOE to fund continued development of the PWR compact 
        gasification system with at least $7 million in fiscal year 
        2007. (This project is identified in the President's budget 
        request.)
  --Request DOE to prepare a plan (with proposed budget) to expand 
        development of advanced gasification technologies in fiscal 
        year 2008 and future years.
    This expanded DOE Gasification Plan should include sufficient 
funding for: (1) timely completion of on-going advanced gasification 
projects; and, (2) new initiatives to enable cost-competitive 
production of synthetic and alternative transportation fuels, as well 
as electricity, with near-zero emissions.

                          SUMMARY OF BENEFITS

    The benefits from widespread deployment of coal and biomass 
gasification are substantial for a broad range of constituents:
  --America will benefit from enhanced energy security.
  --The U.S. economy will benefit from domestically-produced, 
        affordable energy supplies.
  --Coal-producing regions, farm States, and forestry regions will 
        benefit from sustainable, environmentally sound utilization of 
        coal and biomass.
  --Oil producing regions will benefit because carbon dioxide (produced 
        as a byproduct of gasification) can be used for enhanced oil 
        recovery.
  --Refinery regions will benefit as gasification technology enables 
        cost-competitive utilization of refinery wastes and other low-
        cost feedstock.
  --Energy consumers will pay less for electricity, natural gas, and 
        transportation fuels.
  --All people on the planet will benefit from a clean environment and 
        a stable climate.
    These are clear and compelling reasons to develop and deploy 
advanced gasification technologies.
    Thank you for giving us the opportunity to provide this testimony. 
With your leadership, America will transform today's energy challenges 
into tomorrow's opportunities.
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