[Senate Hearing 109-1101]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 109-1101

                     DEVELOPMENTS IN NANOTECHNOLOGY

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

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 15, 2006

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation















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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                     TED STEVENS, Alaska, Chairman
JOHN McCAIN, Arizona                 DANIEL K. INOUYE, Hawaii, Co-
CONRAD BURNS, Montana                    Chairman
TRENT LOTT, Mississippi              JOHN D. ROCKEFELLER IV, West 
KAY BAILEY HUTCHISON, Texas              Virginia
OLYMPIA J. SNOWE, Maine              JOHN F. KERRY, Massachusetts
GORDON H. SMITH, Oregon              BYRON L. DORGAN, North Dakota
JOHN ENSIGN, Nevada                  BARBARA BOXER, California
GEORGE ALLEN, Virginia               BILL NELSON, Florida
JOHN E. SUNUNU, New Hampshire        MARIA CANTWELL, Washington
JIM DeMINT, South Carolina           FRANK R. LAUTENBERG, New Jersey
DAVID VITTER, Louisiana              E. BENJAMIN NELSON, Nebraska
                                     MARK PRYOR, Arkansas
             Lisa J. Sutherland, Republican Staff Director
        Christine Drager Kurth, Republican Deputy Staff Director
             Kenneth R. Nahigian, Republican Chief Counsel
   Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
   Samuel E. Whitehorn, Democratic Deputy Staff Director and General 
                                Counsel
             Lila Harper Helms, Democratic Policy Director

















                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on February 15, 2006................................     1
Statement of Senator Allen.......................................    25
Statement of Senator Ensign......................................     2
    Prepared statement...........................................     3
Statement of Senator Kerry.......................................    30
Statement of Senator Pryor.......................................    27
Statement of Senator Smith.......................................    29
Statement of Senator Stevens.....................................     1
    Prepared statement...........................................     1
    Prepared statement of Senator Inouye.........................     1

                               Witnesses

Buckius, Dr. Richard O., Acting Assistant Director for 
  Engineering, National Science Foundation.......................    10
    Prepared statement...........................................    12
Davies, Dr. J. Clarence (Terry), Senior Advisor, Project on 
  Emerging Nanotechnologies, Woodrow Wilson International Center 
  for Scholars; Senior Fellow, Resources for the Future..........    68
    Prepared statement...........................................    70
Davis, Mark E., Ph.D., Professor of Chemical Engineering, 
  Caltech; Member of the Comprehensive Cancer Center, City of 
  Hope...........................................................    63
    Prepared statement...........................................    65
Gotcher, Alan, Ph.D., President/CEO, Altair Nanotechnologies, 
  Inc............................................................    31
    Prepared statement...........................................    33
Hylton, Dr. Todd L., Director, Center for Advanced Materials and 
  Nanotechnology, Science Applications International Corporation.    39
    Prepared statement...........................................    42
Linares, Bryant R., President/CEO, Apollo Diamond, Inc...........    57
    Prepared statement...........................................    59
Schloss, Jeffery, Ph.D., Program Director, Division of Extramural 
  Research, National Human Genome Research Institute; Co-Chair, 
  National Institutes of Health Nanomedicine Roadmap Initiative, 
  National Institutes of Health, Department of Health and Human 
  Services.......................................................    15
    Prepared statement...........................................    17
Swager, Timothy M., Ph.D., Professor of Chemistry, Massachusetts 
  Institute of Technology (MIT); on behalf of the Institute for 
  Soldier Nanotechnologies (ISN).................................    45
    Prepared statement...........................................    47
Teague, Dr. E. Clayton, Director, National Nanotechnology 
  Coordination Office............................................     3
    Prepared statement...........................................     5

                                Appendix

Response to written questions submitted by Hon. Gordon H. Smith 
  to:
    Dr. Richard O. Buckius.......................................    85
    Dr. J. Clarence (Terry) Davies...............................    88
    Mark E. Davis, Ph.D..........................................    89
    Alan Gotcher, Ph.D...........................................    90
    Dr. Todd L. Hylton...........................................    91
    Bryant R. Linares............................................    89
    Jeffery Schloss, Ph.D........................................    86
    Timothy M. Swager, Ph.D......................................    89
    Dr. E. Clayton Teague........................................    83

 
                     DEVELOPMENTS IN NANOTECHNOLOGY

                              ----------                              


                      WEDNESDAY, FEBRUARY 15, 2006

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:40 p.m. in room 
SD-562, Dirksen Senate Office Building, Hon. Ted Stevens, 
Chairman of the Committee, presiding.

            OPENING STATEMENT OF HON. TED STEVENS, 
                    U.S. SENATOR FROM ALASKA

    The Chairman. I'm sorry to be a little late. We appreciate 
your being here. I do not know how many others will join us. I 
am going to put my statement in the record.
    [The prepared statements of Senator Stevens and Senator 
Inouye follow:]

    Prepared Statement of Hon. Ted Stevens, U.S. Senator from Alaska
    Nanotechnology is a revolutionary science, one that has the 
potential to change and improve many facets of our lives.
    From the creation of more precise methods of targeting and treating 
cancer, to stronger body armor for our soldiers in the line of attack, 
to consumer products like straighter flying golf balls or better 
sunscreen, nanotechnology's potential engenders excitement, intrigue, 
and substantial benefits to society as a whole.
    As with any technological and scientific progress, certain 
obstacles and challenges abound. For starters, how does one efficiently 
produce anything in quantity when the raw material is only one one-
thousandth the width of a human hair? Or, do nanoparticles differ to 
such an extent from their larger counterparts in the physical world 
that their properties exhibit unknown or unstable characteristics? 
These questions lie at the heart of what we hope to examine today. In 
other words, what is the status of developments in the nanotech field 
and how will further progress in this area of science impact our 
everyday lives?
    Because we are here in a Senate hearing room, it is only natural 
for us also to consider what the proper role of government is in 
responding to nanotechnology's tremendous promise. We want to avoid 
stifling this technology before beneficial applications have the 
opportunity to successfully enter the market. We also want to protect 
all consumers who are the eventual end-users of these scientific 
achievements. Because, after all, if a nanoproduct is not safe, all the 
potential in the world would not justify its use.
    We welcome two very distinguished panels of witnesses today. Our 
witnesses come from diverse backgrounds, and we look forward to hearing 
their perspectives on developments in the field of nanotechnology. We 
hope to take away some of their wisdom regarding the most appropriate 
paths to follow in this area of science.
                                 ______
                                 
 Prepared Statement of Hon. Daniel K. Inouye, U.S. Senator from Hawaii
    Nanotechnology is the science of very small things that have very 
big potential. Like information technology, nanotechnology is not an 
end in itself. Rather, it has the potential to change fundamentally the 
way we make products from airplanes to pharmaceuticals.
    Nanotechnology holds great promise, but to secure that promise, we 
need to understand the long-term effects of exposure to nano-engineered 
particles. What, if any, impact do they have on human health? 
Researchers are trying to answer this question as we speak.
    Despite this uncertainty, companies are already marketing a wide 
range of products that utilize nanotechnology, from stain-resistant 
clothing to clear sunscreen.
    The question is, are we doing enough to learn about the long-term 
effects of nano-engineered products? Are we making the right decisions 
about research funding and prudent regulation?
    According to Mr. Davies' colleagues at the Wilson Center, the 
answer is no. Only $39 million of the government's $1.3 billion annual 
investment in nanotechnology research has been directed toward 
environmental, health, and safety research and development. Little of 
that is dedicated to long-term exposure studies.
    In what could be a fortuitous coincidence, the Senate is currently 
considering legislation that addresses the consequences of asbestos 
exposure. As many of us recall, asbestos was once well-regarded. We 
knew very little about its effect on human health before its widespread 
use. We now know it can be deadly to those exposed to it.
    With nanotechnology, history must be our guide, and our experience 
with asbestos provides an important lesson. If we do not learn from it, 
Congress could very well be considering legislation 30 years from now 
to address the ill-effects of nano-engineered products.
    Like the other members of this committee, I am excited about 
nanotechnology's enormous potential, and I look forward to hearing 
about the advancements in this field. I also hope that our witnesses 
can help us understand how we can make choices that will allow this 
industry to grow safely and responsibly.

    The Chairman. I think everyone realizes that we are dealing 
with a very evolutionary science, and we are trying to improve 
our knowledge of what it is and what is going on and what is 
the progress--what has the progress been so far, and what 
obstacles and challenges are involved.
    So, I'll yield to my friend here, who was here ahead of me.
    Senator Ensign, do you have an opening statement?

                STATEMENT OF HON. JOHN ENSIGN, 
                    U.S. SENATOR FROM NEVADA

    Senator Ensign. Yes, Mr. Chairman. I'll keep it very brief, 
because I know we have nine witnesses today and we want to hear 
as much as we can, especially with all the witnesses we had 
this morning. We did not get nearly as much time to hear from 
them as we wanted to.
    In the second panel, I'm very excited to have a Nevadan 
here, Dr. Allan Gotcher. Dr. Gotcher will be discussing his 
efforts to develop a nanotechnology business. He is the 
President and Chief Executive Officer of Altair 
Nanotechnologies, in Reno, Nevada. I think the importance of 
this hearing is that nanotechnology is such an exciting field 
with so many potential applications. But I know that people 
have raised a lot of concerns about the safety of 
nanotechnology. We have to be careful, but we also have to make 
sure that we do not squelch innovation. In addition, although 
we must monitor potential health problems related to 
nanotechnology, I think that we have to proceed very carefully 
and slowly as we are looking at potentially regulating an 
incredible field of science and technology. The potential 
benefits from nanotechnology are so incredible that we have to 
be careful, exactly what we do as policymakers. With that in 
mind, I look forward to hearing from the witnesses on both of 
our panels.
    [The prepared statement of Senator Ensign follows:]

    Prepared Statement of Hon. John Ensign, U.S. Senator from Nevada
    Thank you, Chairman Stevens, for holding a hearing on this exciting 
topic.
    With 9 witnesses set to testify, I will try to keep my opening 
remarks brief. I look forward to hearing from all of our witnesses this 
afternoon and, in particular, I would like to extend a hearty welcome 
to a fellow Nevadan, Dr. Alan Gotcher. Dr. Gotcher will be discussing 
his efforts to develop a nanotechnology business, Altair 
Nanotechnologies, Inc., out in Reno.
    Nanotechnology has the potential to positively impact so many 
aspects of our lives that it is helpful for this committee to explore 
where we have been, where we are, and where we are going with 
nanotechnology.
    Nanotechnology can assist humans in very serious ways, from 
improving the treatment of life-threatening diseases like cancer and 
diabetes, to assisting our men and women in the armed forces to detect 
explosive devices.
    In addition, nanotechnology can help provide simple pleasures like 
facilitating the creation of improved sports equipment and chocolate 
chewing gum.
    Nanotechnology has already demonstrated that it will be 
increasingly relevant in society for a long time to come.
    As scientists, universities, and businesses continue their efforts 
to use nanotechnology in a broad number of fields, we as policymakers 
in Washington need to be careful as we examine what role we should 
play.
    While nanotechnology has tremendous potential to improve our daily 
lives, we need to make sure that we are adequately addressing the 
potential safety concerns that are raised by this dynamic field of 
development. I look forward to hearing more on this topic from today's 
witnesses.
    At the same time, we need to be cautious about introducing 
additional regulation that could unintentionally squelch the positive 
innovation that is occurring in the field.
    Thank you again, Mr. Chairman.

    The Chairman. Well, thank you very much.
    We have two panels this afternoon. The first panel has 
three witnesses: Dr. E. Clayton Teague, Director of the 
National Nanotechnology Coordination Office; Dr. Richard 
Buckius, Assistant Director for Engineering at the National 
Science Foundation; and Dr. Jeffrey Schloss, the Co-Chairman of 
the Nanomedicine Roadmap Initiative at the National Institutes 
of Health.
    We look forward to hearing your testimony. We will print 
your statements in the record in full. Because of the subject 
matter, I am not going to place a time limit on you, but I hope 
you'll realize that there is a second panel behind you of six 
other people that we would like to listen to this afternoon.
    So, Dr. Teague, would you start it off, please?

         STATEMENT OF DR. E. CLAYTON TEAGUE, DIRECTOR, 
          NATIONAL NANOTECHNOLOGY COORDINATION OFFICE

    Dr. Teague. Good afternoon, and thank you, sir.
    Chairman Stevens and other distinguished members of the 
Committee who are present, I'm honored to have this opportunity 
to speak with you today about developments in nanotechnology; 
in particular, the role of the National Nanotechnology 
Initiative. My primary message today is that, with your 
support, the NNI has been, and will continue to be, a major 
driver for the responsible development of nanotechnology in the 
United States and the world.
    The NNI is now in its sixth year, and it is a highly 
collaborative program among 25 Federal agencies, 13 of which 
have budgets for nanotechnology R&D. Because of the NNI, 
Federal agencies have initiated major new nanotechnology R&D 
activities that support national goals in their agency 
missions. There is an extensive and growing infrastructure of 
nanotechnology research centers and user-facilities that have 
been put in place. The 25 participating agencies are--and I 
have emphasized--they are working together very harmoniously to 
maximize the effectiveness of their individual and collective 
investments through communication, coordination, and actual 
joint programs.
    As called for by you and your fellow legislators, the 
President's Council of Advisors on Science and Technology, in 
its role as the National Nanotechnology Advisory Panel, 
recently reviewed the first 5 years of the NNI. Overall, they 
gave the NNI high marks for advancing foundational knowledge, 
for promoting technology transfer for commercial and public 
benefit, and taking steps to address societal concerns. They 
also concluded that the money the U.S. is investing in 
nanotechnology is money very well spent.
    With a Federal investment of over $1 billion a year and 
over 4,000 active R&D projects, the U.S. is the world leader in 
nanotechnology development. With only one-quarter of the total 
international funding in nanotechnology, U.S. researchers are 
the leading producers of nanotechnology patents and publish 
over half of the nanotechnology papers in the key high-impact 
journals worldwide.
    The NNI has also been effective in using these funds to 
support the movement of scientific discoveries from the lab to 
the marketplace. More than 160 companies supported by Small 
Business Innovation Research grants are now producing 
nanotechnology products or providing related commercial 
services. Since 2001, some 600 new ``pure-play''--totally 
nanotechnology--companies have been formed in the United 
States.
    Technology transfer, in this vein, is also promoted by the 
creation of a large geographically distributed network of 
research facilities. The NNI has established more than 50 
nanotechnology research and education centers. I've provided a 
list of these centers along with my written testimony. These 
include more than a dozen user-facilities that are open to all 
researchers from academia and from industry.
    I'd like now to take just a moment to explain a little bit 
about why spending a billion dollars of taxpayers' money each 
year in nanotechnology R&D is justified.
    This slide shows some of the major application areas for 
nanotechnology. In each of the areas that are shown--and this 
is just a sampling of the many areas that nanotechnology will 
impact--this transformational technology promises to overcome 
what people sometimes call ``brick walls'' to the advancement 
by conventional approaches. In medicine and health, for 
example, targeted treatments for cancer with minimal or no 
side-effects. In information technology, devices that are 
``beyond silicon,'' a phrase that's used in the industry, and 
will allow us to stay on the path of Moore's Law. In energy 
production, revolutionary high-efficiency, low-cost solar 
cells. In materials science, achievement of atom-by-atom design 
of materials. In food, water, and the environment, effective 
remediation methods for Superfund sites and membranes to 
produce pure water, free even of viruses. In instrumentation, 
microscopes that can image the 3D--three dimensional--locations 
of atoms and the nanostructure on the time-scale of chemical 
reactions.
    Along with all these advances in technology, in line with 
your comments, the United States has also pioneered 
environmental health and safety research, leading the world in 
this area. This research has been directed at implications of 
engineered nanoscale materials, and the U.S. is the world's 
leader in funding this work. Another vital element of the NNI 
is research directed at the societal aspects of nanotechnology 
development, as well as education and public outreach.
    Among the challenges ahead are, certainly, strong 
competition from other countries, an issue with both economic 
and national security implications. While recognizing this, we 
are working to cooperate with other countries on research 
related to safety and societal impacts and on setting standards 
for this field.
    In these brief remarks today, I hope I've been able to 
communicate that the NNI has been a major driver for 
nanotechnology in the U.S. and the world. All the members of 
the NNI, the agency members and representatives, see tremendous 
opportunity ahead and realize that we've got much work that 
remains to be done. We have now in place a vigorous program 
underway to launch a new era in this science and technology, 
thanks to the support of this administration and this Congress. 
With your continued support, the NNI will bring us closer to 
achieving some of our greatest national and societal goals.
    Thank you, and I'll look forward to your questions.
    [The prepared statement of Dr. Teague follows:]

        Prepared Statement of Dr. E. Clayton Teague, Director, 
              National Nanotechnology Coordination Office
    Chairman Stevens, Co-Chairman Inouye, and distinguished members of 
the Committee, I'm honored to have the opportunity to speak with you on 
behalf of the Nanoscale Science, Engineering, and Technology (NSET) 
Subcommittee of the President's National Science and Technology 
Council, which coordinates the National Nanotechnology Initiative 
(NNI). My subject is developments in nanotechnology--in particular, the 
role of the National Nanotechnology Initiative (NNI) in driving the 
responsible development and application of nanotechnology. That is my 
primary message today--that the NNI has been and continues to be the 
major driver for developments and applications of nanotechnology in the 
U.S. and the world.
    The NNI--now in its sixth year--is a highly successful, 
collaborative, cross-cutting program among 25 Federal agencies: 13 
agencies involved in the NNI R&D budget and 12 others with missions 
related to advances in nanotechnology (see list below). For a 
description of the vision, goals, organization, and management of the 
initiative, I would direct you to the NNI Strategic Plan provided along 
with this written testimony. Because of the NNI: (1) Federal agencies 
have initiated major new programs and efforts in nanotechnology 
research, development, and applications that expand knowledge and 
understanding, address broad national goals, and support the agencies' 
missions; (2) an extensive infrastructure of focused centers of 
excellence in nanotechnology and nanotechnology user facilities has 
been established and continues to grow; and (3) the 25 participating 
agencies are working together to maximize the effectiveness of their 
individual and collective investment through communication, 
coordination, and joint programs.
    As called for by you and your fellow legislators, the President's 
Council of Advisors on Science and Technology (PCAST), in its role as 
the National Nanotechnology Advisory Panel, recently reviewed the first 
5 years of the NNI. In its report, which is provided along with this 
written testimony, PCAST concludes that our activities already have 
paid significant dividends, such as ``advancing foundational knowledge, 
promoting technology transfer for commercial and public benefit, 
developing an infrastructure of user facilities and instrumentation, 
and taking steps to address societal concerns.'' PCAST members believe 
the NNI ``appears well positioned to maintain United States leadership 
going forward,'' that ``the money the U.S. is investing in 
nanotechnology is money very well spent,'' and that ``continued robust 
funding is important for the Nation's long-term economic well-being and 
national security.''
    With a total Federal investment of more than $1 billion per year, 
the U.S. is the acknowledged world leader in nanotechnology R&D as 
evidenced by research output measured by patents and publications. With 
only one quarter of the total international funding in nanotechnology, 
U.S. researchers are the leading producers of nanotechnology patents 
and publish over half of the nanotechnology papers in high-impact 
journals worldwide.
    The investment of such funds must lead to commercialization, 
however, in order to contribute to our economy. The NNI has also been 
effective in moving science from the bench to products in the 
marketplace. The U.S. leads in the number of nanotechnology-based 
start-up companies, many of which have received Federal support. More 
than 160 companies supported by Small Business Innovation Research 
grants are now producing nanotechnology-based products or providing 
related commercial services. Many of these are among the 600 ``pure 
play'' nanotechnology companies formed in the United States since 2001, 
identified in a recent survey by Small Times Media.
    Technology transfer is also promoted by the creation of a large, 
geographically distributed network of research facilities. The NNI has 
established more than 50 nanotechnology research and education centers 
at universities and government laboratories, including more than a 
dozen user-facilities that are open to all researchers, including those 
from industry. Such broad access facilitates collaborations between 
government, business, and university partners. (See the attached list 
of all centers and user facilities established by the agencies 
participating in the NNI.)
    I'd like to take a moment to explain why the Federal Government is 
investing over $1 billion in nanotechnology R&D each year. 
Nanotechnology incorporates science, engineering, and technology at the 
nanometer scale. Technically, a nanometer is a millionth of a 
millimeter; I find it useful to think of a nanometer in terms of the 
thickness of a sheet of paper--100,000 nanometers. At this scale, 
properties of materials can differ markedly from those of individual 
atoms and molecules or of bulk matter. By putting these unique 
properties to work, scientists are developing highly beneficial 
products in medicine, energy, electronics, materials, and other areas. 
Nanoscale control over the structure of materials and their properties 
is already leading to a variety of innovative technologies and is 
expected to impact virtually all industry sectors as an ``enabling'' or 
``key'' technology. Some examples of impact areas are shown in the 
figure below.


    To focus on one of these areas, consider an example of how 
nanotechnology could transform our economy and enhance our national 
security. Sunlight is by far the largest of all carbon-neutral energy 
sources. More energy from sunlight strikes the Earth in 1 hour than all 
the energy consumed on the planet in a year. Sunlight has long been 
seen as a compelling solution to our need for clean, abundant sources 
of energy in the future. It is readily available, secure from 
geopolitical tension, and can reduce the impact of energy use on our 
environment. This great promise has long been recognized. But cost and 
low-efficiency issues have stood in the way of harnessing this energy--
problems that are largely due to materials limitations. Nanotechnology 
allows us to design materials with combinations of properties not found 
in previously available materials. Photovoltaic cells formed from 
quantum dots--nanometer-sized particles of semiconductor materials--
have been engineered to absorb and convert energy from multiple parts 
of sunlight's spectrum to electricity, yielding devices with 
significantly higher efficiency than those currently in use.
    Today, the cost of producing electricity from photovoltaic cells is 
between two and five times that from conventional systems. With new 
materials and devices for energy conversion, transmission, and storage, 
this price differential could be bridged and make photovoltaic cell 
production of electricity competitive with that of conventional 
systems.
    Another vital element of the NNI is research directed at 
environmental, health, and safety (EHS) impacts. The U.S. is the world 
leader in funding EHS research on the implications of engineered 
nanoscale materials. Further, the Federal Government has been 
coordinating research activity in this area since 2003, when the 
National Toxicology Program began a new program on several engineered 
nanoscale materials and the Nanotechnology Environmental and Health 
Implications (NEHI) Working Group was formed within the NSET 
Subcommittee. NEHI brings together representatives from some 24 
agencies that support nanotechnology research or that have regulatory 
responsibilities to exchange information and to identify, prioritize, 
and implement research needed to support regulatory decisionmaking 
processes. Through the efforts of the NEHI Working Group, regulatory 
agencies have been proactively engaged with each other and the research 
agencies, leading to earlier awareness of relevant issues and expedited 
activities to address them. In addition, those agencies that are 
primarily focused on research have a greater appreciation for the 
issues confronted by the regulatory bodies.
    My colleague Dr. Buckius will report on NSF's support of programs 
aimed at improving nanotechnology education at all ages, including 
through informal venues, such as science museums. NSF is also to be 
commended for the creation, in the Fall of 2005, of the Network for 
Nanotechnology in Society. That network will engage economists, social 
scientists, and non-scientists in looking at how nanotechnology could 
impact society economically, socially, legally, and how nanotechnology 
fits into the ethical dialogue on potential outcomes of emerging 
technologies. Engaging various publics in discussions regarding 
nanotechnology development is another function of this network.
    Because technological innovation is a global phenomenon, 
international cooperation and coordination on many of the pre-
competitive and noncompetitive aspects of nanotechnology will encourage 
development to occur in a responsible and beneficial manner. The United 
States takes the position that all countries will benefit from 
cooperating and coordinating efforts in many of the formative areas of 
nanotechnology R&D, such as technical norms and standards; intellectual 
property rights; environment, health, and safety; and education. In 
2005, the NSET Subcommittee created an informal working group on Global 
Issues in Nanotechnology, whose purpose is to develop, coordinate, and 
support U.S. Government international activities related to 
nanotechnology.
    The GIN working group has supported numerous international 
activities in the past year, including those involving the Organization 
for Economic Co-operation and Development (OECD). At an October 2005 
meeting of the OECD Committee for Scientific and Technological Policy 
(CSTP, within the Science, Technology and Industry Directorate), the 
U.S. proposed the creation of a Working Party on Nanotechnology. This 
new Working Party would provide an international governmental forum to 
help OECD Member States and Observers more effectively utilize their 
nanotechnology R&D investments in furtherance of the CSTP goals of 
stimulating science and innovation, enhancing economic growth, 
providing societal benefits, and promoting innovation through 
international science and technology cooperation. In parallel, 
following a workshop hosted by the United States on the safety of 
manufactured nanomaterials, a proposal has been made to create within 
the OECD Environmental Directorate a working group focused on EHS risk 
assessment and management of nanomaterials.
    A critical aspect of protecting health and the environment are 
standardized tools and methods for measuring and monitoring exposure; 
developing standardized methods for characterizing properties of 
personal protective equipment, etc. Accordingly, the International 
Organization for Standardization (ISO) established in late 2005 the 
Nanotechnologies Technical Committee. The Working Group on Health, 
Safety, and Environmental Aspects of Nanotechnologies under the 
Technical Committee will be led by the U.S. I was privileged to lead 
the U.S. delegation to the ISO inaugural nanotechnology-related meeting 
and also chair the American National Standards Institute (ANSI)-
accredited U.S. Technical Advisory Group (TAG) for nanotechnology 
standards.
    The U.S. delegation to that ISO meeting submitted the National 
Institute for Occupational Safety and Health document on ``Approaches 
to Safe Nanotechnology'' to the ANSI TAG for consideration as a 
possible work item. Following further development and approval of the 
draft by the ANSI TAG, the document will be put forth to the ISO 
Working Group as a draft work item toward an ISO Technical Report. Once 
approved by the ISO Technical Committee, the document will be issued as 
an ISO Technical Report, an informational document available for use by 
all countries.
    The work of the NNI has been broad. Still, there are challenges 
ahead. Among them is strong competition from other countries and 
regions, particularly the EU, Japan, and China, an issue with both 
economic and national security implications, and also for retaining our 
finest scientists.
    I hope I have been able to communicate that the NNI has been a 
major driver for developments and applications of nanotechnology in the 
U.S. and the world. The NNI leadership sees tremendous opportunity 
ahead and fully realizes that much work remains to be done. We have a 
vigorous program underway to launch a new era in science and technology 
in the U.S., thanks to the support of the Administration and Congress. 
With continued support the NNI will advance discoveries in medicine, 
energy, security, and other areas that will bring us closer to 
achieving some of our greatest national and societal goals.
     List of Federal Agencies Participating in the NNI During 2006
Federal Agencies With Budgets Dedicated to Nanotechnology Research and 
        Development
     Department of Agriculture, Cooperative State Research, Education, 
and Extension Service (USDA/CSREES)
     Department of Agriculture, Forest Service (USDA/FS)
     Department of Defense (DOD)
     Department of Energy (DOE)
     Department of Homeland Security (DHS)
     Department of Justice (DOJ)
     Department of Transportation (DOT)
     Environmental Protection Agency (EPA)
     National Aeronautics and Space Administration (NASA)
     National Institute of Standards and Technology (NIST, Department 
of Commerce)
     National Institute for Occupational Safety and Health (NIOSH, 
Department of Health and Human Services/Centers for Disease Control and 
Prevention)
     National Institutes of Health (NIH, Department of Health and Human 
Services)
     National Science Foundation (NSF)
Other Participating Agencies
     Bureau of Industry and Security (BIS, Department of Commerce)
     Consumer Product Safety Commission (CPSC)
     Department of Education (DOEd)
     Department of Labor (DOL)
     Department of State (DOS)
     Department of the Treasury (DOTreas)
     Food and Drug Administration (FDA, Department of Health and Human 
Services)
     International Trade Commission (ITC)
     Intelligence Technology Innovation Center, representing the 
Intelligence Community (IC)
     Nuclear Regulatory Commission (NRC)
     Technology Administration (TA, Department of Commerce)
     U.S. Patent and Trademark Office (USPTO, Department of Commerce)


National Nanotechnology Initiative Infrastructure: Centers, Networks and
                             User Facilities
                             (February 2006)
------------------------------------------------------------------------
  NNI Center, Network, or User
            Facility                  Agency          Host Institution
------------------------------------------------------------------------
Institute for Nanoscience        DOD               Naval Research Lab
Institute for Soldier            DOD               Massachusetts
 Nanotechnologies                                   Institute of
                                                    Technology
Nanoscience Innovation in        DOD               U California-Santa
 Defense                                            Barbara
Functional Nanomaterials (pre-   DOE               Brookhaven National
 operations)                                        Lab
Integrated Nanotechnologies      DOE               Sandia and Los Alamos
 (pre-operations)                                   National Labs
Molecular Foundry (pre-          DOE               Lawrence Berkeley
 operations)                                        National Lab
Nanophase Materials Sciences     DOE               Oak Ridge National
                                                    Lab
Nanoscale Materials (pre-        DOE               Argonne National Lab
 operations)
Biologically Inspired Materials  NASA              Princeton U
 Institute
Cell Mimetic Space Exploration   NASA              U California-Los
                                                    Angeles
Intelligent BioNanomaterials &   NASA              Texas A&M
 Structures for Aerospace
 Vehicles
Nanoelectronics & Computing      NASA              Purdue
Engineering Cellular Control:    NIH               U California-San
 Synthetic Signaling and                            Francisco
 Motility Systems
NanoMedicine Center for          NIH               Columbia U
 Mechanical Biology
National Center for Design of    NIH               U Illinois Urbana-
 Biomimetic Nanoconductors                          Champaign
Protein Folding Machinery        NIH               Baylor College of
                                                    Medicine
Cancer Nanotechnology            NIH/NCI           U. North Carolina
 Excellence
Cancer Nanotechnology            NIH/NCI           Massachusetts
 Excellence                                         Institute of
                                                    Technology/Harvard U
Nanomaterials for Cancer         NIH/NCI           Northwestern U
 Diagnostics and Therapeutics
Nanosystems Biology Cancer       NIH/NCI           California Institute
 Center                                             of Technology
Nanotechnology Characterization  NIH/NCI           NCI Frederick
 Laboratory
Nanotechnology Excellence        NIH/NCI           Stanford U
 Focused on Therapy Response
Nanotechnology for Treatment,    NIH/NCI           U California-San
 Understanding, and Monitoring                      Diego
 of Cancer
Personalized and Predictive      NIH/NCI           Emory U/Georgia
 Oncology                                           Institute of
                                                    Technology
The Siteman Center of Cancer     NIH/NCI           Washington U
 Nanotechnology Excellence
Integrated Nanosystems for       NIH/NHLBI         Washington U
 Diagnosis and Therapy
Nanotechnology: Detection &      NIH/NHLBI         Emory U
 Analysis of Plaque Formation
Nanotherapy for Vulnerable       NIH/NHLBI         Burnham Institute
 Plaque
Translational Program of         NIH/NHLBI         Massachusetts General
 Excellence in Nanotechnology                       Hospital
Nanoscale Science and            NIST              NIST/Gaithersburg
 Technology
Affordable Nanoengineering of    NSF               Ohio State U
 Polymer Biomedical Devices
Directed Assembly of             NSF               Rensselaer
 Nanostructures                                     Polytechnic
                                                    Institute
Electron Transport in Molecular  NSF               Columbia U
 Nanostructures
Extreme Ultraviolet Science and  NSF               Colorado State U
 Technology
High-Rate Nanomanufacturing      NSF               Northeastern U
Integrated Nanomechanical        NSF               U California-Berkeley
 Systems
Integrated Nanopatterning &      NSF               Northwestern U
 Detection
Learning & Teaching in           NSF               Northwestern U
 Nanoscale Science &
 Engineering
Molecular Function at NanoBio    NSF               U Pennsylvania
 Interface
Nanobiotechnology                NSF               Cornell U
Nanoscale Chemical-Electrical-   NSF               U Illinois Urbana-
 Mechanical Manufacturing                           Champaign
 Systems
Nanoscale Systems & Their        NSF               Harvard U
 Device Applications
Nanoscale Systems in             NSF               Cornell U
 Information Technologies
Nanoscience in Biological &      NSF               Rice U
 Environmental Engineering
Nanotechnology Computational     NSF               Purdue and others
 Network
National Nanotechnology          NSF               Cornell U and others
 Infrastructure Network
Network for Informal Science     NSF               Museum Of Science-
 Education at the Nanoscale                         Boston and others
Network for Nanotechnology in    NSF               Arizona State U, U
 Society                                            California-Santa
                                                    Barbara, and others
Network of Materials Research    NSF               Various
 Science and Engineering
 Centers
Oklahoma Nano Net                NSF               Oklahoma U, Oklahoma
                                                    State U and others
Probing the Nanoscale            NSF               Stanford U
Scalable & Integrated            NSF               U California-Los
 Nanomanufacturing                                  Angeles
Templated Synthesis & Assembly   NSF               U Wisconsin-Madison
 at the Nanoscale
------------------------------------------------------------------------


    The Chairman. Thank you very much.
    Dr. Buckius?

              STATEMENT OF DR. RICHARD O. BUCKIUS,

           ACTING ASSISTANT DIRECTOR FOR ENGINEERING,

                  NATIONAL SCIENCE FOUNDATION

    Dr. Buckius. Thank you, Chairman Stevens and distinguished 
members of the Committee.
    My name is Richard Buckius. I'm the Acting Assistant 
Director of the National Science Foundation, for Engineering. 
And I'm very pleased to be here today to discuss NSF's strong 
commitment to fundamental academic research in the area of 
nanoscale science and technology.
    Before I begin, though, I want to thank you for the ongoing 
support of basic research. This support will help ensure our 
Nation's leadership in innovation in an increasingly 
competitive world.
    Nanotechnology is our next great frontier in science and 
engineering. By tailoring molecules and manipulating individual 
atoms, we now have the ability to be able to design materials, 
medicines, and machines at the smallest, most fundamental 
level. This is an amazing capability, and it will have a 
profound and lasting impact on our quality-of-life.
    In the early stages of--nanotechnology referred to simply 
as passive materials, such as nanoparticles found in composites 
materials and even paints. Today nanotechnologies are passive 
systems and active nanostructures, such as thin, nanoscale 
transisters and commercial electronics and the LEDs used in 
some traffic lights. As our ability to create new materials and 
technology increases, we can expect to see complete nanosystems 
with complex three-dimensional structures that will have the 
ability to perform multiple functions. NSF's unique 
contribution to the enterprise is its support of fundamental 
academic research and education through individual 
investigators and interdisciplinary groups.
    Since the inception of NNI, NSF's investments have led to 
significant accomplishments, and I'd like to highlight a few.
    NSF has created an interdisciplinary nanotechnology 
research community through support of the individuals, as well 
as the groups, as well as a variety of programs in training and 
education. Within NSF's total FY07 investment in the 
nanotechnology initiative of $373 million, $65 million will be 
allocated to support these new interdisciplinary research 
teams.
    NSF has established two user networks, the Network for 
Computational Nanotechnology and the National Nanotechnology 
Infrastructure Network.
    Recently, NSF has established three other additional 
networks with national outreach addressing education and 
nanotechnology's societal dimensions; and let me just list 
these: The Nanoscale Center for Learning and Technology will 
reach out to a million students in all 50 States over the next 
5 years. The Nanoscale Informal Science Education Network, 
along with others in the next 5 years, will develop 
approximately a hundred nanoscale science and technology museum 
exhibits. And, also, the Network for Nanotechnology in Society 
will address both the short- and long-term societal 
implications of nanotechnology.
    In the first 5 years of the initiative, the National 
Science Foundation investment for fundamental research 
supporting environmental health and safety aspects of 
nanotechnology is approximately $82 million, or about 7 percent 
of NSF's nanoscale science and engineering investment. The 
support for research in nanomanufacturing and small-business 
innovative research has increased in funding and is helping 
industrial growth. The growth is clearly demonstrated by three 
nanomanufacturing centers which will advance our ability to 
integrate reliable, cost-effective manufacturing of nanoscale 
materials, devices, and systems.
    I'd like to conclude with just a few examples of how this 
fundamental academic research is paying off.
    The first is a group of researchers at the University of 
Kentucky who have demonstrated the potential to build membranes 
from billions of aligned nanotubes. The idea here is that 
nanotubes have an interior that is approximately friction-free, 
allowing the fluids to flow at more than 100,000 times than 
what would be expected in normal situations. Filters based upon 
these highly-efficient nanotubes may one day contribute to the 
purification of products ranging from industrial chemicals to 
pharmaceuticals to dairy products.
    Another exciting example has been developed by the research 
at Northwestern in the University's Nanoscale Science and 
Engineering Center. They've developed a rapid and simple test 
to both diagnose HIV infection in patients and monitor the 
disease progression. This nanotechnology approach is capable of 
detecting proteins associated with HIV at concentrations 
several orders of magnitude smaller than was possible before 
with current technology.
    I think you can see that even though we're just beginning 
to scratch the surface of this powerful new field, we have 
already witnessed remarkable achievements and the promise of 
great things to come. The United States currently is the world 
leader in nanotechnology, I'd claim, and it is a strategic area 
for NSF.
    We seek your continued encouragement and support, and thank 
you for the opportunity to provide these remarks.
    [The prepared statement of Dr. Buckius follows:]

Prepared Statement of Dr. Richard O. Buckius, Acting Assistant Director 
              for Engineering, National Science Foundation
Advancing the Frontiers of Nanotechnology Through Fundamental 
        Academic Research
    Chairman Stevens, Co-Chairman Inouye, and distinguished members of 
the Committee, my name is Richard Buckius, and I am the Acting 
Assistant Director of the National Science Foundation for Engineering. 
I am pleased to be here today to discuss the NSF's strong commitment to 
fundamental academic research in the area of nanoscale science and 
technology.
    Before I begin, I wish to express my thanks for your ongoing 
support for basic research, which is absolutely necessary to ensure our 
Nation's leadership in innovation in an increasingly competitive world.
    Nanotechnology is truly our next great frontier in science and 
engineering, and it represents an entirely new realm of technological 
capabilities. By tailoring molecules and even manipulating individual 
atoms, scientists and engineers now have the ability to design 
materials, medicines, electronics, and machines at the tiniest, most 
fundamental level.
    This is an amazing capability, and it will have profound and 
lasting impact on our industry and economy, our national and homeland 
security, and our commitment to sustain the quality of life for all 
through advances in areas such as affordable healthcare and reliable 
energy.
    In its earliest stages, nanotechnology referred simply to passive 
materials, such as nanoparticles found in composite materials and 
paint. We are now moving beyond passive systems and are beginning to 
see active nanostuctures, such as sub-100-nm transistors in commercial 
electronics and the LEDs used in traffic lights. As our ability to 
create new materials and technologies increases over the next decades, 
we can expect to see complete nanosystems with complex three-
dimensional structures and the ability to respond and perform multiple 
functions.


    Currently, U.S. industry and government agencies are working 
individually and collectively to enable these important developments. 
NSF, however, has a clearly defined yet vitally important role to play 
in this enterprise. Our focus is on fundamental science and engineering 
research and education. This research is supported primarily through 
grants to individuals and teams at our Nation's academic institutions.
    One successful mechanism is through the NSF's support of 
interdisciplinary research teams and centers. These group awards 
related to nanoscale science and engineering are incredibly effective 
in helping advance our understanding of the nanoscale because they 
encourage collaborative and synergistic research.
    These grants enable faculty-level scientists and engineers from 
diverse fields to come together as teams to conduct frontier, nanoscale 
research. Their efforts have been particularly fruitful because 
nanoscale research and education are inherently interdisciplinary 
pursuits, often combining elements of chemistry, biology, 
manufacturing, physics, optics and photonics, and nearly every other 
field of basic science. By fostering this type of research, NSF is able 
to accelerate innovation in this burgeoning field.
    Within NSF's total FY 2007 investment for the National 
Nanotechnology Initiative of $373 million, $65 million will be 
allocated to support such interdisciplinary research teams.
    Since the inception of the National Nanotechnology Initiative (NNI) 
in FY 2001, NSF investments have led to significant accomplishments.

   NSF has created an interdisciplinary nanotechnology research 
        community through support for large and small research groups 
        and individual investigators, as well as a variety of programs 
        for training and education. For example:

        -- NSF supports approximately 3,000 active R&D projects.

        -- NSF has founded 24 centers, networks, and user facilities 
        (nearly half of the total created by the entire NNI).

        -- NSF has educated or trained about 10,000 students and 
        teachers in nanotechnology in 2005 alone.

   Two user networks established by NSF, the Network on 
        Computational Nanotechnology (established in 2002) and the 
        National Nanotechnology Infrastructure Network (established in 
        2003) have attracted over 12,000 academic, industry, and 
        government users in 2005:

        -- The Network for Computational Nanotechnology has a mission 
        to connect theory, experiment, and computation to address the 
        challenges in nanotechnology through new algorithms, 
        approaches, and software tools with capabilities not yet 
        available commercially.

        -- The National Nanotechnology Infrastructure Network (an 
        outgrowth of the National Nanotechnology Users Network) broadly 
        supports nanotechnology activities by providing users across 
        the Nation access to leading-edge fabrication and 
        characterization tools and instruments in support of nanoscale 
        science and engineering research. In addition, this effort 
        seeks to develop and maintain advanced research infrastructure, 
        contribute to the education and training of a new workforce 
        skilled in nanotechnology and the latest laboratory techniques, 
        conduct outreach to the science and engineering communities, 
        and explore the social and ethical implications of 
        nanotechnology.

   The NSF has established recently three other NSF networks 
        with national outreach addressing education and societal 
        dimensions:

        -- The Nanoscale Center for Learning and Teaching aims to reach 
        one million students in all 50 states in the next 5 years.

        -- The Nanoscale Informal Science Education network will 
        develop, among others, about 100 nanoscale science and 
        technology museum sites in the next 5 years.

        -- The Network on Nanotechnology in Society was established in 
        September 2005, with four nodes at the Arizona State 
        University, University of California at Santa Barbara, 
        University of South Carolina, and Harvard University. The 
        Network will address both short-term and long-term societal 
        implications of nanotechnology, as well as public engagement.

   NSF has funded a research theme on nanoscale processes in 
        the environment since FY 2001. In the first 5 years of NNI, the 
        NSF investment for fundamental research supporting 
        environmental, health, and safety aspects of nanotechnology is 
        about $82 million, or 7 percent of the NSF nanoscale science 
        and engineering investment. Research has addressed the sources 
        of nanoparticles and nanostructured materials in the 
        environment (in air, water, soil, biosystems, and work 
        environment), as well as the nonclinical biological 
        implications. The safety of manufacturing nanomaterials is 
        investigated in four NSF centers/networks.

   The support for research in nanomanufacturing and Small 
        Business Innovative Research has seen increases in funding and 
        is helping industrial growth. More than 200 small businesses 
        with a total budget of approximately $60 million have received 
        support from NSF since 2001. This growth is clearly 
        demonstrated in three NSF nanomanufacturing centers, which will 
        advance our ability to integrate reliable, cost-effective 
        manufacturing of nanoscale materials, structures, devices, and 
        systems.

    The NSF investment in nanotechnology is further leveraged and 
augmented through partnering among academic, industry, and state and 
local government organizations; today there are over 20 nanotechnology-
related regional alliances and associations. An important example of 
this is the International Institute for Nanotechnology (IIN) at 
Northwestern University in Illinois. With support from NSF, NIH, DOE, 
and NASA, this institute has developed partnerships with the State of 
Illinois, the City of Chicago, and private foundations to create a new 
kind of science-and-technology-driven regional coalition. With $300 
million in funding for nanotechnology research, educational programs, 
and infrastructure, IIN has established a large pre-competitive 
nanoscale science and engineering platform for developing applications, 
demonstrating manufacturability, and training skilled researchers.
    To conclude my remarks, let me quickly share with you two examples 
of how this fundamental academic research is paying off.
    First, researchers at the University of Kentucky have predicted 
that membranes can be made from billions of aligned carbon nanotubes. 
The nanotubes have interiors that are nearly friction free, allowing 
some fluids to flow through them 100,000 times faster than we would 
normally expect. Filters based on these highly efficient nanotubes may 
one day contribute to the purification of products ranging from 
industrial chemicals and pharmaceuticals to dairy products.


    Next, researchers at Northwestern University's Nanoscale Science 
and Engineering Center in Chicago have developed a rapid and simple 
test to both diagnose HIV infection in patients, and monitor disease 
progression. This nanotechnology approach is capable of detecting a 
protein associated with HIV at concentrations several orders of 
magnitude smaller than is possible with current technology.


    As you can see, even though we are just beginning to scratch the 
surface of this powerful new field of science and engineering, we have 
already witnessed remarkable achievements that promise great things to 
come.
    The United States currently is the world leader in nanotechnology, 
and that offers tremendous advantages as the field grows and matures 
over the next decade. The current vision for the U.S. investment in 
nanotechnology has proven remarkably fruitful. We realize that 
nanoscale science and technology represent a major opportunity for the 
Nation. It is a strategic area for NSF, and we seek your continued 
encouragement and support.

     National Science Foundation Nanotechnology Centers and Networks
------------------------------------------------------------------------

------------------------------------------------------------------------
            Nanoscale Science and Engineering Centers (NSECs)
------------------------------------------------------------------------
Columbia University                   Center for Electron Transport in
                                       Molecular Nanostructures
Cornell University                    Center for Nanoscale Systems
Rensselaer Polytechnic Institute      Center for Directed Assembly of
                                       Nanostructures
Harvard University                    Science for Nanoscale Systems and
                                       their Device Applications
Northwestern University               Institute for Nanotechnology
Rice University                       Center for Biological and
                                       Environmental Nanotechnology
University of California, Los         Center for Scalable and Integrated
 Angeles                               Nanomanufacturing
University of Illinois at Urbana-     Center for Nanoscale Chemical,
 Champaign                             Electrical, Mechanical, and
                                       Manufacturing Systems
University of California at Berkeley  Center for Integrated
                                       Nanomechanical Systems
Northeastern University               Center for High-Rate
                                       Nanomanufacturing
Ohio State University                 Center for Affordable
                                       Nanoengineering
University of Pennsylvania            Center for Molecular Function at
                                       the Nanoscale
Stanford University                   Center for Probing the Nanoscale
University of Wisconsin               Center for Templated Synthesis and
                                       Assembly at the Nanoscale
Arizona State University              Nanotechnology in Society Network
University of California, Santa
 Barbara
University of Southern California
Harvard University
------------------------------------------------------------------------
      Centers From the Nanoscale Science and Engineering Education
                              Solicitation
------------------------------------------------------------------------
Northwestern University               Nanotechnology Center for Learning
                                       and Teaching
Boston Museum of Science              Nanoscale Informal Science
                                       Education
------------------------------------------------------------------------
           NSF Networks and Centers That Complement the NSECs
------------------------------------------------------------------------
Cornell University                    National Nanotechnology
                                       Infrastructure Network
Purdue University                     Network for Computational
                                       Nanotechnology
Cornell University                    STC: The Nanobiotechnology Center
------------------------------------------------------------------------


    The Chairman. Thank you very much.
    Our next witness is Dr. Jeffrey Schloss, Co-Chair of the 
Nanomedicine Roadmap Initiative at NIH.

         STATEMENT OF JEFFERY SCHLOSS, Ph.D., PROGRAM 
          DIRECTOR, DIVISION OF EXTRAMURAL RESEARCH, 
 NATIONAL HUMAN GENOME RESEARCH INSTITUTE; CO-CHAIR, NATIONAL 
INSTITUTES OF HEALTH NANOMEDICINE ROADMAP INITIATIVE, NATIONAL 
 INSTITUTES OF HEALTH, DEPARTMENT OF HEALTH AND HUMAN SERVICES

    Dr. Schloss. Thank you, Senator Stevens and distinguished 
members, for the opportunity to come and describe to you----
    The Chairman. Would you pull that microphone over and be 
sure to press the button?
    Dr. Schloss. Thank you. It's on, thank you--for the 
opportunity to speak with you about a few examples of some of 
the medical applications of nanotechnology, also to describe 
the Nanomedicine Roadmap Initiative, and then, finally, to 
close with a description of some of our recent activities and 
the ways in which NIH funds nanoscience and nanotechnology 
research.
    This is an example of a very recently published study on 
the hearts of rats in which an attempt was made to mimic a 
heart defect--a loss of blood circulation to a region of the 
heart. That's shown here in this region. The study shows that 
by delivering a protein factor that has been attached to a 
nanofiber that's made of protein--quite an innocuous substance, 
the same kinds of proteins that are found in our body--one can 
reduce the death of the cells in the heart, reduce the size of 
the injury, and increase the ability of the heart muscle cells 
to contract.
    In the first figure, they're showing that, for quite a long 
time, even out to 2 weeks, in the presence of this factor that 
has been attached to these nanofibers, there is a biological 
effect of the material. The figure at the bottom shows the 
increased contractility. The difference between the first and 
second bars is the loss of ability of the heart muscle cells to 
contract as a result of the experimental myocardial infarction. 
And then, here at the end is shown the effect of treating with 
this factor in the presence of the nanofibers, retaining the 
majority of the normal contractility. The last figure shows--I 
won't go through the details--a decrease in the cell death that 
results from the injury.
    This is very recently published, and shows hugely 
intriguing possibilities. Of course, it's research. We don't 
know yet all of the answers about this. I want to stress that 
the material that's being used to make the nanofiber is benign. 
It's protein. And it's a study that's being led by a physician 
who is board certified in cardiovascular disease and internal 
medicine. That means that issues of biocompatibility are very 
bright on the radar screen.
    Another study, out of the University of Michigan, shows 
that nanoparticle targeting of anticancer drugs improves the 
therapeutic response, in an animal-model system of human 
epithelial cancer. This uses a very small particle, less than 5 
nanometers, that has been designed with several functions, one 
of which is the anticancer drug, another is a molecule that 
directs this particle to bind very specifically to cancer 
cells, and the third is to help monitor the experiments--it has 
a fluorescent label, so a pathologist can see where the 
particle is going. This study showed improved therapeutic 
response over what would be obtained by using the drug by 
itself.
    The point here is that you can target these particles to 
the location of the cancer. This means you dramatically reduce 
the body-burden of the drug, which would otherwise be used at 
higher concentration and therefore be very toxic.
    The Nanomedicine Roadmap Initiative is part of a much 
larger effort, the NIH Roadmap for Medical Research, that is 
trying to bridge across the NIH organizationally, given that we 
have 27 Institutes and Centers, each with its own mission and 
budget. It is bridging organizationally, and from basic 
research to applications, and across scientific disciplines. 
The Nanomedicine Roadmap Initiative itself is trying to create 
both a conceptual and a literal interface between biology and 
medicine. It does this by starting out with study of the 
physical and chemical properties of molecules in the cell--
which are nanomachines. We will build an understanding, from an 
engineering perspective, of what's going on in the cell, and 
then use the knowledge about how the cells works, and also the 
knowledge that we gained in building the tools to make the 
measurements, to actually build medical treatment devices.
    I'm going to very quickly give you an example of one of the 
centers that was recently awarded, that takes the view of 
biology as having parts out of which one builds devices that 
assemble into functional systems. This study uses an actin-
based motility system, about which we already know quite a lot, 
to build programmable systems that incorporate guidance 
circuits and force-generation into systems that can be used for 
search and delivery, searching for problems in the body and 
delivering therapeutics.
    The three examples I've given you all reflect different 
levels of control of the nanotechnology systems--passive, 
multifunctional, and active.
    And finally, I'll close just by summarizing several of the 
ways in which NIH supports this kind of research through 
programs that are focused on engineering approaches to solving 
biological problems, some of which are specifically for 
nanotechnology. We take very seriously the ideas of 
investigators, who propose their best ideas to the NIH, to 
apply them to a variety of important medical problems. And 
finally, several of the institutes have now launched their own 
programs explicitly in nanotechnology. These include--I need to 
very quickly summarize a characterization laboratory within the 
NCI Alliance for Nanotechnology Cancer program, and several 
programs within the National Institute of Environmental Health 
Sciences, to address the safety- and health-related issues.
    Thank you very much for the opportunity present this 
material, and I look forward to your questions.
    [The prepared statement of Dr. Schloss follows:]

    Prepared Statement of Jeffery Schloss, Ph.D., Program Director, 
    Division of Extramural Research, National Human Genome Research 
Institute; Co-Chair, National Institutes of Health Nanomedicine Roadmap 
  Initiative, National Institutes of Health, Department of Health and 
                             Human Services
    I am Jeffery Schloss, a Program Director in the Division of 
Extramural Research at the National Human Genome Research Institute, a 
component of the National Institutes of Health (NIH) of the Department 
of Health and Human Services, with responsibility for DNA sequencing 
technology development. I have served as an NIH representative to the 
National Nanotechnology Initiative (NNI) even before it became a formal 
Federal initiative. And I am Co-Chair of the NIH Nanomedicine Roadmap 
Initiative, which I shall discuss below. I appreciate the opportunity 
to provide an overview of the Nanomedicine Initiative and nanoscience 
and nanotechnology research at the NIH.
    Each of the twenty-seven Institutes and Centers (ICs) at NIH funds 
nanotechnology research to improve the quality of life for countless 
Americans.
Scientific Opportunities
    Nanotechnology has the potential to radically change the study of 
basic biological mechanisms, as well as to significantly improve the 
prevention, detection, diagnosis, and treatment of diseases. One key to 
this potential is that nanotechnology operates at the same scale as 
biological processes, offering an entirely unique vantage point from 
which to view and manipulate fundamental biological pathways and 
processes. Most other technologies require the study of large numbers 
of molecules purified away from the cells and tissues in which they 
usually function; nanotechnology offers ways to study how individual 
molecules work inside of cells.
    The most immediate near-term benefits envisioned for the use of 
nanotechnology in medicine arise because of novel properties of 
materials, and the ability to prepare and control materials properties 
with greater precision and complexity than can be achieved by other 
methods.
    For example, early-stage proof-of-principle studies have been 
accomplished for most of the elements of a system, made of chemical 
subunits known as dendrimers, in which nanoparticles can be targeted to 
cancer cells wherever they may be in the body, bind exclusively to the 
cancer cells in that region, and deliver both an imaging agent to allow 
the physician to observe the cancer location, and a therapeutic agent 
to reduce or destroy the cancer. Further, the particle can be triggered 
to disintegrate upon release of the therapeutic agent, into harmless 
chemical subunits that no longer have the characteristics of the 
nanoparticle and are readily cleared from the body. These device 
concepts can also be applied to other conditions, such as acute 
vascular injury and inflammation, and can also be achieved by building 
nanoparticles using materials other than dendrimers. Such particles can 
also be programmed to sense molecular and physiological signals, and 
activate the imaging agent, or release the therapeutic agent, only 
under specified molecular circumstances. These strategies should 
dramatically reduce side-effects of drugs by delivering them only when 
and where in the body they are needed. The name ``smart'' nanoparticle 
is therefore apt.
    Metallic nanoparticles have been used in several ways for 
experiments on imaging and therapy. Quantum dots (i.e., nanoscale 
crystalline fluorescent semiconductors) that absorb and emit colors of 
light that can penetrate body tissues have been used in animal 
experiments to demonstrate the potential to allow doctors to see, from 
outside the body, the exact location of certain tumors that occur near 
the body surface. Even though toxicity was not detected in these 
studies, the possibility that some of the particles used could be toxic 
has led to research on the permanence of the coatings and research on 
particles with the same optical properties but that are composed of 
non-toxic materials. A second type of metallic nanoparticle can be 
delivered specifically to tumor locations and heated by the application 
of colors of light that penetrate the skin, resulting in local heating 
to destroy tumor cells but not the surrounding healthy cells. Yet other 
metal particles are already in use to enhance magnetic resonance 
imaging, providing sharper images than previously possible with other 
MRI imaging agents.
    For tissue repair, several different materials are being tested for 
their ability to form nanofibers that mimic natural structures that 
surround cells (extracellular matrix) in the body. Such materials could 
be injected at sites of injury caused by trauma or syndrome-associated 
degeneration, to provide both a physical substrate and the molecular 
signals needed to stimulate and support tissue healing. For example, 
versions of these materials are being tested to support the growth of 
bone, muscle, and nervous tissue.
    While the examples above describe use of nanomaterials inside the 
body, nanotechnology is also being used to produce sensors for use in 
the research or clinical laboratory, or possibly implanted in the body. 
These sensors have exquisite sensitivity and selectivity. Based on 
nanomaterials such as carbon nanotubes or silicon nanowires, whose 
electrical properties change depending on the materials bound to their 
surface, sensors have been developed that can detect very small amounts 
of material, such as biosignatures for infection or disease, in complex 
mixtures such as blood or saliva. These electrically-activated sensors 
could be deployed in simple, cost-effective devices that could record 
several different measurements at once from a very small patient 
sample.
    The scientific research is thus proceeding at a good pace. But 
there is a difference between a successful experiment and a robust 
device or medical treatment that functions in real-life situations, can 
pass all regulatory requirements, and be cost-effectively manufactured, 
commercialized and adopted. The next few years will be very important 
in establishing the reality of the early vision.
NIH Support for Nanotechnology Research
    The opportunities transcend the mission of any single NIH IC. 
Therefore, trans-NIH grant solicitations were developed by the NIH 
Bioengineering Consortium (BECON; www.becon.nih.gov), in which all of 
the ICs participate, and have resulted in funding of dozens of research 
grants to colleges, universities, research institutions, and small 
businesses. Since 1999, BECON initiatives have been reaching out to 
teams of physical scientists, biologists, and clinicians to apply 
state-of-the-art nanotechnologies that are emerging from research in 
non-biological disciplines, to solving important problems in biology 
and medicine, ranging from understanding the mechanisms of disease, to 
developing novel diagnostic and therapeutic methods. To stimulate those 
collaborations and explore opportunities, BECON hosted a nanotechnology 
symposium in 2000 that was attended by over 600 scientists and 
engineers, and NIH co-hosted with the National Science Foundation (NSF) 
and other agencies participating in the National Nanotechnology 
Initiative, a workshop on Nanobiotechnology in 2003.
    In addition to support through BECON initiatives, much of the 
support for nanoscience and nanotechnology research is provided by the 
NIH ICs in response to various other initiatives that are focused on 
solving specific biomedical problems, and to investigator-initiated 
grant applications. In many such cases, the programmatic rationale is 
to develop understanding of biomedical phenomena or the causes of 
disease or to develop specific diagnostics or therapeutics, and the 
particular scientific approach chosen by the investigators to achieve 
the goals incorporates nanotechnology.
    Recently, several institutes have developed explicit nanotechnology 
programs that are central to achieving their missions.
NHLBI Programs of Excellence in Nanotechnology
    The National Heart, Lung, and Blood Institute has initiated 
Programs of Excellence in Nanotechnology (PENs). Its goal is to create 
multidisciplinary teams capable of developing and applying 
nanotechnology and nanoscience solutions to the diagnosis and treatment 
of cardiovascular, pulmonary, hematopoietic, and sleep disorders. To 
accomplish this goal the centers will conduct research on causes and 
treatments for these diseases, train investigators to apply 
nanotechnology to this set of problems, and actively disseminate their 
results. Four center awards were made beginning in FY 2005, 
representing a five-year funding commitment of $53 million.
NCI Alliance for Nanotechnology in Cancer
    The largest single nanotechnology program at NIH is the National 
Cancer Institute's (NCI) Alliance for Nanotechnology in Cancer. These 
activities are integrated with existing NCI programs and resources. The 
Alliance currently supports eight Centers of Cancer Nanotechnology 
Excellence (CCNEs) to serve as hubs to develop and apply nanotechnology 
devices and systems to the diagnosis, prevention, and treatment of 
cancer. Examples of the goals of the centers include: the development 
of smart, multifunctional, all-in-one platform capable of targeting 
tumors and delivering therapeutics; and development and validation of 
tools for early detection and stratification of cancer through rapid 
and quantitative measurement of panels of serum- and tissue-based 
biomarkers.
    The Alliance also awarded twelve cancer nanotechnology platform 
development partnerships. Further, it is supporting the education, 
training, and career development of graduate, post-doctoral, and mid-
career investigators for multi-disciplinary nano-oncology research 
through fellowship grants and, with NSF, institutionally-based awards. 
NCI also is engaged in outreach and communication via its publications 
and website (nano.cancer.gov) about nanotechnology research and 
development as it relates to cancer and other biomedical applications, 
including the full spectrum of societal issues attending the 
development of nanobiotechnology.
    Finally, NCI is actively supporting environmental, health, and 
safety research relevant to the cancer mission, particularly through 
the Nanotechnology Characterization Laboratory (NCL). The NCL will 
provide critical infrastructure for studies supporting decisionmaking 
about the implications of nanotechnology-based products. It will 
develop a characterization cascade to characterize nanoparticles' 
physical attributes, their in vitro biological properties, and their in 
vivo compatibility using animal models, from the perspective of 
intentional exposure (i.e., medical application or delivery). This will 
enable nanotechnology-based strategies to rapidly and safely transition 
to clinical applications. The work also will provide a framework for 
regulatory decisions by the Food and Drug Administration (FDA) 
concerning the testing and approval of nanoscale cancer diagnostics, 
imaging agents, and therapeutics. To achieve these goals, the NCL is 
conducted in collaboration with FDA and the National Institute of 
Standards and Technology at the Department of Commerce. Overall, the 
NCI Alliance for Nanotechnology in Cancer represents a five-year 
funding commitment of $144 million beginning in FY 2005.
NIEHS National Toxicology Program and Collaboration
    The National Toxicology Program (NTP) is a partnership of the 
National Institute of Environmental Health Sciences (NIEHS) with the 
National Institute for Occupational Safety and Health (NIOSH) at the 
Centers for Disease Control and Prevention, and the National Center for 
Toxicological Research (NCTR) of FDA. NTP's research program to address 
potential human health hazards from unintentional exposure associated 
with the manufacture and use of nanoscale materials includes 
investigation of toxicology of nanoscale materials of current or 
projected commercial importance. The overall goal is to understand 
critical physical and chemical properties that affect biocompatibility, 
so in the future nanomaterials can be designed to minimize adverse 
health and safety issues. Most of the funding for this NTP activity is 
contributed by NIEHS. The NCTR contributes the use of state-of-the-art 
capabilities of its NTP Phototoxicology Center. Studies are currently 
underway examining the absorption, biological fate, and potential 
toxicity of quantum dots; metal oxides used in sunscreens; and selected 
carbon-based materials (fullerenes, carbon nanotubes) following 
application to the skin, or exposure by inhalation or oral ingestion. 
The NTP and the NCI NCL programs are coordinated to ensure the most 
efficient development of nanoscale cancer therapeutics that are both 
safe and effective.
    Additionally, NIEHS is participating with the Environmental 
Protection Agency, NIOSH and NSF in funding a joint solicitation to 
investigate environmental and human health effects of manufactured 
nanomaterials. NIEHS will fund research on the routes of human 
exposure, toxicology, biotransformation, and bioavailability of 
nanomaterials. These partner agencies are currently designing the next 
phase of this solicitation and are in dialogue with the Science 
Directorate of the European Commission to explore the possibility of a 
joint U.S.-E.C. research solicitation.
NIH Nanomedicine Roadmap Initiative
    The cross-cutting nature of this technology is exemplified by its 
inclusion in the NIH Roadmap for Biomedical Research, a program that 
began in 2002, to identify major opportunities and gaps in biomedical 
research that no single IC at NIH could tackle alone, but that the 
agency as a whole must address to have the greatest impact on the 
progress of medical research. The Nanomedicine Roadmap Initiative 
(nihroadmap.nih.gov/nanomedicine/) is a component of the ``New Pathways 
to Discovery Theme'' of the Roadmap (the other themes are ``Research 
Teams of the Future'' and ``Re-Engineering the Clinical Research 
Enterprise''). All of the NIH ICs collectively support and are 
responsible for the implementation of all of the Roadmap initiatives.
    The Nanomedicine Initiative is envisioned as a ten-year program 
whose eventual goal is to manipulate precisely cellular processes by 
repairing or building new structures in cells, to prevent and treat 
disease and repair damaged tissue. In the near-term, interdisciplinary 
research teams are assembling to devise new methods to study problems 
in cell biology and biophysics. Those efforts will enable measurement 
of a host of parameters we cannot measure inside of cells today. This 
new information will lead to better prediction of the behavior of 
subcellular assemblies of molecules, and of cells themselves. In 
combining the knowledge gained from new insights into how biomolecules 
work and from building the tools that made those measurements possible, 
research teams can then design new strategies to build molecular-scale 
tools for disease or injury intervention. Unlike conventional medicine, 
the approaches taken here should enable interventions to be made with 
greater precision, much earlier in the course of disease or tissue 
degeneration, and at a more fundamental level for repair of tissue 
damage caused by trauma.
    In a sense, the goal of the Nanomedicine Roadmap Initiative is to 
use quantitative approaches to understand, from an engineering 
perspective, the design of biomolecular structural and functional 
pathways, and to use that information to design and build functional 
biocompatible molecular tools to ``dial'' the body's systems back into 
``normal'' operating ranges after function has been perturbed by 
disease. One might think of this in context of the way in which we can 
design and build a functioning electromechanical system, such as the 
heating and cooling system in your house. We know how to draw it out on 
paper--which electrical parts and controls, and motors, and valves and 
structures are needed--and when we build according to those plans, it 
actually works. We want to be able to understand biology at the 
molecular and system level, in the way in which we understand the parts 
and logic of an engineered system. If we can do that, we should be able 
to precisely repair or replace parts and keep the system operating 
normally, at the fundamental level at which the system operates, 
namely, its molecular systems.
    The teams that will carry out this initiative consist of people 
with deep knowledge of biology and physiology, physics, chemistry, math 
and computation, engineering, and clinical medicine. Even though the 
first few years require basic biology research, the choice and design 
of experimental approaches are directed by the need to solve clinical 
problems. These are extremely challenging problems, and great 
breakthroughs are needed if we are to be successful in achieving our 
goals within the projected timeframe. Therefore, NIH is willing to take 
risks and is working closely with the funded investigators to use the 
funds and the intellectual resources of the entire network of 
investigators to meet those challenges.
    Nanotechnology is key to the Nanomedicine Roadmap Initiative in 
several aspects. First and most obvious, nanotechnologies critically 
enable us to measure things that we have been unable to measure in the 
past, to ``fill in the blanks'' in the equations we need to understand 
and to predict how biomolecules work. Those biomolecules are 
nanostructures, and if we are to be able to touch and measure them with 
precision, without destroying them and their ability to operate, we 
will need to employ biocompatible nanotechnologies. Second, successful 
creation of measurement tools informs the development of manipulation 
tools for biomolecular repair of cells or subcellular assemblies. And 
third, in the process of fulfilling goals that are central to the 
mission of the NIH, we gain knowledge of the design of biological 
systems that nature has produced over millions of years. That knowledge 
of system design can be used by scientists and technologists who are 
working outside of the biomedical realm, to develop novel strategies to 
solve their own engineering problems, whether in computers, 
transportation, energy, or national security. In this way, the 
Nanomedicine Roadmap Initiative will give back in full measure to the 
physical scientists and engineers who developed the earliest ideas from 
which the National Nanotechnology Initiative was formulated.
    To fulfill these goals, the Nanomedicine Initiative is establishing 
a network of highly-interactive centers around the Nation. The first 
four centers were established in FY 2005 with a $6 million investment. 
The initial centers are:

   Center for Protein Folding Machinery, Wah Chiu, Baylor 
        College of Medicine.

   National Center for the Design of Biomimetic Nanoconductors, 
        Eric Jakobsson, University of Illinois, Urbana-Champaign.

   Engineering Cellular Control: Synthetic Signaling and 
        Motility Systems, Wendell Lim, University of California, San 
        Francisco.

   Nanomedicine Center for Mechanical Biology, Michael Sheetz, 
        Columbia University, New York.

    While this list shows only the names of the team leaders and their 
home institutions, the teams include distinguished and experienced 
investigators, and bright new investigators, at institutions across the 
Nation and internationally. To exemplify the program, the themes of two 
centers are briefly described.
    The first project is the Center for Protein Folding Machinery. 
Proteins are synthesized in cells as linear structures. These proteins 
must fold in very precise ways to achieve the correct shape required 
for their function. While a few proteins can fold by themselves, most 
require the action of other proteins in cells, called molecular 
chaperonins. The Center will study the mechanisms by which chaperonins 
select and fold specific proteins, and will use that information to 
develop chaperonins that can trap misfolded proteins or prevent folding 
(and therefore activity) of proteins that should not be present in a 
particular type of cell. This is important because protein misfolding 
is implicated in several neurodegenerative diseases, such as 
Huntington's disease and Alzheimer's disease. Some other diseases 
involve the accumulation of proteins that are normally not present or 
are present only at very low levels (e.g., cancer), so the Center will 
develop specific adapters to control the interaction of the proteins 
with the folding machinery. Additional goals include designing novel 
chaperonins that can be used to deliver drugs in the body, or to be 
used during the processing of protein-based pharmaceuticals, to ensure 
correct folding and activity.
    Another project, the Engineering Cellular Control center, will 
endeavor to develop ``smart'' cells or cell-like devices that have some 
of the properties of normal immune cells. They would be relatively 
simple systems (compared to real cells) that are programmed to detect a 
lesion (e.g., injury) or threat (e.g., infection or cancer cell), then 
move to that site in the body and respond precisely with a controlled 
action such as releasing a therapeutic agent or mediating recruitment 
of the body's own immune system.
    The focus of each center is distinct and complementary to the 
others, and their discoveries will apply to many tissues and diseases.
NIH Participation in the National Nanotechnology Initiative
    NIH activities in the development of nanotechnology for biology and 
medicine are coordinated with those of other Federal agencies through 
its active participation in the NNI. A highlight of that activity is 
the active participation of NIH staff in the planning and development 
activities conducted through working groups on issues such as 
environmental and health implications, public engagement, and global 
issues.
    For example, NIH is participating actively in the Public Engagement 
working group. This group is developing the first stages of an ongoing 
commitment to engage the public in discourse about societal issues 
related to emerging nanotechnologies. A broad range of stakeholders, 
including people from universities, industry, and civic- and community-
based organizations, will be involved in this process.
Conclusion
    The NIH is fully engaged in a wide variety of nanoscience and 
nanotechnology research and development activities to achieve short- 
and long-term advances to reduce the burden of disease and disability. 
Peer-reviewed research support has been growing substantially since the 
initiation of the NNI, as has participation of NIH staff in the full 
range of NNI activities. The NIH is fully committed to continuing these 
activities in ways that capture maximum benefit for improving the 
health of the American people and individuals around the world.

    The Chairman. Thank you very much, all of you, for coming.
    Let me say, we are each going to have a round of 5 minutes, 
and then we'll call the next panel. But can you tell us, Dr. 
Teague, who started the National Nanotechnology Initiative and 
what challenges do you have that pose obstacles that you 
confront to your continued advancement in your area?
    Dr. Teague. Well, the National Nanotechnology Initiative 
has its roots in some terrific efforts started by a group out 
of several of the agencies, one of whom is here today, Dr. 
Michael--Mihail Roco--Mike Roco, as we refer to him. We just 
recently awarded him a plaque to recognize his leadership as 
the Chair of the Nanoscale Science, Engineering, and Technology 
Subcommittee. He is one of the--we say, one of the fathers of 
the NNI, and served as one of the major driving forces of the 
NNI. There were a number of others.
    They had--they pulled together, first, an Interagency 
Working Group on Nanotechnology. My understanding is that they 
worked for several years before the NNI was proposed as an 
Initiative under the previous Administration. Following the 
movement then--it was formed in late 2000--the Initiative 
actually were kicked-off in late 2000. Moving on from there, in 
late 2003 we had the 21st Century Nanotechnology R&D Act, for 
which many of you, including Senator Allen here, was a big part 
of moving that forward. I--we could go quite a long time. The 
NNI has a long and very distinguished history as to how it came 
about. It really was a ground-up effort on the part of several 
representatives from the major agencies--Department of Defense, 
NIH, and others. Dr. Jeff Schloss was also a part of that 
initial Working Group on Nanotechnology. So there was a good 
groundswell to form this and to seize the opportunity that 
nanotechnology offered for our country, and, indeed, for the 
world.
    In terms of the second part of your question, the 
challenges that we face ahead of us, I think that one of the 
real challenges--there are several that I would want to 
discuss--one is international competition. The United States is 
not the only country in the world that has realized the 
tremendous potential of nanotechnology for economic growth, for 
national security, for improvement of our overall health. So, I 
think we need to be very much aware, very keenly aware, of the 
competition as it's building in the world.
    The EU, if you take all the countries in the EU, their 
investment already likely equals, or maybe even is beginning to 
exceed, the U.S. investment in nanotechnology, as far as public 
investment.
    The Chairman. Were any of you involved in Norm Augustine's 
report we received on the problems of the growing disparity in 
education? The report is called ``Rising Above the Gathering 
Storm.'' Were any of you involved in that? NSF was, weren't 
they?
    Dr. Buckius. I mean, I personally wasn't, but, yes, NSF was 
involved, from the point of view----
    The Chairman. Well, I just wonder, has the role of 
technology been examined, as far as this education gap is 
concerned in our country? I notice every one of you has a 
doctorate.
    Dr. Teague. Yes. Well, certainly, the----
    [Laughter.]
    The Chairman. No, I'm serious now. We're asked to try and 
enlarge--we've got an Initiative here called PACE--we're asked 
to enlarge the monies that are available to teach another 
generation of scientists, engineers, and medical people. Is 
this something that bothers you, as far as this area is 
concerned, nanotechnology, the lack of enough funds to educate 
the coming generations to keep up with the world?
    Dr. Buckius. I have a two-pronged answer. From the point of 
view of engineering, which is where the ``Gathering Storm'' 
makes a very large point, engineering education is an important 
issue, and is--and we agree with the ``Gathering Storm's'' 
recommendations. We, in engineering at NSF, are investing, I 
consider, a lot of money into educational activities in the 
engineering field, particular--not in general from the point of 
view of all of education. So, our investment in engineering 
education is significant, because it is a problem. We have--we 
drop off too fast from the freshman class to the graduating 
class. So, from the--now you come to nanotechnology. If you 
read the testimony, there are a couple of points in there. 
We've started to fund nanoscience learning centers and teaching 
centers, for exactly the same point, to make sure that we have 
a population that understands nanotechnology. So, yes, we are 
investing.
    Dr. Teague. Yes. I'd like to just add one----
    The Chairman. Well, I'm going to live within my limits, 
Doctors. I've got to tell you, we have meetings after this 
hearing, so I want to make sure everyone has time. But I do 
hope that you will keep in touch with us. And I think maybe we 
ought to have what I call a listening session sometime, sit 
around with you guys and kick the ball back and forth and 
understand further what is occurring in this important field.
    Senator Ensign?
    Senator Ensign. Thank you, Mr. Chairman.
    There are several proposals out there. Chairman Stevens 
just mentioned the PACE proposal. Senator Lieberman and I 
introduced the National Innovation Act. The exciting 
development is that people are talking about innovation and 
competitiveness issues now. And people are looking at 
nanotechnology and other sciences as a competitiveness issue 
for the United States. The United States is in competition with 
other parts of the world. The National Institutes of Health 
received a doubling of funding over the last several years. Now 
we are considering doing the same thing for the National 
Science Foundation. We must ensure that support for the 
physical sciences keeps up with the funding that we have 
provided to support research in the life sciences. Supporting 
basic research is a fundamental role for the Federal 
Government, and nanotechnology is a great example of why basic 
research is important for the Federal Government to fund, 
because nobody else has the resources required to conduct this 
research.
    Dr. Teague, because nanotechnology covers such a wide 
spectrum of scientific disciplines, could you address how the 
Coordinating Office effectively uses one single plan to 
administer this multi-agency Initiative?
    Dr. Teague. Well, in terms of how we work, my office serves 
as a support for the Nanoscale Science, Engineering, and 
Technology Subcommittee. We also work very closely with the 
Office of Science and Technology Policy, liaison with them. Our 
support and, I think, the primary coordinating, management, and 
reporting aspects of the overall initiative, is done through 
this subcommittee, in the NSET Subcommittee. This subcommittee 
has been meeting monthly for the last 5 years.
    And, as I mentioned in my testimony, through a lot of 
communication and coordination and full joint programs among 
the agencies, a lot of that coordination that you're talking 
about does actually--takes place very effectively. If you 
noticed, I bolded the words ``working together'' in the slide 
that I presented. And as I've said several times, that as I 
look at my job--I've been in it now for about 3 years--one of 
the things that I was most impressed with finding out while 
working with the--these 24 agencies was--I guess it shouldn't 
be too surprising--that the people that worked in those 
agencies are truly dedicated to the missions of their agencies. 
The people in Defense, they're really dedicated to defense, and 
so on.
    But the other part of it is that they are beginning to work 
together in this particular area of nanotechnology. Because all 
of them realize that, while it is important that they 
accomplish their missions, I think, more and more, they're 
realizing that it is essential that they coordinate their 
efforts among the agencies to be as effective as they can in 
moving forward with their programs.
    Probably the most concrete way in which this joint activity 
is manifest is in literal joint solicitations, where about four 
or five agencies would come together and agree upon one 
specific area that they would like to issue a solicitation in. 
The most recent one was led by the Environmental Protection 
Agency, but it also had cooperation from the National Science 
Foundation, from the National Institute for Occupational Safety 
and Health, and the National Institute of Environmental Health 
Sciences, to try to study the environmental, health, and safety 
aspects of engineered nanoparticles for the environment. One 
solicitation went out, proposals came in, and then each of the 
agencies chose the ones that were most appropriate for their 
individual agencies.
    That's just a few examples of how they work together. It's 
workshops conducted jointly, as I say, many different meetings. 
We have working groups that are underneath that subcommittee 
that address various aspects of the work that we do. And----
    Senator Ensign. Dr. Teague, thank you for your answer. I 
only have about a minute left, so----
    Dr. Teague. OK.
    Senator Ensign.--let me just ask Dr. Buckius a quick 
question on how NSF is going to maximize. You know, you have 
limited funds. Obviously, every agency would love more funds. 
And, you know, additional funding makes things a little easier, 
but with limited funds how do you maximize the potential 
research that is being done? How do you pick those projects 
that are the most worthy and where you think you are going to 
get the most bang for the buck?
    Dr. Buckius. Well, let me start off by saying that NSF 
invests in the intelligence of the research community, period. 
That's just the way it works. We obtain proposals that have 
absolutely great ideas and, as you've noted, just aren't able 
to fund them. We use the merit review process, so peers review 
proposals, they assess the quality, they assess and make 
recommendations on which ones are the great ideas, and then we 
try to fund as many of those as we can. And in the case of the 
nano area, because we have generated a very strong community 
now, I'd argue that the proposals are just absolutely superb, 
and we're doing our best to make sure that we get the money in 
the hands of the best ideas.
    Senator Ensign. Just one last comment, Mr. Chairman. Many 
people, especially from NIH, are familiar with Michael Milken, 
the Prostate Cancer Foundation, some of the work that the 
Foundation has done, and the way that the Foundation has 
awarded its grants with both younger researchers and innovation 
in mind. And I have spoken to Mr. Milken about some of the ways 
that we can reform how we do things up here. Sometimes the 
groups that get funding, do so because they are very good at 
writing grant proposals. I think that, especially in a field 
like nanotechnology, that entails such exciting research, we 
have to make sure that we are encouraging innovative young 
researchers to go into these fields instead of other fields.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Our next--Senator Allen?

                STATEMENT OF HON. GEORGE ALLEN, 
                   U.S. SENATOR FROM VIRGINIA

    Senator Allen. Thank you, Mr. Chairman, for holding this 
hearing. And we have some outstanding witnesses on both panels.
    Senator Wyden and I, back in 2002, actually had the first 
hearing on this, and on the issue of nanotechnology, the 
competitiveness, where we were. It is the next transformative 
economic revolution. It is going to affect, and it is 
affecting, as Senator Ensign mentioned, in a variety of ways, 
so many different sectors, from microelectronics to materials 
engineering to the life sciences, health sciences. We had a 
hearing, by the way, this morning in the Energy Committee, and 
I was discussing with one gentleman, one of our witnesses, how 
solar photovoltaics now, or solar power, with nanotechnology 
you have can have shingles that actually look nice rather than 
they, you know, look like you have a sliding glass door on your 
roof----
    [Laughter.]
    Senator Allen.--for solar power. And there are a variety of 
ways that this is improving our lives. I love the medical and 
life sciences aspects of it. In fact, what we passed through 
this committee, Senator Wyden and I, in the bipartisan effort, 
was really in this nanotech initiative. We called it the 21st 
Century Nanotechnology Research and Development Act. But the 
practical matter is, it's the biggest investment in basic 
science since the space program back in the 1960s. Dr. Rocco 
here is really the founder of a lot of it, if you want to know 
who is a key leader; and Dr. Teague and Buckius and Dr. 
Schloss, are all important, as well.
    In our briefing--let me point this out--the briefing from 
the Committee, it has different types of research. And I'm one 
who's very competitive. And one of the--the key impetus and why 
the President was so strongly behind this and the funding of 
it, and actually focusing more in the Department of Energy, out 
of all the different Federal agencies, is to get collaboration 
with the private sector, with the--with college and 
universities, regional initiatives, which we'll hear about in 
the second panel. But I was over in China, and Senator Ensign 
and I, and Senator Lieberman and others, care about how we're 
falling behind in--with engineers and so forth. But I was at a 
facility in China, near Beijing, and they're--they were like--
for carbon nanotubes, which are the basis of materials 
engineering--they wanted to get the best scientists in the 
world there. They're like George Steinbrenner, they were just 
going to get the best, and whatever it cost to get them.
    Now, the Chinese investment in nanotechnology is clearly 
rapidly increasing. They are focused, it seems to me, on the 
materials engineering aspect of it. Do you find, Dr. Teague, 
that the funding that we have provided, and the President has 
initiated, now and in the future, to be adequate for us to 
continue--the education, the innovation, and development to 
continue?
    Dr. Teague. Probably if you ask anyone who's in the field, 
they would like to see the funding keep increasing, certainly 
at something like the rate that it has increased over the past 
years. Certainly, the funding that we currently have in the 
President's request for 2007 is, like, $1.2 billion. This 
request will meet many of the research needs and many of the 
research areas that we're expecting ahead of us.
    One thing that I would point out, to go back to Chairman 
Stevens' question earlier on, is that--and yours, as well, just 
now--is that probably there's no field that has been 
established, in terms of science and technology, that offers as 
great an opportunity to attract young people into science and 
technology as nanotechnology does. It has many wonderful things 
that attract people, particularly young people, into it, the 
promise of being so beneficial to health, to the environment, 
and to the world, that it, I think, is a very attractive field 
for many people.
    Senator Allen. Count on us--we even created a Nano Caucus 
to try to educate more Senators on nanotechnology. Let me ask 
Dr. Buckius--huh?
    Senator Smith. It's a pretty small caucus.
    [Laughter.]
    Senator Allen. Yes, it's--there are not many members, but 
it's not \1/100\th of the width of the human hair; it's bigger 
than that.
    [Laughter.]
    Senator Allen. At any--Dr. Buckius--I only have a minute 
left--the United States, as I understand it, holds about 60 
percent of the worldwide nanotechnology patents. Our patents, 
though--and this is the information I've received--have 
actually decreased in 2005. Do you have an explanation as to 
why there are fewer nanotechnology patents, or nanotech 
application patents?
    Dr. Buckius. I have a conjecture, only.
    Senator Allen. Conjecture, please.
    Dr. Buckius. If you take a look at that curve, it was a 
rapidly increasing curve. OK? And when it got to 2004, there, 
it just flattened off, from the point of view of patents. And, 
as you know, the patenting process is an investment of many 
years. And so, I'm not sure that that individual-year drop-off 
is an indication of a long-term trend; it might simply be the 
way the patents were coming into the system and how long it 
takes. We'll have to probably wait and see what happens in 2006 
and 2007 to see how that curve changes. It's still very 
productive, though. I mean, if you take a look at the quantity 
of patents that are generated by NSF funding in this area, it 
really is--it--the documentation shows that we're way out 
there, from the point of view of comparisons with other 
agencies and other activities that do patents. So, I think 
we're in good shape. I think we have to wait and see what 2006 
and 2007 is going to bring.
    Senator Allen. Thank you very much. Thank you, all three.
    The Chairman. Thank you.
    Senator Pryor?

                 STATEMENT OF HON. MARK PRYOR, 
                   U.S. SENATOR FROM ARKANSAS

    Senator Pryor. Thank you, Mr. Chairman.
    And I'm a big supporter of nanotechnology. In fact, one of 
the things we've done in our State, which is a relatively small 
state, is, we have done a nanotechnology alliance with our 
universities and some businesses there. And they try to reach 
out regionally and nationally and try to pool resources and do 
things like that.
    Let me ask this question. I am a very big supporter of 
nanotechnology. I think it has a very bright future. But I do 
think that we need to be careful when it comes to the possible 
environmental hazards with nanotechnology, health hazards, 
human safety hazards, et cetera. So, I would like to get all 
your thoughts, just whoever wants to take it, on whether we're 
spending enough money when we do research--whether we're 
spending enough money, or whether we have a close enough eye on 
the potential problems that might come from nanotechnology. 
Because I think once we build those safeguards in, we ought to 
really do our very, very best to make sure that we're the world 
leader in nanotechnology. But I think America and the world 
would like to see those safeguards.
    So, who wants to take that?
    Dr. Schloss. Well, I can start off by saying that we 
completely agree with you that these are essential issues to 
address, and to address effectively. I don't know exactly how 
one decides what's the right amount of money to spend. I think 
what we want to do is approach the science as quickly as we 
can, but in a very effective way. We are able to base a lot of 
the studies of engineered nanomaterials on our knowledge of 
other kinds of particles, including natural nanomaterials. So, 
what we're doing now, through several different efforts, is 
building cascades of characterization of nanomaterials so that 
we can really understand: What are the physical attributes? How 
do these materials act in biological systems in glass, in test 
systems? And how do they act in animal studies? We're building 
on the knowledge we have, but these are difficult materials to 
work with and to characterize. A number of studies have been 
published that actually are somewhat misleading, because there 
was other stuff in there that wasn't the material that people 
thought was being tested.
    Senator Pryor. OK. I just hope that we, as a Nation, do 
think through all the ramifications of this. And then, like I 
said, I think once we feel like we have that under control, we 
need to really be aggressive in this area.
    With regard to the universities doing research--Dr. 
Buckius, I'll ask you this--it would--I would think that the 
universities around the country are very, very important 
partners in nanotechnology research. Are they pretty much the 
backbone of the research that's being done in this area?
    Dr. Buckius. From NSF's perspective, yes.
    Senator Pryor. OK. I think that that's good. I just think 
that they're very innovative, and they can do great things.
    Let me also ask this. The Consumer Product Safety 
Commission, are they involved in the National Nanotechnology 
Initiative at all? Do they have a seat at the table, so to 
speak? And do you have someone there who's a consumer advocate?
    Dr. Teague. Yes. We--on the NSET Subcommittee that I 
mentioned earlier, we do have a representative from the 
Consumer Product Safety Commission as an ongoing member of both 
the main subcommittee and also an active member of our 
Environmental Health and Implications Working Group. So, we do 
have someone who is an advocate and keeps us very much aware of 
the concerns for ensuring safety for our consumer products.
    Senator Pryor. From your perspective, at least--I know you 
can't speak for them--but does the Consumer Product Safety 
Commission, from your perspective, have enough staff and enough 
expertise to be competent, I guess, to opine on things like 
that?
    Dr. Teague. Certainly, in terms of the representative that 
we interact with, I would say that he is a--in terms of 
competency, without any question, he's a competent scientist in 
our area and, I think, certainly represents his organization 
very carefully, and the interests of the Consumer Product 
Safety Commission, very effectively.
    Senator Pryor. OK, thank you.
    Mr. Chairman, the last thing I had, really, is more of an 
observation, and that is, I think nanotechnology potentially 
could be the next industrial revolution. Really, it has a ton 
of potential to do great things, long term. And just a very 
simple example would be these incandescent light bulbs right 
here. Supposedly, you guys tell me--you all are the experts on 
this--but, supposedly, about 90 percent of the energy that's 
used in these light bulbs don't go to make light, they go to 
make heat.
    And so, in a way--even though Thomas Edison was a genius 
and all that, in a way these are very efficient--inefficient 
ways to light a room, because not only do you have to use too 
much energy to do it, but, also, you're, in effect, heating the 
room, and then you have to have a system to cool the room at 
the same time, so you're really using way too much energy in 
order to do that. But with nanotechnology, supposedly you can 
now make nanolights that--are either ready for the marketplace, 
or will be very shortly, because I know the University of 
Arkansas has been involved in some of that--but you can make 
nanolights that can save a--well, can heat this--I mean, can 
light this room at the same level, for a fraction of the 
energy, and you don't have the heating problem that these bulbs 
cause.
    So, this has applications really across the board that can 
help our economy so much, and my understanding is the FY07 
budget that the President sent over a few days ago has a very 
small cut in nanoresearch, and I want to double-check that and 
track that down, but I may want to work with some of the 
Committee members here to see if we can't restore that to the 
funding level that it has been in years past.
    Thank you.
    The Chairman. Very astute observation, my friend.
    Senator Smith?

              STATEMENT OF HON. GORDON H. SMITH, 
                    U.S. SENATOR FROM OREGON

    Senator Smith. Thank you, Mr. Chairman. And thanks to our 
witnesses for being here for this very, very important hearing 
and topic. When you contemplate that in the coming years this 
is likely to be a one-trillion-dollar industry, it certainly 
behooves us, as a Nation and as academia, to get a headstart.
    I'm also, like Senator Pryor, proud of my state. We've had 
the same kind of coming together of higher education and 
different industries, under an entity called ONAMI, which 
brings together commercial and academic nanotechnology.
    I'm also very grateful, and want to state publicly, I 
appreciated the President's including nanotechnology in his 
budget for 2007, and specifically the establishment of an 
Institute for Nanotechnology within the State of Oregon.
    I'm wondering if there is more we ought to be doing to 
provide the seed capital and, particularly, the link between 
the classroom, the science, and commerce. In that possibility, 
I have introduced a bill, called the Nanoscience to 
Commercialization Institutes Act, which would establish, I'm 
sure, in each of your states, these kinds of institutes to help 
make this transition. It establishes up to eight Nanoscience 
Commercialization Institutes. And the goal of each institute is 
to apply nanotechnology research to commercial goods or 
services--specifically, in industries including energy, 
electronics, agriculture, medicine, textiles, and 
transportation--and to achieve their full commercial 
realization.
    Any comments on that? Is this--would this be helpful? Is 
this needed? Will this happen, just on its own?
    Dr. Teague. Well, I don't think anything like that happens 
on its own. I think it certainly needs to be driven. And I 
think some of those would be--sounds like it would be a very 
effective means of trying to aid in commercialization. I would 
point out that, within the agencies now participating in the 
NNI, through the Small Business Innovation Research program, 
certainly the degree to which the discoveries have been 
transitioned into commercialization has been quite successful 
and has received strong support through that program. We did a 
study of the amount of funding that had gone into 
nanotechnology from the SBIR grants, and it's something upwards 
of $500 million over the last 5 years has gone to SBIR 
programs, the SBIR grants, for nanotechnology development and 
to do the commercialization of some of the ideas coming out of 
the laboratory.
    Also, I would mention that we have been, just recently, 
interacting quite a bit with the Department of Labor and the 
Department of Education, as well as the ongoing activities from 
the National Science Foundation, to look into workforce issues, 
training issues relative to equipping people to move into this 
new field and to do the commercialization.
    But this sounds like it might well bridge both the 
education, training, and, to some degree, the actual moving of 
nanotechnology from the laboratory to commercialization. We are 
very conscious of the need for this to happen, and have been 
trying to take some appropriate steps to work in this 
direction, as well.
    Senator Smith. Well on the basis of your recommendation, 
I'll recommend it to my colleagues, to become joint sponsors of 
this. Thank heavens for law school, huh?
    Thank you, gentlemen, very much.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    We will print my statement and the statement of the Co-
Chairman at the beginning of this hearing.
    Thank you very much, gentlemen. We appreciate your keeping 
in touch with us, and we would welcome your comments at any 
time to assist in this initiative.
    Dr. Teague. We would welcome the chance to sit down with 
you, as you indicated in your remarks.
    The Chairman. We do that once in a while, Doctor. It is 
off-the-record. We explore the subject to see if we really 
understand what is going on. It's helpful. We will try to do 
that.
    The next panel is Dr. Alan Gotcher, President and Chief 
Executive Officer of Altair Nanotechnologies; Dr. Todd Hylton, 
Director of the Center for Advanced Materials and 
Nanotechnology at Science Applications International 
Corporation; Dr. Mark Davis, Professor of Chemical Engineering 
at the California Institute of Technology; Dr. Clarence Davies, 
Senior Advisor, Project on Emerging Nanotechnologies at the 
Woodrow Wilson Center; and Dr. Timothy Swager, Professor of 
Chemistry, the head of the Chemistry department at the 
Massachusetts Institute of Technology.
    If you would, please. Thank you very much, gentlemen.
    We have been joined by Senator Kerry, who would like to 
introduce Dr. Swager, I believe.

               STATEMENT OF HON. JOHN F. KERRY, 
                U.S. SENATOR FROM MASSACHUSETTS

    Senator Kerry. Mr. Chairman, I--thank you, I wasn't really 
going to so much introduce them as both welcome Dr. Swager, 
from MIT--we're delighted with the work that's being done 
there; obviously, I'm very proud of what's happened--and, also, 
Bryant Linares, from Apollo Diamond. Very, very happy to have 
both to them here, and everybody.
    This is a subject--Mr. Chairman, thank you for having this 
hearing--this is, as everybody on this committee knows, an area 
of extraordinary promise. And given the fact that, since World 
War II, I think something like 75 percent of the productivity 
increases in the United States have been driven by technology 
advances, this is our future. So, I wish that the budget 
weren't being cut this year for it. There's about a $24 million 
cut, I think, in the budget, at this moment. Hopefully, we all 
can address that as we go forward.
    But I welcome all of the witnesses on this panel. And thank 
you very much, Mr. Chairman, for having this important hearing. 
I'm told that it is possible that the worldwide market in this 
field could be as much as $700 billion, some people say, by 
about 2008. And the--therefore, the possibilities, beyond the 
sort of lightness of materials and strength of those materials 
and all the other advances that we could gain through it are 
just mind-boggling, to say the least. So, we look forward to 
your testimony today.
    And thank you, Mr. Chairman, for putting the Committee's 
focus on this.
    The Chairman. Thank you very much.
    Let us proceed and just go through, from left to right. We 
will be pleased to have your statements. All of your statements 
that were prepared will be in the record. And if you have them 
on CD, we'll take them and print them directly. But we hope 
that you can hold your statements to a reasonable period. As I 
said before, I do not want to cut you all off. The whole panel 
has doctorate degrees, and I think we ought to sit and listen, 
rather than ask questions.
    Dr. Gotcher?

    STATEMENT OF ALAN GOTCHER, Ph.D., PRESIDENT/CEO, ALTAIR 
                     NANOTECHNOLOGIES, INC.

    Dr. Gotcher. I'd like to thank you, Chairman Stevens, for 
your leadership on this issue and for holding this hearing. I'd 
also like to thank Senator Ensign for his support in ensuring 
Nevada is a leader and a strong supporter of nanotechnology.
    I'm Alan Gotcher, President and Chief Executive Officer of 
Altair Nanotechnologies. Previously, I was the Senior Vice 
President of Manufacturing and Technology, and Chief Technical 
Officer at Avery Dennison, a $5 billion company, where I 
managed corporate research, product development, and 
manufacturing.
    I led the development and commercialization of several 
hundred-million-dollar new product platforms. I was, and still 
am, a serial inventor and entrepreneur.
    Altair Nanotechnologies, or Altairnano, is a small, rapidly 
growing company where innovative nanomaterials are created and 
commercialized into a wide diversity of globally competitive 
products. We are a Nevada-based company publicly traded on 
NASDAQ. We have about 60 employees located in Reno, Nevada, and 
Anderson, Indiana.
    Our twin missions are to create innovative products, such 
as green batteries for fully electric vehicles, or drug 
therapies for renal failure in humans and animals, that can 
benefit our society as a whole, and then to ensure that those 
products are safe. Because we take product stewardship 
seriously, we are currently gathering data to measure the 
impact of our nanomaterials and manufacturing processes on the 
health and safety of our employees and the environment. We do 
this to protect the environment and to provide sustainable 
economic benefits to our shareholders.
    Here's the view of nanotechnology from the trenches. The 
hyperbole surrounding this technology is significant, but the 
potential is real. It can truly change our lives in many 
fundamental and positive ways. We're already beginning to see 
some of those changes. Almost half of the U.S. consumption of 
imported oil comes from dependence on the internal combustion 
engine used in cars and trucks. Nanotechnology may provide 
significant new products that can break that dependence and win 
the quest for a practical alternative-energy vehicle. Those 
vehicles of the future are just several years down the road. At 
Altairnano, our innovative nanostructured electrode materials 
enable realistic production of vehicles unlike any that are 
available today. Imagine a fully electric six-passenger car, or 
full-size pickup trucks, operating on batteries that can offer 
conventional acceleration and cruising speeds. These batteries 
will provide a driving range of at least 200 miles and a 
recharge time of just a few minutes, under 6. These batteries 
are more than twice the life cycle of comparable batteries 
today, able to power a vehicle for more than 100,000 miles 
without replacement, batteries that will be affordable, 
inherently safe, and environmentally friendly. Even sooner, 
imagine plug-in hybrid electric vehicles that can be charged 
rapidly at home, at work, providing gas mileage dramatically 
better than similar vehicles today.
    At companies such as ours, environmental stewardship is 
obligatory. We are strongly committed to that principle, both 
in our manufacturing processes and in the applications of our 
products. Our product portfolio includes ion exchange and 
photocatalytic materials for cleaner water, biochemical sensors 
for environmental monitoring and homeland security, 
photocatalytic materials for indoor air purification, and, as I 
mentioned previously, a new generation of ``green'' battery 
technology. We're seeking partnerships with the Government in 
this pursuit, as illustrated by a collaboration that we 
initiated with the National Institute on Occupational Safety 
and Health.
    We ask, from Congress--our two separate thrusts--the first 
focus on continued funding to U.S. companies for basic and 
applied R&D. Priority spending would be on alternative energy 
and life sciences. The former would be for commercially-
interesting nanomaterials and systems solutions to replace or 
decrease the use of internal combustion engines. The latter, 
life sciences, would be for nanotechnology that could help 
investigate, monitor, and treat cancer and cardiovascular 
disease; thus, improving the quality of life and decreasing the 
cost of healthcare.
    The second thrust would provide increased Federal funding 
for environmental health and safety research and development. 
What is needed is a broad initiative aimed at establishing 
empirical data and models for the predictability of 
environmental health and safety risks of commercially-
interesting nanomaterials. Included must be inducements for 
private-sector companies to engage in this research initiative.
    Yesterday, Altairnano cosigned a letter to the Senate 
Appropriations Committee urging just this sort of research 
initiative. As the letter notes, ``Myriad applications of 
nanomaterials, which can exhibit a range of novel or enhanced 
properties, can hold great promise, but much more needs to be 
known about their potential risks.'' Other signatories include 
large and small business, environmental groups, and 
nongovernment organizations. It's not often that these diverse 
groups find themselves on the same page. While I recognize that 
this committee does not handle appropriations, this letter may 
be of interest to your members. With the Chairman's permission, 
I ask that it be included in the record of today's hearing.
    Thank you for the opportunity to speak here today. I'd be 
pleased to answer any questions later.
    [The prepared statement of Dr. Gotcher follows:]

       Prepared Statement of Alan Gotcher, Ph.D., President/CEO, 
                     Altair Nanotechnologies, Inc.
    I thank Chairman Stevens and Co-Chairman Inouye for their 
leadership in holding this hearing on the Developments in 
Nanotechnology in the U.S. Further, I would like to thank Senator 
Ensign for his support to ensure that Nevada is a nanotechnology 
leader.
    I am Alan Gotcher, President and CEO of Altair Nanotechnologies, 
Inc. Altair (Altairnano), based in Reno, Nevada, is a leading supplier 
and innovator of advanced ceramic nanomaterial technology. Previously, 
I was Senior Vice President of Manufacturing and Technology and CTO at 
Avery Dennison, where I managed R&D, product development, manufacturing 
and lead the development and commercialization of several hundred-
million-dollar new product platforms. I am also an inventor and 
entrepreneur.
    The hyperbole surrounding nanotechnology is significant. And yet 
the potential of the technology is real. I wish to take this 
opportunity to address three core issues:
1. The State of the Technology: How it Looks From the Trenches
    Nanotechnology can truly change our lives in many fundamental and 
positive ways. We have barely scratched the surface of what the science 
of nanotechnology might be capable. Today I will tell you how two of 
Altairnano's platforms--its Lithium-ion nano battery initiative and its 
chem/bio sensors--are on the verge of changing our reality.
2. The Responsible Commercialization of Nanotech Products: Altairnano 
        as Steward
    As this infant industry grows, we--like the chemical industry 
before us--must learn how to be good stewards of our environment. I 
will briefly outline our corporate commitment to product and 
environmental stewardship, and what we are doing to ensure that our 
products and manufacturing processes are safe.
3. The Role of the Federal Government: Ensuring the Global 
        Competitiveness of the U.S. Nanotechnology Industry
    All members of our national science and engineering establishment 
need to come together and partner with people in the nano industry in 
order to ensure that nanotechnology is researched and developed 
properly from the beginning. This will require a major commitment of 
Federal resources, which will be an investment in our country's future 
competitiveness.
1. The State of the Technology: How it Looks From the Trenches
    As I said earlier, the hyperbole about nanotechnology is 
tremendous, but the potential for this technology to change our lives 
in many fundamental and positive ways is real. To illustrate that 
point, I offer two examples of exciting technology that Altairnano has 
developed and is currently in the process of commercializing. In each 
instance, the Altairnano materials--specifically due to their ``nano-
ness''--provide revolutionary characteristics that are desired by the 
marketplace. In addition to stimulating significant national economic 
activity, these development programs at Altairnano will serve to 
protect and improve the environment.
    My first example is Altairnano's advanced, rechargeable Lithium-ion 
(Li-ion) nano battery. This product is a response to the increasing 
need and demand for more affordable, less-environmentally damaging 
energy sources. Consider the factors that are driving this demand:

   Pollutants emitted by conventional cars and trucks are 
        making the air we breath increasingly unhealthy. (Recognizing 
        this danger, many states are looking to follow California's 
        lead by requiring low- and zero-emission vehicles.)

   Nearly half our consumption of imported oil comes from a 
        dependence on conventional cars and trucks with internal 
        combustion engines.

   We need to win the quest for the production of a practical 
        alternative-energy vehicle.

    The solution? Altairnano has created an innovative, rechargeable 
Li-ion battery that will enable realistic production of a vehicle 
unlike any available today. Imagine a fully electric six-passenger car 
or full-size pickup truck operating on batteries that offer 
conventional acceleration and cruising speed. Imagine batteries with a 
range of 200 miles--and with a recharge time of just several minutes. 
And imagine batteries with twice the lifecycle of anything comparable 
today--powering a vehicle for more than 100,000 miles.
    Just last week, we produced and tested our first batch of Li-ion 
battery cells, utilizing the company's nano-structured electrode 
materials, at our Anderson facility just north of Indianapolis, 
Indiana.
Unprecedented Battery Performance
    Testing has revealed that they perform at 90 percent of capacity at 
-22 degrees, Fahrenheit. Conventional Li-ion batteries and the nickel-
metal hydride batteries used in hybrid electric vehicles become either 
sluggish or unable to charge at temperatures below freezing. In 
addition, unlike conventional Li-on batteries that risk spontaneous and 
catastrophic failure at temperatures above 266 degrees, the safety 
threshold for Altairnano's nano-structured lithium titanate spinel 
electrodes is 480 degrees, an important consideration for such extreme 
environments as aerospace and military applications. And, unlike 
current Li-ion batteries that contain hazardous chemicals and 
materials, the Altairnano battery designs and materials are 
intrinsically safe because they do not contain any toxic materials. 
This also makes them recyclable without any special needs.
    As this performance shows, the infrastructure now exists for the 
creation of a high-performance, all-electric vehicle. This technology 
could be rapidly adopted by American automobile manufacturers, and is 
just around the corner. We are already in negotiations with top 
automobile, truck and bus manufacturers. Similarly, our technology is 
being evaluated by major manufacturers of hand-held power tools. Just 
imagine a power tool with twice the power of today's 18- to 20-volt 
tools at the same price point, and one that can be fully recharged 
while the worker grabs a cup of coffee. That, also, is coming soon.
Chemical/Biological Sensors for National Security
    My second example of how Altairnano's unique materials can change 
our world relates to national security. We have been collaborating with 
the Universities of Western Michigan and Nevada-Las Vegas to develop 
chem/bio sensor arrays capable of detecting the presence of a wide 
spectrum of potential explosives, chem/bio weapons and illegal drugs. 
These arrays, made possible by Titanium Dioxide (TiO2) base 
technology unique to Altairnano, have been successful beyond our 
wildest expectations. Not only are they capable of sensing the presence 
of low levels of potential explosive and chem/bio hazards, they're also 
able to report this information to a local display or a remote 
monitoring station.
    With the help of scientists and engineers at Genesis Air 
Technologies, we have also learned how to use these and similar 
materials to destroy target chem/bio agents introduced into, for 
example, a building's HVAC system. The application of this technology 
can provide protection against most airborne health or environmental 
hazards. These materials are now being incorporated and tested by 
Genesis Air in systems designed for ``smart'' buildings. Clean, safe 
air with a built-in early-alert system in the case of adverse action: 
It's within sight, thanks to nanotechnology.
2. Responsible Commercialization of Nanotech Products: Altairnano as 
        Steward
    Altairnano is strongly committed to a position of good stewardship. 
This includes concern for the safety and welfare of our employees, our 
customers and strategic partners. Employees and consumers should be 
shielded from exposure to nanoparticles at every point along a product 
lifecycle. That is why we are dedicated to creating ``safe'' products--
safe for individuals and safe for the environment.
Altairnano-NIOSH-University of Nevada Collaboration
    Since the Fall of 2005, Altairnano has been working closely with 
scientists at NIOSH and the University of Nevada-Reno to monitor air 
quality in our Reno facilities. Ultimately, the two goals of this 
program are to ensure minimal--or zero--worker exposure to fine and 
ultrafine materials in the workplace, and to establish the basis (a 
series of standard operation procedures or best practices) for a 
responsible employee health monitoring system. Regarding the former, 
preliminary findings show that Altairnano's particulate aggregates are 
of a size that would not likely harm either the environment, employees 
or consumers.
    As for the latter, if this collaboration results in the creation of 
new best practices for the safe handling and monitoring of 
nanoparticles, these practices will be broadly disseminated through 
scientific talks and publications. Hopefully, this collaboration will 
also serve as a template for similar future efforts within the 
industry.
Altairnano & University of California-Santa Barbara (UCSB)
    We are committed to this explicit goal: There must be little or no 
direct worker exposure to nanoparticles at the manufacturing site, and 
there must be virtually no downstream-worker or consumer exposure to 
free nanoparticles throughout the manufacture, use, and normal disposal 
of products incorporating these nanomaterials.
    We will be collaborating with UCSB chemists, and materials, 
biological and environmental scientists to evaluate the intrinsic 
health hazard of our materials. Based on the data available in the 
literature and from our own testing programs, we believe the materials 
we are using in our products and platforms are generally recognized as 
safe at normal levels of exposure. Our goal in this collaboration is to 
learn under what conditions--if any--these materials might pose health 
or environmental hazards. We will simultaneously be investigating how 
to modify the composition, surface functionality or morphology of our 
materials so that they concurrently provide superior performance and 
inherently low-to-zero health risk.
    The Altairnano Lithium-ion battery mentioned earlier is just one of 
several Altairnano products and initiatives that are ``green.'' The EPA 
recently suggested six foci for improving environmental sustainability. 
Our R&D pipeline is already devoted to addressing these four:

   Sustaining water resources--Some of our products remove 
        contaminants like arsenic, promote photo-oxidation of microbes 
        and dangerous organics, and inhibit algal growth.

   Generating clean energy--We improve the manufacture of high-
        efficiency photo-voltaics and rechargeable, high-performance 
        ``green'' batteries.

   Sustaining clean and healthy air--Our photocatalytic systems 
        can be added to building HVAC systems.

   Using materials carefully and shift to environmentally 
        preferable materials--We're achieving that through development 
        of green products (e.g., Altairnano's innovative Li-ion 
        battery) and manufacturing processes that do not use hazardous 
        solvents.

3. Role of the Federal Government: Ensuring Global Competitiveness of 
        the U.S. Industry
    The needs of our society require continued funding to U.S. 
nanotechnology companies for basic and applied R&D, including priority 
spending in:

   Alternative energy, for commercially-interesting nano-
        materials and system solutions to replace or decrease the use 
        of internal combustion engines.

   Life Sciences--For nano-materials and methods to 
        investigate, monitor and treat cancers and cardio-vascular 
        diseases to improve quality of life and decrease the cost of 
        care.

    Additionally, the Altairnano safety partnerships outlined earlier 
are examples of the first step in the type of research still needed to 
fill in the gaps about nanotechnology. The list of gaps in our 
knowledge base--connecting characteristics of one type of nanoparticle 
or another to potential environment, health or safety risks--is very 
long.
    The U.S. is at a critical point in the development of this infant 
industry. If we go the route of seeking better answers and 
understanding of the various families/classes of nanomaterials before 
imposing government regulation, it could lead to greater benefits to 
the consumers and the environment through dramatic changes within 
widely diverse industries.
    Taking the other road--regulation first, without research--could 
lead to a disquieting moratorium on all future nano-research and 
development in the U.S., with great cost to our economy. There are some 
who feel that nanotechnology will require new regulatory legislation--
for example, a recent report by Terence Davies with the Woodrow Wilson 
International Center for Scholars/The Pew Charitable Trusts Project on 
Emerging Nanotechnologies.
    But much of this concern is founded on sparse and sometimes 
conflicting data. If anything is clear, it is that there is no single 
prototypical ``nanoparticle.'' Asbestos-like fibrous nanotubes and 
toxic-metal containing quantum dots are not good surrogates for all 
nanomaterials. To fall into a ``one-size-fits-all'' approach to 
nanotechnology is irresponsible and counter-productive. There are no 
clear and comprehensive data available to let us really assess the 
general risk of the wide range of nanomaterials under consideration 
and/or development.
    Many of the cognizant Federal funding and regulatory agencies--such 
as the National Institutes of Health (NIH), the National Cancer 
Institute (NCI), the Food and Drug Administration, EPA and NIOSH--
recognize this reality and are working hard to understand the 
underlying science and to develop quantitative data and models to 
quantitatively assess risks.
    What Altairnano asks from Congress is the following:

        A broad, government-funded initiative (similar to the Human 
        Genome project) with the goal of establishing broad empirical 
        data and models for the predictability of the environment, 
        health and safety risks of commercially-interesting 
        nanomaterials.

    Today, we lack data to say what characteristics or properties of a 
nanomaterial make it potentially harmful. Nor are there sufficient 
models to predict how the characteristics of materials change upon 
exposure to the environment, to transport, or bioaccumulation for most 
of the types of nanomaterials being developed.
    While industry, academic, and government scientists continue to 
vigorously explore nanotechnology's potential applications in a wide 
variety of fields, including groundwater cleanup and cancer therapy, 
research on nanotechnology's potential health and environmental 
implications has failed to keep up. Federal funding for programs to 
develop appropriate EHS data for use in responsible regulation of 
nanotechnology is critical. EHS types of R&D comprise less than 4 
percent of the core National Nanotechnology Initiative funding for 
materials and applications R&D. So much more needs to be done.
    Federal research dollars are essential to supporting the creation 
of methods and tools critical to developing a fundamental understanding 
of the risk potential of nanomaterials and nanotechnologies. A 
metrology and modeling infrastructure would help producers and users of 
nanomaterials to fulfill their responsibility to identify potential 
risks of their own materials and applications. With increased Federal 
funding, our society will be in a stronger position to address such 
risk while these materials are still in an early stage of development 
and commercialization. An early and open examination of the potential 
risks of a new product or technology is critical to responsible product 
development and technology application.
    Others have presented the data gaps and modeling needs, and have 
priced such a program at the $0.5 billion to $1 billion range over the 
next five to 8 years. And, to be very clear, this would not be a 
program aimed at elucidating the connection of structure-function 
relationships of certain nanomaterials to performance enhancements in 
specific applications. Nor should it have a materials discovery thrust.
    For a national prioritization of EHS research needs, we need to 
convene a dialogue of all informed stakeholders to assess what is 
known, what technologies are available, and what capabilities need to 
be developed.
    Once the needs are prioritized--once we have a roadmap--we can then 
form teams and consortia, and attack the highest-priority problems. 
Hopefully a strong Federal participation (including staff at NIST, NIH, 
NCI, EPA, NIOSH, etc.) and substantial Federal funding will ensure that 
what we learn is broadly shared across our entire nanotech enterprise.
    Private-sector participation is also critical. But participation by 
and Federal funding to for-profit companies has to be acceptable as a 
trade-off for their participation, and the sharing of results. Federal 
investment and participation in developing the underlying EHS 
metrologies, models and methodologies will dramatically accelerate the 
realization of the economic potential promised by nanotechnology. This 
would be an investment that will raise all boats.
    I would like to ask you think back just 10 years. Take a minute to 
revisit the history of the gene chip. In 1994, it was just a dream--a 
concept that might have utility in clinical diagnostics. The government 
made a coherent suite of tailored investments in the mid-1990s--less 
than $200 million of government funding invested in industry-led R&D 
activities engaging over 100 companies, universities and national 
laboratories. With the help of that funding, by 2001 we had an infant 
gene-chip industry, with widespread use in academic and medical 
research labs and a changing view of what the technology could do. By 
2005, gene-chip sales had reached nearly $1 billion and micro- and 
nano-arrays are now a core tool of modern drug development, as well as 
powerful diagnostics. Now, healthcare professionals can't imagine 
modern medicine without the presence of the gene chip.
    This is an excellent example of how the right types of investments 
at the right time in history can make all the difference. Federal 
investment into nanotechnology EHS research today could lead nano along 
similar time and economic development trajectories.
Inducements for Private-Sector Companies to Engage in That Research 
        Project, Within a Framework That Is as Open and Accessible as 
        Possible
    Neither academia nor the Federal Government is going to be able to 
develop the requisite knowledge-base without the help of private 
industry--especially not without technology start-ups and small 
materials development companies. Smaller, independent companies like 
ours are the ones that will ultimately bring the majority of new 
nanomaterials into the marketplace. These types of companies not only 
provide insight into the types of materials to which workers, consumers 
and the environment will soon be exposed, they also provide a window on 
manufacturing processes and waste streams.
    It is in our Nation's best interest to have them involved, in order 
to get this right, and to get it right from the start.
    To ensure the participation of smaller nanomaterials companies, 
reimbursement for their participation in such programs is crucial. 
Unfortunately, most of the NNI funding mentioned earlier goes to 
Federal agencies, like NIH and EPA, which do not generally fund 
companies. If funding is provided, it's limited to materials-discovery 
R&D. Even the NIOSH and NIEHS components of the joint STAR grants are 
limited to the modest funding of $133,000 per year.
Open Source Infrastructure
    Beyond the absence of company participation in most of the current 
nanomaterials EHS research, there is a fundamental problem with our 
collective approach to ensuring the responsible development of 
nanotechnology.
    Most large chemical companies involved in nanotechnology have 
established safety programs and diverse product pipelines. They know 
what to do, but will wait until specific materials and product concepts 
have passed through multiple developmental-stage gates prior to 
undertaking any substantive EHS studies. Even then, the methods used 
and results will remain proprietary. Because new metrologies and 
predictive models need to be developed for nanoparticles and materials, 
this business-as-usual approach is highly inefficient, and will create 
a few winners and many losers.
    What we need are Federal R&D programs geared toward bringing 
companies and academics together to develop a suite of metrology tools 
and predictive models that will be accessible to and usable by all. 
This is a critical point in history. Five years ago it was too early in 
the lifecycle of nanotechnology for such a bold plan. Five years from 
now, it could be too late for us to catch up with advances made by 
competing nations.
Regulatory Mentoring
    Many smaller nanotechnology companies have no prior experience with 
worker safety or regulatory compliance programs, and are fearful of 
``big government's stick.'' Regulatory agency staffers need to 
establish informational outreach programs that make it easy to ``do it 
right'' from day one. Programs that encourage mentorship from larger, 
established chemical companies in the same materials or applications 
space would be especially useful.
    Altairnano, and companies like us, need to be able to know that we 
can approach these Federal agencies and get helpful guidance for moving 
forward. Because we are investing shareholder monies in our R&D and 
product development programs, we also need to know that evolving 
regulations will be predictable and based on sound science--not 
political expedience.
    One suggestion would be to fund regularly held workshops that 
gather scientists, technologists and engineers from large and small 
companies, academic and government research labs, and legal advisors 
and regulators to discuss application- or materials-specific 
regulations and appropriate regulatory pathways from product concept to 
market entry and beyond.
A Transparent and Consistent Regulatory Environment That Is Truly Data 
        Driven
    I believe we can all agree that there is insufficient quantitative 
data to inform the development or application of any new regulatory 
activities. And, anything we attempt to put in place today would likely 
prove to be an imperfect solution that might be a greater drag on 
economic development than no regulation at all. There seem to be two 
common concerns: There is no clear central point of contact and control 
for nanotechnology, and the number of new materials being developed 
would swamp the system
    I would like to propose a solution that I believe would be embraced 
by both large and small nanomaterials companies. Let's create a portal 
to a unified governance committee that operates in a manner analogous 
to the FDA.
    While holding regulatory authority, the FDA is probably one of the 
single most powerful drivers of economic development throughout the 
medical industry. The agency staff helps innovators and inventors at 
early stages of product and process development by teaching them what 
they need to know and do to comply with the appropriate regulatory 
framework. The staff provides a way for the innovator's product ideas 
and work to come up to speed on new technologies as they arise, a 
single point-of-contact and control, constant and transparent 
processes, strong outreach and advocacy.
    The approval process is also a staged process. For example, in 
developing a new drug, one might evaluate (at the sub-gram level of 
manufacture) tens of thousands of molecules before striking the handful 
of potential leads that the company considers commercially relevant. It 
is only at this point that manufacture is scaled up to tens or hundreds 
of grams and animal trials are undertaken. Only those lead candidates 
that pass initial animal trials are submitted for limited evaluation 
for safety (Phase I Clinical Trials).
    Essentially, what this means is that only one in many compounds are 
presented to the FDA for regulatory approval. Clearly, it is at this 
point that the analogy between development of nanomaterials and 
therapeutic drugs breaks down. But my point is that there are examples 
that demonstrate responsible and effective regulatory oversight without 
imposition of unreasonable burden to the innovators. From a corporate-
governance perspective, having an established and rigorous regulatory 
pathway to market enables innovators to know that they are acting in 
good faith as product stewards.
Support Math and Science Education at All Levels
    We all have seen the numbers from the National Science Foundation--
while 70,000 Ph.D. engineers are graduating from universities in China 
and 35,000 from universities in India, there are fewer than 10,000 
engineering graduates from universities in the U.S. Plus, many of the 
U.S. graduates are foreign nationals, many of whom return home with the 
benefits of their education. This is a national crisis.
    For Altairnano, it is also a company crisis. It is extremely 
difficult for us to recruit science and engineering students from the 
University of Nevada-Reno. There just are not enough students in the 
pipeline to go around. Nanotech--the ``sexy'' science of the 21st 
century--might be the catalyst needed to stimulate renewed interest in 
math and science in American students, from K through graduate school. 
One approach would be to fund the development of curricula, in 
coordination with scientists and engineers from local/regional 
nanotechnology companies, and focused on, perhaps, grades five and six, 
junior high, and high school.
    Another approach could be to fund scholarships to nanoscience camps 
for students at the junior high and high school levels. A third 
approach could be to provide scholarships for students enrolling in 
nanotechnology programs at undergraduate and graduate levels--including 
curricula focused on nanomaterials and nanochemistry, nanobiology, and 
nano-environmental engineering. All of these programs should include a 
component devoted to considerations of public policy issues affecting 
nanotechnology.
    Thank you for the opportunity to speak here today. I will be 
pleased to try to answer any questions that you might have.
                                 ______
                                 
      [Individually addressed copies of this letter were sent to 
     all members of the Senate and House Appropriations Committees]
February 14, 2006

Dear Senator:

    The undersigned organizations strongly urge you to significantly 
increase appropriations directed to research on the health and 
environmental implications of nanotechnology. Although the National 
Nanotechnology Initiative (NNI) has an annual budget of more than $1 
billion, health and environmental implications research currently 
accounts for less than 4 percent of that amount ($38.5 million for 
FY06).
    Nanotechnology, the design and manipulation of materials at the 
molecular and atomic scale, is one of the most exciting fields in high 
technology--one that could revolutionize the way our society 
manufactures products, produces energy, and treats diseases. Myriad 
applications of nanomaterials, which can exhibit a range of novel or 
enhanced properties, hold great promise, but much more needs to be 
known about their potential risks.
    While industry, academic, and government scientists continue to 
vigorously explore nanotechnology's potential applications in a wide 
variety of fields, such as groundwater cleanup and cancer therapy, 
research on nanotechnology's potential health and environmental 
implications has failed to keep up. Federal research is essential to 
providing the underlying methods and tools critical to developing a 
fundamental understanding of the risk potential of nanomaterials and 
nanotechnologies--methods and tools that all producers and users can 
then use to fulfill their appropriate responsibility to identify 
potential risks of their own materials and applications. With increased 
Federal funding, our society will be in a stronger position to address 
such risks while these materials are still in an early stage of 
development and commercialization. An early and open examination of the 
potential risks of a new product or technology is critical to 
responsible product development and technology application.
    We appreciate your consideration of this request. For further 
information, please contact Mr. Terry Medley, Global Director, 
Corporate Regulatory Affairs, DuPont, at (302) 773-3191, or Ms. Karen 
Florini, Senior Attorney, Environmental Defense, at (202) 387-3500.
            Sincerely,

Air Products & Chemicals, Inc.
Altair Nanotechnologies Inc.
BASF Corporation
Carbon Nanotechnologies, Inc.
Degussa
DuPont
Environmental Defense
Foresight Nanotech Institute
Houston Advanced Research Center
Lux Research, Inc.
NanoBusiness Alliance
Natural Resources Defense Council
PPG Industries, Inc.
Rohm and Haas Company
Union of Concerned Scientists
  

    The Chairman. Thank you.
    All of the statements you have, and attachments, will be 
printed in the record.
    Dr. Hylton?

       STATEMENT OF DR. TODD L. HYLTON, DIRECTOR, CENTER

           FOR ADVANCED MATERIALS AND NANOTECHNOLOGY,

         SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

    Dr. Hylton. Chairman Stevens and distinguished members of 
the Committee, I want to thank you for inviting me to testify 
on developments in nanotechnology. It is a subject that's near 
and dear to my heart.
    I have spent my entire career working to transition 
nanotechnologies from the research laboratory to products. 
Trained as an applied physicist, my career includes work for 
large and small technology companies working variously in the 
fields of semiconductors, magnetic storage, sensing, equipment, 
and defense.
    I am currently employed by Science Applications 
International Corporation, in McLean, Virginia, where I manage 
a group of scientists and engineers providing nanotechnology 
development and transition services to government and 
commercial clients.
    Nanotechnology is not an isolated technical innovation. 
Rather, nanotechnology is a convergence of emerging 
capabilities from the physical, chemical, and biological 
sciences dealing with the manipulation and design of matter at 
the nanometer scale. I believe that the term ``nanotechnology'' 
ultimately will be recognized as an era of innovation, lasting 
throughout most of this century, that transforms human 
existence with profundity and scope never before seen.
    In the past 2 decades, I have observed a seemingly 
inexorable displacement of the technology industries in this 
country. For example, most of the newest semiconductor and 
display manufacturing facilities are being located offshore. In 
large part, this transformation is a consequence of global 
competition, technology access, and a general leveling of the 
quality of life across the world. From a global humanitarian 
perspective, this transformation is long overdue, and I believe 
it will continue unabated.
    From a national perspective, however, we must maintain 
leadership in the commercialization of new technologies, as 
this leadership will be the material basis of our economic 
prosperity and our global leadership.
    My testimony today focuses on the challenges of 
transitioning nanotechnologies from the research laboratories 
to commercialization. Because of the inherent complexities 
associated with nanotechnologies, many of the most valuable of 
these transitions will be extremely difficult. In addition to 
its basic research investment, I propose that the country 
consider investment in a new means to effectively commercialize 
nanotechnologies.
    I'm going to refer now to a chart which is contained within 
the materials that you have in front of you, committee members, 
but which is not projected.
    The first chart. I illustrate--in the first chart, I 
illustrate a typical technology transition process in the 
United States today. Basic research at universities and 
research laboratories results in the creation of novel 
technical capabilities whose applicability is generally poorly 
understood. A small fraction of these capabilities are absorbed 
by a small company, which invests in the transition of that 
capability into a commercially-viable concept. A larger company 
then generally enters to provide late-stage product development 
and market access. The critical portion of the transition 
process is borne by the small company and its investors.
    Prior to the emergence of this model, the prevalent model 
involved very large, very profitable companies transitioning 
internally funded basic research into new products. This older 
model became obsolete with the advent of increased domestic 
competition and the emergence of similarly powerful foreign 
competitors. By virtue of evolving global competition and 
investor sentiments, the current model, featuring small 
companies and venture capital investors, is now under stress.
    The current technology transition model poses three major 
challenges for nanotechnology commercialization.
    The first challenge is that the technology transition 
process is very long, often exceeding 10 years, because the 
technical breadth and complexity inherent in most 
nanotechnologies. Research institutions and large companies 
typically cannot support a technology transition effort 
exceeding 2 years. Venture capitalists are typically 
uninterested in investments exceeding 5 years. And very, very 
few small companies can sustain a decade-long transition 
process.
    The second challenge is access to intellectual property, 
which initially may be distributed among various research 
institutions and which freedom to employ is required for 
successful commercialization.
    The third challenge is access to, or existence of, 
supporting hardware infrastructure--for example, prototype 
manufacturing--to demonstrate product scalability and cost.
    Referring now to the second chart, I illustrate an 
alternative technology transition model intended to address 
these challenges. The critical piece is the creation of public/
private organizations dedicated to the technology--dedicated to 
technology transition in a specific industry segment that 
coordinate and serve a large array of research institutions, a 
consortium of small and large technology companies, and public 
economic development organizations nationwide. At the interface 
with the research institutions, the new organization provides a 
conduit for intellectual property to the business consortium.
    At the interface with the established industry, which is 
mostly large companies, the new organization provides well-
developed technologies and a new--and new product opportunities 
and receives financial support and product-development 
resources and market guidance.
    At the interface with small technology companies, the new 
organization provides business, technical, and infrastructure-
related services and receives product-development resources.
    And at the interface with the private sector--with the 
public sector, excuse me, the organization provides economic-
development opportunities and receives assistance for 
participating businesses.
    Public funding for the new organization would be used to 
establish and maintain core staff and facilities, while 
participating businesses and research institutions would 
contribute technical staff, as needed.
    The many challenges of establishing such an organization 
notwithstanding, the advantages of such an approach include 
sufficient longevity to address the length of the technology 
transition process, a comprehensive approach to access and 
employ the intellectual property assets of the Nation, and, 
thereby, to maximize the value of the national investment in 
basic research in nanotechnology, a means to effectively share 
expensive infrastructure, such as prototype manufacturing 
capabilities, a means to target markets through the market 
leaders, a large reduction in risk for private investors and 
entrepreneurs, thereby generating greater private investment 
and more new-company starts, a coordination of regional 
economic development resources nationwide, and, finally, a 
competitive posture that does not attempt to select winners in 
the marketplace.
    I propose that the country consider the creation of a 
network of these technology transition organizations, each with 
a specific industry focus, many of which have already been 
discussed, things such as energy, medical devices, medical 
therapeutics, and computing. This network would closely 
parallel the research activity sponsored by the National 
Nanotechnology Initiative and would seek to capitalize on the 
research that it supports.
    Last, I would like to comment on the often-heard statement 
that we need to educate more scientists and engineers in the 
United States. The unstated assumption behind this assumption--
behind this statement is that, by educating more scientists and 
engineers, we will be able to maintain our leadership in 
technical innovation and technology-based economic development.
    I would like to point out that the career of the technical 
professional generally parallels the transition of new 
technologies. In response to our recent difficulties in 
transitioning new technology and the corresponding dearth of 
career opportunities, the best and brightest students in the 
U.S. increasingly, and, I think, correctly, select other 
professions. When the opportunities return, the U.S. students 
will return, as well.
    Thank you very much for the opportunity to testify today.
    [The prepared statement of Dr. Hylton follows:]

Prepared Statement of Dr. Todd L. Hylton, Director, Center for Advanced 
   Materials and Nanotechnology, Science Applications International 
                              Corporation
    Chairman Stevens, Senator Inouye, members of the Committee, I want 
to thank you for inviting me to testify on developments in 
nanotechnology, a subject near and dear to my heart. I have spent my 
entire career working to transition nanotechnologies from the research 
laboratory to products. Trained as an applied physicist, my career 
includes work for large and small technology companies working 
variously in the fields of semiconductors, magnetic storage, sensing 
equipment, and defense. I am currently employed by Science Applications 
International Corporation in McLean, Virginia, where I manage a group 
of scientists and engineers providing nanotechnology development and 
transition services to government and commercial clients.
    Nanotechnology is not an isolated technical innovation; rather, 
nanotechnology is a convergence of emerging capabilities from the 
physical, chemical and biological sciences dealing with the 
manipulation and design of matter at the nanometer scale. I believe 
that the term nanotechnology ultimately will be recognized as an era of 
innovation lasting throughout most of this century that transformed 
human existence with profundity and scope never before seen.
    In the past two decades I have observed a seemingly inexorable 
displacement of the technology industries in this country. For example, 
most of the newest semiconductor and display manufacturing facilities 
are being located offshore. In large part this transformation is a 
consequence of global competition, technology access, and a general 
leveling of the quality of life across the world. From a global 
humanitarian perspective this transformation is long overdue, and I 
believe it will continue unabated. From a national perspective, 
however, we must maintain leadership in the commercialization of new 
technologies, as this leadership will be the material basis of our 
economic prosperity and our global leadership. My testimony today 
focuses on the challenges of transitioning nanotechnologies from the 
research laboratories to commercialization. Because of the inherent 
complexities associated with nanotechnologies, many of the most 
valuable of these transitions will be extremely difficult. In addition 
to its basic research investment, I propose that the country consider 
investment in a new means to effectively commercialize 
nanotechnologies.
    Referring now to Chart 1, I illustrate a typical technology 
transition process in the United States today. Basic research at 
universities and research laboratories results in the creation of novel 
technical capabilities whose applicability is generally poorly 
understood. A very small fraction of these capabilities are absorbed by 
a small company, which invests in the transition of that capability 
into a commercially-viable concept. A larger company then enters to 
provide late-stage product development and market access. The critical 
portion of the transition process is borne by the small company and its 
investors. Prior to the emergence of the current model, the prevalent 
model involved very large, very profitable companies transitioning 
internally-funded basic research into new products. This older model 
became obsolete with the advent of increased domestic competition and 
the emergence of similarly powerful foreign competitors. By virtue of 
evolving global competition and investor sentiments, the current model 
featuring small companies and venture capital investors is now under 
stress.
    The current technology transition model poses three major 
challenges for nanotechnology commercialization. The first challenge is 
that the technology transition process is very long, often exceeding 10 
years, because of the technical breadth and complexity inherent in most 
nanotechnologies. Research institutions and large companies typically 
cannot support a technology transition effort exceeding 2 years; 
venture capitalists are typically uninterested in investments exceeding 
5 years; and very, very few small companies can sustain a decade-long 
transition. The second challenge is access to intellectual property, 
which initially may be distributed among various research institutions 
and which freedom to employ is required for successful 
commercialization. The third challenge is access to (or existence of) 
supporting hardware infrastructure, for example prototype manufacturing 
to demonstrate product scalability and cost.
    Referring now to Chart 2, I illustrate an alternative technology 
transition model intended to address these challenges. The critical 
piece is the creation of public-private organizations dedicated to 
technology transition in a specific industry segment that coordinate 
and serve a large array of research institutions, a consortium of large 
and small technology companies, and public economic development 
organizations nationwide. At the interface with the research 
institutions, the new organization provides a conduit for intellectual 
property to the business consortium. At the interface with the 
established industry (mostly large companies), the new organization 
provides well-developed technologies and new product opportunities and 
receives financial support, product development resources, and market 
guidance. At the interface with small technology companies, the new 
organization provides business, technical and infrastructure-related 
services and receives product development resources. At the interface 
with the public sector, the organization provides economic development 
opportunities and receives assistance for participating businesses. 
Public funding for the new organization is used to establish and 
maintain core staff and facilities, while participating businesses and 
research institutions contribute technical staff. The many challenges 
of establishing such an organization notwithstanding, the advantages of 
such an approach include:

   sufficient longevity to address the length of the technology 
        transition process;

   a comprehensive approach to access and employ the 
        intellectual property assets of the Nation and, thereby, to 
        maximize the value of the national investment in basic research 
        in nanotechnology;

   a means to effectively share expensive infrastructure such 
        as prototype manufacturing capabilities;

   a means to target markets through the market leaders;

   a large reduction in risk for private investors and 
        entrepreneurs, thereby generating greater private investment 
        and more new-company starts;

   a coordination of regional economic development resources 
        nationwide; and

   a competitive posture that does not attempt to select 
        winners in the marketplace.

    I propose that the country consider the creation of a network of 
these technology transition organizations, each with an industry focus 
such as, for example, energy conversion (e.g., solar, thermal), energy 
storage (e.g., batteries, hydrogen), agriculture, medical diagnostics 
and devices, medical therapeutics, high-speed electronics, flexible 
electronics, and high-strength materials. This network would closely 
parallel the research activities sponsored by the National 
Nanotechnology Initiative and would seek to capitalize on the research 
that it supports.
    Lastly, I would like to comment on the often heard statement that 
we need to educate more scientists and engineers in the United States. 
The unstated assumption behind this statement is that by educating more 
scientists and engineers we will be able maintain our leadership in 
technical innovation and technology-based economic development. I would 
like to point out that the career of the technical professional 
generally parallels the transition of new technologies. In response to 
our recent difficulties in transitioning new technology and the 
corresponding dearth of career opportunities, the best and brightest 
students in the U.S. increasingly (and correctly) select other 
professions. When the opportunities return, the U.S. students will 
return, as well.



        Chart 3
          Functions of the Technology Transition Organization
   Intellectual Property Coordination
   Product Development Infrastructure
   Small Business Services
   Participant Relationship Management
   Technical Development Coordination
   Economic Development Coordination
   Market Strategy Coordination and Roadmapping

        Chart 4
     Potential Industry Focused Technology Transition Organizations
   Energy conversion (e.g., solar, thermal)
   Energy storage (e.g., batteries, hydrogen)
   Agriculture
   Medical diagnostics and devices
   Medical therapeutics
   High speed electronics
   Flexible electronics
   High strength materials
   The Focuses of the Technology Transition Organizations 
        should parallel the investments of the National Nanotechnology 
        Initiative

    The Chairman. Thank you very much, Doctor.
    Our next witness is Dr. Timothy Swager, Professor of 
Chemistry at MIT.

             STATEMENT OF TIMOTHY M. SWAGER, Ph.D.,

       PROFESSOR OF CHEMISTRY, MASSACHUSETTS INSTITUTE OF

        TECHNOLOGY (MIT); ON BEHALF OF THE INSTITUTE FOR

                 SOLDIER NANOTECHNOLOGIES (ISN)

    Dr. Swager. Thank you, Chairman Stevens, for the invitation 
to be here. And thank you, Senator Kerry, for----
    The Chairman. I might say, it is a courtesy of the Chair to 
call on witnesses who have home state Senators up here. So, I 
apologize to the rest of you, but----
    Dr. Swager. OK. Thank you for the introduction. I 
appreciate it.
    I'm a Professor of Chemistry at MIT, and representing today 
the Institute for Soldier Nanotechnologies, which is an Army-
funded research center.
    The Institute for Soldier Nanotechnologies is dedicated to 
the development of nano-enabled technologies to protect 
dismounted soldiers. The ISN mission is to increase 
capabilities by simultaneously decreasing the weight soldiers 
must carry. Present-day soldiers, like the one shown in this 
picture from Iraq, often carry in excess of 100 pounds of 
equipment, which reduces their effectiveness and survivability 
in the field.
    The Chairman. I'll tell you, Doctor, when they appeared 
here, we added it up, and they weighed more than I do.
    [Laughter.]
    The Chairman. The stuff that they were carrying weighed 
more than I do.
    Dr. Swager. It's impressive how resilient these soldiers 
are.
    Our vision is to design, from the ground up, a new 
battlesuit with a number of integrated systems that 
automatically activate on on-demand, much in the same way as 
airbags deploy in automobiles. It will include sensing 
subsystems to detect chemical and biological threats, as well 
as perform physiological monitoring. It will provide mechanical 
performance enhancements, integrated power, and informational 
systems.
    Nanotechnology will help us integrate these many functions 
into the uniform. One materials platform we envision is the 
fabric of the uniform itself, wherein a diversity of functional 
nanocoatings will be developed which provide massive new 
capability to the soldier, with an insignificant increase in 
weight.
    The ISN has over 30 research projects, but today I will 
focus on only two examples of new sensory systems for enhanced 
situational awareness.
    New nanostructured optical fibers have been developed to 
detect specific kinds of light, such as that coming from a 
targeting laser. These fibers are produced by a drawing process 
and contain metal electrodes interfaced with semiconductors. 
When illuminated with light, electrical currents are generated 
between the metal electrodes. The optical fibers display 
selected responses to different colors of light due to a 
photonic coating. Grids of fibers can be used to determine the 
point of illumination, and extensions of this technology will 
eventually be able to tell a soldier the direction from which 
the light originated.
    We are also developing networks of photonic molecular wires 
for the detection of explosives. These materials are electronic 
plastics that absorb and emit light, and have high sensitivity 
to explosives like TNT. These materials have the unusual 
ability to self-amplify their own sensory responses due to 
transport of energy packets through the network. This process 
behaves similar to a string of holiday lights, wherein only one 
light need be broken to cause the entire system to become dark. 
In a similar way, one molecule of TNT can produce a massively 
amplified response.
    To transition our technologies to the military, the ISN 
works with partner companies, both large and small, distributed 
throughout the United States. MIT has licensed our explosive-
detection technology, to Nomadics, a small company based in 
Oklahoma, also with a site in Massachusetts, which has 
developed ultrasensitive explosive detectors. I am a paid 
consultant for Nomadics and actively assist them in extending 
this technology.
    The Nomadics sensor, known as Fido TM, one of 
which I have brought with me here today, detects vapors of 
explosives as they pass through a capillary tube. I also have a 
capillary that is coated with our molecular wires.
    The Chairman. I don't think they saw that. Hold that up----
    Dr. Swager. It's just a small capillary that has a 
nanocoating of our electronic polymer inside. You can't even 
see it. It's what I call a definition of very-high-value 
material. These systems can detect explosive vapors at 
distances more than 2 meters away from the source. Only trained 
dogs are capable of similar detection limits; and, hence, Fido 
TM represents a new capability for our soldiers.
    Fido TM sensors are undergoing evaluation in 
Iraq, both as handheld systems and on robotic platforms. I show 
here Fido TM mounted on a PackBot, which is a 
robotic platform developed by iRobot. As shown in the 
photograph, this integrated system can be used at checkpoints 
for vehicle interrogation at safe distances. It can also be 
used for investigating potential roadside bombs and in 
identifying individuals who have recently handled explosives. 
The feedback from the soldiers has been very promising.
    Thank you.
    [The prepared statement of Dr. Swager follows:]

Prepared Statement of Timothy M. Swager, Ph.D., Professor of Chemistry, 
Massachusetts Institute of Technology (MIT); on behalf of the Institute 
                   for Soldier Nanotechnologies (ISN)
    (Slide 1)
    The Institute for Soldier Nanotechnologies (ISN) is dedicated to 
the development of nano-enabled technologies to protect dismounted 
soldiers. The ISN mission is to increase capabilities while 
simultaneously decreasing the weight soldiers must carry. Present day 
soldiers, like the one shown in this picture from Iraq, often carry in 
excess of 100 pounds of equipment, which reduces their effectiveness 
and survivability in the field.
    (Slide 2-3)
    Our vision is to design from the ground up a new battlesuit with a 
number of integrated systems that activate automatically on-demand, 
much in the same way as airbags deploy in automobiles. It will include 
sensing subsystems to detect chemical and biological threats as well as 
perform physiological monitoring. It will further provide mechanical 
performance enhancements, integrated power, and informational systems.
    (Slide 4)
    Nanotechnology will help us to integrate these many functions into 
the uniform. One materials platform we envision is the fabric of the 
uniform itself wherein a diversity of functional nanocoatings will be 
developed which provide massive new capability to the soldier with an 
insignificant increase in weight. The ISN has over 30 active research 
projects, but today I will focus on two examples of new sensory systems 
for enhanced situational awareness.
    (Slide 5)
    New nanostructured optical fibers have been developed to detect 
specific kinds of light such as that coming from targeting lasers. 
These fibers are produced by a drawing process and contain metal 
electrodes interfaced with semiconductors. When illuminated with light, 
electrical currents are generated between the electrodes.
    (Slide 6)
    The optical fibers display selective responses to different colors 
of light due to a photonic coating. Grids of fibers can be used to 
determine the point of illumination, and extensions of this technology 
will eventually be able to tell a soldier the direction from which the 
light originated.
    (Slide 7)
    We have also developed networks of photonic molecular wires for the 
detection of explosives. These materials are electronic plastics that 
absorb and emit light and have a high sensitivity to explosives like 
TNT. These materials have the unusual ability to self-amplify their own 
sensory responses due to the transport of energy packets throughout the 
network. This process behaves similarly to a string of holiday lights 
wherein only one light need be broken to cause the entire system to 
become dark. In a similar way one molecule of TNT can provide a 
massively amplified response.
    (Slide 8)
    To transition our technologies to the military, the ISN works with 
partner companies, both large and small, distributed throughout the 
United States. MIT has licensed our explosives detection technology to 
Nomadics, a small company based in Oklahoma, which has developed ultra-
sensitive explosive detectors. I am a paid consultant of Nomadics and 
actively assist them in extending this technology.
    (Slide 9)
    The Nomadics sensor, known as Fido TM, detects vapors of 
explosives as they pass through a capillary containing a nanocoating of 
our electronic plastic. These systems can detect explosive vapors at 
distances more than 2 meters away from the source. Only trained dogs 
are capable of similar detection limits, and hence Fido TM 
represents an important new capability for our soldiers.
    (Slide 10)
    Fido TM sensors have been fielded in Iraq both as hand 
held systems and on robotic platforms. I show here Fido TM 
mounted on a PackBot, which is a robotic platform developed by iRobot. 
As shown in the photograph, this integrated system can be used at 
checkpoints for vehicle interrogation at safe distances. It can also be 
used for investigating potential roadside bombs and identifying 
individuals who have recently handled explosives. The feedback from 
soldiers has been very promising.




    The Chairman. Tremendous.
    Mr. Bryant Linares, President and Chief Executive Officer 
of Apollo Diamond, Incorporated.

        STATEMENT OF BRYANT R. LINARES, PRESIDENT/CEO, 
                      APOLLO DIAMOND, INC.

    Mr. Linares. Thank you. I would like to thank Chairman Ted 
Stevens, Co-Chairman Daniel Inouye, and our Senator from my 
home State of Massachusetts, John Kerry, for the opportunity to 
testify before this committee.
    My name is Bryant Linares. I'm the CEO and President of 
Apollo Diamond, and a representative of the NanoBusiness 
Alliance.
    I'm here today to tell you that the philosophers and 
alchemists of Ancient Greece actually had it wrong trying to 
turn lead into gold. They should have been trying to turn 
carbon into diamonds.
    At Apollo Diamond, we're using nanotechnology production 
principles to grow one of the most coveted and desired 
materials known to mankind: diamond. I have a couple of 
diamonds. This is a 1-carat diamond that we've grown at Apollo 
Diamond, here. And Jason Mulvihill, from the subcommittee, is--
staff--has some diamonds to show you, Senators. And we all do 
this--we do this atom by atom from ordinary carbon.
    Diamond is an extremely useful material. It is the hardest 
material known to man. It is one of our planet's best 
electrical insulators; and it transmits the entire spectrum of 
light through it. Equally amazing and important is that diamond 
is totally biocompatible with the body's chemistry. Diamonds 
will lead to advanced applications in a wide range of fields, 
from computing to communications to medicine. And yet, 
diamonds' usage today has really been limited to jewelry, on 
the high end, and cutting and grinding applications, on the 
industrial end. The reason for this is simple. Current supplies 
of diamond, either from mines or from traditional industrial 
sources, do not provide diamond in a form, purity, or cost that 
allows its superior characteristics to translate into highly 
useful technical and commercial applications. Nanotechnology 
promises to change the availability of high-quality diamond and 
allow us to unleash the potential of this highly useful 
material.
    At Apollo Diamond, we're using nanotechnology to control 
atoms and molecules so that we can produce diamond in a 
prepared medium of carbon gas. We are able to produce real-
world sized diamonds, 5 carats and larger, that are purer than 
the finest mine diamonds. This process, we call culturing. It 
produces diamonds that are 100 percent real diamond. They are 
optically, chemically, and physically identical to diamonds 
mined from the Earth. They differ from mined diamonds only in 
the following three respects. Apollo diamonds are ultrapure, 
they are large--we're in the process of developing capabilities 
to grow these into 4-inch wafer sizes suitable for 
semiconductors and optics--they are cost-effective for the use 
in electronics, similar to the cost of other high-grade 
semiconductor materials.
    These features are what will make diamond useful for high-
tech applications. They were also the prerequisite material 
characteristics for silicon, which has powered our country's 
high-tech boom over the last 30 years. Diamond is now the 
beginning of a similar 50-year growth curve, in which we will 
see it used in every corner of our society, courtesy of 
nanotechnology manufacturing techniques.
    Apollo plans to use gem diamond sales to fund its 
commercialization of its technology initiatives, which makes us 
very unique, that we have a commercial application early in our 
product's lifecycle. However, most nanotechnology start-ups 
face tremendous challenges taking their technology from the lab 
to the store shelves.
    While there is money for research and for companies that 
are almost ready to sell products, the rest of the 
commercialization process lies in the--what's called the 
``Valley of Death.'' And this is the period, between initial 
research and the final commercialization, where investment 
money is limited. Start-up companies need financing. If America 
is going to maintain its leadership position in the global 
nanotechnology race, government must help create incentives to 
invest in nanotechnology commercialization. This will lead to a 
whole range of high-quality new jobs and new products spread 
across almost every industry, reduce our Nation's 
independence--dependence on foreign oil, generate positive 
effects for our environment and human health.
    We have four recommendations for the Federal Government. 
First, level the playing field by creating incentives for 
nanotech commercialization. This will ensure that the private 
sector takes full advantage of Federal investments in 
infrastructure development to date. Second, develop policy that 
creates export and trade controls that maintain access to 
global markets. Avoid export controls in nanotechnology, except 
where they have national security impact. Combat foreign 
interference with domestic trade institutions to ensure that we 
are able to develop sound business platforms for foreign trade 
here domestically. Third, address environmental health and 
safety implications of nanotechnology using existing regulatory 
structures. We believe that existing laws can, and should, be 
updated to address nanotechnology, rather than creating new 
laws. We must ensure that there are appropriate safeguards 
without diminishing our competitive advantage through--under 
regulations that can strangle small businesses like Apollo. 
Finally, encourage U.S. students to enter science and 
engineering programs, and develop policies that encourage 
foreign graduates to stay in the United States.
    In summary, we feel fortunate to live in the United States 
and to have the ability to develop a world-leading diamond 
technology platform here, domestically. With the right 
nurturing, we can develop a large diamond-based electronics and 
optics industry right here at home. American nanotechnology 
companies are making breakthroughs that could develop into 
full-fledged U.S.-based industries, but in order to realize 
this potential, we need to ensure that we are effectively 
competing with the rest of the world.
    Nanotechnology has the opportunity to profoundly improve 
our quality of life, increase our national security, provide 
good-paying, high-tech domestic jobs for our citizens. We are 
on the verge of a large wave of positive change. Let's make 
sure it stays here in the United States.
    Thank you for the opportunity to address this Committee.
    [The prepared statement of Mr. Linares follows:]

        Prepared Statement of Bryant R. Linares, President/CEO, 
                          Apollo Diamond, Inc.
    As the President and Chief Executive Officer of Apollo Diamond, 
Inc., I would like to thank Chairman Ted Stevens, Co-Chairman Daniel 
Inouye, and our Senator from my home State of Massachusetts, John 
Kerry, for the opportunity to testify before this committee.
The Potential of Nanotechnology
    The National Nanotechnology Initiative defines nanotechnology as 
the understanding and control of matter at dimensions of roughly 1 to 
100 nanometers (for comparison, a sheet of notebook paper is about 
100,000 nanometers thick) and exploiting the unique phenomena that 
occur at that scale to enable novel applications. Market impact 
estimates for nanotechnology have reached as high as $1 trillion by 
2015.
    At Apollo Diamond we are now using nanotechnology production 
principles to grow one of the most coveted and desired materials known 
to mankind, diamond.
The Need for Diamond
    Diamonds have long been desired not just because of their beauty in 
a necklace or an engagement ring, but also for their utility as an 
extreme material that surpasses all other known materials in its 
physical ability.
    Diamond's physical properties are truly amazing: diamonds are the 
hardest material known to man, they are known to be our planet's best 
electrical insulator, they can pass heat through their structure faster 
than any other known substance, they offer minimal expansion through 
large temperature variations, they are inert to most chemical and 
radioactive environments, and they are optically transmissive through 
the infrared, visible and ultraviolet spectrums of light. Yet, equally 
amazing and important, they are also totally biocompatible with the 
body's chemistry.
    Diamond is a material of the highest utility, yet its use has been 
limited to gem jewelry applications on the high end and cutting/
grinding applications on the industrial end. The reason for this is 
simple: current supplies of diamond, either from the mine or from other 
conventional diamond sources, do not provide diamond in a form, purity 
or cost that allows its superlative physical characteristics to 
translate into useful high-technology and commercial applications.
    The Defense Advanced Research Projects Agency (DARPA) has kept an 
early eye on diamond's development over the years because of the 
tremendous promise of the material's performance. In a Naval Research 
Lab/DARPA analysis on various semiconductor materials, diamond was 
shown to have a performance potential 100,000 times greater than that 
of silicon and hundreds of times that of the then state-of-the-art 
semiconductor materials gallium nitride and silicon carbide. The 
prospect of discovering a path to make such diamond material, however, 
appeared so daunting that the United States basically gave up all 
government-funded research on diamond's fundamental materials 
development in the mid-1990s.
The Nanotechnology Solution
    At Apollo Diamond, we are using nanotechnology manufacturing 
processes (i.e., controlling atoms and molecules) to reproduce diamond 
on an atomic level, while producing real-world sized diamonds (i.e., 5+ 
carat crystals) that have the purity of the finest diamond crystals 
found in mines. This process is called ``culturing,'' the growth of 
diamond through a prepared medium.
    The Apollo process produces diamonds that are 100 percent real 
diamond. They are optically, chemically and physically identical to 
diamonds mined from the Earth. They differ from earth-mined diamonds 
only in the following respects. Apollo Diamonds have:

        1. Costs similar to other semiconductor materials (when in 
        wafer form);
        2. Large sizes heading toward super sizes (4 inch wafers); and
        3. Ultra purity.

    These three features of cost, size and consistent purity are the 
hallmarks of an industrialized materials platform and were 
prerequisites for another fundamental high-utility material that has 
powered our country's high-tech boom over the last thirty years: 
silicon. Diamond is now at the beginning of a similar fifty-year growth 
curve, in which we will see it used in every corner of our society, 
courtesy of nanotechnology manufacturing techniques.
    Nanotechnology manufacturing techniques in essence let us to do two 
things: (a) control the diamond material at the nano scale to create an 
exact copy of a high-quality natural diamond; and (b) impart (if we so 
choose) nano scale features in the body of the diamond or on the 
surface of the diamond that can be electrically, optically or 
biologically activated.
    In our diamond growth chamber, thin slivers of diamond (diamond 
seeds) are placed on a pedestal. Purified gas is introduced into the 
growth chamber and super-heated, stripping the carbon atoms away from 
other impurities. The plasma gas of superheated carbon atoms envelops 
the diamond seeds and begins the deposition of individual carbon atoms 
on top of the seed diamond in the growth chamber. By maintaining this 
process the diamond grows literally atom by atom. A pure, perfect 
diamond crystal forms from what was previously gas.
    Through the selective introduction of other atoms (such as boron or 
nitrogen) into the pure carbon-based diamond, nano/atomic scale 
features can be imparted into the interior of the diamond or on its 
surface. These features and their consistent, engineered placement 
connect the potential of the diamond to the full utility of the 
material's promise. Consistent manufacturing, over large areas, with 
controlled impurity content create the platform for semiconductor, 
optical, and life science applications.
    There is enormous opportunity for diamond to shape our world in the 
same way that other blockbuster materials technologies like silicon 
have done. Diamond is poised to be the materials platform of choice for 
many advanced semiconductor, optical and life science applications that 
will radically change the world.
The Commercialization Path
    The culture of entrepreneurship is critical to innovation in the 
nanotechnology sector. Apollo Diamond is an excellent example of this. 
Like many high-potential, fast-growing American technology companies, 
Apollo Diamond is a start-up company with twenty full-time employees. 
The company was started in a garage but has its roots in the success of 
the previous technology companies started and sold by its founders. Our 
company places the good fortune of its success squarely on the fertile 
ground of the United States capital system, the work ethic and 
ingenuity of our American employees, and a band of 300 dedicated angel 
investors who want to see this diamond technology stay domestic and 
morph into a globally dominant business. This intersection of business 
propellant only happens in the United States and we are truly 
fortunate!
Apollo Diamond's Unique Approach to Commercialization
    Materials technologies are time-consuming and capital-intensive to 
commercialize. Fortunately, Apollo was able to leverage some unique 
capabilities and opportunities that most semiconductor materials 
science companies cannot access. First, the founders were commercially 
successful in other technology ventures and could fund the preliminary 
growth of the company despite lack of government funding. Second, and 
more importantly for Apollo, it was the early business opportunity to 
commercialize Apollo diamonds as gemstones that gave the company the 
business strategy it needed to develop this difficult technology. The 
gemstone opportunity is truly unique for a new materials technology 
because it represents an extremely large market opportunity early in 
the lifecycle of the product. Gem quality diamonds make up a $60 
billion global market at the retail level and an $11 billion market at 
wholesale.
    Furthermore, a precedent had already been set in the gemstone 
business with the introduction of cultured pearls early in the 1900s, 
which essentially allowed the introduction of cultured pearls into what 
was then a totally natural pearl market. Cultured pearls now represent 
over 90 percent of the cultured pearl business as natural pearls have 
become scarcer on a per capita basis because of environmental 
sustainability issues surrounding pearl diving.
    Enter the cultured diamond! Despite the fear in the diamond 
industry surrounding the introduction of a competing product, the 
cultured diamond actually makes the industry healthier. Diamonds remain 
robust as a product category by allowing consumers to purchase larger, 
more perfect diamonds than they were previously able to afford, opening 
new markets while allowing mined diamonds to grow in value. A gem 
market commensurately allows a technology company like Apollo to 
attract investments which require early commercialization, while 
building for the larger, long-term technology play.
    The opportunity is large. As in other areas, the United States has 
the opportunity to thrive in this emerging multi-billion dollar market. 
But, the stakes are high and we cannot take victory for granted. As a 
fundamental technology, we can not afford to hold anything less than a 
commanding lead. A national effort in diamond will lead to a whole 
range of technology sector jobs and allow our country to maintain our 
lead in the applications spin-offs from diamond technology that will 
directly affect our Nation's strategic capabilities.
Industry Challenges
    Innovation is the key to America retaining its competitiveness in 
nanotechnology. The source of innovation in America is our distinctive 
culture of entrepreneurship. This culture and its advantages, however, 
have come under increasing pressure in recent time. Investors want 
quick returns and the private and public-market sector do not want to 
invest in research or development. This comes at a time when foreign 
governments are directly supporting product focused R&D in their 
companies.
    Although there are seemingly many new technology start-ups every 
year in the United States, these startups need risk capital to bring 
innovations to market. The period between a company's formation and its 
achieving positive cashflow, known as the ``Valley of Death,'' is 
particularly acute for new technologies including nanotechnology start-
ups. Start-ups are most vulnerable during this time. Apollo is ending 
this phase with early stage revenues starting from gemstone sales which 
will ideally in turn support further technology development. To get 
here, however Apollo required investments in ``platform'' development 
and capital support to make the fundamental breakthroughs in basic 
research that power our product.
    From our perspective, we see that the U.S. has the opportunity to 
seed a large diamond-based electronics and optics industry here. The 
industry can give us leadership in a number of areas including electric 
power controls, high-speed wireless, water purification and bio-medical 
sensors for life science applications. These products could profoundly 
improve our quality of life, increase our national security and provide 
well-paying high-tech, domestic jobs. We are however under competitive 
threat from a declining local capital environment and growing foreign 
subsidies for our competitors. Leveling this playing field by 
encouraging investments in research and development will ensure that we 
are not in the nanotech race just to play, but that we are going to 
win.
Policy Recommendations
    We recommend that the U.S. Government:

   Level the playing field by creating incentives for 
        commercially-focused nanotech R&D. This will ensure that the 
        private-sector takes full advantage of the Federal investments 
        in infrastructure development to date. We believe that a focus 
        on commercialization will show an increased rate in new start-
        up development, successful companies and a good return on 
        investment.

   Engage the environmental, health and safety implications of 
        nanotechnology using the existing infrastructure and Acts for 
        materials regulation. We believe that the existing laws can and 
        should be updated to reflect nanotech rather than creating a 
        new law. The question is how we ensure that there are 
        appropriate safeguards without diminishing our competitive 
        advantage through undue regulations. We believe that when 
        answering this question we must make sure we consider 
        engineered nanomaterials in the context of other, known 
        materials rather than as a separate class.

   Encourage U.S. students to enter science and engineering 
        graduate programs and developing policies that encourage 
        foreign graduates to stay in the United States. In the near-
        term, we must continue to attract and retain the best 
        technological minds from around the world. In the medium- to 
        long-term, we must redevelop a pool of skilled domestic talent 
        that has always been a cornerstone of U.S. industry.

   Develop policy that creates export and trade controls that 
        do not restrict access to global markets. Support free and open 
        trade and avoid export controls on nanotechnology except where 
        they have a clear, direct, and material national security 
        impact relative to existing non nanotechnology based 
        alternatives. Commensurately, ensuring that foreign competitors 
        do not unduly access and influence institutions such as the 
        Federal Trade Commission or other governing bodies would ensure 
        that we are able to develop sound domestic business as a 
        platform for foreign trade.

    In summary, we feel fortunate to be in the United States and have 
had the benefits of our system to fund a world-leading diamond 
technology like the one we have at Apollo Diamond. With the right 
nurturing, we collectively have the opportunity to seed a large 
diamond-based electronics and optics industry here in the United States 
similar to the silicon-based renaissance that happened in the 1960s and 
1970s with silicon-based integrated circuit technologies. As Wired 
Magazine stated, a ``New Diamond Age'' is upon us where we will see 
diamond in every aspect of our society including electric power 
controls, high-speed wireless, water purification and bio-medical 
sensors for life science applications. These products have the 
opportunity to profoundly improve our quality of life, increase our 
national security and provide good-paying, high-tech, domestic jobs for 
our citizens. We are on the verge of a large wave of positive change, 
let's make sure it stays here in the United States.
    Thank you.

    Senator Allen. Mr. Chairman?
    The Chairman. Yes, sir?
    Senator Allen. Just for a point of clarification, may I 
ask, do you own the intellectual property to the manufacturing 
of these nano----
    Mr. Linares. Yes, we do.
    Senator Allen.--diamonds? You do.
    Mr. Linares. Yes, we do.
    Senator Allen. Thank you.
    The Chairman. Our next witness, Dr. Mark Davis, Professor 
of Chemical Engineering, at Caltech.

        STATEMENT OF MARK E. DAVIS, Ph.D., PROFESSOR OF

          CHEMICAL ENGINEERING, CALTECH; MEMBER OF THE

           COMPREHENSIVE CANCER CENTER, CITY OF HOPE

    Dr. Davis. Mr. Chairman and Committee Members, thank you 
for the opportunity to speak to you today.
    My objective is to tell you all about the excitement around 
nanoparticles used in medicines, and how they might be able to 
revolutionize the treatment of cancer.
    The summary points from my written testimony are that not 
all nanoparticles are alike, that nanoparticles that are made 
for injection into humans for therapeutics are well-designed 
and rigorously tested before they are injected into humans; 
these nanoparticle therapeutics, as I will try to show you, 
have the potential to change the way cancer is treated; and 
that the regulatory processes for these high benefit-to-risk 
ratio nanomedicines are working and constantly evolving, both 
from a scientific and regulatory point of view.
    Now, there has been great progress in understanding cancer, 
but there is still a great need to try to reduce the number of 
deaths due to cancer. And the ultimate cause of death in most 
cancer patients is drug-resistant metastatic cancer. What does 
that mean? That means that you have tumors disseminated through 
your body that no longer respond to chemotherapeutic 
treatments. And it's actually this state that nanoparticles 
have an opportunity to attack, precisely because of their 
unique properties.
    Here, I show a picture of nanoparticles. These particles 
contain polymers that are carrying therapeutic agents; and 
they're in the size of about 100 nanometers. And what that 
means is, they're very small. And, being small, they can 
circulate through your blood for a long period of time, access 
tumors throughout your body, and penetrate into the tumors. And 
we, and others, have shown that when you're in this size range 
between 50 and 100 nanometers, you can actually enter cells to 
bring in the drug that would normally be resistant to the 
molecule itself. So, it's an access plus also a treatment to 
drug resistant cells, that's important with that size.
    Now, although these are small, relative to particles you 
can see with your eye, and feel, they're large, relative to 
molecules. A molecule is about one nanometer in size. And so, 
when you have a 100-nanometer particle, you can really carry a 
lot of drug molecules with it. So, in addition to the access, 
you can carry a big payload.
    Now, let me illustrate how that can work. I hope we've all 
seen fireflies; and the back of a firefly lights up. And that's 
a protein that gives off that light. We can take the gene for 
that protein, put it in cancer cells; and so, we can follow 
those cancer cells through animals, because they light up. What 
I've shown you here is a series of images of a mouse where 
we've put human cancer cells in; and where you see the color in 
the white fur is actually where the tumors are. In the top 
sequence of days that you see there, there are three treatments 
at--where the stars are, of the normal chemotherapeutic drugs 
used in its optimum conditions. And this is one that's 
commercially used in patients. What you see is that the tumors 
start to shrink, but they ultimately come back in multiple 
locations and ultimately cause the death of the animal.
    On the bottom panel, we've given a nanoparticle with--
holding essentially the same drug, at one-tenth the amount of 
drug going into the animal, which can then access, very 
efficiently, these tumors. As you can see, those tumors are 
eradicated, and they stay away. And the animal lives a long 
life and dies of old age. These principles are--I show you 
today in animals--actually being tested in humans right now in 
early clinical trials.
    So, there's an amazing excitement, but also caution, 
because of safety. But what I want to make clear to you today 
is, nanoparticles in medicine are not new. There have been 
nanoparticles in humans used for therapeutics for at least 25 
years now. And there's a history of safety with these. In fact, 
the safety profile of these nanomedicines are actually better 
than the drugs that they're carrying when they're used alone.
    The features of these medicines that are really exploited 
are not only the size, but the surface properties. And it's the 
control of those properties that's important to these 
nanomedicines and doesn't happen when you get environmental 
exposures to nanoparticles. It's this control and then all of 
the regulatory safety issues that we have to go through, first 
in animals and in humans, before these are released to the 
public that make this different than other areas of 
nanoparticles.
    So, to conclude, where's the future and what are the 
challenges?
    Well, in the future, these newer nanoparticles are only 
going to get better. They're going to get more uniform in size 
and surface properties, which will make them more effective, 
and also we'll be able to make them more definable from their 
safety profiles. And, in fact, this year alone, for the first 
time, new nanomedicines that were designed from first 
principles are reaching the clinic.
    These new particles are going to have greater 
functionality, in the sense that they're going to be ``smart.'' 
They can recognize what's going on and do their functions only 
when they're in the right place to do them.
    We'll also have, simultaneously, imaging in therapeutic 
particles so that we can go into a patient and make sure that 
the target of the disease is in the patient before you treat 
the patient. And so, in a way, this is one aspect of 
personalized medicine.
    Now, what are the challenges? These are complex particles. 
They have many components. And so, their costs are going to be 
high. Also, we--any new medicine has long regulatory pathways. 
And in this space here, there are many, many intellectual 
property issues that have to be resolved to be able to make a 
functioning particle. Also, because of these regulatory issues, 
there are long times for approval, which turn into being very 
capital-intensive. These are really the rate-limiting steps to 
getting these medicines through to the public. So, because of 
those time-scales and so forth, if we're to get these medicines 
to the public in the next 10 years, they either have to exist 
today or in the very near future to be able to get it to them 
in the next few years.
    Thank you very much.
    [The prepared statement of Dr. Davis follows:]

   Prepared Statement of Mark E. Davis, Ph.D., Professor of Chemical 
 Engineering, Caltech; Member of the Comprehensive Cancer Center, City 
                                of Hope
    Mr. Chairman and members of the Committee, thank you for the 
opportunity to testify at this hearing. Since the early 1980s, I have 
been working in areas of science and technology that are now classified 
as nanoscience/nanotechnology. My objective today is to present the 
potential of nanoparticles for use as therapeutics to treat human 
disease. In particular, I wish to convey the excitement over what these 
new medicines could mean to the diagnosis and treatment of metastatic 
cancer. Additionally, I want to emphasize that not all nanoparticles 
are the same: those created for the purpose of injection into humans 
for therapeutic purposes are well designed and rigorously tested for 
safety offer a tremendous benefit-to-risk ratio for the treatment of 
cancer, unlike nanoparticles that enter the body from environmental 
exposure.
    Numerous diseases occur throughout the human body, and systemic 
imaging and therapy are necessary to treat and eradicate them. 
Metastatic cancer, for one, is a particularly important disseminated 
disease requiring such an approach, because treatment-resistant 
metastases (tumors located throughout the body that are not the primary 
tumor or site of the cancer) ultimately are the cause of death in most 
cancer patients. Detection and treatment of systemic diseases present 
numerous challenges, since humans possess a variety of defense 
mechanisms against the foreign agents that must be inserted into the 
body for imaging and therapy. Additionally, systemically-delivered 
agents need to reach all their intended tissue and cellular targets to 
be effective. These features and many others make the creation of 
systemic imaging and therapeutic agents a daunting task.
    Nanoscaled materials typically have properties not manifested 
either in larger particles with the same composition or in individual 
molecules, a distinguishing feature of great significance. While this 
motivation has driven nanoscience and technology in physics and 
engineering, it is not the main reason that nanoparticles are useful 
for systemic applications in the human body. Nanoparticles in the body 
behave differently compared with larger particles, not because of any 
fundamental difference in physical or chemical properties, but instead 
because the small size of a nanoparticle allows it access to sites that 
larger particles cannot reach.
    To achieve systemic localization, medicines must at some point 
enter the circulatory system for dissemination throughout the body. 
Molecular medicines that are typically 1 nm in size are quickly removed 
from the body by the kidneys. In order to stop this fast elimination, 
nanoparticles must be larger than 10 nm in diameter. Thus, an advantage 
of nanoparticle medicines over molecular medicines is that they can 
remain in circulation for longer times and provide for extended length 
of therapy (in addition to the enhanced localizations). Through careful 
experimentation, we and others have shown that nanoparticles can access 
tumors from the circulatory system and move throughout them if they are 
``well designed,'' and have sizes in the 50-100 nm range (Hu-Lieskovan 
et al., 2005 and Kim et al., 2006). By ``well designed'', I mean the 
surface of the particles are carefully controlled as the surface 
properties of the nanoparticles can greatly influence their behavior in 
humans (Chen et al., 2005). It is the purposeful control of size and 
surface properties of nanoparticle medicines that distinguishes them 
from other types of nanoparticles.
    Nanoparticles for imaging and therapy will be of size 10-100 nm and 
are composites of polymers and other organic materials and the 
therapeutic/image agents. These particles are typically spherical and 
they are seven orders of magnitude smaller than a soccer ball. That is, 
the increase in size from the nanoparticles to the size of a soccer 
ball is the same increase in size as going from the size of a soccer 
ball to the size of the Earth. While these nanoparticles are small 
compared to other particles, they are large compared to molecules. For 
example, the size of a molecule (ca. 1 nm) to the size of a 100 nm 
nanoparticle is analogous to the size relationship between a soccer 
ball and the Goodyear blimp (think about how many soccer balls could be 
held in the blimp). This size allows nanoparticles to have a variety of 
features and functions that are not possible with molecules. It is 
precisely these features and functions that can be exploited to create 
nanoparticle medicines.
    What particular features will be exploited when nanoparticles are 
used for systemic imaging and therapy? First, control over size and 
surface properties allows access to locations that are either denied to 
larger entities or difficult to reach in significant quantities with 
smaller entities such as molecule therapeutics because of rapid loss 
from the body (renal clearance). Additionally, if the drug or imaging 
agent needs entrance into the cell, nanoparticles can be engineered so 
that they can be internalized. There are at least two important 
consequences of this feature. Nanoparticles can be used to attack 
intracellular disease targets. Many of these intracellular targets have 
been known for some time but have been considered un-drugable. Also, 
nanoparticles can be designed to release a significant portion of their 
``payload'' when they enter cells, and this feature can be very 
advantageous. For example, many anticancer drugs lose their 
effectiveness when tumors become resistant owing to surface proteins 
that deny entrance to the drug molecules. Nanoparticles internalize 
into cells in ways that bypass the surface proteins, and can thus 
facilitate new therapies using existing drugs that, administered alone, 
would be ineffective. This capability of nanoparticles may provide 
whole new treatment methodologies for cancer patients.
    These attributes lead to a second feature of nanoparticles that 
makes them useful for systemic imaging and therapy: their ability to 
perform multiple functions, since the particles are large enough to 
accommodate numerous components within the same particle. Multiple 
agents can be assembled into individual nanoparticles (multiple 
therapeutic agents, multiple imaging agents, and their combinations), 
making it possible, for example, to combine small molecular 
chemotherapeutic agents with other types of agents to simultaneously 
attack cancer at multiple pathways.
    A third feature important for systemic imaging and therapy is the 
large number of atoms contained in a nanoparticle relative to that 
contained in a molecule (think of the soccer balls in the blimp). The 
nanoparticle thus delivers a greater ``package'' of material, and this 
increased payload size can help enhance the signal for imaging or 
provide a localized ``bolus'' of drug. One can imagine nanoparticle 
imaging agents that provide information on intracellular targets. The 
molecular target of the disease could be verified to exist in a patient 
prior to treatment, and since the observation was made via a 
nanoparticle with the same size and surface properties as the 
therapeutic particle, the therapy would be expected to reach the 
target. This combination will allow personalized medicine in the sense 
that treatment does not have to be administered until the target is 
known actually to be present in the patient. Also, follow-up imaging 
can be performed to verify that the target has been reached and that 
the therapy is working.
    While there is tremendous excitement over the potential of 
nanopaticles for cancer imaging and therapy, there are also words of 
caution about their safety appearing in the literature. Concerns about 
nanoparticle toxicity are legitimate since not much is known about how 
these entities behave in humans. The size and surface properties of 
nanoparticles give them access to locations that were not previously 
available with larger particles, and the size of properly designed 
nanoparticles can affect their localization. Studies in this area 
suggest that more investigation is needed in order to define the 
biocompatibility of nanoparticles in humans. On the one hand, there are 
examples where nanoparticles have no detrimental effects (silica coated 
magnetic 50 nm particles: Kim et al., 2006), and, on the other hand, 
examples where they do (carbon nanotubes: Salvador-Morales et al., 
2006). As expected, the size and surface properties of nanoparticles 
dictate their behavior, and much more data are necessary to develop a 
fundamental understanding of the structure-property relationships. 
However, one must consider the benefit-to-risk ratio for the intended 
application when assessing the biocompatibility of nanoparticles. In 
cancer, this ratio is very high and therapeutic agents in current use 
are not without their own safety risk profile. In fact, current 
nanoparticle medicines have superior safety profiles to the drugs that 
they are carrying. Also, in order to use a nanoparticle in humans, they 
must pass rigorous and lengthy regulatory processes prior to approval.
    Nanoparticle medicines and imaging agents already have a history of 
use in humans. Commercial therapeutics and imaging agents such as 
AmBisome (liposomal amphotericin B), SMANCS (synthetic polymer-drug 
conjugate), Abraxane (albumin-paclitaxel nanoparticle), and Feridex 
(dextran-iron oxide nanoparticle for MRI) are just a few of the 
nanoparticulate drugs and imaging agents currently available for human 
use. Some of these nanoparticles are in the 10-100 nm range (AmBisome 
has an average size of 60-90 nm, Feridex an average size of 
approximately 30 nm), while others are not (Abraxane has an average 
size of 130 nm). Other nanoparticulate materials such as the polymer-
drug conjugate XYOTAX (polygutamate-paclitaxel) are in late-stage 
clinical trials. Thus there is at least a 25-year history of using 
nanoparticles in medicine (AmBisome being the first and used in 
clinical trials in the 1980s). These commercial nanoparticles have gone 
through rigorous toxicity testing for regulatory approvals and have 
years of experience in humans. This increasing store of information 
provides an initial understanding of how nanoparticles can exist and 
function in the body. Although each new nanostructure will need to be 
tested individually, there is reason to believe that nanoparticles can 
be used as effective systemic medicines and imaging agents. As more 
biocompatibility data become available, a further understanding of how 
to tune size and surface properties to provide safety will permit the 
creation of new, more effective nanomedicines for systemic use.
    Since nanoparticles already exist as commercial medicines and 
imaging agents, what might be expected in the future? To begin, control 
over the size distribution and surface properties will see great 
improvements. Although average sizes of commercial nanoparticulate 
medicines and imaging agents fall within the range 10-150 nm, the 
distribution in size (that is, the spread of values about the average) 
and the consequent variation of surface properties are quite large for 
each product. Newer nanoparticles will be much more uniform in their 
size and surface properties than current ones, and this uniformity 
should translate into more effective medicines and imaging agents with 
better definable biocompatibilities. Additionally, nanoparticles will 
become ``smart'' in the sense that they will be able to take cues from 
their local environment to activate functions at specified times and 
locations. Early examples of this phenomenon already exist for 
nanoparticles designed to sense their entrance into cells and trigger 
the release of therapeutic agents (Davis et al., 2004).
    There is no doubt that these types of nanoparticles will exist in 
the future. Current nanoparticle medicines and imaging agents provide 
initial support for low toxicity with properly designed nanoparticles, 
and significant advancements in nanoparticle uniformity will further 
improve this situation. As newer and more complex nanoparticle systems 
appear, better methodologies to define biocompatibility will need to be 
developed, especially those that can assess intracellular 
biocompatibility. A significant remaining question is whether complex 
nanoparticle agents for imaging and therapy will be commercially-viable 
in the face of numerous impediments to their development and 
implementation. These complex, multifunctional nanoparticles will be 
expensive to produce, and issues regarding scale-up and cGMP production 
are not often discussed. The multi-component nature of the 
nanoparticles also renders their manufacture and regulatory approval 
very difficult. Beyond the cost of development itself, intellectual 
property costs can be very high as well, because each of the many 
components needed to create the nanoparticle might require multiple 
licenses. Given these high barriers to commercialization, some 
excellent medical nanoscience will doubtless never attain clinical or 
commercial status, and those products that do win approval will likely 
be expensive. Finally, we must recognize that the time-frame for 
regulatory approval is sufficiently long that new nanomedicines of the 
next 10 to 15 years--if they are to be realized--must already exist and 
be in some stage of research or development, or else be invented within 
the next few years. If advanced nanomedicines are to reach the public 
within 10 or 15 years, there must be a significant effort underway in 
their discovery and development today because of lengthy approval 
processes.
References
    Chen, M.Y., Hoffer, A., Morrison, P.F., Hamilton, J.F., Hughes, J., 
Schlageter, K.D., Lee, J., Kelly, B.R. and Oldfield, E.H. (2005) 
Surface properties, more than size, limiting convective distribution of 
virus-sized particles and viruses in the central nervous system. J. 
Neurosurg. 103, 311-319.

    Davis, M.E., Pun, S.P., Bellocq, N.C., Reineke, T.M., Popielarski, 
S.R., Mishra, S. and Heidel, J.H. (2004) Self-Assembling Nucleic Acid 
Delivery Vehicles via Linear, Water-Soluble, Cyclodextrin-Containing 
Polymers. Curr. Med. Chem. 11, 179-197.

    Hu-Lieskovan, S., Heidel, J.D., Bartlett, D.W., Davis, M.E. and 
Triche, T.J. (2005) Sequence-Specific Knockdown of EWS-FLI1 by 
Targeted, Nonviral Delivery of Small Interfering RNA Inhibits Tumor 
Growth in a Murine Model of Metastatic Ewing's Sarcoma. Cancer Res. 65, 
8984-8992.

    Kim, J.S., Yoon, T.J., Yu, K.N., Kim, B.G., Park, S.J., Kim, H.W., 
Lee, K.H., Park, S.B., Lee, J.K. and Cho, M.H. (2006) Toxicity and 
Tissue Distribution of Magnetic Nanoparticles in Mice. Toxicol. Sci. 
89, 338-347.

    Nomura, T., Koreeda, N., Yamashita, F., Takakura, Y. and Hashida, 
M. (1998) Effect of particle size and charge on the disposition of 
lipid carriers after intratumoral injection into tissue-isolated 
tumors. Pharm. Res. 15, 128-132.

    Popielarski, S.R., Hu-Lieskovan, S., French, S.W., Triche, T.J. and 
Davis, M.E. (2005) A Nanoparticle-Based Model Delivery System to Guide 
the Rational Design of Gene Delivery to the Liver, 2. In Vitro and In 
Vivo Uptake Results. Bioconj. Chem. 16, 1071-1080.

    Salvador-Morales, C., Flahaut, E., Sim, E., Sloan, J., Green, 
M.L.H. and Sim, R.B. (2006) Complement activation and protein 
adsorption by carbon nanotubes. Mol. Immunol. 43, 193-201.

    The Chairman. Thank you, Doctor.
    Our last witness is Dr. Clarence Davies, Senior Advisor to 
the Project on Emerging Nanotechnologies at Woodrow Wilson 
International Center.
    Dr. Davies?

      STATEMENT OF DR. J. CLARENCE (TERRY) DAVIES, SENIOR

         ADVISOR, PROJECT ON EMERGING NANOTECHNOLOGIES,

            WOODROW WILSON INTERNATIONAL CENTER FOR

       SCHOLARS; SENIOR FELLOW, RESOURCES FOR THE FUTURE

    Dr. Davies. Thank you, Mr. Chairman.
    My name is J. Clarence Davies. I am Senior Advisor to the 
Project on Emerging Nanotechnologies at the Woodrow Wilson 
International Center for Scholars, and a Senior Fellow at 
Resources for the Future. However, my testimony represents my 
personal views, and not the views of any of these 
organizations.
    The Project on Emerging Nanotechnologies asked me to 
examine the strengths and weaknesses of the current U.S. 
regulatory system in relation to nanotechnology. My report, 
``Managing the Effects of Nanotechnology,'' is the subject of 
my testimony. And I gather that will be included in the hearing 
record, Mr. Chairman.
    It is a critical time for nanotechnology. It can offer 
solutions to many of the most serious problems our society 
faces, as you have heard from many of the other witnesses 
today. However, we currently know little about its short- and 
long-term effects on human health or the environment. The 
public's views of nanotechnology remain----
    The Chairman. Can you all hear him back there? I don't 
think they can hear you. Pull that mike up a little bit closer. 
Thank you.
    Dr. Davies. That better?
    The Chairman. Yes.
    Dr. Davies. OK.
    The Chairman. Thank you.
    Dr. Davies. The public's views of nanotechnology remain 
unformed. Most people have never heard of nanotechnology. We 
now have a unique opportunity to get it right, to introduce a 
major new technology without incurring significant public 
opposition, and without gambling with the health of citizens, 
workers, consumers, or the environment.
    A lot depends on our ability to get it right. If we fail, 
we run a double risk. First, a risk of unanticipated harm to 
health and the environment. Second, a risk of public rejection 
of the technology. Our past experiences with agricultural 
biotechnology, nuclear power, and asbestos, for example, 
illustrate how tragic either of these risks could be. Industry, 
as well as the general public, has a big stake in ensuring that 
nanotechnology is developed responsibly from the start.
    Adequate government oversight of nanotechnology is an 
essential part of getting it right. The Federal agencies have 
maintained that they have adequate statutory authority to deal 
with nanotechnology. The analysis in my report clearly shows 
that the existing regulatory structure for nanotechnology is 
not adequate. Some programs, like FDA's oversight of drugs, are 
OK, as Dr. Davis has commented, but the regulatory structure as 
a whole suffers from three types of problems: gaps in statutory 
authority, inadequate resources, and a poor fit between some of 
the regulatory programs and the characteristics of 
nanotechnology.
    The Chairman. What was that, the third one?
    Dr. Davies. A poor fit between some of the regulatory 
programs and the characteristics of the technology. In other 
words, the definitions in the laws and, you know, the way the 
program is oriented don't fit very well.
    The gaps in statutory authority are most obvious with 
respect to two of the most common uses of nanomaterials, 
cosmetics and consumer products. In both cases, there is 
essentially no statutory authority to review the health and 
safety of these products. In both areas, there is a large 
potential for human exposure.
    Originally, I did not believe that new legislation would be 
necessary; however, given the shortcomings of the existing 
system, I now believe that it is in everyone's interest to 
start thinking about a new law. The existing laws cannot 
provide protection for the public or offer a predictable 
marketplace for nanotechnology businesses and investors. No 
amount of coordination or patching will fix this problem.
    One of the frequent reactions that I got to the report 
after its release was, shouldn't we wait for more information 
before we regulate? Waiting for more information is a 
reasonable and valid option in the scientific world; however, 
in the policy world, waiting for more information is not 
delaying a decision, it is making a decision. It is making a 
decision to not do something. Put another way, our policy 
choice is not between acting or waiting for more information, 
it is between reviewing products for their health and safety or 
allowing people to be exposed to products without any 
government oversight of their effects.
    Do we need more scientific information to help us evaluate 
the health and safety of nanoproducts? Absolutely. And I 
support the kinds of initiatives that Dr. Gotcher talked about 
in his testimony.
    Is there reason now to believe that some nanoproducts could 
have adverse effects? Yes, for reasons that I outlined in my 
written testimony and also in a scientific review article which 
I have submitted for the record.
    We might not need regulation if all companies were good 
product stewards, just as we would not need criminal laws if 
all people were angels. Unfortunately, there are bad actors in 
the corporate world, and all companies face pressures not to 
invest money in so-called nonproductive efforts, like testing 
for health and environmental effects. It is in a firm's 
interest to test products for acute, immediate adverse effects, 
but when it comes to testing for chronic effects, like cancer 
immunogenesis, or to testing for environmental effects, it can 
be tempting for companies to not test their products.
    The greatest threat to the future of nanotechnology and to 
nano-based businesses is not regulation, but a collapse in 
public confidence. A dialogue among interested parties, 
including industry, environmental and consumer groups, and 
government agencies can, I think, arrive at a reasonable 
regulatory approach that does not unduly inhibit technological 
innovation. This dialogue needs to start now. We cannot afford 
to lose the opportunity to get it right.
    Thank you, Mr. Chairman.
    [The prepared statement of Dr. Davies follows:]

 Prepared Statement of Dr. J. Clarence (Terry) Davies, Senior Advisor, 
  Project on Emerging Nanotechnologies, Woodrow Wilson International 
      Center for Scholars; Senior Fellow, Resources for the Future
    I would like to thank Chairman Ted Stevens, Co-Chairman Daniel 
Inouye, and the members of the Senate Commerce, Science, and 
Transportation Committee for holding this hearing on developments in 
nanotechnology. I appreciate the opportunity to appear here before you 
today.
    My name is J. Clarence (Terry) Davies. I am a Senior Advisor to the 
Project on Emerging Nanotechnologies at the Woodrow Wilson 
International Center for Scholars and a Senior Fellow at Resources for 
the Future. However, my testimony represents my personal views and not 
those of the Project on Emerging Technologies, the Wilson Center, or 
Resources for the Future.
    Last summer, the Project on Emerging Nanotechnologies asked me to 
examine the strengths and weaknesses of the current U.S. regulatory 
system in relation to nanotechnology. My report, ``Managing the Effects 
of Nanotechnology,'' is the subject of my testimony today. I request 
the Committee's permission to include the report as part of the hearing 
record.
    I was asked to do the study because I have spent more than 40 years 
as an analyst and participant in environmental policy. I have a Ph.D. 
in American Government from Columbia University, and have been on the 
faculties of Bowdoin College and Princeton University. I have worked in 
the Federal Government at three different times, most recently as 
Assistant Administrator for Policy at the Environmental Protection 
Agency (EPA) in the George H.W. Bush Administration. In 1970, as a 
consultant to the President's Advisory Council on Executive 
Organization, I co-authored the plan that created EPA.
    I have served on a number of committees of the National Academy of 
Sciences, chaired the Academy's Committee on Decision Making for 
Chemicals in the Environment, and in 2000 I was elected a Fellow of the 
American Association for the Advancement of Science for my 
contributions to the use of science and environmental policy analysis.
    When I began the study for the Project on Emerging 
Nanotechnologies, I spent several months focusing on the applications 
and implications of nanotechnology. As I learned more, I was impressed 
by what a critical time this is for the development of this marvelous 
technology. Nanotechnology is still very new and it is full of promise. 
It may offer solutions to many of the most serious problems our society 
faces. It offers the hope of significant breakthroughs in areas such as 
medicine, clean energy and water, environmental remediation, and green 
manufacturing. However, we currently know little about the short- and 
long-term effects of nanotechnology on human health or the environment.
    Additionally, the public's views of nanotechnology remain largely 
unformed. The vast majority of people have never heard of 
nanotechnology, though it is anticipated that they will learn about the 
technology as applications emerge and as products enter the market. For 
this reason, we now have a unique opportunity ``to get it right''--to 
introduce a major new technology without incurring significant public 
opposition and without gambling with the health of citizens, workers, 
consumers, or the environment.
    A lot depends on our ability to ``get it right.'' If we fail, we 
run a double risk. First, we run the risk of unanticipated harm to 
health and the environment. Second, we run the risk of public rejection 
of the technology. Our past experiences--with agricultural 
biotechnology, nuclear power, and asbestos, just to name a few--
illustrate how tragic either of these scenarios could be. Industry, as 
well as the general public, has a big stake in ensuring that 
nanotechnology is developed responsibly from the start.
    Adequate government oversight of nanotechnology is an essential 
part of ``getting it right.'' The public does not trust industry to 
regulate itself. Past experience, as well as surveys and focus groups, 
show that if the public does not think that the government is 
exercising adequate regulatory oversight of a potentially hazardous new 
technology then it will mistrust and likely reject that technology. If 
this happens, literally billions of dollars of investment by government 
and industry in nanotechnology research and development may be 
jeopardized.
    To date, the National Nanotechnology Coordinating Office (NNCO) has 
maintained that the Federal agencies have adequate statutory authority 
to deal with nanotechnology. Dr. E. Clayton Teague, Director of the 
NNCO, has said that: ``Until we have good, solid, scientifically 
validated information that would indicate significant inadequacies in 
existing regulatory authorities, additional regulations would just be 
unnecessarily burdensome.'' \1\ This is an insufficient response to the 
challenge, and, I believe, misleading to both the public and industry. 
By overstating the case for regulatory adequacy, one shifts risks onto 
corporate investors, shareholders, and the exposed public.
---------------------------------------------------------------------------
    \1\ Susan R. Morrissey, ``Managing Nanotechnology: Report Evaluates 
Ability of US Regulatory Framework to Govern Engineered 
Nanomaterials,'' Chemical & Engineering News, Volume 84, Number 5, 
January 30, 2006, p. 34.
---------------------------------------------------------------------------
    The analysis in my report clearly shows that the existing 
regulatory structure for nanotechnology is not adequate. It suffers 
from three types of problems: (1) gaps in statutory authority, (2) 
inadequate resources, and (3) a poor fit between some of the regulatory 
programs and the characteristics of nanotechnology.
    (1) The gaps in statutory authority are most obvious with respect 
to two of the most common uses of nanomaterials--cosmetics and consumer 
products. In both cases, there is essentially no statutory authority to 
review the health and safety of these products. In both cases, the 
principle is caveat emptor--let the buyer beware. In both areas, there 
is large potential for human exposure to nanomaterials. A wide variety 
of nano-based consumer products have already begun to enter the market 
as sporting goods, clothing, cleaning materials, and kitchen 
appliances. Similarly, nano-based cosmetic products already range from 
skin creams to spray-on foot deodorizers, all with significant exposure 
potential (dermal, inhalation, and ingestion) and little publicly-
available risk data.
    A more subtle set of statutory problems relates to the Toxic 
Substances Control Act (TSCA), which many have suggested as the primary 
law that should be used to regulate nanotechnology. TSCA is a very weak 
law for reasons that I describe in the report. One weakness is 
particularly important in relation to nanotechnology. TSCA implicitly 
assumes that if there is no information on the risk of a chemical then 
there is no risk. In other words, the law acts as a significant 
disincentive to generating information on possible risks of a chemical. 
This is exactly the opposite of what is needed. A major reason to 
adequately regulate nanotechnology is to provide an incentive for 
generating information. There is an interaction between regulation and 
information. A certain amount of information is needed to make 
regulation work, but regulation, properly crafted, can provide an 
important incentive to produce health and safety information.
    (2) All of the Federal regulatory programs suffer from a shortage 
of resources. This shortage of resources is not only related to funding 
levels. There is also a shortage of personnel--particularly individuals 
with the appropriate expertise to deal with nanotechnology. For some of 
the programs most relevant to nanotechnology the deficiency is so great 
that it raises doubts about whether the program can function at all. In 
1980, The Occupational Safety and Health Administration (OSHA) had 
2,950 employees, a number that was inadequate for its responsibilities 
then. Today, with a greatly expanded economy and workforce, OSHA has 
2,208 employees, approximately 25 percent fewer. The Consumer Product 
Safety Commission (CPSC) has, since its creation, suffered from both 
statutory and resource problems. Today CPSC has half the staff that it 
had in 1980. Statutory authority without the resources for 
implementation will not lead to adequate oversight. This committee 
should ask for a more detailed accounting of available resources 
[including personnel (FTEs) and research dollars] dedicated 
specifically to nanotechnology oversight in key agencies (EPA, FDA, 
OSHA, CPSC, and the U.S. Department of Agriculture).
    (3) None of the health and environment laws were drafted with 
nanotechnology in mind, and fitting nanotechnology into the existing 
statutory framework can be problematic. For example, many of the 
environmental statutes are based on an assumption that there is a 
direct relationship between quantity or volume on one hand and degree 
of risk on the other. This relationship does not hold for most 
nanomaterials.
    In the near-term, we will have to make do with current laws and 
programs. My report discusses adjustments to existing laws. It also 
discusses voluntary programs that can be used in the near-term. Though 
voluntary programs have been put forth as an interim solution, they are 
not a solution over the long-term.
    Voluntary programs tend to leave out the firms that most need to be 
regulated. Such programs also lack both transparency and accountability 
and thus do not contribute to public confidence in the regulatory 
system.
    When I began working on the report, I did not believe that new 
legislation would be necessary. However, given all of the shortcomings 
of the existing system, I now believe that it is in everyone's interest 
to start thinking about what a new law might look like. The existing 
laws are not adequate. They cannot provide protection for the public, 
or offer a predictable marketplace for nanotechnology businesses and 
investors. No amount of coordination or patching is likely to fix the 
problem.
    The report devotes a whole chapter to what a new law might contain. 
However, the details are less important than getting the major 
interested parties talking about what needs to be done. Such a dialogue 
depends on recognizing the shortcomings of the existing regulatory 
framework. All-out defense of the status quo does not serve the 
interests of public safety or technological innovation. If 
nanotechnology is to reach its full potential, then the problems that I 
raise in my report need to be faced.
    Since its release in January 2006, the report has attracted a good 
deal of attention. I have frequently been asked three questions which 
are worth briefly addressing here:

        1. Is there any reason to believe that there are any adverse 
        effects from nanotechnology?

        2. Can't industry be trusted to test new products since it is 
        in its best interest to do so?

        3. Don't we need to wait for more information before we can 
        regulate nanotechnology?

    (1) Adverse effects: I am not a toxicologist, and I do not have the 
qualifications to address in depth the potential adverse effects of 
nanotechnology. However, there are three reasons to believe that such 
effects are likely. First, every technology of the scope of 
nanotechnology has had adverse effects. The idea that nanotechnology 
could be completely innocuous flies in the face of what we have learned 
over many years of dealing with technological innovation.
    Second, many decades of studying exposure to fine particles--in the 
workplace and the environment in general--have shown that inhaling fine 
(and possible nanometer-sized) particles can be harmful. Third, on-
going research into the health implications of engineered nanomaterials 
raises many questions and concerns. For instance, we know that:

   Nanometer-scale particles behave differently from larger 
        sized particles in the lungs--possibly moving to other organs 
        in the body;

   The surface of some nano-structured particles is associated 
        with toxicity--rather than the more usually measured mass 
        concentration; and

   Conventional toxicity tests do not seem to work well with 
        nanomaterials such as carbon nanotubes.

    My report references several summaries of the results of these 
tests. \2\
---------------------------------------------------------------------------
    \2\ Additionally, see: Gunter Oberdorster, Eva Oberdorster, Jan 
Oberdorster. ``Nanotoxicology: An Emerging Discipline Evolving for 
Studies of Ultrafine Particles,'' Environmental Health Perspectives, 
July 2005, 113(7): 823-839; The Royal Society and The Royal Academy of 
Engineering. Nanoscience and Nanotechnologies, London, U.K., The Royal 
Society and The Royal Academy of Engineering, 2004; and Tracy Hampton. 
``Nanotechnology Safety,'' JAMA 294(20): 2564-2564.
---------------------------------------------------------------------------
    The debate over how safe nanotechnology is, and how risk should be 
governed, must be conducted in the knowledge that nanotechnologies--or 
the specific applications of nanotechnology--are diverse. Some will 
present a far greater risk to health and the environment than others.
    For example, a review article, which I also ask permission to 
submit for the record, notes that nanomaterials and products which 
present the greatest risk to human health are those that can both get 
into the body and possess a nanostructure that is associated with toxic 
effects. These include unbound nanometer-diameter particles (in 
powders, aerosols and liquid suspensions); agglomerates and aggregates 
of nanometer-diameter particles, and particles produced as 
nanotechnology products degrade or are machined in some way. \3\
---------------------------------------------------------------------------
    \3\ Andrew D. Maynard and Eileen D. Kuempel. ``Airborne 
Nanostructured Particles And Occupational Health,'' Journal of 
Nanoparticle Research, 2005 7: 587-614.
---------------------------------------------------------------------------
    Overall, the current state-of-knowledge on nanotechnology and risk 
does not provide definite answers to how harmful nanotechnologies are. 
Rather, it raises red flags concerning some materials and products, and 
enables us to start asking important questions. Now that we can begin 
to ask the right questions, it should be possible to develop 
scientifically sound, rational and responsible approaches to 
understanding and managing the possible impacts of nanotechnology on 
health.
    (2) Voluntary testing. It is in the interest of most manufacturers 
to do some tests of their products. A number of companies have a 
reputation of exceeding current regulatory requirements in regards to 
product testing, and no manufacturer wants its customers or workers to 
be adversely affected by its products. However, testing, when done, is 
largely for short-term acute effects and not for long-term effects, 
such as cancer, mutagenesis, and environmental effects. Testing for 
long-term health and environmental effects can be expensive and, if 
there is some adverse effect, it is unlikely that the effect will ever 
be associated with the particular product. Thus it can be tempting not 
to do such testing, if not required.
    (3) Information and regulation. We do need more information before 
an adequate oversight system can succeed. But it is not too early to 
start thinking and talking about the outlines of such a system. It is 
not too early because nanotechnology products are being commercialized 
now, and the regulatory system must deal with them. A survey by EmTech 
Research of companies working in the field of nanotechnology has 
identified approximately 80 nanotechnology consumer products, and over 
600 nanotechnology-based raw materials, intermediate components and 
industrial equipment items that are used by manufacturers. \4\ Experts 
at the Project on Emerging Nanotechnologies believe that the number of 
nanotechnology consumer products on the market worldwide is actually 
larger than the EmTech data suggest.
---------------------------------------------------------------------------
    \4\ U.S. Environmental Protection Agency, External Review Draft 
Nanotechnology White Paper, December 2, 2005, p. 14.
---------------------------------------------------------------------------
    Furthermore, it also is not too early to start thinking and talking 
about an oversight system because knowing what a regulatory structure 
will look like can provide important guidance about what information is 
needed. Given the realities of the legislative process, it could be 
years before new legislation is enacted. The process of discussing a 
better system can itself help generate agreement about what needs to be 
done, and help foster international harmonization, research, and public 
participation.
    We will never have all the information we want, but now is the time 
to begin putting in place an oversight system to utilize the available 
information and encourage the generation of more.
    My report is intended to help advance a powerful and beneficial new 
technology while at the same time ensuring that it does not produce 
avoidable adverse effects. These twin goals are mutually compatible. In 
reality, they are inseparable. If we do not create a system that can 
adequately review nanotechnology products for potential adverse 
effects, we not only may endanger human health and the environment, we 
will also endanger the future of the technology itself.
    The Financial Times last year in an editorial, ``Nurturing 
Nanotech'' said: ``No one wants to strangle a fast-expanding young 
industry with regulations. The Internet illustrates the benefits of 
allowing an exciting new technology to explode in a virtually 
unregulated environment. But some promising new fields are likely to 
grow better inside a well-constructed regulatory framework, either 
because they are exceptionally sensitive in moral and ethical terms or 
because they pose a potential hazard to health and the environment. 
Nanotechnology comes clearly into the latter category.'' \5\ I agree.
---------------------------------------------------------------------------
    \5\ ``Nurturing Nanotech,'' The Financial Times. February 26, 2005.
---------------------------------------------------------------------------
    Existing laws and regulatory programs are inadequate for dealing 
with the possible adverse effects of nanotechnology. Failure to develop 
a better system could leave the public unprotected, the government 
struggling to apply existing laws to a technology for which they were 
not designed, and industry exposed to the possibility of public 
backlash, loss of markets, and potential financial liabilities. 
Nanotechnology holds great promise for a better life. If it is to 
fulfill this promise, we must openly face the issues of whether the 
technology has adverse effects, what these effects are, and what kind 
of a regulatory system can prevent adverse effects from occurring.
    The greatest threat to the future of nanotechnology and to 
nanotechnology-based businesses is not regulation but a collapse in 
public confidence. Based on polling and focus groups, I believe that 
the public will hold both government and industry to a higher standard 
of safety for nanotechnology than it has for any previous technology. 
\6\ Citizens are both more sophisticated and more suspicious of new 
technologies and will be largely intolerant if adverse effects occur. 
If a problem develops and public confidence collapses, it will be 
impossible to go back and argue that the existing system of statutes 
was adequate. There will be great public pressure to do something. We 
will not have the time to undertake the careful deliberation and 
consultation with stakeholders that can take place now. We will have 
lost the opportunity to ``get it right.''
---------------------------------------------------------------------------
    \6\ See Jane Macoubrie. Informed Public Perceptions of 
Nanotechnology and Trust in Government. Washington, D.C.: Woodrow 
Wilson International Center for Scholars, 2005. Available at http://
www.wilsoncenter.org/news/docs/macoubriereport1.pdf;
    Nanotechnology: Views of the General Public. London, U.K.: BMRB 
Social Research, January 2004, BMRB/45/1001-666. Available at 
www.nanotec.org.U.K./Market%20Research.pdf; and Andrew Laing. ``A 
Report on Canadian and American News Media Coverage of Nanotechnology 
Issues'' in First Impressions: Understanding Public Views on Emerging 
Technologies. Ottawa, Canada: Canadian Biotechnology Secretariat, 2005. 
Available at http://www.biostrategy.gc.ca/english/View.asp?x=802.

    The Chairman. Well, thank you very much.
    You really hit the area that I was going to ask about, 
harder than I intended to hit it. We have on the floor, as you 
know--well, it is not in the floor now. It missed staying on 
the floor by one vote last night on asbestos. The problems of 
whether any of these new substances or new combination of 
substances--am I using the right words?--could cause us 
problems of exposure, contamination, diseases, or not. Who is 
going to look into that? Dr. Davies, you sort of indicate we 
don't have enough basic law to deal with that. Have you written 
anything on that, in particular?
    Dr. Davies. On the need for further research or on the gaps 
in the laws?
    The Chairman. On gaps in the law.
    Dr. Davies. Yes. I mean, the best example is cosmetics, 
which are being--nanomaterials are being widely used now in 
face creams, hair lotions, foot deodorants, a whole range of 
cosmetic products. They are not tested--or, I mean, so far as 
we know, they are not tested for their effects, or at least 
there is certainly no public requirement that they be tested. 
There is no governmental review of those products for their 
safety or their environmental effects. So, that's--you know, 
that's the kind of gap that I'm talking about.
    There are whole other areas of--Dr. Davis talked about FDA 
review of drugs and so on--which I think are fine, which are 
functioning, you know, reasonably well now, and, you know, I 
wouldn't tamper with at all. But there are large gaps, in terms 
of the statutory authority, and there are also major resource 
problems. There was an earlier question, I think by Senator 
Pryor, about the resources for the Consumer Product Safety 
Commission. The Consumer Product Safety Commission has slightly 
over 400 people, total staff. That's 50 percent down from what 
it was in 1980. And in 1980 it didn't have anywhere the staff 
it needed to keep track of consumer products. So, that's the 
kind of resource problem that I'm talking about.
    The Chairman. Well, I was told last night that the last 
time asbestos was really utilized in our industry was around 
1970, but the exposure continues for years, as we found in 
schools and other places around the world. It's a very serious 
subject, I think. We are getting into newly developed 
substances, in effect, either manmade or at least isolated by 
man, that might have the potential for contamination or 
exposure leading to difficulty. I think it is something that we 
ought to explore with you further, Dr. Davies. It may send 
shudders up and down the back of people, like Dr. Gotcher here, 
but who is going to think about the delay that might come from 
such a review to determine whether exposure--whether there is 
an environmental potential for such contamination for the 
future, or cause of illness in the future? I think it is 
something we ought to explore.
    I do want to thank all of you for your testimony, and I 
think you probably testified more about the real application of 
some of these nanotechnologies. What challenges did you really 
face as you developed these new concepts, particularly in the 
battery area?
    Dr. Gotcher. Well, I think I'd like to address your 
question about health and safety, just for a moment, if I may.
    The Chairman. Sure.
    Dr. Gotcher. The asbestos issue is a severe issue. But what 
happened there was, a lot of material was mined and 
incorporated into products before any health or safety work was 
done at all. And I think in the nanomaterial world----
    The Chairman. There was a war going on, Doctor.
    Dr. Gotcher. Well, absolutely. But, I think, in the 
nanomaterials, I think a number of us are trying to react much 
more responsibly and look at the health and safety impact of 
these materials before they're widely used, before millions of 
pounds are used in products. And so, I think we're trying to 
address some of the concerns that Dr. Davies is raising.
    Now, with respect to batteries, our materials are used 
inside of a product, they're encapsulated in materials. And so, 
the nanomaterials are not readily available to the environment.
    The Chairman. Let me back up and tell you about a pit in 
Alaska, where they went back and excavated all of the residue 
of rehabilitated and reprocessed materials. A man took old 
batteries, and he combined pieces of them and made new types of 
batteries. And he lined a pit with some substance, thinking it 
was enough protection, and he put batteries that he had gotten 
for several years in that pit. It was found that there was 
leaching out of that pit, chemicals that had been blended 
together by virtue of his disposal, and it became a Superfund 
site.
    Now, what about your batteries? What happens when they 
dispose of them?
    Dr. Gotcher. Well, our materials are much more 
environmentally friendly. There are no caustics, no acids, no 
lead, no chromates, no cadmium, and no hazardous metals at all. 
And our anticipation is that these batteries will be 
recyclable. So, what we're trying to do is look ahead, and 
learn from the past, and develop an attitude to bring new 
products to market with this product stewardship concept in 
mind that has been used in the chemical industry for decades.
    The Chairman. You use a lithium ion, don't you?
    Dr. Gotcher. That's correct.
    The Chairman. Can that be reprocessed?
    Dr. Gotcher. Yes, it can.
    The Chairman. Is there any danger, if it is not?
    Dr. Gotcher. Not that we're aware of. In fact, lithium, in 
small quantities, is considered to be a favorable metal to have 
in your body. It's actually used as a positive drug to treat 
depression, in low quantities.
    The Chairman. Well, my time is almost running out. I would 
like to have any comment from any of you who would like to make 
one on the following question: Is there anything here that we 
should do in the near future that we have not done with regard 
to this new whole concept in nanotechnology? I am talking about 
Congress. I have Dr. Davies' concept about reviewing the laws, 
but do you have any gaps in the legal processes or the 
availability of assistance that you think we should know about?
    Dr. Davies. Yes, absolutely. I mean, I--as I say, things 
like cosmetics, many kinds of consumers products have gaps, 
which the Congress should address. Also, with respect to the 
resource shortages, which I think are very acute in the 
regulatory process, or among regulatory programs, I think this 
committee, or a committee of the Senate, could request from the 
regulatory agencies what resources they do have available to 
deal with the health and safety consequences. And just as a 
starting point----
    The Chairman. Let me go to Dr. Hylton, and then I have got 
to move on. Doctor, you looked like you wanted to say 
something.
    Dr. Hylton. So, my comment about nanotechnologies and 
environmental health and safety is much along the lines that 
they're--they may be hazardous materials, and we should think 
of them as hazardous materials, not necessarily because they're 
nanotechnology, but because they're new and we don't know what 
they do yet. So, we've dealt with hazardous materials for a 
long, long time, and sometimes in not very smart ways, the 
examples of which, or some of which, were just mentioned. So, I 
think--but it's an immensely complicated problem. I think it 
would be--it would be very difficult to come up with a piece of 
legislation that could address all of the risks associated with 
nanotechnology. So, I think one approach might be to employ a 
team of experts to identify where the hotspots are--cosmetics 
being one example, perhaps--where there might be risks that are 
large in comparison to the current usage of the materials, or 
the anticipated usage of the materials in the near future, and 
then attack those one by one. Because I think attacking them 
will require a different approach in each case.
    The Chairman. Very well. I thank you.
    Senator Ensign?
    Senator Ensign. Thank you, Mr. Chairman.
    With such a diverse panel with different ideas, it is hard 
to know where to begin questioning. But, let me try to address 
it this way. First of all, Dr. Hylton--is it Hylton or----
    Dr. Hylton. It's Hylton.
    Senator Ensign. Hylton, OK. Dr. Hylton, regarding the model 
that you have drawn up to try to get products to market via 
more public/private partnerships, I was just mentioning to 
Senator Allen, that I could foresee potential future problems. 
We even hear criticisms now, and we do not have these centers 
set up. For instance, when the government conducts basic 
research on drugs, and then the drug companies take a product 
to market, we get criticized, because people wonder why the 
government does not get funds in return for its investment. How 
do you foresee answering criticisms that this would happen? You 
know those kind of criticisms would occur in a situation like 
that. The product is developed out of government-funded basic 
research, then somebody takes the product and makes a gazillion 
dollars out of it. Does the government get any benefit, other 
than a stronger economy from that? How do you address this 
issue?
    Dr. Hylton. I guess I would say two things, the most 
obvious benefit being the economic one, which you brought up.
    Senator Ensign. Sure.
    Dr. Hylton. We get more--public invests money, we get taxes 
for it in return.
    I think, however, if we could--we could level the playing 
field to a great deal--a great deal if we had organizations 
such as the ones that I suggested, because they would make it--
they would make intellectual-property access, for example, much 
easier to a much larger group of people. I think it's partly a 
problem of transparency. There's a--if many more people could 
see the opportunities, many more people would take the leap and 
start a new company or invest in a new product or so forth. So, 
it's partly one of providing transparency, and also by 
providing, I think, critical pieces of infrastructure--that 
maybe only very rich organizations could afford--to smaller 
organizations will also help to level the playing field there.
    So, I guess that would be my comment there, about why an 
organization--that's how you might respond to a criticism such 
as that.
    Senator Ensign. Interesting idea. I think that the health 
issue related to nanotechnology is something that should be a 
concern. Dr. Gotcher, I am very proud of the efforts that you 
and your company are making to address health concerns. I think 
that is very responsible. A company should be applauded when 
they are doing that right up front. And, based on what the 
trial lawyers do to companies, I think it is actually a smart 
business move, because, as you have seen, the reason we are 
trying to fix the asbestos problem is because of the huge 
potential liabilities. If there turns out to be problems with 
nanotechnology, trial lawyers will exploit it. So, it is a 
smart move on your part to behave so responsibly up front.
    In addition, I just want to point out the difficulty in 
this. Dr. Davies, I appreciate the concerns you raised in your 
testimony. How do we balance the importance of safety with the 
danger of over-regulating, and trying to be too safe. Over-
regulation can stop products coming to market that may save 
hundreds of thousands of lives a year. You know, this balancing 
act is so difficult. I once heard an illustrative and analogous 
hypothetical--if we had OSHA around when the Wright Brothers 
were developing the first airplane an OSHA regulator might have 
looked at what the Wright Brothers were doing and said ``Wait a 
second. You're going to take this thing up into the air, where 
man has never been before, and you're going to have employees, 
potentially, on this thing, test pilots. But how are we going 
to ensure safety on this thing? I don't think we can go for 
this.'' I'm just saying that we may never have been able to 
break into the heavens if we regulated the wrong way. And you 
could seriously impede progress if you regulated product after 
product after product in this overly burdensome manner.
    I think, that it is sometimes very beneficial when the 
Congress is so slow to act that we actually allow products to 
evolve into their final versions before we can actually act and 
over-regulate. And so, I want to make sure that, as we move 
forward in the nanotechnology field, that we all consider the 
related issue of global competitiveness. We are worried about 
being competitive in the world, and we want to ensure that safe 
nanotechnology products are made here in America, not China. I 
don't think, the Chinese are going to be nearly as worried 
about safety. If we over-regulate, and, because of that 
burdensome activity, the costs are too high to do the research 
in this country and to take the risk here in this country, we 
will drive innovative nanotech productions to China and to 
India and to other places in the world that have less 
burdensome regulations. Nanotechnology research is going to 
occur. Whether it happens in the United States or not, it is 
going to happen. And that is why we have to be very, very 
careful as we're going forward to make sure that nanotech 
research continues to occur in the United States.
    I want to applaud everybody here. You know, you all 
provided excellent, excellent oral testimony. And your written 
testimonies are very good. And regarding the diamonds, I just 
want to know, are those diamonds going to be available 
commercially? And if so, what will the cost of such diamonds 
be?
    [Laughter.]
    Mr. Linares. We're actually starting to sell some diamonds 
now----
    Senator Ensign. What are the comparable prices for your 
diamonds versus diamonds extracted from the Earth? I'm actually 
thinking about this from a competitive perspective, as well, 
because right now the diamond market is totally dominated by 
such a small number of people in the world. And, obviously, if 
your diamonds are true diamonds, it could really become a 
competitive market for the United States.
    Mr. Linares. Sure, absolutely. The opportunity is huge. The 
global retail market for diamonds is $60 billion. It's large. 
And we're looking for the right value proposition right now. 
The analogy that we use is cultured diamond, and these are 100 
percent real diamond in every respect to a mined diamond, 
except that we culture them. It's like the cultured pearl.
    Senator Ensign. Right.
    Mr. Linares. So, we see the markets starting to mimic each 
other over time. So, we're starting to sell, right now, 
privately, and expect to move into a commercial venue toward 
the end of this year.
    Senator Ensign. I think we could spend a lot of time 
discussing the issues raised by members on both panels. I think 
that having more listening sessions that this committee has had 
earlier is a great idea, because the complexity of these issues 
is so great. And to have such listening sessions on a little 
more informal setting, I think, would be very, very helpful, 
Mr. Chairman.
    So, thank you.
    The Chairman. It's one thing to have a hearing, but it's 
another thing to ask people to just come by and talk. So, I 
don't know, do you all have a national association of any kind? 
Is there a national association of people involved with 
nanotechnologies?
    Mr. Linares. Yes, absolutely. There's the NanoBusiness 
Alliance.
    Voice. The NanoBusiness Alliance. In fact, we have about--
--
    The Chairman. I'm wondering--things that these guys are 
members of. That's what I'm talking about. Is--we've got to 
find--to answer your question, we've got to find sometime when 
these people will be in town, anyway, and ask them to give us a 
little bit of their time.
    Dr. Allen?
    [Laughter.]
    Senator Allen. Thank you, Dr. Chairman Stevens.
    [Laughter.]
    Senator Allen. I have very much enjoyed listening to all 
these applications and--of what I said in the beginning, being 
such a multifaceted discipline, from the microelectronics to 
the life science and health sciences, which I think will be 
really the great applications of the future, where you kill the 
cancerous cells without this shotgun-blast approach of killing 
healthy and bad cells together. I think that we'll look, 
someday in the future, back at chemotherapy and these sort of 
approaches differently, maybe the way we look at leeches in 
medicine. But much--it's just targeted to kill the cancerous 
cells. And then, the materials engineering, where--which 
really, as a practical matter, has the most application 
commercially right now.
    What we are doing, as a country, with this nanotechnology 
initiative, is to fund this collaboration that people have been 
talking about, whether it's the Department of Energy, the 
Department of Defense with some of these applications, NASA and 
a lot of the things that we learned from space in the past are 
being made applicable today, the engines, the energy aspects of 
it, the lighter, stronger materials that'll be made out of 
nanomaterials, the area--in EPA, there are some ways for 
environmental cleanups. And so, while we need to be concerned, 
as we always are, about health and safety, what Mr. Linares 
said is, we do have the protocols, the principles of safe 
workplaces, clean rooms. If your diamonds are going to be used 
as a substitute for silica for microelectronics, or microchips, 
semiconductor chips, those rooms are as clean as possible. It's 
probably more dangerous to be drinking this water here, with 
the dust from the carpet and all the rest, than what are in 
those working places. Dr. Gotcher, in his company there in 
Nevada--it's just fantastic. And there are others like that. 
There's a Luna Innovations, in Virginia, which are making--
manufacturing these Trimetaspheres, which will have all sorts 
of applications; and they're in the old tobacco warehouse 
district in Danville, Virginia. That's at--almost a symbol of 
the transformation of old industry, loss of textile jobs, 
tobacco's gone down, and now there's something there for the 
future.
    What we need to do, Mr. Chairman, is make sure that our tax 
policies, our regulatory policies--which need to be 
reasonable--there's nothing wrong with reasonable regulations, 
but they need to be science-based. In this area, just like what 
happened with genetically modified crops or seeds, if people do 
not know--are not sufficiently conversant, they can be 
frightened, unnecessarily frightened. Genetically modified 
organisms are no more than, really, hybrid crops. No one cared 
about hybrid crops. But, because they didn't know about it, 
we've seen the problems we've had with the Europeans. And it is 
important that Senators are conversant and the American people 
are conversant. So, then we make the right decisions so that we 
don't cutoff what is really a transformative part of our 
economy and making sure that that intellectual property is 
owned here in this country from creative inventors, innovators, 
scientists, technologists, and materials engineers, for 
example.
    So, I have about a minute or two minutes left, but what--if 
each and every one of you all just said, number one, would be 
the number-one thing that the government, your government, can 
do to make sure that we're preeminent in this multifaceted 
field, just--I just want number-one thing from each and every 
one of you, starting with you, Dr. Gotcher.
    Dr. Gotcher. I'd say the one thing that weighs on my mind 
is the cost to do the last two steps of commercializing a 
product. It takes the most people, and it's the most costly. 
And it isn't risk-free. Many people think the invention is the 
most difficult part. And, frankly, that's the easiest step. 
It's the last two or three steps in the commercialization as 
you scale-up that, I think, concerns me most about----
    Senator Allen. What----
    Dr. Gotcher.--the competitive----
    Senator Allen. OK, what should government do, if we can, 
anything, on that?
    Dr. Gotcher. What I would ask is that the government help 
mentor and help fund the last step or two of the 
commercialization process. Share the risk, share the funds, and 
share the reward.
    Senator Allen. Hopefully, the National Nanotechnology 
Initiative, with the peer review, can determine which ones to 
fund, because there are not enough funds for every single one 
of them.
    Dr. Gotcher. I think that's an excellent idea.
    Senator Allen. Dr. Hylton?
    Dr. Hylton. Along the same lines. I would say, more 
generally, to focus on this problem of transitioning the 
technologies. I think we are institutionally handicapped, in 
that we don't have an appropriate institution in place that can 
do the thing that needs to be done. The small companies 
struggle with various parts. He mentioned the late-stage part. 
Getting the company off the ground is another hard thing to do, 
as well. It's just that--I've done it, and I know he's past it, 
so--but all of the stages are difficult. And I think they're 
going to be really, especially difficult in nanotechnologies. 
And if we don't go and solve that problem, we risk, I guess, 
several things. We risk that other countries that figure it out 
before we do can take advantage not only of their research, but 
also of ours, because the information is public, generally 
speaking. And I think we will also miss, I think, sort of the 
next wave, the next industrial revolution if we don't solve 
that problem.
    Senator Allen. Well, you've worked in a collaborative way 
in Virginia, Maryland, and D.C., together in this Chesapeake 
Initiative. And those are universities, the----
    Dr. Hylton. Correct.
    Senator Allen.--private-sector, and the government. Are 
those not helpful ways that others may wish to emulate, as far 
as that development----
    Dr. Hylton. I----
    Senator Allen.--structure of a company and what they need 
to--what these scientists need?
    Dr. Hylton. I would be happy to share the--those findings--
that report is relatively recently completed. I'd be happy to 
share it with others who would be interested. But, yes, it does 
attempt to address many of those issues.
    Senator Allen. Thank you, Dr. Hylton.
    Dr. Davis?
    Dr. Davis. In medicine, everything funnels through the FDA.
    Senator Allen. Right.
    Dr. Davis. So, I would request that the FDA continue to get 
resources so that they can evolve to evaluate these new 
medicines properly and help speed the processes through.
    Senator Allen. Good advice. We hear that a lot. Thank you.
    Dr. Davies?
    Dr. Davies. I'd just make the point that, in terms of 
competitiveness, the health and safety is an important element 
of competitiveness, and that a product that causes adverse 
health effects or causes adverse environmental effects is not 
going to be competitive for long in the modern world.
    Senator Allen. Dr. Swager?
    Dr. Swager. Yes, I'd make a comment that's specific to 
national security and military issues. I think there's a 
tendency right now to over-regulate universities in terms of 
asking for censorship of publications and restricting what 
students can work on a project. MIT's taken a very firm stand 
on this. And for me to get money to do explosives detection 
these days--I won't go into it here, but it is very difficult, 
because the Department of Homeland Security can't fund me.
    The Chairman. Senator Inouye and I also Co-Chair the 
Defense Appropriations Committee. We will talk to them.
    Dr. Swager. Some of the agencies actually have policies 
which are not consistent with universities and what we do. I 
think that we really need a free and open network, in terms of 
our research. Our goal is to educate the world. And I think one 
of the things we do best, as Americans, is, we run faster, we 
innovate--we work harder, and we innovate more than the rest of 
the world. If we get attenuated on that because of security 
issues, I think it'll be a problem.
    Senator Allen. Thank you.
    Mr. Linares?
    Mr. Linares. Thank you. I would recommend that the Federal 
Government fund fundamental research into diamond-based 
semiconductor and optics for the----
    [Laughter.]
    Mr. Linares.--obviously, directly, but I was too specific. 
Specifically, materials development and devices. And there are 
two specific areas there. The Air Force and Navy have a direct 
need for immune--systems that are immune from electrical 
interference, essentially, from directed energy weapons, and 
for--the Army has specific needs for high-energy laser systems 
for things like remote mine detonation and potentially knocking 
down certain missiles. And those require fundamental 
developments in--largely in material and specific device 
development.
    Senator Allen. Thank you. Thank you, and good luck next 
Valentine's Day with your diamonds----
    [Laughter.]
    Mr. Linares. Thank you.
    Senator Allen.--and anniversaries.
    Thank you, Mr. Chairman.
    The Chairman. Well, thank you very much.
    Mr. Linares, I think you ought to talk to DARPA, at the 
Defense Department.
    I'm pleased to say that the staff tells me that the 
NanoBusiness Alliance will be up here on Capitol Hill tomorrow, 
and they're holding a staff briefing on nano in this building 
for staff. So, we thank you very much for that.
    We thank you all for taking the time. I think you're in one 
of the most fascinating areas of the developing technology base 
that we have, and we want to keep up with you and try to 
understand what you're doing, as much as possible, and to be of 
as much help as we can. So, we will try, sometime, to see if we 
can find a way to--not inconvenience you--to find a way when 
you could come back and just have some conversations with our 
people about--here in this committee--what's going on and what 
we could do, and what we shouldn't do.
    But, Dr. Swager, in our--with other hats that Senator 
Inouye and I wear, your briefing, in terms of what you're 
doing, in terms of protection of our people wearing uniforms, 
just is overwhelming. I'd like to see you come back to the 
Defense Subcommittee soon and tell us more about that.
    Dr. Swager. I'd like to do that, thank you.
    The Chairman. Thank you very much.
    We thank you very much for your patience and your 
contribution. We hope to see you again soon. Thank you all very 
much.
    [Whereupon, at 4:40 p.m., the hearing was adjourned.]
                            A P P E N D I X

  Response to Written Questions Submitted by Hon. Gordon H. Smith to 
                         Dr. E. Clayton Teague
    Question 1. Nanotechnology is an emerging technology in which many 
countries around the globe are making significant investments and 
advancements. What steps are necessary for the United States to be the 
world leader in nanotechnology in the long run?
    Answer. U.S. leadership in nanotechnology is at the heart of the 
National Nanotechnology Initiative (NNI). The strategy for realizing 
the benefits of nanotechnology and sustaining U.S. leadership is 
detailed in the NNI Strategic Plan released in 2004, \1\ and was 
developed with input from academic, industry, and government experts. 
The plan identifies four overarching goals for the initiative. Progress 
toward these goals will go a long way toward sustaining U.S. leadership 
in this important emerging area. The goals are:
---------------------------------------------------------------------------
    \1\ Available at http://www.nano.gov/NNI_Strategic_Plan_2004.pdf.

        1. Maintain a world-class research and development (R&D) 
        program aimed at realizing the full potential of 
---------------------------------------------------------------------------
        nanotechnology.

        2. Facilitate transfer of new technologies into products for 
        economic growth, jobs, and other public benefit.

        3. Develop educational resources, a skilled workforce, and the 
        supporting infrastructure and tools to advance nanotechnology.

        4. Support responsible development of nanotechnology.

    The ability to be a world leader in nanotechnology is underpinned 
by a healthy innovation ecosystem in which discoveries can be made and 
ideas can flourish. The President's American Competitiveness Initiative 
(ACI), announced in the 2006 State of the Union address, proposes a 
comprehensive approach to strengthening this ecosystem, targeting 
policies and programs in the areas of research and development (R&D), 
math and science education, high-skilled immigration, and workforce 
training. A primary role of the Federal Government in fostering 
innovation is sustaining strong support for basic research. As such, 
the centerpiece of the ACI is a commitment to double, over 10 years, 
funding for the most critical basic research in the physical sciences; 
funding for this nanotechnology research is an important component of 
this commitment.
    Within this overall framework, here are five Federal specific areas 
that will be important to maintaining U.S. leadership in nanotechnology 
in the long run:
    Basic research. Continued strong Federal support for nanotechnology 
research, especially in the physical sciences, across the Federal R&D 
enterprise. At the same time, agencies that fund R&D should make 
nanotechnology research a priority. At the Federal level, the United 
States invests approximately one quarter of the amount spent by 
governments worldwide; Japan and the European nations combined each 
spend a similar amount. Although the United States leads all nations in 
the level of funding for nanotechnology research, other nations are 
growing their own programs in this emerging area. Investment in basic 
research today will fuel innovation and American competitiveness in the 
future.
    Infrastructure. Continued strong support for the advanced 
infrastructure of facilities and instrumentation that is necessary in 
order to perform nanotechnology research. Researchers need access to 
costly equipment necessary to fabricate and characterize nanoscale 
materials and devices. User facilities and research centers 
specifically aimed at supporting nanoscale science and engineering 
research are supported by many of the NNI agencies, including the 
National Science Foundation, the Department of Energy, the National 
Cancer Institute, and the National Institutes for Standards and 
Technology. The United States investment in this area has been crucial 
to enabling cutting-edge research and support for maintenance and 
operations will sustain this valuable resource. In addition, research 
is needed to develop the next-generation tools and instruments that 
will continue to allow advances to take place going forward.
    Technology transfer. Support for transitioning the results of 
research from the laboratory to the marketplace, including by creating 
an environment in which entrepreneurial activity can thrive. Generally, 
the challenges associated with transitioning the results of 
nanotechnology research are not unique or specific to nanotechnology. 
Therefore, existing mechanisms and authorities (e.g., those provided 
for by the Bayh-Dole and Stevenson-Wydler Acts, Small Business 
Innovation Research (SBIR) and Small Business Technology Transfer 
(STTR) and other technology transfer statutes) can and should be 
utilized. In addition, making permanent and modernizing the Research 
and Experimentation (R&E) tax credit will strengthen incentives for 
private-sector investment in nanotechnology commercialization.
    Specific actions by the NNI to promote technology transfer and 
commercialization include the following:

   Utilizing the SBIR and STTR programs to fund development of 
        new applications of nanotechnology in small companies.

   Increasing support for research on environmental, health, 
        and safety (EHS) aspects of nanotechnology to allow industry, 
        regulatory agencies, and others to assess and manage risks 
        associated with nanotechnology.

   Strengthening of expertise and structures within the U.S. 
        Patent and Trademark Office to improve the ability of U.S. 
        inventors and businesses to protect intellectual property 
        related to nanotechnology.

   Working with the U.S. Patent and Trademark Office as they 
        strengthen the protection of intellectual property through 
        continued work on the cross-referencing of nanotechnology-
        related patents and in-depth technical training of patent 
        examiners on the state-of-the-art in nanotechnology.

   Facilitation of communication with and among local, state, 
        and regional nanotechnology economic development initiatives, 
        e.g., through workshops such as those organized in 2003 and 
        2005.

    Standards for materials and processes. In industries where 
materials and components are manufactured by one business and 
integrated into products by another, standards are vital to business-
to-business commerce. Standards also allow consumers to know what they 
are buying and allow regulators to establish guidelines for safe 
practices. Already, a number of U.S. standards developers are engaged 
in the development of nanotechnology standards and, following an 
inquiry by OSTP Director John Marburger, the American Nationals 
Standards Institute (ANSI) has established a Nanotechnology Standards 
Panel to coordinate U.S. activities in international standards forums, 
including the International Organization for Standards (ISO). The NNI 
supports the ANSI-led efforts and the Director of the National 
Nanotechnology Coordination Office (NNCO) currently chairs the ANSI-
accredited Technical Advisory Group, which represents the United States 
at the ISO Technical Committee on Nanotechnologies (TC 229). In 
addition, the U.S. leads the subgroup under TC 229 on standards for 
health, environment, and safety of nanotechnology.
    Communication with stakeholders. It is important to educate the 
public about nanotechnology and the steps being taken both to realize 
its potential benefits and to assess and manage, or even avoid, risks. 
Stakeholders include the business, research, policymaking, and investor 
communities, as well as the general public. In general, research 
results are communicated to the scientific and technical community 
through scientific publications, conferences, and workshops (a number 
of which are supported by NNI agencies). To promote communication with 
the broader public, the NNI, through the NNCO, maintains a website with 
regularly updated information about nanotechnology and NNI programs, as 
well as link to agency-specific information (e.g., workplace safety 
information at the National Institute for Occupational Safety and 
Health). The NNCO acts as a portal for questions about the NNI and 
nanotechnology, and works proactively to communicate with the science 
reporters at major media outlets. Finally, the NNCO has conducted 
meetings to plan for public engagement as called for in the 21st 
Century Nanotechnology Research and Development Act.
    As the agencies make progress in the areas outlined above so as to 
advance nanotechnology for government needs and for U.S. economic and 
societal benefit, it is important to bear in mind that the United 
States is not the only nation investing in nanotechnology for the 
future. New knowledge and innovative ideas are being created around the 
world and Federal agencies that support nanotechnology R&D and that 
have needs that can be addressed by nanotechnology solutions should be 
informed about activities taking place elsewhere. Advances in 
nanotechnology in the United States will be expedited by working 
cooperatively in areas of nanotechnology research that are pre-
competitive or noncompetitive, such as research on environmental and 
health implications and research to promote the incorporation of U.S. 
standards and concepts into international standards.
    To assess U.S. global performance in nanotechnology, the NNI, 
through the interagency Nanoscale Science, Engineering, and Technology 
(NSET) Subcommittee of the National Science and Technology Council, 
tracks activities internationally, including investments, scientific 
publications, and patent activities. The NSET Subcommittee also 
provides input and feedback to U.S. representatives to international 
bodies that are considering nanotechnology, such as the ISO and other 
standards developers, the Organization of Economic Cooperation and 
Development (OECD), and the Wassenaar organization.
    The NNI, through the activities of the participating agencies, the 
interagency NSET Subcommittee and its subgroups, and the National 
Nanotechnology Coordination Office is working to address the areas 
outlined above. In its review of the NNI released in 2005, \2\ the 
President's Council of Advisors on Science and Technology (PCAST) 
concluded that ``the United States is the acknowledged leader in 
nanotechnology R&D,'' and that the NNI is well managed. PCAST goes on 
to caution that the U.S. lead in nanotechnology is under increasing 
competitive pressure from other nations. While encouraging efforts by 
the NNI to facilitate technology transfer, the PCAST report emphasizes 
that the primary focus is on supporting and coordinating a broad, 
multidisciplinary program of world-class basic research.
---------------------------------------------------------------------------
    \2\ See full PCAST at http://www.ostp.gov/pcast/
PCASTreportFINAL.pdf.

    Question 1a. What are other countries doing that we could learn 
from?
    Answer. As the first of its kind, the NNI is the model for 
nanotechnology programs in many other countries. Yet each country or 
region has adapted the U.S. approach to its needs and strengths. 
Notably, a number of countries have elected to focus research around 
one or more particular areas of application, such as materials science, 
biomedicine, or electronics. The members of the NSET Subcommittee 
representing the diverse Federal agencies participating in the NNI have 
considered such an ``application-driven'' strategy and continue to 
support the current broad program of basic research at the level of the 
initiative as a whole. Individual mission-oriented agencies, such as 
the Department of Defense, Department of Energy, and the National 
Institutes of Health, is the level at which application-driven 
nanotechnology research is and should be organized.
    The NNI has established a Global Issues in Nanotechnology Working 
Group under the NSET Subcommittee. One objective of the Working Group 
is to track international activities related to nanotechnology. The 
Working Group reports to the Subcommittee, thereby providing 
information about ``lessons learned'' from around the world to the 
Subcommittee as it manages the initiative and periodically reviews the 
U.S. strategy for the Federal nanotechnology R&D program.
                                 ______
                                 
   Response to Written Question Submitted by Hon. Gordon H. Smith to 
                         Dr. Richard O. Buckius
    Question. Do you support the concept of my legislation, S. 1908 the 
Nanoscience to Commercialization Institutes Act, that emphasizes 
commercialization of nanotechnology? What more should be done to 
promote the commercialization of nanotechnology?
    Answer. NSF cannot comment on provisions in legislation that do not 
affect the agency. The long-term objectives of this Nation's broad 
initiatives in nanotechnology--as contained in the National 
Nanotechnology Initiative (NNI)--focus on building a foundation of 
fundamental research to understand nanoscale concepts, and to apply 
novel principles to the most promising opportunities in measuring and 
manipulating matter on the nanoscale. Another objective is ensuring 
that U.S. institutions have access to a full range of nano-facilities, 
enabling access to nanotechnology education, and catalyzing the 
creation of new commercial markets that depend on three-dimensional 
nanostructures. These are intended to facilitate the transfer of new 
technologies into products for economic growth, jobs, and other public 
benefit. The promise of nanotechnology resides in controlling the 
atomic and molecular realm, where new principles and possibilities 
emerge. This is a fundamental distinction between nanotechnology and 
micro-technology. Additionally, a comprehensive peer-review process 
should be carried out by expert groups to select any potential 
awardees.
    To facilitate the commercialization of nanotechnology and bring 
discovery to innovation, NSF supports and maintains strong partnerships 
with industry, national laboratories, and international centers of 
excellence. This support includes investments in 16 Nanoscale Science 
and Engineering Centers, and grants for nanoscale research through the 
Small Business Innovation Research (SBIR) program and the Small 
Business Technology Transfer (STTR) program.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Gordon H. Smith to 
                         Jeffery Schloss, Ph.D.
    Question 1. The potential applications of nanotechnology to 
diagnose and treat cancer are remarkable. Do you have any 
recommendations on how we can further support advancements in this 
area?
    Answer. Nanotechnology does indeed encompass a wide range of 
materials and techniques that are being applied to a remarkable range 
of cancer problems, including:

   Early imaging agents and diagnostics that will allow 
        clinicians to detect cancer in its earliest, most easily 
        treatable, presymptomatic stage;

   Systems that will provide real-time assessments of 
        therapeutic and surgical efficacy for accelerating clinical 
        translation;

   Multifunctional, targeted devices capable of bypassing 
        biological barriers to deliver multiple therapeutic agents at 
        high local concentrations, with physiologically appropriate 
        timing, directly to cancer cells and those tissues in the 
        microenvironment that play a critical role in the growth and 
        metastasis of cancer;

   Agents capable of monitoring predictive molecular changes 
        and preventing precancerous cells from becoming malignant;

   Surveillance systems that will detect mutations that may 
        trigger the cancer process and genetic markers that indicate a 
        predisposition for cancer;

   Novel methods for managing the symptoms of cancer that 
        adversely impact quality of life; and

   Research tools that will enable investigators to quickly 
        identify new targets for clinical development and predict drug 
        resistance.

    The National Cancer Institute's Alliance for Nanotechnology in 
Cancer (http://nano.cancer.gov) is developing more effective 
interventions to accelerate progress against cancer in the next decade. 
New nanotechnology-based therapeutic delivery systems could 
significantly enhance the efficacy and tolerability of cancer 
treatments, immediately benefiting cancer patients. The Alliance is 
also leveraging nanotechnology as a catalyst to build the 
multidisciplinary teams that are the future of biomedical research and 
molecular, personalized medicine. In addition, NCI's close 
collaboration with the FDA through the Interagency Oncology Task Force 
(IOTF) and the Alliance's Nanotechnology Characterization Laboratory 
will help to ensure that the science needed to inform the review of 
these new products keeps pace with the research. This is a crucial step 
in ensuring that the critical pathway to clinical application is well-
defined for these novel technologies.
    In short, advancements in applying nanotechnology to the diagnosis 
and treatment of cancer can be further supported along the following 
lines:

   Facilitate team science with integration into clinical 
        oncology to accelerate matching of key cancer problems with 
        cutting-edge nanotechnology-based solutions.

   Foster development of standards and informatics to more 
        effectively integrate researchers and clinicians across 
        disciplines and sectors.

   Establish the general clinical development pathway that 
        includes characterization of materials and biological responses 
        to encourage researchers to pursue nanotechnology therapeutic 
        development through to commercialization and broad application.

   Remove barriers to cross-licensing of nanotechnology 
        platforms that will be needed to develop integrated components 
        for diagnostics in particular.

   Support research through user facilities to enhance 
        uniformity of materials and improve nanotechnology platform 
        manufacturing capabilities and quality assurance/quality 
        control measures.

   Support additional research toward understanding fundamental 
        interactions of biological components (nucleic acids, proteins) 
        and a wide range of nanomaterials to address practical problems 
        such as biocompatibility/biofouling, aggregation, and 
        overcoming biological barriers.

   Distinguish environmental (incidental) and medical 
        (intentional) toxicological issues, and quantify and clarify 
        the risk-benefit ratio for novel nanotechnology applications in 
        comparison to current standards of care.

    For more information: The NCI Alliance for Nanotechnology in Cancer 
website http://nano.cancer.gov provides comprehensive information on 
the program and on current nanotech advances relevant to cancer.

    Question 2. To what extent have other countries made advances in 
nanomedicine?
    Answer. Based on information available through the National 
Nanotechnology Coordination Office (NNCO), below is some information on 
what other counties are doing in the area of nanomedicine.
Europe
    The European Science Foundation has identified (ESF Scientific 
Forward Look on Nanomedicine, 2004) needs and opportunities, and the 
trans-European ability to achieve significant advances, in the 
following areas:

   nanomaterials and nanodevices for drug delivery (including 
        an emphasis on scale-up manufacturing and materials 
        characterization); the goal is to realize clinical benefit by 
        2010. Substantial potential exists for direct targeting of 
        specific diseases and transport across biological barriers.

   multiplex sensing of complex analytes in vitro for tissue 
        engineering, regenerative medicine and complex diagnostics 
        (application by 2015). Scaffolds for tissue regeneration.

   externally controlled. multifunctional, mobile devices for 
        combined diagnostics and drug delivery (application by 2015). 
        The subsequent generation of devices would be bioresponsive or 
        autonomously controlled. To realize these opportunities, a 
        better understanding of potential toxicological and 
        environmental implications of these materials is needed, as are 
        risk management strategies. Effective communication among 
        workers from multiple fields in academia, industry and 
        regulatory bodies will facilitate development, and clinical and 
        regulatory evaluation, of products. Multidisciplinary education 
        from undergraduate through graduate and professional levels is 
        needed to support rapid development and clinical application of 
        the field. The level of preparedness to exploit emerging 
        nanomedical technologies was seen as a weakness to be 
        addressed. Better information needs to be conveyed to the 
        public, politicians and policymakers.

    In late 2004, about 40 nanotechnology-related products were 
reported as being in clinical testing or use for medical applications 
with emphasis on treating cancer and infections (including HIV/AIDS and 
STDs), and included examples for mitigation of hereditary or 
degenerative diseases and side-effects of chemotherapy. More than 30 
European companies were involved in nanomedicine product development.
Asia
    Japan, one of the non-U.S. countries with the largest 
nanotechnology investment ($780M overall nanotechnology investment in 
FY 2005), includes both nanotechnology/materials and life sciences 
among four S&T high priorities (the others being information technology 
and environmental sciences). (Second-ranked areas include energy, 
manufacturing technology, social infrastructure, and ``frontier-
sciences.) It is difficult to know with precision how the 
nanotechnology and life sciences interests overlap. One sees credible 
reports in the scientific literature and in news releases in areas 
similar to those of interest in the U.S., including use of 
nanotechnologies for medical imaging, diagnosis of disease signatures, 
and drug delivery.
    Bionanotechnology is China's second largest nano-related funding 
target after nanomaterials. China anticipates a very strong market in 
pharmaceuticals, medical devices, etc., and has invested in industry 
with specific focus on biomedical materials. For example, a Chinese 
company announced last year a patent on a biodegradable nanosilicon 
material for drug delivery, with early intended applications for 
treatment of liver cancer.
    Taiwan supports activities in nanobiotechnology basic science 
contributing to imaging and detection, manipulation of DNA and genes, 
and drug delivery and treatment of disease. The relatively small 
investment is focused on developing products with strong commercial 
potential.
    Singapore has a focus on nanobiotechnology and nanomedicine, and 
has built a dedicated research facility called Biopolis. Scientists in 
Singapore have reported progress in developing materials for drug 
delivery and tissue engineering, and efficient batteries for diagnostic 
and implantable devices. Alliances have been established for 
nanomedicine research with U.S. institutions such as the University of 
Washington and MIT.
    The size of Korea's activity in this area is difficult to separate 
from other S&T activities. One sees reports on nanobiomaterials for use 
in tissue repair, drug delivery and medical diagnostics.
                                 ______
                                 
   Response to Written Question Submitted by Hon. Gordon H. Smith to 
                     Dr. J. Clarence (Terry) Davies
    Question. Nanotechnology is an emerging technology with a short 
history, specifically in the area of regulation and health and safety 
issues. How do you propose we move forward in advancing this technology 
without stifling this industry and preventing its benefits from 
reaching the marketplace?
    Answer. The future of nanotechnology depends on striking a balance 
between over-regulation and under-regulation. The former can stifle 
innovation and technological progress. The latter can turn the public 
against the technology and similarly stifle innovation and 
technological progress. We need to start talking about how to strike 
the necessary balance.
    In a discussion sponsored by the Senate Committee on Environment 
and Public Works, I proposed 15 initiatives that the Congress can take 
now to encourage the development of nanotechnology. They are as 
follows:
Research

        1. Amend Nanotech R&D Act (117 Stat. 1923) to require separate 
        strategic plan for health and environmental research.

        2. Under NNI, establish separate pot of money (5-10 percent of 
        agency nano budgets), distributed by OMB and OSTP for filling 
        gaps identified in H&E plan.

        3. Create a Nanotechnology Effects Institute, modeled after the 
        Health Effects Institute (EPA and auto industry), jointly 
        funded by government and industry.

        4. Commission GAO or Library of Congress, working with State 
        Department and U.S. embassies, to do a report on what other 
        countries are doing with respect to nano R&D, effects research, 
        and regulation.

        5. Commission a study, funded through NSF, on the economic 
        impacts of nano in the U.S. over the next decade.

        6. Conduct a hearing on how to encourage ``green'' 
        nanotechnology.

        7. Provide funding (through NSF) to develop and distribute a 
        layman's primer on nano.

Management

        8. Amend Nanotech R&D Act to establish an interagency 
        Nanotechnology Regulatory Coordinating Committee.

        9. Commission a GAO study of what resources (Dollars, FTEs, 
        expertise) Federal agencies are currently devoting to nano 
        health and safety.

        10. Fund NIOSH/OSHA to: (1) examine existing worker protection 
        practices in nano-manufacturing; (2) evaluate the adequacy of 
        such practices; and (3) promulgate best practices.

        11. Amend the Food, Drug and Cosmetic Act to provide pre-market 
        approval of cosmetics. (Limit to products containing 
        nanomaterials if politically necessary.)

        12. Amend the Toxic Substances Control Act to allow EPA to 
        require additional data for nanoproducts with human exposure.

        13. Start stakeholders' dialogue on nano management/oversight 
        needs.

        14. Start House/Senate dialogue on management/oversight needs.

        15. Commission a study by Library of Congress or GAO 
        (cooperating with Consumer Product Safety Commission, FDA, and 
        Federal Trade Commission) on labeling of nano products.

    I would be happy to discuss any or all of the above items with your 
committee.
  Response to Written Questions Submitted by Hon. Gordon H. Smith to 
                          Mark E. Davis, Ph.D.
    Question 1. Are we on the verge of witnessing a revolution in the 
way we treat and cure disease?
    Answer. Yes. Many factors are contributing to this revolution but a 
specific example is now the ability to attack diseases at their genetic 
level.

    Question 1a. Are other countries making advances in this area?
    Answer. Yes. As expected because of the huge societal and economic 
impacts, many countries throughout the world are making large 
investments in new therapeutics that are taking advantage of the new 
breakthroughs in science/engineering and understandings of the 
molecular basis of disease.

    Question 1b. What are other countries doing, if anything, that we 
could learn from?
    Answer. I believe that the most difficult step on the route to 
bringing new therapeutics to the public is getting them through 
clinical trials for approval. It is lengthy and costly. However, it is 
necessary to provide for public safety. While the FDA is doing a good 
job in my opinion, the European regulatory agencies have adopted a 
better strategy for life-threatening diseases. They allow biological 
markers to be used to test the effectiveness of a new drug rather than 
having to wait for a survival say in a cancer trial. This automatically 
allows companies to go after types of cancers that would take long 
times to determine survival. Because of economic reasons, companies 
tend to go to diseases where the trials can be done in a reasonable 
timeframe and therefore trials in Europe can be performed on disease 
states that would not be done in the U.S. While the FDA is moving 
toward the concept of molecular markers, there is still a large 
difference in what can be used as trial end-points in Europe vs. the 
U.S. This will certainly not favor trials of new revolutionary drugs in 
the U.S. because they tend to all attack molecular targets of disease 
for which molecular markers can be developed. Additionally, the U.S. 
Patent Office is very problematic. The inconsistencies in what is 
allowed and not allowed is causing significant issues for 
commercialization of new drugs. My own experiences with the U.S. Patent 
Office (I have 35 U.S. patents) has taught me that it is an 
organization that needs dramatic change. Other countries have 
variations on how Intellectual Property is handled and I not able to 
recommend a particular country that I would single out who is 
performing well. I just believe that the U.S. Office is a real problem 
at this time.

    Question 2. Do you have specific examples of institutions that are 
not in compliance with Title IX?
    Answer. No.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Gordon H. Smith to 
                           Bryant R. Linares
    Question 1. What specific barriers do entrepreneurs like yourself 
experience in advancing commercialization on nanoscience research?
    Answer. There is a great time-lag between getting from the discover 
phase, through research and development to finishing with a 
commercialized product. In the case of Apollo Diamond, this time-frame 
has lasted for over ten (10) years. Funding is very difficult in the 
early phases and relies (from a small company perspective) on mainly 
government funds. Any research funding however is sketchy and may be 
out of phase to the specific technology that is being developed. In our 
case, we relied mainly on private funds from investors. This is a 
difficult process and adds extreme risk to the early stage company.
    In summary adequate funding is the main barrier to thorough 
commercialization.

    Question 1a. What can be done to benefit entrepreneurs in this 
field?
    Answer. Better sources of funding and support infrastructures to 
connect small businesses with good technologies with large companies 
getting government funding and government institutions.
    Apollo Diamond supports the Nanoscience to Commercialization 
Institutes Act.
                                 ______
                                 
   Response to Written Question Submitted by Hon. Gordon H. Smith to 
                        Timothy M. Swager, Ph.D.
    Question. How has collaboration with industry made a difference in 
attaining your institute's objectives?
    Answer. The Institute for Soldier Nanotechnologies (ISN) at the 
Massachusetts Institute of Technology (MIT) considers the collaboration 
with industry to be a critical underpinning that is essential for our 
continued success. One obvious advantage of engaging industry is the 
fact that MIT is a university and hence is not able to manufacture. The 
ISN has a portfolio of activities at different levels of scientific and 
technological maturity. Companies actively engaged in the ISN can best 
identify opportunities for transitioning technologies at an early stage 
to the Army. The most successful transition thus far have been in the 
area of sensors that can detect bombs based upon an explosives vapor 
signature. A small company, Nomadics Inc. of Stillwater, OK, was 
responsible for this transition. Multiple other transitions in 
materials for protection from ballistic impacts and optical sensors are 
anticipated in the future. Companies understand that the ISN has 
established creditability with the Army. Hence, companies are becoming 
more willing to help to underwrite part of the ISN and will help us to 
expand our program in the future.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Gordon H. Smith to 
                          Alan Gotcher, Ph.D.
    Question 1. What impediments do you face in achieving your business 
goals relating to nanotechnology?

    Question 1a. Do you believe more can be done to support the 
commercialization of nanoscience research?

    Answer. In the development of any new technology the coordinated 
roles of industry and government are critical to world leadership in 
the sector. In general industry's role is to marry scientific 
development with exploiting market opportunities for the new 
technology, while government's role is to provide funding that 
accelerates time to market, ensure a regulatory environment that 
removes impediments to market, and fund educational establishments to 
provide a skilled pool of scientists.
    With regard to nanotechnology we believe the U.S. Government should 
work with industry to ensure the global competitiveness of the U.S. 
nanotechnology industry by focusing on the following key areas:

        1. Funding that accelerates time to market. Two specific areas 
        are critical to the development of commercial nanotechnology. 
        The first is judicious, continuing funding of programs in 
        segments critical to our society--life sciences, nanomaterial 
        manufacturing technology and alternative energy. By 
        appropriately funding basic and applied R&D in U.S. 
        nanotechnology companies we can ensure we stay in a world 
        leadership position. A further area for funding is providing a 
        national infrastructure for the testing and analysis of new 
        materials. Frequently innovators are unable to afford the 
        leading-edge analytical equipment required to ensure rapid time 
        to market. Examples of these are very high resolution 
        transmission electron microscopes.

        2. Ensure an appropriate regulatory environment. The U.S. is at 
        a critical point in the development of this infant industry. If 
        we go the route of seeking better answers and understanding of 
        the various families/classes of nanomaterials before imposing 
        government regulation, it could lead to greater benefits to the 
        consumers and the environment through dramatic changes within 
        widely diverse industries. Taking the other road--regulation 
        first, without research--could lead to a disquieting moratorium 
        on all future nano-research and development in the U.S., with 
        great cost to our economy. There are some who feel that 
        nanotechnology will require new regulatory legislation--for 
        example, a recent report by Dr. Clarence Davies with the 
        Woodrow Wilson International Center for Scholars/The Pew 
        Charitable Trusts Project on Emerging Nanotechnologies. But 
        much of this concern is founded on sparse and sometimes 
        conflicting data. If anything is clear, it is that there is no 
        single prototypical ``nanoparticle.'' Asbestos-like fibrous 
        nanotubes and toxic-metal containing quantum dots are not good 
        surrogates for all nanomaterials. To fall into a ``one-size-
        fits-all'' approach to nanotechnology is irresponsible and 
        counter-productive. There are no clear and comprehensive data 
        available to let us really assess the general risk of the wide 
        range of nanomaterials under consideration and/or development. 
        Many of the cognizant Federal funding and regulatory agencies--
        such as the National Institutes of Health (NIH), the National 
        Cancer Institute (NCI), the Food and Drug Administration, EPA 
        and NIOSH--recognize this reality and are working hard to 
        understand the underlying science and to develop quantitative 
        data and models to quantitatively assess risks. What is needed 
        is a broad, government-funded initiative (similar to the Human 
        Genome project) with the goal of establishing broad empirical 
        data and models for the predictability of the environment, 
        health and safety risks of commercially-interesting 
        nanomaterials.

        3. Supply of educated personnel. We all have seen the numbers 
        from the National Science Foundation--while 70,000 Ph.D. 
        engineers are graduating from universities in China and 35,000 
        from universities in India, there are fewer than 10,000 
        engineering graduates from universities in the U.S. Plus, many 
        of the U.S. graduates are foreign nationals, many of whom 
        return home with the benefits of their education. This is a 
        national crisis. For Altairnano, it is also a company crisis. 
        It is extremely difficult for us to recruit science and 
        engineering students from the University of Nevada-Reno. There 
        just are not enough students in the pipeline to go around. 
        Nanotech--the ``sexy'' science of the 21st century--might be 
        the catalyst needed to stimulate renewed interest in math and 
        science in American students, from K through graduate school. 
        One approach would be to fund the development of curricula, in 
        coordination with scientists and engineers from local/regional 
        nanotechnology companies, and focused on, perhaps, grades five 
        and six, junior high, and high school. Another approach could 
        be to fund scholarships to nanoscience camps for students at 
        the junior high and high school levels. A third approach could 
        be to provide scholarships for students enrolling in 
        nanotechnology programs at undergraduate and graduate levels--
        including curricula focused on nanomaterials and nanochemistry, 
        nanobiology, and nano-environmental engineering. All of these 
        programs should include a component devoted to considerations 
        of public policy issues affecting nanotechnology.

    Question 1b. Do you support the concept of my legislation, S. 1908, 
the Nanoscience of Commercialization Institutes Act, that emphasizes 
commercialization of nanotechnology?
    Answer. We believe that more needs to be done to harness the 
potential of nanotechnology for the U.S. economy. Currently specific 
programs are funded by individual government departments, often as 
collaborative projects between academia and industry. These are, in 
general, excellent programs and Altairnano is grateful for the support 
it has received under these fundings, often leading to new commercial 
opportunities such as our battery program. However the programs are 
silos and need to be self-contained from a funding perspective.
    A key missing component to this funding allocation model is that 
there is fundamental infrastructure that is not getting built which 
would significantly help each project. Examples of this include state-
of-the-art analytic equipment such as transmission electron 
microscopes. This type of equipment is too expensive to justify either 
for an individual project or for an entrepreneurial industrial partner. 
Although only occasional access would be required, when the equipment 
is used it would provide invaluable insight to the materials being 
investigated and could save unnecessary additional experimental work 
and time to market delays.
    We support the concept of S. 1908, that is the establishment of 
centers of nanoscience excellence. We believe the greatest contribution 
that these centers could make to the progress of nanotechnology would 
be to provide regional centers of nanoscience infrastructure. These 
centers would provide shared access to a range of analytic and 
experimental equipment key to nanotechnology. They would also naturally 
act as centers for information exchange and potentially technical 
recruitment.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Gordon H. Smith to 
                           Dr. Todd L. Hylton
    Question 1. Do you believe that more can be done to support 
commercialization of nanoscience research?
    Answer. I strongly believe that more can be done to support 
commercialization of nanoscience research. The country has to date 
invested well and wisely in support of basic research, but many of the 
commercial benefits of this research will not be realized without 
effective support of commercialization. Because of the complexities 
associated with nanotechnologies, conventional commercialization paths 
are not likely to be as effective as they have been with other recent 
technology transformations (e.g., the Internet and telecommunications). 
In addition to the impact on the U.S. economy, effective 
commercialization of nanotechnologies promises to address many of the 
most pressing problems facing humanity today (in energy, healthcare and 
national security) and, thereby, to dramatically improve the quality of 
life worldwide. The principal problem to be addressed is to effectively 
coordinate the many academic, national laboratory, small and large 
technology businesses, capital investors, and public-sector support 
organizations along selected high-value market opportunities. I believe 
that this coordination should be led by public-private partnerships 
focused in these high-value market/application areas. The U.S. 
Government should sponsor the creation of these partnerships and 
sustain support for them for a significant period of time. In 
proportion to the benefit that would be derived, the investment needed 
from the U.S. Government is very small.

    Question 1a. Would you support public-private partnerships to 
promote the application of research to commercialization?
    Answer. As stated in my response to Question 1, I strongly support 
this concept and believe that it is the best way to enhance 
nanotechnology commercialization.

    Question 1b. Do you support the concept of my legislation, S. 1908, 
the Nanosciences to Commercialization Institutes Act that emphasizes 
commercialization of nanotechnology?
    Answer. I was very pleased to read the S. 1908. It clearly 
recognizes the challenges and importance of nanotechnology 
commercialization. I would offer, however, the following comments on 
the measure that I believe will make it more effective in its intended 
purpose.

        1. Because nanotechnologies are so complicated and because of 
        the substantial amount of time that will be required to 
        implement the type of organization required of the Institutes, 
        I believe that 3 years is an inadequate period of support. I 
        recommend 5 years as a minimum.

        2. My concept of such an Institute would include the following 
        minimal set of personnel. The role of this staff is to build 
        and sustain a national partnership of universities, research 
        laboratories, capital investors, regional economic development 
        organizations and small and large technology businesses. I 
        believe that the $1.5M/yr maximum allocation is approximately 
        $1M too low to support such a staff.

          a. Director (1)
          b. Intellectual Property expert or attorney (1)
          c. Technical specialists (2)
          d. Business services specialists (2)
          e. Economic development specialist (1)
          f. Communications/liaison staff (2)
          g. Administrative staff (1)

        3. While it may be advantageous from a technical resource 
        perspective to locate the Institutes in the vicinity of 
        universities or national laboratories, I strongly recommend 
        that the Institutes be managed by (impartial) technology 
        businesses with expertise in technology commercialization. 
        Universities and national laboratories do not have the 
        appropriate experience or backgrounds in commercialization to 
        manage these Institutes effectively. These managing businesses 
        should be held accountable for the results and replaced as 
        necessary to continue the mission. Also, I believe that a 
        strong affiliation with a single university or government 
        laboratory would unavoidably give the Institutes strong biases 
        and discourage the participation of other similar institutions. 
        The result would be much smaller, more regional efforts that do 
        not draw upon the resources and investment in nanotechnology 
        nationwide.

        4. The Institutes should strive to continually increase 
        private-sector support and correspondingly decrease public-
        sector support. At the end of the public-support period, the 
        successful Institutes will be self-sustaining privately-funded 
        organizations playing a role similar to that played by Sematech 
        in the microelectronics industry.

        5. I recommend that there be two energy institutes--one focused 
        on conventional sources (e.g., fossil, bio, nuclear) and one 
        focused on renewable sources (e.g., solar, fuel cells, 
        hydrogen).

    The comments and opinions described here are derived largely from 
my testimony of 15 February 2006. A key piece of that testimony 
describes what I call a ``Technology Transitions Organization,'' which 
corresponds closely to the ``Institutes'' in S. 1908. Here I insert two 
charts from that testimony illustrating the function of that 
organization for your ease of reference. I believe that these ideas in 
these charts are highly relevant to the underlying purpose of S. 1908.
    I appreciate the opportunity to be of service in this matter. 
Please contact me if I can be of further assistance.*
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    * Charts attached to questions are printed on pg. 44.
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