[Senate Hearing 109-107]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 109-107

                                                        Senate Hearings

                                 Before the Committee on Appropriations

_______________________________________________________________________


                                                      Energy and Water,

                                                   and Related Agencies

                                                         Appropriations

                                                            Fiscal Year
                                                                   2006

                                          109th CONGRESS, FIRST SESSION  

                                                              H.R. 2419

DEPARTMENT OF DEFENSE--CIVIL

DEPARTMENT OF ENERGY

DEPARTMENT OF THE INTERIOR

NONDEPARTMENTAL WITNESSES



99-860 PDF

2005

                                                        S. Hrg. 109-107

 ENERGY AND WATER, AND RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 
                                  2006

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

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                                   on

                               H.R. 2419

 AN ACT MAKING APPROPRIATIONS FOR ENERGY AND WATER DEVELOPMENT FOR THE 
     FISCAL YEAR ENDING SEPTEMBER 30, 2006, AND FOR OTHER PURPOSES

                               __________

                      Department of Defense--Civil
                          Department of Energy
                       Department of the Interior
                       Nondepartmental witnesses

                               __________

         Printed for the use of the Committee on Appropriations



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                               index.html


                               __________

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_____________________________________________________________________________
Energy and Water, and Related Agencies Appropriations, 2006 (H.R. 2419)
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                      COMMITTEE ON APPROPRIATIONS

                  THAD COCHRAN, Mississippi, Chairman
TED STEVENS, Alaska                  ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico         PATRICK J. LEAHY, Vermont
CHRISTOPHER S. BOND, Missouri        TOM HARKIN, Iowa
MITCH McCONNELL, Kentucky            BARBARA A. MIKULSKI, Maryland
CONRAD BURNS, Montana                HARRY REID, Nevada
RICHARD C. SHELBY, Alabama           HERB KOHL, Wisconsin
JUDD GREGG, New Hampshire            PATTY MURRAY, Washington
ROBERT F. BENNETT, Utah              BYRON L. DORGAN, North Dakota
LARRY CRAIG, Idaho                   DIANNE FEINSTEIN, California
KAY BAILEY HUTCHISON, Texas          RICHARD J. DURBIN, Illinois
MIKE DeWINE, Ohio                    TIM JOHNSON, South Dakota
SAM BROWNBACK, Kansas                MARY L. LANDRIEU, Louisiana
WAYNE ALLARD, Colorado
                    J. Keith Kennedy, Staff Director
                  Clayton Heil, Deputy Staff Director
              Terrence E. Sauvain, Minority Staff Director
                                 ------                                

         Subcommittee on Energy and Water, and Related Agencies

                 PETE V. DOMENICI, New Mexico, Chairman
THAD COCHRAN, Mississippi            HARRY REID, Nevada
MITCH McCONNELL, Kentucky            ROBERT C. BYRD, West Virginia
ROBERT F. BENNETT, Utah              PATTY MURRAY, Washington
CONRAD BURNS, Montana                BYRON L. DORGAN, North Dakota
LARRY CRAIG, Idaho                   DIANNE FEINSTEIN, California
CHRISTOPHER S. BOND, Missouri        TIM JOHNSON, South Dakota
KAY BAILEY HUTCHISON, Texas          MARY L. LANDRIEU, Louisiana
WAYNE ALLARD, Colorado               DANIEL K. INOUYE, Hawaii
TED STEVENS, Alaska (ex officio)

                           Professional Staff

                             Scott O'Malia
                             Roger Cockrell
                             Emily Brunini
                        Drew Willison (Minority)
                   Nancy Olkewicz (Minority)

                         Administrative Support


                           C O N T E N T S

                              ----------                              

                        Thursday, March 10, 2005

                                                                   Page
Department of Energy:
    Office of Environmental Management...........................     1
    Office of Civilian Radioactive Waste Management..............    19

                        Tuesday, March 15, 2005

Department of Energy:
    Office of Energy Efficiency and Renewable Energy.............    39
    Office of Science............................................    51
    Office of Nuclear Energy, Science and Technology.............    66

                        Thursday, April 7, 2005

Department of Defense--Civil: Department of the Army: Corps of 
  Engineers--Civil...............................................   103
Department of the Interior: Bureau of Reclamation................   145

                        Thursday, April 14, 2005

Department of Energy: National Nuclear Security Administration...   179

                       Nondepartmental Witnesses

Department of Defense--Civil: Department of the Army: Corps of 
  Engineers--Civil...............................................   251
Department of the Interior: Bureau of Reclamation................   321
Department of Energy.............................................   363

 
 ENERGY AND WATER, AND RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 
                                  2006

                              ----------                              


                        THURSDAY, MARCH 10, 2005

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:01 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Pete V. Domenici (chairman) 
presiding.
    Present: Senators Domenici, Allard, Reid, and Murray.

                          DEPARTMENT OF ENERGY

                   Office of Environmental Management

STATEMENT OF PAUL M. GOLAN, PRINCIPAL DEPUTY ASSISTANT 
            SECRETARY FOR ENVIRONMENTAL MANAGEMENT


             OPENING STATEMENT OF SENATOR PETE V. DOMENICI


    Senator Domenici. The hearing will please come to order. I 
understand that Senator Reid and Senator Murray may attend, but 
Senator Reid, ranking member, as usual has been very 
accommodating. Because of his busy schedule he has suggested 
that we start and he will arrive shortly. I think it's--the 
scheduled time has arrived.
    So good morning everyone. Today the subcommittee is going 
to take testimony on the fiscal year 2006 budget request for 
the Office of Environmental Management and the Office of 
Civilian Radioactive Waste Management. We're joined by Paul--do 
you say Golan?
    Mr. Golan. Yes, sir.
    Senator Domenici. Principal Deputy Assistant Secretary for 
Environmental Management. You have some big shoes to fill. Your 
predecessor was a very----
    Mr. Golan. Yes, I do.
    Senator Domenici [continuing]. Excellent person. And Ted 
Garrish, Deputy Director for the Office of Civilian Radioactive 
Waste Management. Essentially that's a nice name for the Yucca 
Mountain project. That's an easy job.
    Mr. Garrish. Yes, sir.
    Senator Domenici. I don't know how--well, I'm looking at 
you now, so we can see what you look like in 3 or 4 years.
    Mr. Garrish. Much grayer.
    Senator Domenici. I understand that both of you are serving 
as acting replacements for Jessie Roberson and Dr. Chu. Both 
women were exceptional administrators and I enjoyed working 
with both of them. Obviously everyone knows that Dr. Chu was 
from New Mexico, from one of our great laboratories. While she 
was a very small person, she carried a very big stick. She was 
a very powerful person with a very, very fine intellect, and we 
appreciated her wonderful work.
    I do appreciate your participation here today. This year's 
presidential budget requests $6.5 billion for environmental 
clean-up activities. This is a reduction from $7.4 billion that 
we appropriated last year, which was in turn the highest level 
we had provided in the history of the clean-up program.
    Over the past 4 years, the Department succeeded in reducing 
the total cost of the environmental clean-up--I didn't see you, 
Senator. Good morning.
    Senator Murray. Good morning, Senator.
    Senator Domenici. Of environmental clean-up by $50 
billion--that is the expected cost--and shortening the 
estimated time table imagined by 35 years. Now you'll have to 
tell us how much that leaves. We shortened it by 35 years, but 
it's still a long time left.
    By focusing on risk-based clean-up as a strategy and 
accelerated clean-up agreements with States, the Department 
contends--there it is--they'll finish by 2035. By the end of 
2006, DOE will complete an additional 10 facilities, including 
Rocky Flats in Colorado. This will bring the total of sites 
that have been cleaned up to 89 of the 114 sites.
    The President's budget has proposed shifting clean-up 
responsibilities from the Office of Environmental Management to 
the NNSA at six sites. The budget claims that operational 
efficiencies can be achieved by eliminating the dual chain of 
management between DOE and NNSA. While I agree with the goal of 
the increased efficiency, I'm not totally convinced and have 
some concerns about NNSA. They may not be able to do this and 
they may have so much to do they might not be up to the 
challenge. They have many responsibilities, including the 
maintaining of our nuclear deterrent and combating 
proliferation of nuclear materials. So it remains to be seen as 
to whether that change in the management scheme would be 
acceptable up here, at least for this committee.
    The President's budget requests $651 million for Yucca 
Mountain to be funded from the civilian nuclear waste fund and 
defense nuclear waste account. This is up 14 percent from $572 
million, and while it's not as much as could be used, it is 
indeed a very good change in that it is funded in a way that 
will not charge this account against the appropriated account, 
which made it very difficult in the past, because the President 
would not charge it--would not charge it to the accounts of the 
appropriation, and we were compelled to by our rules. So that's 
been fixed and we appreciate OMB doing that.
    The President did not include the reclassification of the 
fee paid into nuclear waste fund as we proposed last year. 
However, the President did suggest as a matter of fairness that 
the annual fee collections be consistent with the level of 
appropriations, as I just indicated, and that makes sense.
    While this funding debate was underway, the State of 
Nevada--and the Senator from the State of Nevada has just 
arrived--one lawsuit effectively vacating the radiation 
standard, as proposed by the Environmental Protection Agency. 
The Yucca Mountain project is facing some critical legal and 
political challenges, and the landscape we face today is a very 
difficult one. In addition to tight budgets, the Department has 
slipped the submittal of a license application by another year.
    Also, the administration is working to address the court of 
appeals' ruling that has discussed a radiation standard of 
10,000 years. Now the EPA must promulgate new standards and go 
through whatever legal hoops are involved in that.
    Last week in a separate hearing, the Energy and Natural 
Resources Committee when we had the new Secretary here, I asked 
him to provide a status report on Yucca Mountain that will give 
us an update on all the various issues, licensing, safety 
assessments, technical challenge, transportation needs. I hope 
the Department is working on this project. If not, to the 
extent that you can serve as a reminder for that, I ask that 
you do that for the committee.
    Now I note that the distinguished minority leader has 
arrived, and I'm going to yield to him. I'd like to remind the 
witnesses that your statements are going to be made a part of 
the record now, so I don't think you have to give them in 
detail. We'd like you to abbreviate them. With that, Senator 
Reid.


                    STATEMENT OF SENATOR HARRY REID


    Senator Reid. Mr. Chairman, thank you very much. I'm 
grateful to you for holding these hearings, especially in light 
of the fact that we have the most important bill--resolutions 
before the Budget Committee, and you having been chairman of 
that for so many years. I want to extend my appreciation to 
Patty Murray for filling in for me today for this hearing. She 
is a stalwart member of the Appropriations Committee and I am 
grateful for her helping on this issue today.
    Last year was really a bad year for Yucca Mountain. On July 
9, 2004, the Circuit Court of Appeals ruled with the State of 
Nevada about radiation standards. A month later, the NRC's 
Atomic Safety and Licensing Board rejected DOE's Yucca Mountain 
document database, saying it failed to make public many of the 
documents it had in its possession. October 4, last year, DOE 
Inspector General found DOE gave away more than half a million 
dollars worth of Yucca Mountain construction equipment. On 
November 22, the Nuclear Waste Technical Review Board said DOE 
does not have a plan for safely transporting nuclear waste. 
Just in February, Margaret Chu, the former director, said that 
she was going to delay the application which would probably 
take until 2006 before the application would be considered by 
the Nuclear Regulatory Commission.
    There are just so many other things I want to say that in 
spite of the fact that a lot of people think that Senator 
Domenici and I are constantly at each other's throat on this 
issue, we have, I think, constructively worked over the years 
to do what legislators are supposed to do, and that is work 
toward compromise. We've done that. I appreciate his attention 
to this matter each year and look forward to working with him.
    And the most important part of all of this is going to be 
when we finish our bill, what happens with the House of 
Representatives, not only on this issue, but all issues. We've 
developed a tremendously difficult situation with the House and 
I hope we can resolve it better than we did last year.
    Thank you, Mr. Chairman. If you would excuse me, I'd 
appreciate it.
    Senator Domenici. Yes. Thank you very much. Senator from 
Colorado, would you like to make a comment?
    Senator Allard. I would, Mr. Chairman, if I might.
    Senator Domenici. Please.


                   STATEMENT OF SENATOR WAYNE ALLARD


    Senator Allard. First of all, this is the first time I've 
had an opportunity to attend this subcommittee meeting. I just 
want to tell you how much I appreciate being on the 
Appropriations Committee and particularly being on this 
subcommittee. I look forward to working with members of this 
subcommittee.
    I just want to--I do have a total statement I'd like to 
make a part of the record--but I'd just like to call to the 
attention of the committee that we do have a success story that 
is happening in the State of Colorado with Rocky Flats. 
Originally some 10 years ago, we were looking at cost estimates 
of over 70 years and $35 billion. With some extra expenditure 
up front, we figured we could save a lot of money over time, 
and we have. And on top of that, we are now a year ahead of 
schedule from what I understand, and that we're going to save 
close to a billion dollars.
    And this is a cost savings--this is a--due to incentive-
driven contracts, where you pay bonuses for performance, and 
this is reflected, I think we've saved taxpayers a lot of 
dollars. You'll probably hear more about it, Mr. Chairman, and 
I look forward to continuing to work with this committee on 
issues that are important.


                           PREPARED STATEMENT


    Thank you very much to the country. Thank you. Mr. 
Chairman, I'm going to be gone too, because as you know, I 
serve with you on Budget Committee and I've got to be there for 
some amendments, so if I could be excused, I would appreciate 
it.
    [The statement follows:]

               Prepared Statement of Senator Wayne Allard

    Thank you, Mr. Chairman, for holding this important hearing. Over 
the last 4 years, the Department of Energy's Environmental Management 
program has made enormous progress. Under the leadership of former 
Under Secretary Bob Card, former Assistant Secretary Jesse Roberson and 
now Acting Assistant Secretary Paul Golan, EM has taken several steps 
forward. Today, in Colorado, we have seen the fruits of their labor and 
we thank them for their efforts.
    Mr. Chairman, 10 years ago, most doubted that Rocky Flats could be 
cleaned up in 6 years and for under $7 billion. In fact, most thought 
the clean-up would take 70 years and cost as much as $35 billion. The 
task of cleaning up Rocky Flats was considerable. Over 800 facilities 
and structures had to be torn down, including building 771, which was 
labeled the ``Most dangerous building in America'' because of the level 
of contamination present. Indeed, much of the 385-acre industrial area 
needed to be decontaminated and treated. The special nuclear material 
also needed to be shipped off site and the orphan waste needed to be 
disposed of.
    Now, we are on the brink of a major success story. The Department 
of Energy announced just last week that clean-up was a year ahead of 
schedule and will save the taxpayers close to $1 billion. Few of the 
buildings remain and most of the decontamination effort has been 
completed.
    I believe the success we have seen at Rocky Flats is a result of 
combined effort by the Department of Energy, the local governments, the 
State of Colorado, the Colorado delegation, and with committees like 
this one. Because of team work and cooperation we have enjoyed at the 
local, State, and Federal levels, the people of Colorado will shortly 
be able to live without the fear of nuclear contamination. It is my 
hope that in a few months I will be able to invite you, Mr. Chairman, 
and other members to this committee to join me at a ceremony this fall 
celebrating the completion of the clean-up at Rocky Flats.
    Thank you, Mr. Chairman for the opportunity to share a few words 
about Rocky Flats. I look forward to the testimony of our witnesses.

    Senator Domenici. I will be there shortly.
    Senator Allard. Okay. Very good.
    Senator Domenici. I just wanted to say we welcome you, 
Senator, and we know that you have a genuine interest, not only 
in the issue you just described, but in your State you have a 
very powerful facility with reference to renewable energy.
    Senator Allard. Yes, that's true.
    Senator Domenici. And we have funded it regularly and we 
look forward to you participating in the oversight, because it 
is a formidable operation. And in all other respects we welcome 
you, because you will be a dedicated member.
    Senator Murray.

                   STATEMENT OF SENATOR PATTY MURRAY

    Senator Murray. Thank you very much, Mr. Chairman. You 
know, I say it every year, but again I want to thank you and I 
want to thank Senator Reid for your leadership on this 
subcommittee. This jurisdiction of this subcommittee really 
touches on so many critical issues in my State, the Corps of 
Engineers, Bureau of Reclamation, Pacific Northwest National 
Lab, and most prominent today is the Hanford nuclear 
reservation. So I really appreciate the time and consideration 
you and Senator Reid and the entire subcommittee staff give to 
matters that affect my State.
    I know we all have to get to the Budget Committee that's 
doing the markup, we've got votes on the floor, so I'll be 
brief. But I first want to thank Senator Reid for being here. 
He had to leave as we all know, but I know he and a number of 
other Senators had statements and questions they wanted 
submitted, so I'd just ask unanimous consent that those can be 
submitted for the record and answered in a convenient time 
frame.

                     HANFORD CLEAN-UP FUNDING CUTS

    Mr. Chairman, I do want to make some comments about the 
budget for Hanford and for the Environmental Management 
Program. By my calculation, the Defense Environmental Program 
has been reduced by $548 million, and Hanford alone will suffer 
54 percent of that cut. This massive funding cut is 
dramatically disproportionate to Hanford's share of the overall 
EM Program. And that fact, combined with the absolutely lack of 
sound rationale for the majority of Hanford budget cuts, can 
easily lead some of us to believe that the State was targeted 
by both DOE and OMB.
    This--I want to point out just one budgeting issue that 
makes no sense. The budget cuts the tank farm program by $89 
million on the basis of legal uncertainty caused by the 
reclassification issue. I'll move beyond the fact that DOE 
itself created that legal uncertainty, but the fact is that the 
tank farm activities going on this year can and should proceed 
in fiscal year 2006. There's absolutely no legal or technical 
reason that these activities have to end on September 30. So 
this budget is already undercutting a scope of work that has 
yet to be awarded.
    There are a lot of other examples of this budget's lack of 
integrity and intelligence when it comes to Hanford. I'll not 
spell them out. But, Mr. Chairman, let me end here with my hope 
that communication and agreement between Washington State and 
the Department of Energy is going to improve, and that hope is 
largely based upon the nominations of Clay Sell and David 
Garman. I really respect the work they did here in the Senate, 
their willingness to listen, and their forthright 
communication, and I hope their confirmations will help us move 
past the political and legal games and back to the strong 
partnership between Washington State and the Department of 
Energy.

                           PREPARED STATEMENT

    But regardless of improving relationships between the State 
and the Department of Energy, I want you to know I do not 
accept the Department's rationale for these cuts, and I will 
urge this subcommittee to maintain the Federal Government's 
moral and legal obligation to Washington State and the Hanford 
communities.
    Thank you, Mr. Chairman.
    [The statement follows:]

               Prepared Statement of Senator Patty Murray

    Thank you, Mr. Chairman.
    I say it every year, but I again want to thank you and Senator Reid 
for your leadership on this subcommittee.
    The jurisdiction of the subcommittee touches on so much that is 
critical to my State including the Corps of Engineers, the Bureau of 
Reclamation, the Pacific Northwest National Laboratory, and--most 
prominent today--the Hanford Nuclear Reservation.
    I appreciate of the time and consideration you, Senator Reid, and 
the entire subcommittee staff give to matters affecting Washington 
State.
    Now, we both have to get to the Budget Committee that is beginning 
its mark up at this time, so I'll try to be brief.
    I first want to recognize that Senator Reid wished to be here, but 
Budget Committee and floor matters required his attention.
    I know Senator Reid, myself and others likely have statements and 
questions they would like to have been able to give in person, but will 
not be able to. I ask that Senators be given an appropriate amount of 
time to submit these for the record and response from the Department.
    Mr. Chairman, I'd like to make some comments about the budget for 
Hanford and the Environmental Management program.
    By my calculation, the Defense Environmental Management program has 
been reduced by $548 million. Hanford alone would suffer 54 percent of 
this cut.
    This massive funding cut is dramatically disproportionate to 
Hanford's share of the overall EM program.
    This fact, combined with the absolute lack of sound rationale for 
the majority of Hanford budget cuts, can easily lead one to believe 
Washington State was targeted by DOE and OMB.
    Let's just point out one budgeting issue that makes no sense.
    The budget cuts the tank farm program by $89 million on the basis 
of legal uncertainty caused by the reclassification issue. I will move 
beyond the fact that DOE itself created this legal uncertainty.
    The fact is that tank farm activities going on this year can and 
should proceed in fiscal year 2006. There is absolutely no legal or 
technical reason that these activities must suddenly end September 30.
    So, this budget is already undercutting a scope of work that has 
yet to be awarded.
    There are other examples of this budget's lack of integrity and 
intelligence when it comes to Hanford, but I will not spell them all 
out.
    Rather, Mr. Chairman, let me end with my hope that communication 
and agreement between Washington State and the Department of Energy 
will improve.
    This hope is largely based upon the nominations of Clay Sell and 
David Garman.
    I respect the work they did here in the Senate, their willingness 
to listen, and their forthright communication.
    I hope their confirmations will help us move past the political and 
legal games and back to a strong partnership between Washington State 
and the Department of Energy.
    But, regardless of improving relationships between the State and 
the Department of Energy, I do not accept the Department's rationale 
for these cuts and I will urge this subcommittee to maintain the 
Federal Government's moral and legal obligation to Washington State and 
the Hanford communities.

    Senator Domenici. Thank you very much, Senator. I assure 
you that we will do everything we can to make sure that 
whatever happens at Hanford is not the result of any kind of 
targeting. I'm not aware of that. I don't accept that as 
reality. We'll see as we work it through, but it's going to be 
treated fairly.
    I can say that as I alluded in my statement, the last 4 
years, whatever has been said about the administration, could 
always complain that the clean-up is not enough, this is the 
best 4 years of clean-up that we've ever had in terms of 
getting things done, in terms of achieving goals, in terms of 
saving money, and in terms of new ideas that will get the job 
done. And I think there's a lot--you weren't in charge, but a 
lot that you can be proud of. We want to make sure that 
continues for the next 4 years, and we're going to do our best 
to help with that.
    And we will proceed now in--let's go in the order that--
starting on my left with you, Mr. Golan.

                       STATEMENT OF PAUL M. GOLAN

    Mr. Golan. Thank you, Mr. Chairman, and members of the 
subcommittee. As this is my first time to appear before this 
committee, I'd like to thank you for the support you've given 
to the Department of Energy's clean-up program. This support 
has been crucial in turning this program around and 
revitalizing it, because it had lost track of its objectives in 
the 1990's.
    Over the last 4 years, our goal has been simple: transform 
this program from one that managed risks to one that reduces 
risk and cleans up the environment, a program that delivers 
real risk reduction, that's safe for the workers, protective of 
the environment, and respectful of the taxpayers.
    Over the last 4 years, we've gotten our sites to focus on 
this goal and these objectives, which in my written statement, 
Mr. Chairman, which I'd like to submit for the record, contains 
a full accounting of the accomplishment of the Environmental 
Management Program over the last 4 years, articulates a more 
complete list. I'd just like to highlight a few of those today 
as a precursor as we talk about 2006.
    At the Savannah River site, we've completed our nuclear 
stabilization missions. That's plutonium residues, plutonium 
metals, and plutonium oxides. We've consolidated all our 
special nuclear materials into two storage vaults. 
Additionally, we've consolidated all our spent nuclear fuel 
into a single spent fuel pool.
    Just last week we de-inventoried the FB line, once a major 
nuclear processing facility at Savannah River built in the 
1950's that helped fight and win the cold war.
    At Hanford, we removed all the spent nuclear fuel from the 
K-basins, and we're working diligently to get the sludge out 
today. All pumpable liquids have been removed from the single 
shelled tanks, dramatically reducing the risk to the Columbia 
River. Additionally, the nuclear materials stabilization 
missions, the plutonium and the plutonium residue missions have 
also been completed at the Hanford site.
    At Idaho, all the spent nuclear fuel has been either dry-
stored or put into our most robust storage basin. And right now 
we're actually removing water from the five older, less robust 
basins, dramatically reducing the risk to the Snake River 
aquifer. We've also taken down 300,000 square feet of old and 
decaying infrastructure at that facility, and just in the last 
15 months, reducing our fixed costs and allowing the Idaho 
National Laboratory to engage on its new mission.
    At Rocky Flats, as Senator Allard alluded to, we've just 
completed demolition of two major nuclear facilities: Building 
771, which in the 1990's was called the most dangerous facility 
in America, and building 707, which is the facility that 
manufactured all the pits in the nuclear weapons inventory 
today, have been completely demolished. In addition, just last 
week we commenced demolition of building 776, the site of the 
largest industrial and radiological accident at its time in 
1969 in the United States. Rocky Flats is on track to meet is 
closure goals.
    In Ohio, we've demolished all the former uranium processing 
facilities at the Fernald site, and we recently demolished the 
tritium processing facility at Mound.
    In the area of safeguards and security, or places where we 
store our special nuclear material, we've reduced by over half 
the number of protected areas this program has, eliminating 
potential security vulnerabilities as well as reducing the 
fixed costs, as these are some of the highest cost areas to 
maintain and keep secure.
    These are a sampling of our progress. We are committed to 
work diligently with all concerned parties to continue to 
reduce risk and remediate the environment.
    Now I'd like to turn this discussion to the 
administration's fiscal 2006 budget request for the 
Environmental Management clean-up program and how we plan to 
use the taxpayers' investment to continue to deliver risk 
reduction and environmental remediation.
    Future success of this program depends on key elements 
we've worked so hard over the last 4 years to put in place, 
such as continuing to improve worker safety, where our goal and 
my personal goal is to eliminate accidents and injuries from 
the workplace entirely. It depends on continuing to work with 
our local communities, tribal nations, regulators, and local 
representatives. It depends on continuing to challenge our 
contractors to work smarter and safer under the contract and 
continuing to bring competition to our work.
    Our future success depends on us rising to meet new 
challenges, and these are going to be demanding challenges, 
that include finding disposition pathways for waste that has no 
disposition pathway today. Our future success involves 
resolving important waste issues that we will work closely with 
our regulators in South Carolina and Idaho, as well as the 
Nuclear Regulatory Commission. Our future success depends on 
our ability to resolve seismic issues that we recently 
discovered at the waste treatment plant at our Hanford site 
where we design--where we're designing and constructing a 
facility to deal with the millions of gallons of waste that's 
at that site.
    Some may say that we have yet to tackle our most difficult 
issues. A program as large and complex as environmental 
management is not without issue, nor should anyone expect it to 
be. Our job is to find those problems and solve them. We have 
proven we can reduce risk and we've--and complete environmental 
remediation. We have projected that we can take decades off the 
time to complete the removing of the source term and hazards 
decades before anybody hoped or planned.
    We did not want to have this program take longer to 
complete than the actual cold war, which is the origin of our 
work. We need to maintain our sense of urgency to complete the 
work rather than put it off. We need to keep a clear and 
unambiguous vision of risk reduction and continuation of clean-
up. Our aim is for a site to be cleaned up so that the end 
state is protective of the environment while fully supportive 
of the future users of that site.
    Our clean-up approaches are based on good science, require 
full review and approval by State and local and Federal 
regulators. Our continuing work with our communities and 
stakeholders on a day-in and day-out basis is instrumental in 
addressing these concerns and is crucial for our success.
    In fiscal year 2006, for example, our $6.5 billion request 
includes funding such key activities as decommissioning the F 
Canyon at Savannah River, reducing a large fixed cost; removing 
the sludge from the K-basins at Hanford, reducing the risk to 
the nearby Columbia River; completing our clean-ups at Rocky 
Flats, Ashtabula, Mound, and Columbus; completing transuranic 
waste retrieval from Pit 4 at the Idaho National Laboratory; 
removing a source term over the Snake River aquifer; completing 
the clean-up of the Melton Valley project at the Oak Ridge 
reservation; mitigating a major source term that's in close 
proximity to the Clinch River; and continuing to eliminate our 
high-security protected areas, further reducing our fixed costs 
and vulnerabilities.
    Over the law few months, some aspects of our clean-up 
program became clearer and our path forward is better defined. 
Other aspects of our clean-up program have become less certain 
and our path forward has become less clear. I'd be more than 
happy to discuss these particular issues in my question and 
answer session today.

                           PREPARED STATEMENT

    We believe that will take a combined effort of all parties 
working together to resolve our challenges so we can continue 
to deliver risk reduction and clean-up for the community and 
for the taxpayer. I look forward to working with you and this 
committee and others to achieve this goal. Thank you, Mr. 
Chairman.
    [The statement follows:]

                  Prepared Statement of Paul M. Golan

    Mr. Chairman and members of the subcommittee, I take great pleasure 
today in discussing the fiscal year 2006 budget request for the 
Environmental Management (EM) program, our progress in implementing 
cleanup reform, and the importance of sustaining this momentum for the 
benefit of our workers, our communities, our environment, and the 
generations to come.
    In 2001, we embarked on a course to revitalize and reform a cleanup 
program that had lost track of its objectives. As a result of the 
reforms and Congressional investments of additional funds in the 
cleanup budget, the Department of Energy set forth to accelerate the 
reduction of risk and site cleanup completion in a manner that is safe 
for the worker, protective of the environment, and respectful to the 
taxpayer. To stay true to these principles and cleanup objectives, EM 
established business management, project management, and performance 
management systems, a new organizational structure, and acquisition 
strategies. The principles and cleanup objectives used as a basis for 
this transformation are now in place.
    This strategy to quickly reduce urgent risks to workers, 
communities and the environment was tied to our requests for funding 
increases in fiscal years 2003, 2004, and 2005. The fiscal year 2006 
budget request represents the next stage of our strategy. The 
principles and management systems have been tested and although there 
are and will continue to be very difficult obstacles, the program is 
continuing forward. The Department has addressed challenges as they 
arise and is positioned to move to the next stage of cleaning up the 
Cold War legacy.
    For fiscal year 2006, the President's Budget includes a request for 
$6.5 billion for the Department's cleanup program, a 7.8 percent 
reduction from our fiscal year 2005 comparable appropriation. We 
committed that if we could eliminate urgent risks and associated fixed 
costs, then starting in fiscal year 2006, we would request a declining 
level of funding to complete our work. The investment has paid off and 
we believe we are providing the return on the taxpayer's investment 
that the American people expect and deserve. Some may say incorrectly 
that we may be accomplishing less work or will need to slow the pace of 
cleanup by requesting a lower funding level. But the investments of 
2003 through 2005 have allowed us to lower the infrastructure costs, 
complete work, reduce high cost security areas, and pull work forward. 
Thus, we have reduced fixed costs, allowing a greater proportion of our 
funds to go to actual cleanup--a trend we will continue to improve 
upon.
    The EM portion of the fiscal year 2006 congressional budget 
structure is analogous to last year. The budget structure focuses on 
completion, accountability, and visibility; institutionalizes our 
values; and integrates performance and budget. Requested funding can 
clearly be associated with work that is planned and achievable in 2006.
    This budget request reflects a transfer of legacy environmental 
cleanup at most NNSA sites and management of newly generated waste at 
Lawrence Livermore National Laboratory and the Oak Ridge Y-12 plant to 
NNSA. The NNSA Act provides only the Secretary and Deputy Secretary of 
Energy, through the NNSA Administrator, the authority to direct or 
control officers', employees', and contractors' work. This creates a 
very cumbersome and inefficient management structure. Under the 
proposed transfer, EM would transfer the following activities to NNSA 
as follows:
  --Transfer legacy waste treatment, storage, disposal, and remediation 
        at 7 sites: Nevada Test Site; Sandia National Laboratory; 
        Separations Process Research Unit; Kansas City Plant; Lawrence 
        Livermore National Laboratory Main Site and Site 300; and 
        Pantex Plant to NNSA.
  --Transfer newly generated waste activities at 2 sites: Lawrence 
        Livermore National Laboratory and Oak Ridge Y-12 Plant to NNSA.
  --Transfer operation of the Nevada Test Site low-level waste disposal 
        site to NNSA.
    In addition, EM has completed active cleanup at the Laboratory for 
Energy-Related Health Research and is transferring the long-term 
response actions to the Office of Legacy Management (LM).
    This budget request includes funds for the new national 
Consolidated Business Center (CBC) in Cincinnati, Ohio. The CBC will be 
the central clearinghouse for a wide range of activities supporting 
small sites and near-term closure sites.
    The administration considers this budget request crucial to 
maintaining the successful trend of the past 3 years. Without your 
continued support, we could face higher risk to the environment and the 
public and lose the headway we have worked so hard to achieve. With 
your support, we will continue to produce measurable results that will 
last for years to come. We thank you for your trust and support, and 
plan on continuing to earn your trust in producing real risk reduction 
with future investments.

                       DELIVERING ON COMMITMENTS

    A major priority is to eliminate accidents and injuries from the EM 
work. Our best performing sites are also our safest sites. EM is no 
different than any other industry; improved safety performance is a 
necessary precursor for improved operational performance. In order to 
accomplish our accelerated risk reduction and cleanup mission, we must 
improve safety performance first. Safety and results go hand in hand. 
Neither can be compromised if we are to reach our goals. We are 
committed to continue instilling this philosophy in every worker's day-
to-day decisions.
    In fiscal year 2004, EM has been able to:
  --Complete packaging all excess plutonium into a safe long-term 
        storage configuration. Performance is largely due to 
        accelerated schedules at Savannah River and Hanford.
  --Retrieve spent fuel from all aging water-filled pools and placing 
        it into dry storage or modern, more robust storage pools.
    Cumulatively, EM has accomplished the following (included are 
activities at the NNSA sites proposed for transfer):
  --3,228 containers of enriched uranium (out of 9,101 containers 
        required over the cleanup lifecycle) have been packaged and 
        certified for long-term storage, 173 containers ahead of the 
        accelerated schedule.
  --9,057 metric tons of depleted uranium (out of 742,149 metric tons 
        required over the cleanup lifecycle) have been packaged in a 
        suitable form for disposition. The complex is cumulatively 
        ahead of the accelerated schedule by 4,142 metric tons.
  --615,473 cubic meters of legacy mixed low-level waste (MLLW) and LLW 
        (out of 1,154,636 cubic meters required over the cleanup 
        lifecycle) have been disposed. The complex is ahead of the 
        accelerated schedule by 166,437 cubic meters because almost all 
        sites have accelerated their schedules.
  --Eliminate half of the Material Access Areas, highly secure and 
        costly special nuclear materials storage areas, a significant 
        reduction in fixed costs.
  --911 out of 2,647 industrial facilities have been completed. The 
        complex is cumulatively ahead of the accelerated schedule by 
        212 facilities.
  --5,486 release sites (out of 10,374 release sites required over the 
        cleanup lifecycle) have been completed. The complex is ahead of 
        schedule by 144 release sites. Hanford, Savannah River, and 
        Rocky Flats contributed greatly to the positive performance on 
        this goal.
    In addition, on a site specific level, we have:
  --Completed packaging all (2,090 metric tons) of Hanford K-Basins 
        spent nuclear fuel for final disposition and moved them well 
        away from the Columbia River for long-term storage;
  --Removed all pumpable liquids from the 149 single shell tanks at 
        Hanford;
  --Removed all spent nuclear fuel from three aging pools at the Idaho 
        National Laboratory;
  --Dispositioned 50 percent (124 out of 248) of the Oak Ridge 
        Reservation facilities which include 2 nuclear facilities, 6 
        radiological facilities, and 116 industrial facilities;
  --Removed all spent nuclear fuel from the West Valley Demonstration 
        Project site to safe and secure long term off-site storage;
  --Completed 35 percent of the Defense Waste Processing Facility 
        mission by producing 1,712 out of 5,060 high-level waste 
        canisters;
  --Disposed of more than 18,300 cubic meters of transuranic (TRU) 
        waste at the Waste Isolation Pilot Plant (WIPP), roughly 10 
        percent of the legislated 176,000 cubic meters capacity of 
        WIPP; and
  --Stayed on track to complete cleanup and closure of Rocky Flats, 
        Fernald, and Mound and four other sites in 2006.
    By completing these actions and reducing risks, the liability to 
the taxpayer is reduced and the environment for future generations will 
be safer.

                            CHALLENGES AHEAD

    Many of the acute hazards to communities and the environment have 
been substantially reduced. And although we can and should feel proud 
about what we have done, real challenges still lie in front of us. 
While our nuclear materials stabilization mission is by and large 
completed, the EM program is evolving into a more a radiological and 
industrial facilities deconstruction program. For example, at the 
Portsmouth Gaseous Diffusion Plant in Ohio, EM is transitioning from 
cold standby operations to decontamination and decommissioning, a step 
consistent with the development of the new United States Enrichment 
Corporation Gas Centrifuge facility at Portsmouth.
    In addition, we have uncertainties that challenge us such as end 
states for some sites, disposition paths for some wastes, and legal and 
regulatory issues. For example, the Department must:
  --Successfully implement the path forward provided by section 3116 to 
        disposition tank waste stored at Savannah River and Idaho, 
        working with the Nuclear Regulatory Commission and State 
        regulators;
  --Initiate major procurement activities at Hanford and Savannah River 
        in fiscal year 2006 to align cleanup work scope for these sites 
        with our contracts, thereby bringing an even greater portion of 
        the Department's cleanup work under contracts that better drive 
        performance;
  --Establish a disposition pathway for silos residues from the Fernald 
        site, to allow that site to close in 2006;
  --Address seismic design issues for the Waste Treatment Plant at 
        Hanford, to ensure we build a plant that meets all design 
        requirements;
  --Resolve uncertainties that challenge our ability to clean up and 
        dispose of radioactive wastes at our Department of Energy 
        sites. The cleanup of the EM program requires us to work 
        together cooperatively.
    In front of us still remains a tremendous amount of risk reduction 
and environmental remediation, which is why this program still requires 
$6.5 billion in fiscal year 2006 to operate. In addition we have 
uncertainties that challenge us, issues like end states for some sites, 
disposition paths for some wastes, and legal and regulatory issues.
    The Department is taking proactive steps in anticipating and 
addressing such challenges, challenges which are to be expected for a 
program as complex and diversified as EM. We have taken on challenges 
in the past. This experience gives us the confidence to take on what 
some may think are insurmountable issues. We will use our technical, 
legal, and regulatory resources and will work with Congress, affected 
Tribes, State and local authorities along with our community 
stakeholders to continue to provide to our nation the risk reduction 
and cleanup it expects and deserves. EM is and will continue to refocus 
new energy on resolving significant issues and safety performance as 
well as contract performance and integrated acquisition strategy, 
managing post cleanup liabilities, and human capital.

                  THE FISCAL YEAR 2006 BUDGET REQUEST

    The investment we have requested in our fiscal year 2006 budget 
will continue the Department's success in achieving its mission of 
accelerated risk reduction and cleanup completion.
    DOE's 2006 budget request for EM activities totals $6.5 billion. 
The request includes five appropriations, three of which fund on-the-
ground, core mission work, and two of which serve as support. The five 
appropriations and associated requested funding are:
  --Defense Site Acceleration Completion ($5.184 billion)
  --Defense Environmental Services ($831 million) (Includes $451 
        million for the Federal contribution to the Uranium Enrichment 
        Decontamination and Decommissioning Fund.)
  --Non-Defense Site Acceleration ($172 million)
  --Non-Defense Environmental Services ($178 million)
  --Uranium Enrichment Decontamination and Decommissioning Fund ($591 
        million)
    In building the request, the Department applied the following 
principles and priorities:
    Protect workers, public, and the environment.--The budget request 
continues to place the highest priority on protecting workers, the 
public, and the environment. The implementation of EM's cleanup 
strategies allows for an overall improvement in safety and reduction in 
risk because cleanup will be completed sooner, reducing the extent to 
which workers, the public, and the environment have the potential to be 
exposed. Over the past 3 years, improvements in safety performance have 
been demonstrated.
    Ensure the appropriate levels of safeguards and security.--It is 
crucial that we maintain vigilance in our security to protect our 
citizens. The EM program is responsible for many tons of surplus 
nuclear material. There is an overall increase in the safeguards and 
security budget in fiscal year 2006 due to additional security 
requirements primarily at Hanford, but also Savannah River, Oak Ridge, 
Portsmouth, and Paducah, as a result of revisions to the Department's 
Design Basis Threat--the risk scenarios which each of our sites must 
plan to withstand.
    Risk reduction and cleanup completion.--Accelerated risk reduction 
requires a pragmatic approach to cleanup and occurs in various stages, 
which involve the elimination, prevention, or mitigation of risk. 
Because safe disposal of many materials will take a number of years to 
complete, our major focus of risk reduction is stabilization of high-
risk materials, including:
  --High-curie, long-lived isotope liquid waste;
  --Special nuclear materials;
  --Liquid transuranic waste in tanks;
  --Sodium bearing liquid waste in tanks;
  --Deteriorating spent nuclear fuel in leaky or poor integrity basins;
  --Remote-handled transuranic waste and high transuranic content 
        waste; and
  --Transuranic waste stored on the surface.
    Although all of these items are to be considered when setting 
priorities, their relative ranking may vary from site to site. Risk 
reduction is a major consideration in the development of the site 
baselines. Examples of planned activities and milestones for fiscal 
year 2006 that correspond to site-specific risk categories are:

Hanford
  --Complete cleanout of K East and K West basins (sludge, debris, and 
        water).--The K basins are located about \1/4\ mile from the 
        Columbia River. This project involves removing radioactive 
        sludge, debris, and water from wet storage in the K Basins to 
        safe, interim storage or final disposition away from the 
        Columbia River. The K Basin facilities are well past their 
        design lives and are a major threat to the environment due to 
        the potential for basin leakage to the surrounding soil and the 
        Columbia River. Continued deactivation of the K Basins will 
        support final turnover to the River Corridor Closure 
        contractor. Their cleanout will decrease the risks posed by the 
        basins to human health and the environment.
  --Complete remaining activities to support interim safe storage 
        (cocooning) of the H-Reactor.--Complete all remaining 
        activities to support interim safe storage of the H-Reactor, 
        provide safe storage for approximately 825 metric tons of 
        unirradiated fuel in the 300 Area facilities and begin 
        preparations for shipping the material offsite. The interim 
        safe storage of the reactor and fuel will decrease the risks 
        they pose to human health and the environment.
  --Complete dismantlement of 232-Z facility within Plutonium Finishing 
        Plant (PFP) Complex to slab-on-grade.--The PFP Complex consists 
        of several buildings that were used for defense production of 
        plutonium nitrates, oxides and metal from 1950 through 1989. 
        The end state for the PFP is the dismantlement of all 
        facilities to slab-on-grade. Progress will continue on the 
        deactivation and decommissioning of the Plutonium Processing 
        Facility, Plutonium Reclamation Facility, High-Level Liquid 
        Waste Facility, Americium Facility and other nuclear facilities 
        within PFP. Dismantlement of the 232-Z incinerator facility 
        will be completed resulting in reduced risk to human health and 
        the environment.
  --Accelerate the retrieval of suspect transuranic waste and shipments 
        to the Waste Isolation Pilot Plant.--Hanford has several 
        thousand containers of previously generated suspect transuranic 
        waste stored in the ground in a retrievable configuration. The 
        retrieval of this waste will be accelerated from 1,500 m\3\ in 
        fiscal year 2005 to 1,800 m\3\ in fiscal year 2006. Of the 
        retrieved waste, more than 700 m\3\ of transuranic waste will 
        be shipped to the Waste Isolation Pilot Plant for final 
        disposal. Characterization and shipment of this waste to the 
        Waste Isolation Pilot Plant for final disposal will reduce the 
        risks to facility workers as well as reduce the safeguard and 
        security vulnerability associated with this waste. This action 
        represents final disposal of this waste in an environmentally 
        protective repository.
  --Prepare T Plant to support Tri-Party Agreement M-91 Milestone 
        Requirement.--T Plant will be utilized for support of various 
        waste management missions including repackaging of mixed low-
        level and transuranic wastes. T Plant preparation supports the 
        Tri-Party Agreement M-91 milestone requirements for repackaging 
        of large/remote handled mixed low-level and transuranic wastes.
  --Complete upgrade of the remediation system for the 100-D Area 
        Chromium Plume.--Chromium-contaminated groundwater is reaching 
        the Columbia River in the 100-D Area. The contamination levels 
        are more than 20 times the aquatic life water standard, and the 
        area is adjacent to potential salmon spawning locations. To 
        address this, the ground water remediation system in the 100-D 
        Area will be upgraded. As a result, the groundwater reaching 
        the Columbia River will once again meet the aquatic water 
        standards, thereby protecting human health and the salmon 
        population in the River.
  --Complete construction of Integrated Disposal Facility and initiate 
        treatment of selected low-level and transuranic wastes from 
        single-shelled tanks.--Radioactive liquid waste stored in older 
        single-shelled tanks has the potential of leaking and 
        contaminating soil and groundwater that flows to the Columbia 
        River, presenting a risk to human health and the environment. 
        Construction of the Integrated Disposal Facility will provide 
        expandable, on-site disposal capacity for treated low-activity 
        tank wastes, low-level and mixed low-level wastes. Treatment of 
        selected low-level and transuranic tank wastes using 
        supplemental treatment technologies such as bulk vitrification 
        will allow early and accelerated treatment of tank wastes 
        outside the Waste Treatment Plant currently under construction 
        at Hanford.

Idaho
  --Complete the construction and startup repackaging facilities for 
        remote handled transuranic waste, and disposition 6,800 m\3\ of 
        transuranic waste at the Waste Isolation Pilot Plant. 
        Disposition 5,600 m\3\ of low level and mixed low level 
        waste.--These actions will serve to reduce operating, 
        surveillance, and maintenance costs while at the same time 
        offering improvements in waste management and long-term safety 
        and security.
  --Complete design and initiate construction of the Sodium Bearing 
        Waste Treatment Project, to treat tank radioactive wastes.--
        These actions support the EM goal of reducing the risk of 
        stored liquid radioactive waste and support the 1995 settlement 
        agreement with the State of Idaho. These actions will reduce 
        the potential risk to human health by preventing the migration 
        of contamination into the Snake River Plain Aquifer which is a 
        sole source aquifer used to supply water to the people of 
        southeastern Idaho.
  --Close one underground storage tank (WM-184).--This would be the 
        first liquid waste underground storage tank closed since 1997. 
        Removing the liquid waste decreases the risks they pose to 
        human health and the environment, including the underlying 
        Snake River Plain sole-source aquifer.
  --Initiate the deactivation of excess reactors and complete 
        deactivation of the Power Burst Facility, building 620.--These 
        actions will reduce potential risk by deactivating high risk 
        excess Idaho National Laboratory nuclear buildings that have 
        reached the end of their useful lives.

Paducah
  --Continue construction of Depleted Uranium Hexafluoride (DUF6 ) 
        Conversion facility.--The DUF6 conversion facility 
        will convert depleted uranium hexafluoride into a more stable 
        form (depleted uranium oxide) suitable for reuse or 
        disposition. Depleted uranium oxide will be disposed of at a 
        licensed commercial facility, the hydrogen fluoride by-products 
        will be sold on the commercial market, and the empty cylinders 
        will be crushed and disposed of or reused.
  --Disposition 116 cubic meters of waste.--The continued shipment and 
        disposal of newly generated and legacy waste will 
        proportionally reduce the risk such wastes present to the 
        health and safety of workers and reduce the on-going potential 
        for release to the environment from aging storage containers.
  --Continue decontamination and decommissioning of C-410 Complex.--The 
        C-410 Complex is a large chemical complex in a shutdown 
        condition. Removal of contaminated materials and equipment 
        reduces potential risk to onsite workers and represents a key 
        step in stabilizing the facility such that contaminants are 
        prevented from release to the environment.

Portsmouth
  --Complete Shutdown of Cold Standby Operations and transition to 
        D&D.--Planned transition from cold standby to final shutdown 
        and subsequent decontamination and decommissioning activities. 
        This will result in a significant mortgage cost reduction and 
        will eliminate risk to public health and the environment.
  --Disposition 1,600 cubic meters of legacy waste.--The continued 
        shipment and disposal of legacy waste will proportionally 
        reduce the risk such wastes present to the health and safety of 
        workers and reduce the on-going potential for release to the 
        environment.
  --Operate active and passive groundwater treatment systems.--Plume 
        control keeps contaminants from reaching surface streams and 
        off-site drinking water supplies. Trichloroethylene (TCE), 
        which is an industrial solvent, is the main groundwater 
        contaminant at the site.
  --Complete disposition of the Gas Centrifuge Enrichment Plant 
        components.--Complete shipment of 720 disassembled centrifuges, 
        disposition all RCRA waste, and complete decontamination in 
        certain Gas Centrifuge Enrichment Plant facilities. These 
        facilities are to be used by the United States Enrichment 
        Corporation (USEC) for development and deployment of an 
        advanced centrifuge uranium enrichment plant.
  --Continue construction of DUF6 Conversion facility.--The 
        DUF6 conversion facility will convert depleted 
        uranium hexafluoride into a more stable form (depleted uranium 
        oxide) suitable for reuse or disposition. Depleted uranium 
        oxide will be disposed of at a licensed commercial facility, 
        the hydrogen fluoride by-products will be sold on the 
        commercial market, and the empty cylinders will be crushed and 
        disposed of or reused.

Oak Ridge
  --Continue demolition of the K-25 and K-27 buildings and process 
        equipment removal.--Decommissioning the buildings will reduce 
        the footprint of the site, and therefore reduces significant 
        fixed costs and risks to the workers by eliminating the need to 
        enter the buildings to perform required, routine surveillance 
        and maintenance activities. Decommissioning the buildings also 
        eliminates the potential environmental and human health risk of 
        accidental releases from these facilities.
  --Initiate the construction of the final expansion of the 
        Environmental Management Waste Management Facility (EMWMF).--
        Construction of the final expansion of the EMWMF represents an 
        important step in the completion of environmental cleanup at 
        the Oak Ridge Reservation. Waste received from remedial action/
        decontamination and decommissioning projects from all of the 
        Oak Ridge Reservation will be placed in the engineered disposal 
        facility. Disposition of this waste will greatly decrease the 
        risks to public health and the environment.
  --Complete Melton Valley cleanup.--Completion of Melton Valley 
        cleanup in fiscal year 2006 will ensure that the largest source 
        term threatening the nearby Clinch River is contained, on-site 
        surface water quality is improved to meet required standards, 
        and off-site users of the Clinch River remain protected.
  --Complete shipment of DUF6 cylinders to Portsmouth.--This will 
        complete the removal of all remaining cylinders from the East 
        Tennessee Technology Park in accordance with the Tennessee 
        Department of Environment and Conservation Order.
  --Initiate contact-handled transuranic waste processing at the Waste 
        Treatment Facility.--This waste is stored in above grade-
        storage facilities and in earthen trenches. Processing the 
        waste prevents the risk of release to the environment and the 
        continued cost of waste storage and monitoring.
  --Complete Offsite Remediation. Complete Atomic City Auto Parts. 
        Complete building and debris removal at Witherspoon 901 
        sites.--This action will reduce the risks posed to workers and 
        the surrounding community from uranium and polychlorinated 
        biphenyls contamination in the soil.

Los Alamos National Laboratory
  --Disposition 1,400 cubic meters of legacy transuranic waste and 
        initiate retrieval of legacy transuranic waste storage above 
        ground.--Characterization and shipment of this waste to the 
        Waste Isolation Pilot Project for final disposal will reduce 
        the risks to facility workers as well as reduce the safeguard 
        and security vulnerability associated with this waste. This 
        action represents final disposal of this waste in an 
        environmentally protective repository.

Savannah River Site
  --Complete processing neptunium solutions.--SRS has approximately 
        6,000 liters of neptunium-237 nitrate solution in H-Canyon. 
        Through processing, the neptunium solutions are converted into 
        a more stable form, and the risks they pose to human health and 
        the environment are reduced.
  --Complete de-inventory and deactivation of the F-Area nuclear 
        materials processing facilities.--Complete de-inventory and 
        deactivation of the F-Area nuclear materials processing 
        facilities including F Canyon, FB Line, and F Outside 
        Facilities. In addition, complete the stabilization and 
        packaging of plutonium to DOE Standard 3013 in FB Line. This 
        will greatly reduce the security threat and the large fixed 
        costs associated with these facilities as well as the risk 
        posed to human health and the environment.
  --Continue to stabilize liquid waste from underground storage 
        tanks.--Complete design and begin construction of Salt Waste 
        Processing Facility; produce 250 canisters of vitrified high-
        level waste.
  --Complete decommissioning of 28 industrial, nuclear, and radioactive 
        facilities, including the completion of M Area Facilities.--
        Decommissioning excess radioactive facilities will reduce the 
        footprint of the site and associated fixed costs, and therefore 
        collectively reduce risk to the worker by eliminating the need 
        to enter the facilities to perform required, routine 
        surveillance and maintenance activities. Risk of worker 
        exposures while performing these activities is eliminated. 
        Decommissioning excess radioactive facilities also eliminates 
        the potential environmental and human health risk of accidental 
        releases from these facilities.

Brookhaven National Laboratory
  --Complete removal of Brookhaven Graphite Research Reactor Canal and 
        continue Reactor Pile removal.--Brookhaven National Laboratory 
        sits over a sole-source aquifer used as a primary source of 
        drinking water for the people of Long Island. Decontamination 
        and decommissioning of the Brookhaven Graphite Research Reactor 
        activities for fiscal year 2006 will remove the Canal and the 
        Graphite Pile, both highly contaminated components from the 
        reactor; contaminated soils adjacent to the reactor will also 
        be removed. These actions will reduce the potential risk to 
        human health by eliminating a possible source of contamination 
        to the aquifer.

Waste Isolation Pilot Plant
  --Begin receipt and placement of remote-handled transuranic waste.--
        The Waste Isolation Pilot Plant, in Carlsbad, New Mexico, is 
        the Nation's mined geologic repository for the permanent 
        disposal of defense-generated transuranic waste. All 
        transuranic waste comes to the Waste Isolation Pilot Plant for 
        receipt, handling, and disposal. WIPP is not permitted to 
        receive and dispose of remote-handled transuranic waste 
        (defined as such because it generates higher levels of 
        radiation). The permitting activities this year, which come 
        from the combination of many years of regulatory, scientific 
        and engineering efforts, will enable WIPP to receive remote-
        handled waste by June 2006. This will remove these wastes from 
        around the complex where it constitutes a major health and 
        safety risk, into a centralized, safe disposal site in New 
        Mexico.
    Maintain closure schedules.--Three major sites, Rocky Flats, 
Fernald, and Mound, have accelerated closure schedules. In addition, 
two smaller sites, Ashtabula and Battelle-Columbus are scheduled to 
close in 2006. Funding in the fiscal year 2006 budget will allow these 
sites to remain on track toward project completion and site closure.
    At Rocky Flats, fiscal year 2006 funding provides for:
  --Completing the disposal of legacy low-level and mixed low-level 
        waste to off-site disposal; completing remediation of all 
        remaining release sites.--During fiscal year 2006, Rocky Flats 
        will be completing their commitment of site closure and 
        conversion of the Rocky Flats site for future beneficial use. 
        All of the legacy waste as well as amounts generated by 
        remediation will be disposed of off-site in DOE or commercial 
        disposal facilities. Remediation will be completed on all 
        remaining release sites including building foundations and 
        ponds. Site re-contouring and grading will be completed along 
        with all necessary regulatory and project closure 
        documentation.
  --Completing nuclear facility deactivation and decommissioning for 
        all nuclear as well as non-nuclear buildings on site.--All the 
        buildings where plutonium and other hazardous materials were 
        used in support of the nuclear weapons deterrent, which 
        constitute over 1,000,000 square feet of space, will be 
        demolished. All final quantities of radioactive wastes will be 
        removed from the site, and the grounds will be receiving the 
        necessary remediation action. These actions, when complete, 
        will allow the Department of Energy to release the site to the 
        U.S. Fish and Wildlife Service to become the Rocky Flats 
        National Wildlife Refuge with little or no further risk to 
        human health or the environment.
    At Fernald, fiscal year 2006 funding provides for:
  --Completing decontamination and decommissioning of Silos 1, 2, and 3 
        treatment facilities and associated support structures/
        facilities.--Silos 1 and 2 contain the highest levels of 
        radiological activity residing in any waste stream at the site, 
        a risk to human health and the environment. The Silos 1 and 2 
        Project constitute the Site Closure Critical Path. Their 
        successful completion is a prerequisite for a timely and safe 
        closure.
  --Completing construction of the On-Site Disposal Facility Cells 6 
        and Cell 7 caps, contaminated soil excavation, expansion and 
        capping of Cell 8, and natural resource restoration.--
        Completing soil excavation, disposal into the onsite cells, and 
        capping the cells of the On-Site Disposal Facility (OSDF) will 
        insure the reduction in risk to human health and the 
        environment during post closure. Overall, the OSDF will be 
        composed of 8 cells, containing 2.5 million cubic yards of 
        waste soil and debris. The OSDF has been designed and 
        engineered to possess a 5-foot thick liner and a 9-foot thick 
        cap. The OSDF has a design life of 1,000 years.
    At Mound, fiscal year 2006 funding provides for:
  --Completing the excavation and verification of Potential Release 
        Site 131 (soil beneath Buildings R, SW, and B Slab) and the 
        remaining Potential Release Sites and ship the remaining 
        remediation waste for off-site disposal, and transfer remaining 
        land to the Miamisburg Mound Community Improvement Council.--
        Completing Potential Release Site 131 decreases risk by 
        preventing any further radioactive contamination from migrating 
        into clean soil areas and ground water, by reducing potential 
        exposure to site workers and other personnel located on site, 
        and by precluding any potential environmental impacts to off 
        site areas.
    At Ashtabula, fiscal year 2006 funding provides for:
  --Completing remediation of the Waste Management Unit.--Remediating 
        the Waste Management Unit significantly reduces the remaining 
        risks of organic and inorganic chemical exposure to both soil 
        and groundwater at the RMI site.
    At Battelle-Columbus, fiscal year 2006 funding provides for:
  --Completing demobilization of equipment and site infrastructure to 
        support closure and complete off-site disposal of transuranic 
        waste.--Demobilization of the remaining equipment and 
        infrastructure will support final closure of the site. Removal 
        of the transuranic waste will also reduce risk to off-site 
        areas and members of the general public.

                               CONCLUSION

    Three years ago we started down the path to bring clarity and focus 
to our mission and deliver on our commitments. We must continue to 
improve our performance and look beyond the gains we have made to 
achieve our vision for the benefit of future generations. I have 
challenged our partners in cleanup: our workforce, our contractors, our 
regulators, our communities, and all those interested in joining us in 
our vision of cleanup to put their most innovative ideas and people 
forward. We must not lose the momentum that has been established, 
particularly as we work through the tremendous challenges that still 
face us. This program spends nearly $1 million per hour, 24 hours per 
day, 7 days a week. The question is how we continue to return value to 
the communities and taxpayers with this program. We are committed to 
using our resources to show meaningful risk reduction and cleanup 
completion results.
    We must never go backwards, to the time when we measured success by 
how much we spent, not by how much we did. We must never again believe 
the falsehood that it is a choice between being safe and doing work, 
for it is only when we do our work that we are really safe. We must not 
by our inaction allow this legacy to become our children's, 
grandchildren's, or our great-grandchildren's problem . . . it is for 
us to solve and for us to complete. We must demand excellence and never 
again accept the notion that this job is too hard or too dangerous to 
complete. We have demonstrated that we can do this work, that we can do 
it safely, and that we can do it on a schedule to be completed in our 
lifetime.
    The challenges before us are formidable. To solve them will require 
our collective resources, ingenuity, and hard work. But we are up to 
this challenge. Over the last 3 years, EM has demonstrated that 
challenges can be overcome.
    Again, I thank you for the support you have provided these last few 
years, and I ask for your continued support in this very important 
work. The potential is there to lose what we have gained should we fail 
to stay true to our commitments: a cleanup that is safe for the worker, 
protective of the environment, and respectful of the taxpayers.
    I look forward to working with the committee and others to achieve 
this worthy goal.
            Office of Civilian Radioactive Waste Management

STATEMENT OF THEODORE J. GARRISH, DEPUTY DIRECTOR

    Mr. Garrish. Mr. Chairman, members of the committee, I am 
Ted Garrish, Deputy Director of the Department's Office of 
Civilian Radioactive Waste Management. I'd like to thank the 
committee for inviting me here to discuss our program, and in 
the interest of time, I'd like to cut down a little bit on some 
of my remarks.
    As you know, it is a priority of this administration to 
consolidate waste currently at 125 sites in 39 States to a 
single, secure, remote location. We remain committed to our 
obligation to safely dispose of spent fuel and high-level 
radioactive waste resulting from commercial nuclear power and 
defense activities.
    First, as I begin, I'd like to address some of the opinions 
that have been offered to the effect that the program is unable 
to move forward. Some people have suggested that it's even 
broken. On the contrary, this program has a sound, scientific, 
and technical basis, and we are moving forward step by step 
toward the development of a repository at Yucca. I believe we 
are better situated than we have ever been to move forward with 
this program, and let me describe a couple of the reasons.
    First and foremost, we have a site for the repository. 
Congress approved the Yucca Mountain site in 2002, and the 
courts have affirmed the constitutionality of the site 
selection process and we have a location for the repository. 
Secondly, we have a draft of the entire license application in 
hand and we are making improvements to the analysis to provide 
a high quality presentation by the end of this calendar year.
    To this end, we have submitted 293 of the key technical 
issue agreements to the Nuclear Regulatory Commission, and they 
are in the process of reviewing them. Two hundred and nine have 
been closed. We are improving our computer models to reflect 
the conditions in the future. We have provided over 1 million 
documents, which is 5 million pages, to the Nuclear Regulatory 
Commission for their web site for interested parties to review 
the license application and related material. We currently 
estimate that we have approximately 3.7 million documents to 
put into the licensing support network and we are approximately 
44 percent complete.
    We have had positive exchanges with the Nuclear Waste 
Technical Review Board ranging from groundwater flow to the 
waste package corrosion. All told, the license application 
process is going well.
    Third, the transportation program in Nevada and throughout 
the country is moving forward in earnest. The EIS process for 
the Nevada rail alignment is well along in the process, and we 
expect the draft EIS to be completed in the near future. And we 
have begun our institutional activities with getting tribes and 
States as our partners around the country. These are all 
positive developments demonstrating that we are making 
progress. Nevertheless, the program does face challenges 
involving parties outside the Department. These include the 
court decision on the EPA standard and the need for funding 
reform.
    Last summer, as you know, the U.S. Court of Appeals vacated 
EPA's Yucca Mountain radiation protection standard with regard 
to the 10,000 year regulatory compliance period. EPA is 
currently preparing a radiation standard to conform with the 
court's direction. We remain optimistic that EPA's work in 
promulgating the standard will be contemporaneous with our work 
on the license application, and both will be ready by the 
latter part of this year.
    In addition, we are facing serious funding issues for the 
future. Both Congress and the administration have recognized 
the funding program facing the program and have desired to make 
the nuclear waste money--fund monies available for their 
intended purpose. To ensure sufficient and stable funding, the 
administration remains supportive of the concept embodied in 
our legislative proposal submitted last year, and the 
administration remains interested in pursuing further 
discussions with Congress on these issues in the hope of 
reaching some agreement that will assure access to the nuclear 
waste fund when that money is needed.
    Despite these challenges, the program is on sound footing 
and we are poised to make significant progress in the coming 
years. In the current fiscal year 2005, there have been several 
important objectives, mainly to focus on refining and 
completing the license application. Supporting that, we are 
continuing to work on the design of the waste package, the 
surface and sub-surface facilities, and to complete the total 
system performance assessment.
    We anticipate completing the certification of the licensing 
support network mid-summer, preparing millions of pages of 
documentation for the public. And on transportation, we are 
anticipating completing the draft EIS of the Nevada rail and 
completing the conceptual design of that rail objectives in 
fiscal year 2005.
    Fiscal year 2006 is a critical period for the Department. 
We will be submitting our license application and we will begin 
the NRC regulatory process leading to the issuance of the 
construction authorization. As we submit the license 
application and as we proceed, we are going to need to advance 
the repository design. We will need to support the NRC review 
and to support our defense of the license application.
    For transportation, we will need to continue with our 
design and pre-construction activities for the Nevada rail and 
to develop cask and railroad cars used to develop waste. Our 
budget request of $651 million represents a modest increase in 
funding to complete the tasks we believe can reasonably be 
accomplished in fiscal year 2006. We will continue to make real 
progress on the license and the repository and the development 
of the national infrastructure for accepting and transporting 
waste, and we urge your support for our budget request, and 
we're pleased to work with you on the various issues that 
should come up in fiscal year 2006.

                           PREPARED STATEMENT

    Finally, I cannot emphasize enough the administration's 
continued strong support for this program as we move forward 
with the implementation. And I will be happy to respond to your 
questions. Thank you.
    [The statement follows:]

               Prepared Statement of Theodore J. Garrish

    Mr. Chairman and members of the committee, I am Ted Garrish, Deputy 
Director of the Department of Energy's (DOE) Office of Civilian 
Radioactive Waste Management (OCRWM). I appreciate the opportunity to 
present our fiscal year 2006 budget request and discuss our plans to 
license, build, and operate a geologic repository at Yucca Mountain in 
Nevada, and our efforts to develop the transportation system needed to 
deliver spent nuclear fuel and high-level radioactive waste to the 
repository.
    There has been a lot of comment about this Program being unable to 
move forward. On the contrary, the Program is as well situated as it 
has ever been. Indeed, we are in excellent shape for the future and we 
are moving ahead deliberately, step-by-step, toward development of a 
geologic repository at Yucca Mountain. Here are some of the reasons why 
this Program is poised for success:
  --We have a site for the geologic repository. Congress approved the 
        Yucca Mountain site in Nye County, Nevada for development as a 
        repository in 2002. Lawsuits have affirmed the 
        constitutionality of the process and therefore we have a 
        location for the development of a repository.
  --We have a draft of the license application in the process of 
        refinement. We are making improvements to the analysis and 
        presentation of information to meet one objective of completing 
        preparation of a high quality license application by the end of 
        this calendar year.
  --Transportation activities have begun in earnest. We issued Records 
        of Decision for both transportation mode and the rail line 
        corridor through Nevada. We are currently preparing an 
        Environmental Impact Statement for the specific rail alignment 
        within that corridor. Institutional activities to include the 
        States as partners have also begun.
  --We are requesting the full funding amount needed to complete those 
        tasks we can reasonably accomplish in fiscal year 2006. The 
        Department will continue to request the appropriate funding 
        required for the project.
  --The administration continues its strong support of this Program as 
        we move forward with its implementation.
    This Program does face a couple of challenges involving parties 
outside the Department that I would like to briefly bring to your 
attention.
    First, the U.S. Court of Appeals for the District of Columbia 
Circuit vacated the Environmental Protection Agency's Yucca Mountain 
radiation protection standard with regard to its 10,000 year regulatory 
compliance period. EPA is currently working to revise its Yucca 
Mountain radiation standard to conform to the court's direction. We 
remain hopeful that EPA's work in promulgating the standard will be 
contemporaneous with our work on the license application and that both 
will be ready by the latter part of the year.
    Second, both Congress and the administration have recognized the 
long-term funding problem facing the Program and the need to make 
Nuclear Waste Fund monies available for their intended purpose. The 
administration believes that the fees currently paid to the government 
by utilities to finance the repository should be treated as offsetting 
collections against the appropriation from the Nuclear Waste Fund. The 
amount credited as offsetting collections should not exceed the amount 
appropriated for the repository. To ensure stable and sufficient 
funding, the administration continues to support the concept embodied 
in the legislative proposal submitted last year to provide the 
increased annual funding needed for construction and operation of the 
repository. The administration remains interested in pursuing such a 
proposal and intend to have further discussions with Congress on these 
issues in the hope of reaching some agreement.
    Despite these challenges, the Program is fundamentally on sound 
footing and we are poised to make significant progress in the coming 
year.

                  THE FISCAL YEAR 2006 BUDGET REQUEST

    Fiscal year 2006 is a crucial period for the Department and for the 
regulatory process leading to issuance of a construction authorization 
for the Yucca Mountain Project. To accomplish our goals, the budget 
request $651 million for the Program in fiscal year 2006. A significant 
portion of the work planned for fiscal year 2006 is required to advance 
the repository design and facilitate construction and operation, and to 
support the NRC's review and the Department's defense of the license 
application. In addition, funding will also support design and pre-
construction activities for the approximately 300-mile Nevada branch 
rail line. The Department will also continue to support development of 
transportation casks and railroad cars capable of delivering spent fuel 
and high-level waste to the repository.
    To set the stage for our fiscal year 2006 budget request, I would 
like to describe briefly OCRWM's fiscal year 2004 accomplishments and 
our ongoing activities based on our fiscal year 2005 appropriation.

                    FISCAL YEAR 2004 ACCOMPLISHMENTS

    Having achieved Congressional and Presidential approval of the 
Yucca Mountain site in 2002, we have transitioned from a scientific 
study program to one focused on the regulatory requirements for 
obtaining a license from the NRC to construct and operate the proposed 
repository.
    Over the past 2 years the main effort of the program has been 
preparation of the license application for submittal to the NRC. The 
majority of the funding for the Yucca Mountain Project in fiscal year 
2004 was devoted to various aspects of the license application. While a 
solid working draft had been received, the Program elected to take the 
time afforded by the vacating of the EPA standard to strengthen the 
license application and ready it for submission in calendar year 2005. 
The Program has established plans for completing and further 
strengthening the license application and has based its funding request 
upon these plans.
    The Program prepared a design and a detailed plan for repository 
licensing, construction, and operation, and focused on completing the 
license application to the NRC for authority to construct the 
repository. By the end of fiscal year 2004, the Yucca Mountain Project 
had accomplished the following:
  --Completed required elements of the design of the waste package and 
        repository facilities in support of the license application.
  --Addressed all ``key technical issue'' agreements that the 
        Department and the NRC had agreed needed to be addressed prior 
        to license application submittal.
  --Prepared tens of millions of pages of relevant documentation for 
        inclusion in the electronic Licensing Support Network.
  --Prepared a draft license application for construction of the 
        repository facilities needed to begin acceptance of spent fuel 
        and high-level waste.
  --Institutionalized a Science and Technology Program to enhance the 
        understanding of the repository system and potentially reduce 
        the Program's cost and schedule.
    In addition, during fiscal year 2004, the OCRWM Office of National 
Transportation completed conceptual design and project management 
documentation needed to support cask and rolling stock acquisition and 
rail line design and construction, issued a Record of Decision to use 
the mostly rail mode of transportation, and issued a second Record of 
Decision selecting the Caliente corridor for the Nevada branch rail 
line.

                  FISCAL YEAR 2005 ONGOING ACTIVITIES

Yucca Mountain Project
    Consistent with Departmental and Program objectives, the Yucca 
Mountain Project's main focus in fiscal year 2005 is on improving and 
completing the license application. The required elements of design, 
performance assessment, safety analyses, and technical data in the 
license application must be sufficient for the NRC to conduct an 
independent review and reach a decision to issue a construction 
authorization. The application must demonstrate that the repository can 
be constructed and operated and that the health and safety of the 
public will be protected.
    By the end of fiscal year 2005, with the funds appropriated, our 
objectives are to:
  --Make significant progress on and improvements to design for the 
        waste package, surface facilities, and subsurface facilities in 
        support of the license application.
  --Complete total system performance assessment calculations and final 
        report in support of the license application.
  --Complete certification of the electronic Licensing Support Network 
        consistent with the requirements of 10 CFR Part 2, Subpart J, 
        by preparing tens of millions of pages of relevant 
        documentation to support review of the license application.
    Even though site characterization is complete, in fiscal year 2005 
we are continuing to collect valuable scientific information, including 
for the Performance Confirmation baseline. The NRC requires scientific 
analyses in support of Performance Confirmation to continue until the 
repository is permanently closed.

National and Nevada Transportation Projects
    In early fiscal year 2004, the transportation program focused on 
selecting the transportation mode and the corridor for the Nevada 
branch line that would establish the transportation system's 
infrastructure requirements. In April 2004, the Department announced 
the Record of Decision for the selection of rail as the mode of 
transportation and a second Record of Decision for the selection of 
Caliente corridor for construction of a branch rail line in Nevada to 
connect from an existing rail line to the Yucca Mountain site. The 
program is now planning and developing designs for infrastructure 
development projects to provide the capability for transporting spent 
nuclear fuel and high-level waste to the repository. Funding in fiscal 
year 2005 supports completion of the conceptual design process and 
issuance of the draft Rail Alignment Environmental Impact Statement for 
the transportation system in Nevada. Funding also supports initial 
investments in transportation infrastructure needs, including 
transportation casks, railroad rolling stock, operations planning, and 
the business systems needed to manage multiple procurements and 
construction projects.

Program Management and Integration
    A key component of the Program Management and Integration budget 
element is Quality Assurance (QA). In the last year we continued to 
make progress in the implementation of our QA program requirements. 
Several independent assessments have determined that the QA program is 
being effectively implemented.
    During this fiscal year, we continue to take steps to ensure we are 
prepared to manage major capital projects efficiently and cost-
effectively. We submitted an updated Capital Asset Management Plan for 
the Program to the Office of Management and Budget and the Congress in 
November 2004 and have completed a comprehensive program acquisition 
strategy. We continue to strengthen our performance measurement and 
project management capabilities and systems, and have institutionalized 
their use in monitoring and managing all the activities that support 
license application completion. We continue to implement the 
President's Management Agenda.
    In fiscal year 2005, the Science and Technology Program continued 
work in the areas of repository materials performance, applied research 
on the Yucca Mountain geologic environment, and methods for developing 
new substances that will selectively capture waste elements. 
Additionally, projects will be initiated to examine advanced welding 
technologies, development of innovative materials for potential use in 
waste packaging and the repository's tunnels, and the potential 
application of additional advanced remote handling and robotics 
technologies in the repository system.

                    FISCAL YEAR 2006 KEY ACTIVITIES

Yucca Mountain Project
    Fiscal year 2006 is a crucial period for the Department and for the 
regulatory process leading to the NRC's issuance of a construction 
authorization for the Yucca Mountain Project. After submittal, the NRC 
is expected to start the docketing review and if, docketed, a detailed 
technical review of the license application. Docketing of the 
application will initiate adjudicatory proceedings on the license 
application. A significant portion of the work planned for fiscal year 
2006 is required to advance the repository design and facilitate 
construction and operation, and to support the NRC's review and the 
Department's defense of the license application. Departmental 
activities encompassed within this work scope are premised on meeting 
NRC requirements and obtaining any necessary regulatory approvals.
    The Department will be required to respond to technical questions 
and requests for additional information from the NRC in a timely 
fashion. The Department will also be required to appear at the 
evidentiary hearings that are likely to begin by fiscal year 2007 
following the completion of the Commission's review of the license 
application and issuance of its Safety Evaluation Report on that 
application. The NRC is expected to issue a final decision on a 
construction authorization for the repository 3 to 4 years after 
submittal of the license application, the statutorily established time 
period.
    In parallel with the licensing process, the Program must focus on 
design of the repository must and ensure that the site is ready to 
support construction as soon as it is authorized by the NRC.
    By the end of fiscal year 2006, our objectives are to have:
  --Completed the preliminary design for the waste package, surface 
        facilities, and subsurface facilities, which requires 
        continuing performance assessment analysis.
  --Completed and submitted a license application for repository 
        construction authorization to the NRC.
  --Responded to NRC's initial Request for Additional Information as 
        they review the license application.
  --Updated the LSN certification concurrent with license application 
        submittal.
  --Continued to refine the safety analysis as needed, in response to 
        NRC review and in accordance with NRC licensing regulations.
  --Fabricated prototype waste packages to ensure a process that is 
        replicable while meeting rigid quality assurance requirements.
  --Initiated procurement activities for materials, equipment and 
        services needed for construction of the surface and underground 
        facilities.
  --Completed upgrades of existing facilities needed for site safety.
  --Developed designs for site infrastructure facilities and utilities 
        needed to support the start of construction.
  --Completed the detailed work plan, cost estimate, and schedule, and 
        established a performance baseline for the final repository 
        design and construction.
    We are requesting funding for payments-equal-to-taxes to the State 
of Nevada and to Nye County, Nevada, where Yucca Mountain is located. 
Our fiscal year 2006 request also includes funding for Affected Units 
of Local Government, as well as funding to the University System of 
Nevada and to Nye County and Inyo County, California, for independent 
scientific studies. The increased request for State and local 
government oversight represents a one-time adjustment in the funding 
cycle to align with State and county fiscal years.

National and Nevada Transportation Projects
    The requested funding will support the initiation of design and 
pre-construction activities for the branch rail line through Nevada as 
well as initial procurement of railroad cars, transportation casks and 
auxiliary equipment and will accelerate operational capability.
    For Nevada Transportation, DOE plans to issue the Final Rail 
Alignment Environmental Impact Statement and issue a Record of Decision 
identifying the alignment within the selected corridor on which the 
railroad may be built. The Department expects to complete the 
preliminary design and award a design/build contract for completion of 
the design and actual construction of the rail line and associated 
support facilities. Procurement of long lead-time rail construction 
materials, including track way and auxiliary equipment, will also be 
initiated.
    The National Transportation Project encompasses overall system 
planning, procurement of casks and rolling stock or railroad cars, and 
stakeholder relations activities. Significant lead time is required for 
solicitation, evaluation of proposals, NRC certification (for new 
designs), and fabrication of transportation casks. The initial 
procurement of transportation casks is needed to provide the capability 
for waste acceptance to support repository operations. We are working 
with the cask vendor industry to procure an efficient cask fleet that 
maximizes the government's ability to support the full range of 
contents that need to be shipped with the minimum number of separate 
designs. These procurements will proceed towards cask fabrication in a 
step-wise manner to maintain flexibility on final procurements as long 
as possible. We will also continue to address a new railcar standard 
implemented by the American Association of Railroads for shipments of 
spent nuclear fuel and high-level waste. Finally, the Program will 
conduct conceptual design activities for transportation support 
facilities, most significantly for the Fleet Management Facility which 
will provide cask and railcar maintenance capabilities during 
operations.
    The National Transportation Project will also continue to expand 
its efforts to engage a wide range of stakeholders with regard to 
establishing preliminary transportation routes, operating protocols, 
and safeguards and security activities. The Department will work with 
key stakeholders to identify a suite of potential transportation 
routes, and we will continue to support State regional groups and 
tribes to develop a policy for funding State and tribal emergency 
response training and technical assistance as required by Section 
180(c) of the NWPA.

Program Management and Integration
    The budget request reflects the Program's need to have the 
strongest possible Quality Assurance program as it moves into the 
licensing phase. Quality Assurance is the cornerstone in assuring that 
the Program has successfully implemented the radiological safety and 
health and waste isolation activities required by NRC regulations. We 
will continue to institutionalize a nuclear safety culture by 
completing efforts introduced through the Management Improvement 
Initiative to meet the NRC's expectations of its licensees.
    The fiscal year 2006 request also contains funding for systems 
engineering and analysis activities to enable us to better evaluate and 
optimize the Program's component elements as they begin to converge 
into a single waste management system. In addition to the repository 
and transportation readiness, the third key piece that must be put in 
place is waste acceptance readiness. That is, the Program must 
establish the ``pipeline'' of wastes destined for Yucca Mountain. By 
addressing waste acceptance issues now, we can ensure that repository 
facilities and transportation infrastructure will be compatible with 
the commercial spent nuclear fuel and DOE-managed wastes that are 
planned for receipt. OCRWM will work closely with the Office of 
Environmental Management on DOE spent nuclear fuel and high-level waste 
acceptance criteria to ensure that we have an integrated, timely, and 
cost-effective approach.
    Requested funding in fiscal year 2006 for the Science and 
Technology Program reflects the Department's continuing commitment to 
enable the repository system to take advantage of the very latest 
scientific discoveries and technologies that may be potentially 
applicable over the long life of the repository.

Program Direction
    The Program Direction budget request supports Federal salaries, 
expenses associated with building maintenance and rent, training, and 
management and technical support services, which include independent 
Nuclear Waste Fund audit services and independent technical and cost 
analyses. The increased request (approximately 2.5 percent) reflects a 
small increase in Federal staff expenses to manage additional 
repository design/licensing activities and National and Nevada 
transportation work.
          ensuring adequate resources to complete the mission
    The Department of Energy and the Congress have been aware for many 
years that funding requirements for the repository program would 
increase substantially as we approach construction and transportation 
system development. In fiscal year 2007 and beyond, the Program will 
need significantly increased funding to pay for the design, 
construction, and operation of the repository, and for acquisition and 
development of the transportation infrastructure. Much greater 
certainty of funding is needed for such a massive capital project to 
ensure proper and cost-effective planning and acquisition of capital 
assets. Delays simply increase costs without meeting the Federal 
responsibility for safe, secure disposal of the waste.
    In accordance with the funding approach established in the Nuclear 
Waste Policy Act, the Department collects annual fees from nuclear 
utilities for the disposal of their spent nuclear fuel. The fees are 
reflected in the utility bills that their customers receive. In fiscal 
year 2006, an estimated $752 million will be collected. We should not 
delay in making these resources available for their intended purpose.
    The administration believes that the fees currently paid to the 
government by utilities to finance the repository should be treated as 
offsetting collections against the appropriation from the Nuclear Waste 
Fund. We will continue to work within the administration and with our 
Congressional counterparts to afford sufficient available funding to 
meet Yucca Mountain's programmatic requirements.

                       COST REDUCTION INITIATIVES

    While addressing the funding needs of the Program is a high 
priority, we also believe that by looking at several system 
enhancements we can improve both the near-term and long-term funding 
outlook. With this goal in mind, we are looking at potential 
enhancements that can be achieved through phased development, technical 
alternatives, and acceleration of operations.
    Under a phased development approach to repository construction, we 
have divided the surface and underground facilities into several phases 
so that the repository can be constructed and operated in stages. The 
license application will address all facilities necessary to emplace 
70,000 metric tons of spent nuclear fuel and high-level radioactive 
waste, and will describe the incremental process for building those 
surface and underground facilities in modules and panels. In addition 
to controlling short-term cost spikes, this strategy will increase 
confidence in our ability to accelerate operations, allow experience 
from initial operations to guide later activities, and retain 
flexibility for the incorporation of future technology improvements.
    We are making investments today in science and technology that will 
result in life-cycle cost savings, schedule efficiencies, and improved 
understanding of the safety and security of the repository system. To 
date, we have identified potential cost savings opportunities totaling 
several billion dollars over the long operating life of the repository 
in areas such as welding, advanced materials, techniques for excavating 
the underground tunnels, and low-maintenance ground support. While 
current technology and technical information are adequate to support 
the license application, we believe that strategic investments today 
can yield substantial benefits over the long term.

                           CONCLUDING REMARKS

    We are committed to the goal of beginning to receive and transport 
spent nuclear fuel and high-level waste to an NRC-licensed repository. 
Toward that end, our objective is to complete a high-quality license 
application and have it ready to submit to the NRC in December of this 
year.
    We are requesting a moderate increase in funding in fiscal year 
2006 to continue progress on licensing and constructing a geologic 
repository and developing the national infrastructure for accepting and 
transporting spent nuclear fuel and high-level waste. After more than 
20 years of scientific study, a site approval process involving the 
Department, the State of Nevada, Congress, and the President, and 
purposeful efforts toward securing a license, we are on the edge of the 
licensing and construction phase of this Program. We urge your support 
for our budget request, and we are pleased to be able to work with you 
on this important national issue.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Domenici. I'm getting fairly short of time because 
I believe it's unfair for me not to be at the Budget Committee 
hearing, and you have the same situation. I assume you're going 
to submit some questions.
    Senator Murray. I will submit my questions.
    Senator Domenici. I think what I'm going to do, I have some 
on both issues, I'm going to submit them.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

            Questions Submitted by Senator Pete V. Domenici

                   OFFICE OF ENVIRONMENTAL MANAGEMENT
                   NATIONAL ACADEMY OF SCIENCES STUDY

    Question. Last week the National Academy of Sciences panel 
published a report that evaluated the risk-based approach DOE utilizes 
in making cleanup and disposal decisions for transuranic and high level 
waste. The study made a number of findings. I am interested in Finding 
#7, which found that ``DOE's planning and decision making is reduced by 
the apparent conflict of interest created by DOE's authority to propose 
and approve disposition plans for radioactive waste.'' The NAS 
suggested that as an alternative, DOE have either EPA or the NRC serve 
as an independent regulator.
    As outlined in this finding, it would appear that the Department 
doesn't have any oversight or limitations on its ability to 
characterize and dispose of transuranic and high level waste. That 
isn't the case, is it?
    Answer. Actually, several entities provide oversight or review of 
the Department's plans and operations for characterizing, retrieving, 
treating and disposing of transuranic (TRU) and high-level waste (HLW). 
The U.S. Environmental Protection Agency (EPA) is responsible for 
certifying all TRU waste streams to be disposed at the Department's 
Waste Isolation Pilot Plant (WIPP) in Carlsbad, New Mexico. 
Additionally, the New Mexico Environment Department must approve permit 
modification requests for certain new TRU waste streams proposed for 
disposal in WIPP. State environmental organizations provide oversight 
of certain HLW management functions conducted at DOE locations, 
including granting environmental permits for HLW treatment facility 
operations. Both the EPA and the U.S. Nuclear Regulatory Commission 
(NRC) have a regulatory role in the disposal of HLW. EPA specified the 
radiation protection standards that a HLW repository is required to 
meet. The NRC will license the construction and operation of a HLW 
repository that meets the radiation protection standards. The Defense 
Nuclear Facilities Safety Board (DNFSB) provides oversight of 
activities related to operation of defense facilities to ensure 
adequate protection of public health and safety. Much of DOE's TRU and 
HLW are defense wastes, and consequently many of the facilities used 
for retrieving and treating such wastes for disposal are under DNFSB 
oversight. Additionally, the U.S. Department of Transportation 
prescribes regulations for the transportation of radioactive materials 
that the Department must meet for the packaging and shipping of its 
treated HLW and TRU from its generation sites to disposal sites.
    Question. Do you believe the NAS finding has any merit, and is the 
Department considering using an independent arbiter to review DOE 
disposal plans?
    Answer. The Department agrees with the approach to independent 
oversight of cleanup and disposal decisions for transuranic (TRU) and 
high-level waste (HLW) provided by the U.S. Environmental Protection 
Agency (EPA) and the State for TRU, and the U.S. Nuclear Regulatory 
Commission (NRC), EPA, the States, the Defense Nuclear Facilities 
Safety Board and the U.S. Department of Transportation in connection 
with HLW. For example, provisions of section 3116 of the National 
Defense Authorization Act for fiscal year 2005 call for a consultation 
role by the NRC, and stipulate a State-approved closure plan or State-
issued permit for such wastes that the Secretary determines not to be 
HLW in accordance with section 3116. In addition, for wastes not 
subject to section 3116, DOE would continue its past practices of 
providing for independent review of such determinations by the NRC, and 
work with the host States to obtain necessary permits and approval of 
associated plans, such as closure plans. In these cases, both NRC and 
the States act as independent arbiters.
    Question. Several of the findings of the National Academy of 
Science study determined that ``it is infeasible to recover and dispose 
of every last bit of waste that might be classified as transuranic or 
high level.'' It also found that the cost and potential exposure of 
trying to recover every last gram of waste was not justified by the 
actually [sic] risk reduction. While the NAS study seems to favor the 
Department's decision to use a risk-based approach to cleanup, the 
report was very critical of the Department's lack of effort in seeking 
input from stakeholders and the public. How do you respond to this 
assertion that the Department has failed to include public 
participation and stakeholder input?
    Answer. One of the keys to the Office of Environmental Management's 
(EM) progress in recent years has been its public outreach and 
stakeholder programs. This allows for substantive input into decision-
making, and promotes proactive and systematic complex-wide public 
involvement. EM has a long history of working with a variety of 
intergovernmental groups (i.e., Energy Communities Alliance, 
Environmental Council of the States, National Association of Attorneys 
General, National Governors Association, and the State and Tribal 
Government Working Group) as well as with EM's Site-Specific Advisory 
Boards. The End States initiative is just one of many issues, including 
waste disposition, long-term stewardship, and natural resource damage 
assessments, that DOE and EM are working on with their various 
stakeholders.
    The National Academy of Sciences' study was rightly critical of the 
lack of appropriate involvement by the public in the early stages of 
the EM End States (formerly the Risk-Based End States) initiative. 
However, beginning with the End States Workshop held in Chicago, 
Illinois, in October 2004, EM has increased stakeholder and regulator 
interactions. As a result of the Chicago workshop, EM formed an End 
States Working Group with representatives from the National Governors 
Association, the U.S. Environmental Protection Agency (EPA), State and 
Tribal governments, and environmental interest groups. The Working 
Group advises EM on the conduct of our End States initiative at the 
national level. At the site level, Field Office managers are providing 
additional time for meaningful stakeholder input into their End States 
Vision documents. In addition, Field Office managers have been 
instructed to ``involve stakeholders in a straightforward and frank 
manner . . . ''. EM has reinforced that the End States Vision documents 
are not final decisions on cleanup plans, but are instead a vehicle for 
discussions with our stakeholders and regulators on potential 
alternatives to the current cleanup plans. Through these efforts, EM is 
taking the time at the site and national levels to involve our 
stakeholders and regulators in the End States process.

   TRANSFER OF CLEANUP FROM ENVIRONMENTAL MANAGEMENT TO THE NATIONAL 
                    NUCLEAR SECURITY ADMINISTRATION

    Question. The President's budget provides for the transfer of 
cleanup responsibility from the Department of Energy's Office of 
Environmental Management to the NNSA at several NNSA sites. This 
transfer of authority promises to deliver savings as a result of 
improved efficiency and intends to be more consistent with the NNSA 
Act. While I appreciate the fact that NNSA site managers will no longer 
be required to report to both the NNSA and EM regarding cleanup 
activities, I am concerned that EM will not remain a top priority 
within NNSA. What guarantee do we have that NNSA will approach cleanup 
as effectively as EM has in reducing the time and cost of cleanup of 
DoE sites across the complex?
    Answer. This proposal resolves conflicts emanating from the NNSA 
statute, which precludes any non-NNSA official other than the Secretary 
and Deputy Secretary from directing NNSA personnel. In addition, the 
NNSA accepts responsibility for environmental work at NNSA sites, and 
will make every effort to conduct cleanup as effectively as EM has in 
reducing the time and cost of cleanup of DOE sites across the complex. 
The functional transfer of environmental scope, funding and the 
associated Federal personnel from the Office of Environmental 
Management (EM) to the NNSA aligns responsibility with accountability, 
ensures clear accounting of the total cost of ownership, and improves 
overall effectiveness and efficiency. The transfers resolve existing 
inefficiencies caused by the duplicate EM/NNSA chain of command. The 
NNSA has established the organizational and operational framework 
needed to ensure that cleanup activities at NNSA sites will continue to 
be accomplished effectively and efficiently once the transfers are 
approved by Congress. The cleanup processes and approaches that have 
worked so well in EM, along with the EM field staff who are currently 
executing this at NNSA sites, will be integrated into the NNSA. As with 
EM, the NNSA's corporate approach to environmental cleanup at NNSA 
sites will focus on risk reduction and compliance, pursue accelerated 
cleanup, and involve stakeholders. NNSA will use their successful 
Facilities and Infrastructure Recapitalization Program (FIRP) as the 
business model for managing their new environmental responsibilities. 
This includes strong central management and accountability for results; 
best-in-class business practices; and transparency in budget and 
program performance.
    Question. The NNSA has major responsibilities of maintaining our 
nuclear deterrent, supporting the Naval Reactor program and stopping 
proliferation of nuclear material. Do you believe NNSA will be able to 
achieve the same level of success that EM has achieved in cleaning up 
80 DOE sites?
    Answer. Yes. The decision to transfer cleanup responsibilities at 
NNSA sites to the NNSA is the culmination of 2 years of effort within 
the Department. After careful consideration, the Department concluded 
that the conduct of cleanup work at NNSA sites is most effectively 
accomplished by NNSA personnel, who can integrate all operational 
requirements at NNSA sites to ensure that the NNSA Stockpile 
Stewardship mission, as well as the environmental cleanup 
responsibilities (which are inextricably intertwined at many NNSA 
sites), are successfully and most efficiently accomplished and resolve 
operational and priority conflicts between program mission and cleanup 
mission.
    Key underpinnings of the environmental transfers are that the 
cleanup strategies, processes, and approaches that worked successfully 
in EM will be incorporated into the NNSA. The NNSA's environmental 
performance strategy will continue to focus on risk reduction and 
compliance, accelerated cleanup, and stakeholder involvement. The EM 
field staff currently conducting NNSA environmental activities will 
directly transfer to the NNSA, thereby maintaining the same level of 
technical expertise. The NNSA intends to manage its new environmental 
responsibilities using approaches proven to be effective in the 
Facilities and Infrastructure Recapitalization Program (FIRP) to 
include strong central management with accountability for results; 
focus on best business practices; and transparent budgets and program 
performance. The NNSA and EM are working corporately to ensure a 
seamless transfer of environmental responsibilities from EM to the 
NNSA.
    Question. The budget provides over $696 million over the next 5 
years to support NNSA-led cleanups. Does this budget provide sufficient 
funding to support these cleanup activities within NNSA and not divert 
scarce resources from science or nonproliferation activities?
    Answer. Yes. This budget provides sufficient funding to support 
these cleanup activities within the NNSA and will not divert scarce 
resources from science or nonproliferation activities. The 
environmental transfers represent a zero sum budget transfer, fully 
resourced, from EM to the NNSA that provides sufficient funding and 
full time equivalent (FTE) positions to accomplish environmental 
cleanup activities at NNSA sites. The NNSA intends to manage its new 
environmental cleanup activities and funding entirely separate from 
other programs in the NNSA budget.

    LOS ALAMOS NATIONAL LABORATORY CLEANUP STAYS WITH ENVIRONMENTAL 
                    MANAGEMENT FOR FISCAL YEAR 2006

    Question. The President's budget proposes moving the cleanup 
responsibilities at six NNSA sites from the Office of Environmental 
Management to the NNSA. Two sites were not included in that transfer--
Los Alamos and Y-12. Why didn't the NNSA accept cleanup responsibility 
for Los Alamos and Y-12 this year? Will these facilities be transferred 
eventually?
    Answer. The Department is taking a measured approach to this 
transfer to ensure that environmental responsibilities at NNSA sites 
are fully accounted for in the budget transfer requests.
    The NNSA and EM agreed to defer the transfer of cleanup 
responsibilities for Los Alamos until after the Department of Energy 
and State of New Mexico finalize an important and complex Consent Order 
for Los Alamos National Laboratory. The Order was signed in March 2005. 
EM and NNSA are jointly reviewing all aspects of the Los Alamos 
environmental activities to ensure there is a clear understanding and 
agreement on the scope and attendant funding requirements of 
environmental responsibilities at LANL. Because of these issues, the 
Department will consider the transfer of Los Alamos environmental 
activities to the NNSA in fiscal year 2007.
    The NNSA and EM agreed to postpone the transfer of Y-12 National 
Security Complex environmental restoration projects to coordinate it 
with the transition of contracting arrangements for environmental 
services at Oak Ridge. The Department plans to transfer environmental 
activities at Y-12 in future years.

            OFFICE OF CIVILIAN RADIOACTIVE WASTE MANAGEMENT
                       OPENING OF YUCCA MOUNTAIN

    Question. Originally, the Department was to open Yucca Mountain in 
1998 to receive spent fuel from the Nation's utilities. Obviously that 
schedule has slipped. Last year, the President's budget proposed that 
the Department would submit the license application to the NRC at the 
end of 2004. Now, we understand that date has been delayed until 
December 2005--a delay of 1 year. Dr. Margaret Chu, the outgoing 
Director of the Office of Civilian Radioactive Waste Management was 
recently quoted in the press as saying that 2012 was now an optimistic 
forecast for initial operations at Yucca Mountain.
    When do you believe Yucca Mountain will begin to receive spent 
nuclear fuel if the license application is submitted to the NRC in 
December 2005 as proposed in this budget?
    Answer. As the Department indicated in last year's testimony, if 
the program did not receive its full request of $880 million, it would 
be unable to meet the goal of beginning waste acceptance in 2010. As 
you know, the Department did not receive the full funding amount and so 
now we are re-evaluating the program's schedule. The Department's 
efforts in this area are complicated by the Court's remand of the 
10,000-year time period in the Environmental Protection Agency's 
radiation protection standard and by the ongoing need for stable 
funding. When these issues are resolved, the Department will then be in 
a position to establish a better estimate for opening the repository.
    Question. In order to meet your current schedule what level of 
funding needs to be provided to the program for each fiscal year 
beginning in fiscal year 2006 until facility construction is complete?
    Answer. The Department has developed two 10-year funding profiles 
that are only preliminary planning estimates. These funding profiles 
are intended to be used only for purposes of illustrating the possible 
funding levels associated with a 2012 or 2015 date for the start of 
repository operations. These profiles are based on several critical 
assumptions, including predictable and adequate program funding, the 
EPA radiation protection standard being in place by December 2005, and 
the start of construction of various non-nuclear items, such as the 
Nevada rail line before receipt of NRC construction authorization. Some 
of these assumptions will require specific policy decisions that have 
not yet been made, and as such these profiles do not represent 
administration policy.
    A major operational problem is the lack of a regular funding 
profile. When appropriations are significantly below the budget 
request, which happens often, plans are derailed, staff are realigned 
or dismissed, deadlines missed, and costs increased.

                                                                     PRELIMINARY PLANNING ESTIMATES 2012 START OF OPERATIONS
                                                                                    [In thousands of dollars]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Fiscal      Fiscal      Fiscal      Fiscal      Fiscal      Fiscal      Fiscal                  Fiscal      Fiscal      Fiscal
                                                 Year 2006   Year 2007   Year 2008   Year 2009   Year 2010   Year 2011   Year 2012   Subtotal    Year 2013   Year 2014   Year 2015      Total
                                                  Request     Request     Request     Request     Request     Request     Request                 Request     Request     Request
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Program Requirements....................     651,447   1,019,503   1,169,740   1,616,000   1,804,000   1,911,000   1,520,000   9,691,690   1,090,000     850,000     850,000    12,481,690
Funding From:
    Nuclear Waste Fund Fee Income.............     300,000     519,503     619,740     765,000     766,000     767,000     769,000   4,506,243     772,000     620,000     620,000     6,518,243
    Nuclear Waste Fund Corpus.................  ..........  ..........  ..........     301,000     488,000     594,000     201,000   1,584,000      38,000  ..........  ..........     1,622,000
    Defense Nuclear Waste.....................     351,447     500,000     550,000     550,000     550,000     550,000     550,000   3,601,447     280,000     230,000     230,000     4,341,447
                                               -------------------------------------------------------------------------------------------------------------------------------------------------
      Total Funding...........................     651,447   1,019,503   1,169,740   1,616,000   1,804,000   1,911,000   1,520,000   9,691,690   1,090,000     850,000     850,000    12,481,690
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


                                                                     PRELIMINARY PLANNING ESTIMATES 2015 START OF OPERATIONS
                                                                                    [In thousands of dollars]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year
                                                    2006         2007         2008         2009         2010         2011         2012         2013         2014         2015          Total
                                                  Request      Request      Request      Request      Request      Request      Request      Request      Request      Request
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Program Requirements....................      651,447    1,019,503    1,169,740    1,391,000    1,404,000    1,711,000    1,695,000    1,365,000    1,175,000    1,060,000      12,641,690
Funding From:
    Nuclear Waste Fund Fee Income.............      300,000      519,503      619,740      765,000      766,000      767,000      769,000      772,000      774,000      778,000       6,830,243
    Nuclear Waste Fund Corpus.................  ...........  ...........  ...........       76,000       88,000      394,000      376,000      313,000      171,000       52,000       1,470,000
    Defense Nuclear Waste.....................      351,447      500,000      550,000      550,000      550,000      550,000      550,000      280,000      230,000      230,000       4,341,447
                                               -------------------------------------------------------------------------------------------------------------------------------------------------
      Total Funding...........................      651,447    1,019,503    1,169,740    1,391,000    1,404,000    1,711,000    1,695,000    1,365,000    1,175,000    1,060,000      12,641,690
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                     EPA AND THE RADIATION STANDARD

    Question. Last summer, the radiation standard for the project was 
vacated by a ruling from the U.S. Court of Appeals in NEI v. EPA. It 
has been rumored the EPA is preparing a draft regulation to be 
available by mid-2005. What impact will this Court decision have on the 
project if EPA fails to develop a new regulation setting the radiation 
standard?
    Answer. The license application will be delayed further.
    Question. Are you aware of any discussions within the 
administration to ensure a radiation standard is in place in order to 
support DOE's license application to the NRC?
    Answer. It is my understanding that the administration is fully 
committed to the issuance of a revised EPA standard as soon as 
practicable.

                        LICENSE SUPPORT NETWORK

    Question. The NRC has indicated they will not docket a license 
application until 6 months after certification of the License Support 
Network, a web-based data collection of all relevant documents for the 
application. What is the status of your work to address the 
shortcomings NRC identified in your earlier license support network 
submission?
    Answer. Since the NRC ruling, the Department has focused on three 
key activities--processing legacy e-mails, identifying additional 
documents that may be relevant to the licensing proceedings, and 
reviewing relevant documents for privileges. The Department has made 
substantial progress in its efforts to complete the work necessary for 
certification of the Licensing Support Network.
    Question. When do you anticipate it will be certified?
    Answer. The Department's objective is to be prepared to certify its 
document collection by this summer.
    Question. Are you confident that you can meet this target?
    Answer. The certification process has proven more time-consuming 
than originally envisioned. We are working diligently toward our goal 
of certifying this summer.

                          LICENSE APPLICATION

    Question. The Department now plans to submit a license application 
to NRC late in 2005 for the construction of the repository, a year 
later than the schedule you provided to us by DOE last year. What 
specific activities will you be undertaking this year on the license 
application at DOE headquarters and will these activities facilitate an 
expeditious review of the application by NRC?
    Answer. We are making improvements to the analysis and presentation 
of information in the draft license application to meet our objective 
of completing preparation of a high quality license application. These 
improvements to the document will facilitate the NRC's review by making 
our analyses more robust and straightforward. We also continue to 
interact with NRC staff in meetings open to the public in the form of 
technical exchanges and management meetings to inform the NRC on the 
status of our technical activities and our plans.
    Question. What milestones are scheduled to complete overall for the 
project this year?
    Answer. Our foremost milestone is to complete the license 
application by December of this year and have it ready to submit to the 
NRC.

                             TRANSPORTATION

    Question. The increase in the request over fiscal year 2005 
appropriations is primarily focused in the transportation arena, an 
aspect of the program that has been repeatedly deferred when 
appropriations were reduced from budget requests. Please provide a 
description of the specific transportation activities included in the 
budget request.
    Answer. We have requested funding appropriate for the activities we 
can reasonably accomplish in fiscal year 2006. Within the request of 
$651 million, funding is provided for transportation infrastructure 
development activities, including design and long-lead procurement for 
the Nevada rail line; design, certification and procurement of 
transportation casks and rolling stock; completion of the rail 
alignment final Environmental Impact Statement (EIS); issuance of a 
record of decision; and expansion of institutional outreach.
    Question. If funding is not provided for these activities, would 
this impact initial operation of the repository?
    Answer. As waste acceptance at the repository depends on our 
ability to transport it there safely and securely, full funding of our 
transportation activities is critical. Not funding these activities 
would adversely impact the initial operation of the repository.
    Question. What transportation related challenges still face this 
project?
    Answer. The following challenges still face the project: (1) An EIS 
on rail alignment has to be completed, and a final alignment selected. 
(2) The selected alignment needs protection through establishment of a 
permanent withdrawal or establishment of a right-of-way. (3) New cask 
designs and certificates of compliance from the Nuclear Regulatory 
Commission are needed to ship the majority of the contents destined for 
disposal at the repository. (4) Rail cars have to be designed and 
tested to meet new railroad standards for shipment of spent nuclear 
fuel. In addition, the Department is actively working with stakeholders 
to develop transportation routes and to establish the process for 
funding emergency preparedness training.
    None of these challenges is dependent on new technology, but they 
all require funding to be completed successfully. Additionally, the 
State of Nevada's legal case challenging the transportation mode and 
rail corridor records of decision or any additional lawsuits could 
cause delays.
    Question. What opportunities could the State of Nevada interfere 
with various permits or rights of way that may delay the Yucca Project 
even further?
    Answer. DOE will need several permits from the State of Nevada 
under the Clean Air Act and the Clean Water Act. DOE also will need 
land use permits, approval of road construction projects, and 
appropriation of water for use at the project. We are hopeful that the 
State will proceed in a fair and expeditious manner to grant the 
required permits, although the State Engineer has already denied the 
project's water use permit. This denial is in litigation.

                          TECHNICAL CHALLENGES

    Question. The budget justification for Yucca Mountain and 
supporting documentation identified a number of regulatory and legal 
risks that may further jeopardize the timely completion of the Yucca 
Mountain project, but there was no mention of any technical risks. Are 
you aware of any technical, geologic or other scientific reasons that 
might prevent the placement of spent nuclear fuel or high level waste 
at Yucca Mountain?
    Answer. No. We have confidence that we have addressed the 
technical, geological, and other scientific matters that are relevant 
to the placement of spent fuel and high-level radioactive waste at 
Yucca Mountain. The NRC will ultimately decide through the licensing 
process, with full public participation, whether our efforts are 
sufficient to justify issuance of a license to construct and operate a 
repository at Yucca Mountain.

                      FEES PAID FOR YUCCA MOUNTAIN

    Question. The Department has not provided a Total Systems Life 
Cycle Cost Analysis for the program since May 2001. This analysis is 
required to determine the adequacy of the fees paid into the Nuclear 
Waste Fund and the appropriate mix of civilian and defense funding 
sources. Is the Department currently conducting an updated Total System 
Life Cycle Cost Analysis, and if not why not?
    Answer. Although a complete program analysis has not been conducted 
since 2001, the Department has updated portions of the life cycle cost 
estimate to support planning and budget developments. We expect to 
undertake a comprehensive, bottom-up cost analysis following submission 
of the license application to the NRC. Additionally, in accordance with 
the Nuclear Waste Policy Act, the Department annually assesses the 
adequacy of the fee under a variety of economic, cost-sharing, and life 
cycle costs scenarios.
    Question. The budget proposed that the fees should be tied to the 
annual appropriation to ensure that the fees paid by ratepayers not 
exceed what has been appropriated. Will the administration propose 
legislation to enact this change? What impact will this have on the 
budget?
    Answer. The administration supports legislation to enact the 2005 
Budget proposal to reclassify receipts as discretionary offsetting 
collections. Although Congress did not adopt that language last year, 
the administration remains interested in pursuing such a proposal and 
intends to have further discussions with the Congress on these issues 
in the hope of reaching some agreement on reclassifying receipts in a 
budget-neutral manner.
                                 ______
                                 
              Questions Submitted by Senator Patty Murray

                   OFFICE OF ENVIRONMENTAL MANAGEMENT
                          HANFORD CLEANUP CUTS

    Question. Mr. Golan, it appears Hanford makes up over 50 percent of 
the cut facing the entire Environmental Management program. Hanford's 
proposed cut is around 13 percent while the proposed cuts for other 
large, ongoing DOE cleanup projects range from 1 percent to 6 percent. 
Based on these numbers, it appears that Hanford is taking a 
disproportionate share of these cuts in the DOE cleanup budget request. 
Why does Hanford take this large budget reduction when it is the most 
contaminated site in DOE's complex, and why is Hanford's cut so large 
in comparison to these other sites?
    Answer. The fiscal year 2006 budget supports the Department's needs 
in meeting its commitments at Hanford. In fiscal year 2006, the 
Department is requesting more than $1.8 billion for cleanup work at 
Hanford, a figure representing over 27 percent of the entire EM budget 
and 20 percent more than the fiscal year 2001 funding.
    For the past few years, the administration has requested and 
received funding increases to address its urgent risks sooner and to 
accelerate cleanup. We committed that if we could eliminate those 
urgent risks, then starting in fiscal year 2006, we would request a 
declining level of funding to complete our work. The fiscal year 2006 
budget represents the next stage in our strategy.
    Hanford's fiscal year 2006 budget request accounts for this 
completion of work, and is commensurate with seismic, legal, and 
programmatic uncertainties. Examples of major risk reduction at Hanford 
include completion of removal of spent nuclear fuel from the K-Basins, 
completion of nuclear material and residue stabilization project, and 
removal of all pumpable liquids from older-style single shell tanks.
    The budget request for Waste Treatment Plant (WTP) construction is 
$59 million less than the fiscal year 2005 comparable appropriations 
due to recently discovered seismic uncertainties. A detailed analysis 
of the impacts associated with the change in seismic criteria is 
underway. The analysis will allow DOE to decide how to proceed with the 
completion of the WTP. There are also several legal uncertainties which 
impact the Department's ability to close waste tanks. The associated 
fiscal year 2006 request to account for these uncertainties is $70 
million less than the fiscal year 2005 comparable appropriations 
budget. There are uncertainties associated with retrieval and disposal 
of tank waste that the Department believes may be transuranic waste. 
These uncertainties account for a fiscal year 2006 request that is $20 
million less than the fiscal year 2005 comparable appropriations 
budget.
    Question. Mr. Golan, the Department of Energy seems to contend this 
budget cut will not result in missing legally enforceable cleanup 
milestones in fiscal year 2006 and beyond. How is it that these cuts 
will not delay cleanup completion and increase life cycle costs?
    Answer. This budget supports the Department's needs in fiscal year 
2006 for implementing the accelerated risk reduction and cleanup 
completion at our sites and meeting enforceable milestones. As noted in 
our budget justifications, fiscal year 2006 represents the first year 
of a declining budget request from our ``peak year'' of fiscal year 
2005, an expected outcome brought about by accelerating risk reduction 
and cleanup completion. For the past few years, the administration has 
requested and received more funding for the Environmental Management 
program to accelerate cleanup and reduce risk. The strategy was to 
invest these additional resources to accelerate cleanup and complete 
work sooner, reform the acquisition strategy to compete more work and 
place incentives on cleanup completion, and work with regulators to 
develop more effective cleanup approaches, resulting in cost savings in 
the longer term. This is being accomplished at Hanford and regulatory 
milestones are expected to be met with this budget request. However, 
the Hanford cleanup program has significant technical and legal/
regulatory challenges that are resulting in uncertainties. Thus, in 
fiscal year 2006, some projects will be slowed due to such 
uncertainties, and our budget reflects them accordingly. Our Hanford 
staff is continuously reviewing its strategies and technologies for 
optimization, such as tank retrieval and waste loading at the Waste 
Treatment Plant. Because of these efforts, it is premature to assume 
there will be a delay or cost increase.

                      HANFORD WORKFORCE REDUCTIONS

    Question. Mr. Golan, as I'm sure you'll acknowledge, the reduction 
in funding being proposed by the administration for Hanford will mean 
significant workforce reductions there. I understand the estimate is 
that the proposed cuts will mean layoffs of between 1,500 and 2,000 
workers across the site. That means the layoff process will have to 
begin in August and September in order not to further magnify the 
impacts in fiscal year 2006. Is this correct?
    Answer. Workforce reductions are always a possibility at Hanford as 
projects are completed and the skills mix for the remaining work scope 
is reprioritized. DOE and its contractors continue to identify and 
manage work scope, schedule, and cost.
    DOE has currently approved workforce reductions for Fluor Hanford, 
Inc., (FHI) for up to 1,000 contractor employees, with 600 employees to 
be separated by September 30, 2005. The remaining 400 employees are 
planned to be separated no later than September 30, 2006.
    Additionally in fiscal year 2005, DOE approved a previous workforce 
reduction request from FHI which resulted in a reduction of 154 
contractor employees. The 154 reductions consisted of 148 FHI employees 
who were separated by April 29, 2005, and six Bechtel Hanford, Inc., 
employees who were separated by June 3, 2005.
    These reductions are attributable to planned clean up progress and 
reprioritization of fiscal year 2006 work scope and the projected 
skills mix needs for the balance of the contract.

                     HANFORD TANKS WASTE TREATMENT

    Question. Mr. Golan, all of us in the Pacific Northwest delegation 
applauded your efforts to complete the removal of the liquids from the 
single shell tanks, but there are still millions of gallons of sludge 
and solids that must be removed. Now we're looking at delays in 
completion of the waste treatment plant, which means that if you stay 
on schedule for tank farm retrieval operations, the existing double-
shell tanks are going to fill up long before you have the treatment 
plant in operation. Do you still plan to meet your commitment to empty 
the single shell tanks by 2018? And if so, aren't you going to have to 
build more double-shell tanks to receive the remaining wastes?
    Answer. We continue to take the steps that are necessary and 
prudent to meet our Tri-Party Agreement (TPA) commitments, including 
emptying the single-shell tanks by 2018. In the Hanford Performance 
Management Plan (August 2002), DOE's analyses indicated that in order 
to meet the TPA requirement to complete tank waste treatment by 2028, 
several changes in our approaches were required to enable waste to be 
retrieved and treated sooner. One of the recommended changes is to 
evaluate the use of supplemental treatment techniques for low-activity 
waste (LAW).
    Bulk vitrification (BV) is one of the candidate technologies under 
evaluation for the immobilization of LAW from the Hanford tanks. The 
Washington Department of Ecology (Ecology) recently issued a Research, 
Development, and Demonstration permit that enables DOE to test the BV 
technology on approximately 200,000 gallons of low-activity tank waste. 
If the BV technology performs as anticipated based upon laboratory, 
engineering scale, and full-scale tests with surrogate materials, it 
would provide a means to more rapidly treat LAW, which makes up 
approximately 90 percent of the single-shell tank waste volume.
    Some of the LAW requires less pretreatment than the WTP is designed 
to provide. This waste could, therefore, proceed through other 
treatment processes, such as BV, which have minimal need for double-
shell tank space. We do not plan to build any additional double-shell 
tanks to facilitate single-shell tank retrievals. Whereas new double-
shell tanks may offer some advantages relative to facilitating certain 
retrieval actions, those benefits are more than offset by the 
additional contaminated underground tanks that would be created, all of 
which would need to be cleaned and closed at some future date.

                HANFORD WORKER HEALTH AND SAFETY ISSUES

    Question. Mr. Golan, there are many significant worker health and 
safety issues with Hanford cleanup. I know that Secretary Bodman has 
said that safety is his No. 1 priority. What procedures are you putting 
in place to assure that the Department continues to improve its health 
and safety protection for workers at sites such as Hanford?
    Answer. As you have mentioned, safety is the Secretary's No. 1 
priority. Safe working conditions and processes are an essential 
precursor to and an indicator of performing quality work.
    We have established an organizational goal of zero injuries and 
zero accidents. To reach this goal, we have done the following.
  --Weekly and individual calls with the field managers, EM management 
        staff meetings and other interactions with direct reports at 
        Headquarters, and quarterly project reviews with each site that 
        focus on safety and safety management.
  --We have incorporated safety performance as the highest weighted 
        standard in the field managers' performance objectives. This 
        includes a commitment that the field managers and their direct 
        reports overseeing operations and cleanup are in the field, in 
        personal protective equipment where needed, at least 200 hours 
        a year observing first hand work activities with an emphasis on 
        operational safety.
  --We have also directed the use of contracts to define and 
        communicate worker safety and health expectations, and on 
        multiple occasions have used the contract clauses to hold 
        contractors accountable for less than adequate safety 
        performance.
  --We have significantly upgraded accident and injury reporting by 
        requiring all contractors, subcontractors, and vendors, 
        regardless of size, to report their illness and injury 
        statistics to DOE. With these data, we can analyze trends and 
        share lessons learned, which we do on nearly a daily basis 
        among the sites.
  --We are improving Federal oversight by ensuring we have the Federal 
        staff with the right training and qualifications, positioned in 
        the right place at the right time. We have made more resources 
        available for training to qualify our managers and safety 
        professionals who are in the field where the work is being 
        performed.
  --We are instilling the expectation that any worker can question the 
        work activities and has the authority to stop that work if he 
        or she believes safety is compromised. By empowering the worker 
        with the ability to stop work, we are better able to address 
        errors before accidents happen.
    The emphasis we have placed on responsibility, accountability, 
oversight, and technical competence flowing down through the DOE 
manager to the contractors and subcontractors management and most 
importantly to the workers, is the right course of action to improve 
the Department's health and safety record.

                        EM PROCUREMENT DECISIONS

    Question. Mr. Golan, many EM procurement decisions are being 
challenged and some have been overturned. What actions are you taking 
to improve the quality, fairness, timeliness, and success of the EM 
procurement process, specifically for River Corridor and FFTF, which 
have been delayed for many months?
    Answer. The Secretary has ordered a review of the procurement 
process. This review is currently being conducted. We would be happy to 
meet with you after the review is completed and the Secretary has made 
his determination.

                     HANFORD WASTE TREATMENT PLANT

    Question. Mr. Golan, DOE has made a major commitment to the Hanford 
Waste Treatment Plant to separate and vitrify tank waste. The Defense 
Nuclear Facilities Safety Board and others have raised serious 
questions about the safety of the design and prospect for cost 
increases and schedule slippage. Given the supreme importance of this 
project to the future of Hanford cleanup, what do you propose to ensure 
that this facility stays on track? Should there be an independent 
review by nationally recognized technical experts to advise DOE on how 
to address these issues and minimize the impacts to cost and schedule?
    Answer. A detailed analysis of the impacts associated with the 
change in seismic design criteria is underway. The analysis will allow 
DOE to decide how to proceed with the completion of the WTP. To provide 
an independent view, EM has brought in a number of outside experts on 
seismic issues and their effect on facility design and construction, 
including the U.S. Army Corps of Engineers and the Pacific Northwest 
National Laboratory.

   VOLPENTEST HAZARDOUS MATERIALS MANAGEMENT AND EMERGENCY RESPONSE 
                   TRAINING CENTER (HAMMER) FACILITY

    Question. Mr. Golan, the Volpentest HAMMER Training and Education 
Center at Hanford was built by DOE to ensure the health and safety of 
Hanford cleanup workers and emergency responders. HAMMER's unique 
hands-on ``Training as Real as It Gets'' is essential to the safe, 
cost-effective, and successful completion of Hanford cleanup. Further, 
as the cleanup workforce decreases, more of HAMMER's capabilities will 
become available for other DOE missions, such as energy assurance and 
hydrogen safety, and for training law enforcement, security, emergency 
response, and other homeland security-related personnel. Yet, funds 
were eliminated again from the budget for HAMMER.
    After being proposed by DOE and authorized by Congress, for the 
past several years DOE has failed to request the funding needed to 
operate HAMMER. Why do you force Congress year after year to direct you 
to fund this facility that is essential to achieving your mission of 
safe accelerated cleanup at Hanford?
    Answer. The Volpentest Hazardous Materials Management and Emergency 
Response Training Center (HAMMER) facility continues to play an 
important role in Hanford cleanup, training our workers to safely 
perform their roles in their cleanup activities. We continue to include 
the costs for HAMMER in our baseline Hanford budget, distributing the 
costs to each of the EM programs that use the HAMMER facility for their 
workers. HAMMER was established to ultimately be self-sustaining. Thus, 
as EM cleanup is accomplished and the workforce decreases, the non-
Hanford work at HAMMER should grow. This will allow HAMMER to continue 
to provide its unique facilities to other national priorities, such as 
energy assurance, hydrogen safety, emergency response, and other 
homeland security-related training.
    Question. Mr. Golan, what are you going to do to ensure that DOE 
continues to fully utilize HAMMER to protect the safety and health of 
Hanford cleanup workers? Will you support the development of new DOE 
training missions at HAMMER? Will you actively work with the Department 
of Homeland Security and other agencies to develop, expand, and support 
other training missions at HAMMER?
    Answer. DOE continues to use the Volpentest Hazardous Materials 
Management and Emergency Response Training Center (HAMMER) to provide 
hands-on safety training for workers involved in the Hanford cleanup 
mission and considers HAMMER's role in Hanford's safe operation to be 
vital.
    The HAMMER facility remains available for use by other DOE entities 
and other agencies on a full cost recovery basis. By covering the costs 
of maintaining HAMMER, EM is, in fact, making excess capacity at HAMMER 
available for use by others. HAMMER was established to ultimately be 
self-sustaining. We continue to encourage the development of new 
missions at HAMMER to offset the impacts of a declining EM workforce in 
the future. EM will cooperate with the Department of Homeland Security 
(DHS) to develop a strategy and a cooperative agreement to ensure that 
HAMMER remains available to meet their growing training needs. We want 
to ensure that HAMMER, as a national asset, continues to serve this 
country's needs now and in the future, beyond the cleanup mission.
    HAMMER is already involved in the training of fire, law 
enforcement, Customs and Border Protection, security, emergency 
medical, and other emergency response personnel for a wide-spectrum of 
regional and Federal agencies on a full cost recovery basis. A strong 
partnership has been forged between HAMMER and the Pacific Northwest 
National Laboratory to use HAMMER as a test bed to deploy new field 
technologies for homeland security personnel. Sharing HAMMER with DHS 
would maximize the investment of Federal funds spent so far to build 
and develop HAMMER.

                        EM CONTRACTOR WORKFORCE

    Question. Mr. Golan, what has DOE done to ensure that all cleanup 
work scheduled for the current fiscal year (fiscal year 2005) is not 
impacted by the costs associated with funding reductions and layoffs 
for fiscal year 2006?
    Answer. The Office of Environmental Management (EM) uses a 
combination of contractor workforce restructuring strategies that most 
effectively accomplish a site's mission objectives. The primary 
objective is to retain employees with the skills, knowledge and 
abilities necessary to effectively and safely meet assigned and future 
missions. Restructuring strategies are closely integrated with planning 
based on identified work requirements. Both short-term requirements for 
immediate tasks, as well as long-term requirements for skills based on 
missions identified in the sites' strategic plans are considered. 
Improvements in organization and operations efficiency are also 
considered, including changes in internal organizational structure and 
contracting mechanisms, as well as contractual provisions, collective-
bargaining agreements, and other legal obligations.
    Cleanup work for fiscal year 2005 is being completed as scheduled. 
Timing of workforce reductions is driven primarily by the completion of 
work consistent with the pace of the program's cleanup progress. The 
fiscal year 2006 budget request reflects the fact that cleanup is 
progressing as projects are completed. Contractors continue to identify 
and manage work scope, schedule, and cost, and plan their workforce 
needs accordingly with anticipated funding. Additional workforce 
reductions may occur throughout fiscal year 2005, regardless of the 
fiscal year 2006 budget. As these additional reductions become 
necessary, timely congressional notification will be provided.

                  ADEQUATE FUNDING FOR YUCCA MOUNTAIN

    Senator Domenici. Let me just ask, did you say in your 
testimony that the amount requested by the administration, that 
it is your position that that is satisfactory for this year?
    Mr. Garrish. Six hundred fifty-one million dollars is 
satisfactory to complete the activities that we can reasonably 
accomplish in fiscal year 2006.
    Senator Domenici. Okay. Since we are discussing such large 
amounts of money for the clean-up of the sites, I just want for 
the record to make a statement that I think perhaps in a couple 
years people will understand what this means, but we've been 
spending billions and billions of dollars in clean-up and all 
of that's been done on the basis that the current standard for 
impact on human health from low-level radiation exposure is 
accurate. And it's a very old standard and it's linear in 
nature, and I'm just going to state in the record, wouldn't we 
be shocked to learn maybe 10 years from now that that standard 
is wrong and has been wrong all along, and that that dosage is 
far too low in terms of the relationship to human safety. 
Incidentally, there is a major study going on right now, it's 
in its fifth year, by the National Academy and great scientists 
who are looking at that.

                          SUBCOMMITTEE RECESS

    I am convinced, and I just want to state this in the 
record, that they will conclude that it is not right, and that 
will say that--will indicate that over the years perhaps we 
have spent untold amounts of money trying to save ourselves 
from something that wasn't harmful to begin with. That 
doesn't--you can't do anything about that. You've got to keep 
on doing that.
    Having said that, we are recessed.
    [Whereupon, at 10:33 a.m., Thursday, March 10, the hearing 
was recessed, to reconvene subject to the call of the Chair.]


 ENERGY AND WATER, AND RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 
                                  2006

                              ----------                              


                        TUESDAY, MARCH 15, 2005

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:21 p.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Pete V. Domenici (chairman) 
presiding.
    Present: Senators Domenici, Craig, Allard and Dorgan.

                          DEPARTMENT OF ENERGY

            Office of Energy Efficiency and Renewable Energy

STATEMENT OF DAVID GARMAN, ASSISTANT SECRETARY

             OPENING STATEMENT OF SENATOR PETE V. DOMENICI

    Senator Domenici. The hearing will please come to order.
    We have checked, and the minority has suggested that we 
proceed, even though they're not in attendance, because they 
won't be able to be here for awhile, and we have to get a few 
things on the record. So if there are questions, we will give 
them plenty of opportunity to present them, and if you would 
answer them in due course we would appreciate it.
    So, today we are going to hear from the Office of Science, 
the Office of Nuclear Energy, and the Office of Energy 
Efficiency and Renewable Energy.
    Since the Senate Appropriations Committee reorganized 2 
weeks ago, this is the first opportunity for this subcommittee 
to hold hearings on several DOE activities that had previously 
been under the jurisdiction of the Interior Subcommittee. 
Overall, this subcommittee will add to its jurisdiction roughly 
$1.6 billion in new programs, and various functions from the 
Interior Subcommittee.
    Today we have three witnesses; Dr. Ray Orbach, Director of 
the Office of Science; David Garman, Assistant Secretary for 
the Office of Energy Efficiency and Renewable Energy; Mr. 
William Magwood, Director of the Office of Nuclear Energy.
    Mr. Garman, the President has nominated you to serve as the 
Under Secretary. During the last Congress, you served in this 
same position and did a fine job. I hope that we're going to be 
able to work out things where we can proceed with your 
confirmation quickly.
    Mr. Garman. Thank you, Mr. Chairman.
    Senator Domenici. The President made deficit reductions a 
top priority in his budget; as a result, things are very tight. 
The budget for the Department of Energy proposes a $23.4 
billion, which overall is a 2 percent reduction from the 
current year. The Office of Science budget provides for $3.46 
billion, and it's down about 3.8 percent.
    Despite these tight budgets, Dr. Orbach and his team have 
put together a program that supports cutting-edge research and 
funds for world-class research facilities, at least as we see 
it. We'll be talking about that briefly today. Completes the 
construction of a Spallation Neutron Source at Oak Ridge, a 
marvelous new facility which I think will make that national 
laboratory a very significant laboratory for years to come.
    The DOE will also complete construction of four of the five 
nanotechnology centers, another very exciting activity. We read 
a lot about it, not very often do they mention the DOE is out 
front, on the cutting edge of that.
    In Biology and Environmental Research programs, funding for 
the Genomes to Life program, the human genome and the low dose 
radiation study are all continued at current levels.
    One area which we believe the budget comes up short is in 
the area of fusion energy research. The budget shifts funding 
from the United States research to the international 
thermonuclear experimental reactor, despite the fact that there 
is no agreement on the site of that facility as we speak here 
today. If we're to remain at the cutting edge of fusion 
research, it would seem to me, unless we can be convinced to 
the contrary, that we can't undermine our scientific excellence 
by under-funding our own capability. Now, maybe we can be 
convinced that we're not under-funding to that extent, but it 
would appear so, just looking at the numbers and activities.

                        OFFICE OF NUCLEAR ENERGY

    The Office of Nuclear Energy--which concerns all of us--
last year Congress increased the funding for the Office of 
Nuclear Energy and R&D by $100 million. In the fiscal year 
2006, this account is up an additional 12 percent. This budget 
provides $56 million to support the Nuclear Power (NP) 2010 
program, and that provides matching funds for early-site 
permitting, and shares the cost associated with the first of 
the kind engineering of a new plant. To date, three utilities 
have now applied for early-site permits--rather exciting news--
three more in the exploration phase. Two consortia have applied 
for DOE funding, to support construction and operating licenses 
for new plants before the Nuclear Regulatory Commission.
    While I am pleased with the utility interest, and will be 
having further meetings with others who will be financing 
nuclear power plants in the future--so we'll get a full picture 
of the enthusiasm, or lack of it, whichever the case may be--
since Congress last passed the budget in November, DOE 
designated two groups go forward. Four months later, the Office 
of Nuclear Energy has yet to send out a single dollar in that 
regard. So, I'm concerned with the administration's commitment 
to supporting long-term research in the next generation of 
reactors. We would expect some comment on that today.
    The budget fails to mention what has become of the $25 
million earmarked in the 2005 Energy Conference Report for the 
deployment of the next generation of nuclear plants at Idaho 
National Laboratory. I intend to work with the Secretary and 
certainly with Senator Craig to develop a path to ensure that 
the Idaho National Lab will develop the next generation nuclear 
plant. We designated that laboratory to do that, and we're 
really wondering what happened--I assume something has 
happened--but we want to make sure that the resources are there 
to continue with it.
    We all know that we're going to continue to support new 
reactors that are more efficient, produce less waste, and 
support the President's Hydrogen Initiative. On the Office of 
Energy Efficiency and Renewables, this budget provides $1.2 
billion for that function, and that's a 4 percent reduction. 
We'd like to know what you think that's going to do, I would 
assume that you're moving things around, and assume that the 
major activities won't be harmed significantly.
    The budget for the Hydrogen Initiative for the present is a 
big winner, and well it should be. While it's way out in the 
future--or out in the future--it clearly is one of the bright 
spots, it's where we might go with a new kind of 
transportation, an engine that will move our transportation. In 
addition, that budget provides a $359.9--almost $600 million--
for hydrogen research, that's a $34 million increase, and a 
$100 million from 2004, so that's pretty good.
    Biomass, it won't get as much money as before, we'll have 
somebody talk about that. There's a reduction of 37 percent. 
Solar energy research is down about 2 percent, funding for 
research is up on wind energy, significantly.
    Finally, the administration has proposed ending the 
hydropower R&D effort, and requested only nominal funding to 
close out this office. I'm sure some Senators will be 
interested in that, we'll see what they have to say. Perhaps 
Senator Craig will be one, I don't know.
    As I noted earlier, there's a significant number of 
functions and activities now under this jurisdiction of our 
subcommittee. We'll be learning of these new accounts, 
hopefully finding some savings through efficiencies that can be 
applied toward additional scientific research, which is what we 
want to try to stress.
    Now, Senator Reid is not here, but I note that--I assume 
he's not going to be here, Senator Reid, is that correct? Okay, 
so we'll put Senator Reid's statement in the record, whenever 
he wants to put it in, and with that, Senator Craig, if you 
have some comments, and Senator Dorgan, if you do, then we'll 
proceed to our witnesses. Senator Craig.

                    STATEMENT OF SENATOR LARRY CRAIG

    Senator Craig. Mr. Chairman, I'll be very brief. You've 
outlined the essence of the President's budget, and in many 
ways it points to energy's future, it's a budget that's gone 
wanting for more resource. I say that, gentlemen, because I 
know you spend a good deal of time out traveling and speaking--
as do many of us--and in every audience, the question is always 
asked, ``What are you going to do about our national energy 
policy? What are you going to do about the future of energy for 
our country?'' Because most Americans believe it has been a 
failure of Congress and administrations to produce a national 
energy policy. We're doing that. The chairman is working 
overtime at this moment to assure that by the close of this 
year, we're going to have a national energy policy in place, 
and this administration and this President have worked very 
hard to promote that.
    But, I must tell you, this budget is not reflective of as 
much of that as we would like to see, without question. Because 
the kind of money that the Federal Government spends as the R&D 
and future type of research that builds that long-term energy 
base, so we'll work closely with you as we deal with this 
budget, it is a tight budget year, and all of us can afford, 
and will do, some belt tightening. But I hope that in the 
budget we can establish the priorities that really are 
futuristic in their vision as it relates to need, and certainly 
as it relates to what's going on in this country. I just can't 
imagine that the Congress and this administration will sit idly 
by, and allow our energy future to continue to erode. Certainly 
that's not where we're all intending to go, and where we're all 
intending to be at the close of business on this issue, and I 
hope that we can work with you to make sure that the budgets 
also reflect that. Thank you, Mr. Chairman.
    Senator Domenici. Thank you very much. Senator Dorgan.

                  STATEMENT OF SENATOR BYRON L. DORGAN

    Senator Dorgan. Mr. Chairman, thank you very much. I'm 
unable to stay for the entire hearing, but I did want to be 
able to comment, say just a word at the start. I share many of 
the comments made by my colleague from Idaho, and you, Mr. 
Chairman.
    We are just one terrorist event away from a catastrophe 
with respect to energy. Sixty percent of our oil comes from off 
our shores, and our economy is vulnerable as a result. I really 
think that we need to move towards a hydrogen fuel cell 
economy. I know that the chairman also has an interest in that 
and other members of the Energy Committee on which we serve. I 
think to do that you need to be bold and aggressive, and need 
almost a Manhattan or an Apollo-type project to get there. I 
really hope that we will be able to have some discussion about 
that once again this year. I think in the near term, we need to 
expand the role that renewables play with respect to our energy 
supply. Mr. Garman, I know that you've been to some events that 
I've held, and others have held on renewables, and you 
understand that.
    I might make just one other comment: probably one of the 
cheapest ways to acquire a barrel of oil is to save a barrel of 
oil through increased efficiency. The saving of energy is 
critically important. I'm involved--along with some of my 
colleagues here in Congress--in something called the Alliance 
to Save Energy. It has done a lot of important work, including 
the development of the Energy Star Awards with the Department 
of Energy.
    And so, I think those three areas are critically important: 
a bold hydrogen fuel cell initiative which moves us towards a 
different kind of energy construct; the use of more renewables, 
including renewable portfolio standards; and then focusing on 
efficiency. And I have great hope as we--in another committee--
put together an energy bill. I have great hope that we will be 
able to construct an energy bill this year that really moves 
aggressively down the road in all three of those areas, and I 
hope also that we're able to find ways--as my colleague Senator 
Craig just said--to fund, aggressively, these areas in the 
appropriations process. Mr. Chairman, thank you for your 
patience.

                       STATEMENT OF DAVID GARMAN

    Senator Domenici. Let's proceed. As I understand it, it is 
common that you will proceed first, Dr. Orbach, then Mr. 
Magwood. So, if you please be as brief as you can, your 
statement will be made a part of the record, so will yours, and 
Mr. Magwood, so will yours at this point. Please proceed.
    Mr. Garman. I will briefly summarize, Mr. Chairman.
    As you mentioned, the President's budget includes $1.2 
billion for the Office of Energy Efficiency and Renewable 
Energy, and I'll briefly outline our priorities for the use of 
those funds.

                    REDUCE DEPENDENCE ON FOREIGN OIL

    First, our top priority is to reduce America's dependence 
on foreign petroleum. And since the majority of the oil that we 
use is used to fuel transportation, we're seeking increases in 
both our vehicle technologies program, and our hydrogen and 
fuel cell program, proposing to spend nearly $349 million in 
these areas. Our work, conducted in partnership with auto 
makers and energy providers, among others, includes research 
and development on gasoline-electric hybrid propulsion, new 
generations of spark and compression ignition internal 
combustion engines, vehicle systems, lightweight materials, and 
of course, hydrogen fuel cells, and elements of the hydrogen 
re-fueling structure to support them.

                         WEATHERIZATION PROGRAM

    Our next priority--and this is a new area under this 
subcommittee--is to reduce the burden of energy prices on the 
disadvantaged. To this end, we're proposing $230 million for 
the low income Weatherization Program, an increase over last 
year's appropriated levels.

                            RENEWABLE ENERGY

    Another priority of our office is to increase the viability 
and deployment of renewable energy technologies. To this end, 
we're seeking approximately $260 million. This funding includes 
our work on solar, wind, biomass, geothermal, hydropower and 
the facilities and activities needed to support these programs.

                        BUILDINGS AND APPLIANCES

    Our next priority is to increase the energy efficiency of 
buildings and appliances. To this end, we're seeking more than 
$75 million for our Building Technologies Program, ENERGY 
STAR, Rebuild America, and building code training and 
assistance activities.

                                BIOMASS

    Our fifth priority is the creation of the domestic bio-
industry. In pursuit of this priority, we are seeking over $72 
million for our Biomass Technologies Program. Our work in this 
area includes lowering the cost of sugars derived from 
discarded or under-utilized cellulosic materials, from which 
ethanol and other chemicals and products can be made.

                      DISTRIBUTED POWER GENERATION

    Our sixth priority is to increase the efficiency and 
performance of distributed power generation, which can enhance 
the reliability of the entire electricity grid. We propose to 
spend $57 million on our distributed energy program, which 
includes work on reciprocating engines, microturbines, 
thermally activated technologies, and the packaging and 
integration of these technologies into compact, affordable 
systems.

                        INDUSTRIAL TECHNOLOGIES

    Our seventh priority is to increase the energy efficiency 
of industry, and to that end we're seeking $56.5 million for 
our industrial technologies program. Technologies we're working 
on in that area are as varied as continuous melt electric arch 
furnaces, coke-less iron making, and high pressure super 
boilers. We're also making efforts to communicate best energy 
efficiency practices among a wide spectrum of industrial 
partners.

                       FEDERAL ENERGY MANAGEMENT

    Our eighth priority is to assist the largest single user of 
energy in the United States' economy--the U.S. Federal 
Government--to lead by example in using energy more 
efficiently, and procuring more energy from renewable 
resources. In pursuit of this goal, we operate the Federal 
Energy Management Program, with over $19 million of funding for 
those activities.

                           PREPARED STATEMENT

    Mr. Chairman, this is an extremely diverse portfolio of 
different activities that's sometimes challenging to manage, 
and that's why our ninth priority has been to change and 
continuously improve the way that we do business. While we have 
made a great deal of progress, there's still much we can do to 
improve our performance. We appreciate the efforts of the 
subcommittee in working with us to ensure that we continue that 
improvement through stronger planning and program management 
efforts. With that, Mr. Chairman, I'd be pleased to take any 
questions you have, either today or in the future. Thank you.
    [The statement follows:]

                   Prepared Statement of David Garman

    Mr. Chairman and members of the subcommittee, I appreciate the 
opportunity to testify on the President's Fiscal Year 2006 Budget 
Request for the Office of Energy Efficiency and Renewable Energy 
(EERE). My focus today will be on the energy conservation, renewable 
energy, and hydrogen activities under the purview of this subcommittee.
    The President's Fiscal Year 2006 Budget includes $1.2 billion for 
EERE. In his February 2 State of the Union Address, the President 
underscored the need to restrain spending in order to sustain our 
economic prosperity. As part of this restraint, it is important that 
total discretionary and non-security spending be held to levels 
proposed in the Fiscal Year 2006 Budget. The budget savings and reforms 
in the budget are important components of achieving the President's 
goal of cutting the budget deficit in half by 2009 and we urge the 
Congress to support these reforms. The Fiscal Year 2006 Budget includes 
more than 150 reductions, reforms, and terminations in non-defense 
discretionary programs, of which one affects EERE's programs. The 
Department wants to work with the Congress to achieve these savings.
    The programs funded by this appropriation continue support for 
certain Presidential initiatives; build on research, development, and 
deployment successes already achieved; and focus on implementing 
results-oriented business practices to help achieve strategic energy 
goals and fulfill the Department's mission.
    EERE has made good on its strategic goal of ``changing the way it 
does business.'' Last fall, the National Academy of Public 
Administration (NAPA) completed an 18-month review of EERE's 
reorganized structure and noted in its final report, Reorganizing for 
Results, that ``the basic construct of the reorganization--eliminating 
the sector organizations and restructuring around the major programs, 
and consolidating the business administration functions--was sound,'' 
and that ``EERE has made great strides to reinvent how it does 
business.'' Our innovative business and management model is enabling 
EERE to fund the right mix of research and development (R&D) and to get 
more technical work done effectively with the R&D dollars appropriated. 
EERE is also guided by the research and development investment criteria 
(RDIC) called for in the President's Management Agenda, as well as the 
Office of Management and Budget's (OMB) Program Assessment Rating Tool 
(PART) to guide its decisions and focus its R&D on long-term, high-
payoff activities that require Federal involvement to be successful.
    A primary long-term goal for our Nation must be to significantly 
reduce our dependence on foreign oil, and to develop the technologies 
that enable Americans to make greater use of our abundant, clean, 
domestic renewable energy resources. EERE's fiscal year 2006 request 
continues support for the President's Hydrogen Fuel Initiative to 
ensure that hydrogen production, storage, and infrastructure 
technologies will be available and affordable when hydrogen-powered 
fuel cell vehicles are ready for commercialization. EERE also continues 
support for its FreedomCAR program (where CAR stands for Cooperative 
Automotive Research), working with industry to improve the efficiency 
and lower the cost of advanced combustion engines and hybrid vehicle 
technologies. In addition, EERE will pursue critical technical 
improvements to biorefineries and the processes that use biomass, the 
only renewable resource that can directly produce liquid transportation 
fuels such as ethanol.
    But long-term results are only part of the story for EERE's 
programs. The Fiscal Year 2006 Budget Request is designed to provide 
results to the American people today by advancing technologies that are 
making their way into energy-related products and services that are an 
integral part of America's energy economy. Since 2001, research 
sponsored by EERE has won 37 R&D 100 awards, ten in 2004 alone. One 
technology winner this year is the world's first portable, flexible 
photovoltaic (PV) power module made from thin-film copper indium 
gallium selenide (CIGS). The U.S. Army is already using these 
lightweight PV systems that can be folded as small as a 912 envelope, 
stowed in a small backpack, and easily carried over long distances to 
supply efficient and reliable power.
    Targeting all sectors of energy use, EERE's fiscal year 2006 
activities are designed to make a difference in the everyday lives of 
Americans today, and an even greater difference in years to come.

  ENERGY CONSERVATION AND RENEWABLE ENERGY PROGRAMS FISCAL YEAR 2006 
                                REQUEST

    EERE programs funded by the Energy and Water Development 
appropriation include Hydrogen and Fuel Cell Technologies, Vehicle 
Technologies, Solar Energy Technologies, Wind and Hydropower 
Technologies, Geothermal Technologies, Biomass and Biorefinery Systems, 
Weatherization and Intergovernmental, Distributed Energy Resources, 
Building Technologies, Industrial Technologies, Federal Energy 
Management, and Program Management and Direction.

                  HYDROGEN AND FUEL CELL TECHNOLOGIES

    The Fiscal Year 2006 Budget Request for Hydrogen and Fuel Cell 
Technologies totals $182.7 million: $99.1 million for hydrogen 
activities, a $5.1 million increase over the fiscal year 2005 
comparable appropriation, and $83.6 million for fuel cell activities, 
an $8.7 million increase. Hydrogen and fuel cell technologies are the 
foundation of the President's Hydrogen Fuel Initiative and help support 
the Department's FreedomCAR program. Under the FreedomCAR and Fuel 
Partnership, government and industry are working together on research 
activities to overcome key technical barriers to commercialization of 
advanced efficient vehicles, and to facilitate a fuel cell hybrid 
vehicle and hydrogen infrastructure commercialization decision by 
industry in the year 2015. Because hydrogen fuel cell vehicles emit no 
criteria pollutants or carbon dioxide, their development and commercial 
success would essentially remove light-duty transportation as an 
environmental issue. The hydrogen will be produced from diverse 
domestic resources, making our Nation self-reliant for our personal 
transportation energy needs.
    Much of the proposed increase in Hydrogen Technology is to 
accelerate and expand research and development of advanced technologies 
for producing hydrogen using renewable feedstocks such as biomass and 
renewable energy sources such as wind and solar. The program is also 
developing technologies for distributed hydrogen production from 
reforming of natural gas and from electrolysis. Other priorities 
include development of on-board vehicular hydrogen storage systems to 
achieve a driving range of greater than 300 miles and development of 
hydrogen delivery technologies. The ultimate goal is to reduce the cost 
of producing, storing, and delivering hydrogen to a cost competitive 
with that of gasoline.
    Validation of fuel cell vehicle and hydrogen infrastructure 
technologies under ``real-world'' operating conditions is essential to 
track progress and to help guide research priorities. This year's 
request contains $24 million for fuel cell technology validation which 
is a 35 percent increase over the fiscal year 2005 comparable 
appropriation. We are also requesting $14.9 million in funding for the 
validation of hydrogen infrastructure technology, a 58 percent increase 
over the fiscal year 2005 comparable appropriation. Automotive and 
energy partners are matching public dollars on a ``50-50'' cost-shared 
basis, and the Department is beginning to receive essential statistical 
data on the status of fuel cell vehicle and infrastructure technologies 
relative to targets in the areas of efficiency, durability, storage 
system range, and fuel cost. By measuring progress under real-world 
driving conditions, the Department can accurately monitor success in 
overcoming remaining fuel cell and infrastructure technology barriers 
and assess progress towards the 2015 commercialization decision by 
industry. These activities also provide technical information and 
analysis to support the development of codes and standards for the 
commercial use of hydrogen, and feedback on vehicle and infrastructure 
safety. Fiscal year 2006 activities include opening eight hydrogen 
fueling stations, assessing performance and cost of hydrogen production 
and delivery technologies, and validating 1,000 hours of fuel cell 
vehicle durability ``on the road.'' By 2009, the program is expected to 
validate fuel cell vehicle durability of 2,000 hours, a 250-mile 
vehicle range, and hydrogen production cost of less than $3.00/gge 
(gasoline gallon equivalent).
    As highlighted by Secretary Bodman in earlier Congressional 
testimony, I am pleased to report that our fuel cell activities 
achieved an important technology cost goal this past year when they 
reduced the high-volume cost of automotive fuel cells from $275 per 
kilowatt in 2002 to $200 per kilowatt in 2004. This accomplishment is a 
major step toward the program's goal of reducing the cost of 
transportation fuel cell power systems to $45 per kilowatt by 2010.\1\ 
Research successes like this will enable a positive commercialization 
decision in 2015 that could lead to the market introduction of hydrogen 
fuel cell vehicles by 2020.
---------------------------------------------------------------------------
    \1\ Cost of 50 kW vehicle fuel cell power systems estimated for 
production rate of 500,000 units per year.
---------------------------------------------------------------------------
    The President's Hydrogen Fuel Initiative was received by Congress 
with enthusiasm, and we appreciate this subcommittee's support. 
However, while the EERE fiscal year 2005 comparable appropriation for 
hydrogen technology was $94 million, 40 percent of those funds were 
earmarked for specific projects that are not wholly consistent with our 
research plan or the recommendations of the National Research Council. 
As a consequence, we must delay some very important work in areas such 
as hydrogen production and storage, and our ability to meet our 
established research targets in the specified timeframes may be in 
jeopardy. The Department looks forward to working with the subcommittee 
to help ensure that projects supported by the committee are consistent 
with our established goals in an effort to keep our progress on track.

                          VEHICLE TECHNOLOGIES

    The FreedomCAR & Vehicle Technologies Program focuses on the 
development of more energy efficient and environmentally friendly 
technologies for cars and trucks that will use significantly less oil, 
and still preserve America's freedom of mobility. Many of these 
technologies also serve as the foundation of tomorrow's hydrogen fuel 
cell vehicles.
    The Fiscal Year 2006 Budget Request for Vehicle Technologies is 
$165.9 million, a $0.5 million increase over the fiscal year 2005 
comparable appropriation. Activities in this program contribute to two 
Departmental initiatives: the FreedomCAR initiative and the 21st 
Century Truck initiative.
    FreedomCAR activities in fiscal year 2006 focus on innovative, 
high-efficiency vehicle technologies including advanced combustion 
engines, advanced fuel formulations, hybrid vehicle systems, high-
powered batteries, lightweight materials, and power electronics. These 
critical technologies can lead to near-term oil savings when used with 
advanced combustion hybrid electric vehicles and support the future 
development of hydrogen fuel cell hybrid vehicles.
    FreedomCAR goals include increasing passenger and light-duty 
vehicle combustion engine efficiency from 30 percent to 45 percent by 
2010 (while meeting 2010 EPA emissions standards), and reducing the 
cost of high-power batteries for hybrid vehicles from $3,000 (1998 
baseline) to $500 for a 25kW battery by 2010. Combustion engine 
efficiency is making good progress, and in fiscal year 2006 we expect 
to reach 41 percent efficiency, a major step towards the 2010 goal of 
45 percent. Battery technologies have also made significant progress 
toward these goals: the program reached its $1,000 cost target for 
fiscal year 2004, and the fiscal year 2006 budget is expected to bring 
that down to $750.
    The 21st Century Truck initiative has similar objectives but is 
focused on commercial vehicles. The 2006 request will fund cooperative 
research efforts between the commercial heavy-duty vehicle (trucks and 
buses) industry and major Federal agencies to develop technologies that 
will make our Nation's commercial vehicles more efficient, cleaner, and 
safer. The effort centers on R&D to improve engine systems, heavy-duty 
hybrids, truck safety, and to reduce parasitic losses (e.g., 
aerodynamic drag as the vehicle moves down the road at 60 mph, and the 
power drain from belt driven accessories like power steering and air 
conditioning) and engine idling.
    In fiscal year 2004, the heavy-duty vehicle activity demonstrated a 
reduction of parasitic losses from 39 percent baseline to 27 percent in 
a laboratory setting, and activities included in the fiscal year 2006 
budget are expected to bring those losses down to 24 percent. The 
program also demonstrated an increase in heavy-duty diesel engine 
efficiency from the baseline of 40 percent to 45 percent in fiscal year 
2004 (while meeting EPA 2007 emission standards) and we expect the 
fiscal year 2006 budget to raise that to 50 percent (while meeting EPA 
2010 emission standards)--important steps toward meeting our long-term 
goal of 55 percent energy efficiency in 2013.

                       SOLAR ENERGY TECHNOLOGIES

    The Solar Energy Technologies Program focuses research on advanced 
solar devices that can bring reliable and affordable solar energy 
technologies into the marketplace, helping our Nation meet electricity 
needs and reducing the stress on our critical electricity 
infrastructure. The Department's efforts are directed in the 
interrelated areas of photovoltaics, concentrating solar power (CSP), 
and solar heating and lighting. The Fiscal Year 2006 Budget Request for 
solar technology is $84.0 million, which is roughly equivalent to the 
fiscal year 2005 comparable appropriation of $85.1 million.
    The Department's photovoltaic research and development is focused 
on next-generation technologies such as thin-film photovoltaic cells 
and leap-frog technologies such as polymers and nanostructures. The 
fiscal year 2006 request of $75.0 million for photovoltaic energy 
systems includes $31.4 million for critical laboratory research, $28.6 
million for advanced materials and devices, and $15.0 million for 
technology development efforts to improve reliability of the entire 
system. The Department has included $4.5 million in the fiscal year 
2006 request to support the new Collaborative Crystalline Silicon 
Photovoltaic Initiative designed to strengthen through research and 
development the technological competitiveness of U.S. products in a 
rapidly growing world market.
    The $6.0 million request for concentrating solar power research 
includes funds to accelerate the development of next-generation 
parabolic trough concentrators and receivers. Development of advanced 
thermal energy storage technologies will continue and field validation 
will be conducted on new collector technology being deployed in trough 
projects in Arizona and Nevada. For distributed applications, research 
in fiscal year 2006 will focus on improving the reliability of dish 
systems through the operation and testing of multiple units at Sandia 
National Laboratory. Technical support will also be provided to the 
Western Governors' Association to assist their CSP deployment 
activities.

                    WIND AND HYDROPOWER TECHNOLOGIES

    Wind Energy research and development promotes greater use of the 
Nation's fastest growing energy resource. Since 2000, installed wind 
turbine capacity in the United States has more than doubled, driven in 
large part by the tremendous reductions in cost that have resulted from 
wind energy research. Our research contributed to reducing the cost of 
electricity generation by a factor of 20 since 1982, to 4 cents or less 
per kilowatt-hour in areas with excellent wind resources.
    The Fiscal Year 2006 Budget Request for Wind Energy is $44.2 
million, $3.4 million more than the fiscal year 2005 comparable 
appropriation. Most of the fiscal year 2006 request is to fund R&D on 
multiple large wind system technology pathways in lower wind speed 
areas to achieve the goal of 3 cents per kilowatt-hour for onshore 
systems and 5 cents per kilowatt-hour for off-shore systems by 2012. 
Working in collaborative partnerships with industry, the Department 
plans to complete field testing of the first full-scale Low Wind Speed 
Technology prototype turbine in fiscal year 2006, and begin fabrication 
of a second prototype turbine (both 2.5 MW scale) which will enable 
electricity to be generated closer to where people live.
    Hydropower is the most widely used form of renewable energy in the 
world today, accounting for over 7 percent of total electricity 
generation in the United States and over 75 percent of domestic 
renewable electricity generation. The Department has supported the 
development of new turbine technology that reduces fish mortality 
associated with hydropower plant operation. With the completion of 
testing on new turbine technologies, and consistent with previous 
Congressional direction, the Department plans to close out the 
Hydropower Program and transfer remaining program activities and 
information to the private sector.
    The fiscal year 2006 hydropower request of $0.5 million will be 
used to complete the monitoring of plant operation and maintenance, and 
document previous program activities. Outstanding contracts will be 
closed out in fiscal year 2006.

                         GEOTHERMAL TECHNOLOGY

    The Geothermal Technologies Program works in partnership with 
industry to establish geothermal energy as an economically competitive 
contributor to the U.S. energy supply. Currently a $1.3 billion a year 
industry, geothermal energy production generates electricity or 
provides heat for applications such as aquaculture, crop drying, and 
district heating, or for use in heat pumps to heat and cool buildings 
without the emission of greenhouse gases. The Fiscal Year 2006 Budget 
Request for Geothermal Technologies is $23.3 million, a $2.0 million 
decrease from the fiscal year 2005 comparable appropriation. The fiscal 
year 2005 appropriation included $3.6 million in funds for 
congressionally-directed activities now completed.
    In fiscal year 2006, the program will conduct extensive field tests 
of exploration technologies such as remote sensing techniques to 
increase the U.S. geothermal resource base, and expand and accelerate 
the geothermal resource assessments conducted in collaboration with the 
U.S. Geological Survey. The program will continue its Enhanced 
Geothermal Systems (EGS) technology research to increase the 
productivity and lifetime of engineered reservoirs. The Department 
estimates that EGS technology could quadruple the amount of 
economically and technically viable geothermal resources in the West 
and open up new geothermal possibilities throughout the United States.

                  BIOMASS AND BIOREFINERY SYSTEMS R&D

    EERE's Biomass Program focuses on advanced technologies to 
transform the Nation's domestic biomass resources into high value 
fuels, chemicals, materials, and power. Working with the U.S. 
Department of Agriculture (USDA), the program leads a multi-agency 
initiative that coordinates and accelerates all Federal bioenergy R&D 
in accordance with the Biomass Research and Development Act of 2000.
    In fiscal year 2006, the Department is requesting $72.2 million for 
Biomass Program activities, $15.9 million less than the fiscal year 
2005 comparable appropriation. Last year's appropriation, however, 
included $35.3 million in funds for congressionally-directed activities 
for which the Department is not requesting additional funds.
    The Department requests $43.4 million to support platforms R&D. The 
$15 million request for Thermochemical Platform R&D will focus on 
developing technologies for the production, cleanup, and conditioning 
of biomass syngas and pyrolysis oils suitable for conversion to fuels 
and chemicals. This will be done in collaboration with industrial 
partners selected under a joint DOE/USDA solicitation issued in fiscal 
year 2004. The $28.4 million requested for Bioconversion Platform R&D 
is to work with industry to improve the performance and reduce the 
costs of enzymes and biomass pretreatment, resulting in a low cost 
sugar stream in support of the nearer-term biorefinery.
    The request also includes $21.8 million for cost-shared R&D with 
U.S. industry to advance technologies that will convert this low cost 
sugar stream into affordable products (chemicals and materials), 
furthering the development of efficient biorefineries. Work with 
industry, universities, and the National Laboratories will focus on 
improving the efficiency of individual process steps such as catalysis 
and separations, with a focus on producing key building-block chemicals 
that have the potential to result in a multitude of high-value, 
renewable chemicals and materials.

             WEATHERIZATION AND INTERGOVERNMENTAL PROGRAMS

    In fiscal year 2006, we are requesting $310.1 million for 
Weatherization and Intergovernmental Activities, a $15.7 million 
reduction from the fiscal year 2005 comparable appropriation. This 
includes $230 million for the Weatherization Assistance Program, which 
will support weatherization of approximately 92,300 low-income homes, 
saving the low-income homeowner an average of $274 annually on their 
energy bills at today's prices, according to estimates by the Oak Ridge 
National Laboratory.
    The Department's Intergovernmental activities promote rapid 
deployment of clean energy technologies and energy efficient products. 
The Fiscal Year 2006 Budget requests $41.0 million for State Energy 
Program grants. These grants, and the funds they leverage, allow State 
governments to target their own high priority energy needs and expand 
clean energy choices for their citizens and businesses.
    In fiscal year 2006, we request $4.0 million for the Tribal Energy 
Program which will enable the Department to continue to build 
partnerships with Tribal governments to assess Native American energy 
efficiency needs and renewable energy opportunities for residential, 
commercial, and industrial uses. These activities are helping to 
complete the foundational work that will encourage private sector 
investment in energy projects on Native American lands.
    The Department includes an increase of $1.7 million in its fiscal 
year 2006 request to expand and support Home Performance with ENERGY 
STAR, an innovative residential program designed to improve the energy 
efficiency of existing homes by up to 30 percent using certified local 
contractors to perform whole-house retrofits. State and local pilot 
projects will be supported at the national level by the dissemination 
of best practices, contractor training, program design assistance, and 
marketing support.

                      DISTRIBUTED ENERGY RESOURCES

    By producing electricity where it is used, distributed energy 
technologies can strengthen our Nation's aging electricity power 
infrastructure, relieve congestion on transmission and distribution 
systems, and increase supplies during periods of peak demand. The 
Distributed Energy Program seeks to develop and deploy a diverse array 
of integrated distributed generation and thermal energy technologies 
that are competitively priced, reliable, and highly efficient. The 
Fiscal Year 2006 Budget Request for this program is $56.6 million, a 
$3.8 million reduction from the fiscal year 2005 comparable 
appropriation. This funding level reflects the reallocation of funds 
given the advances made in previous years and changes within the 
overall energy research and development portfolio. As in previous 
years, this year's request emphasizes integrated designs for end-use 
systems.
    Key performance target goals for fiscal year 2006 include the 
development of a combined heat and power (CHP) system which operates at 
over 70 percent efficiency and a prototype microturbine which can 
achieve 35 percent efficiency for small-scale power generation. To help 
potential users take better advantage of distributed energy 
opportunities, the program will complete a State regulatory database 
including information on regulations such as environmental permitting, 
utility tariffs, and interconnection standards, and continue funding 
the eight Regional Combined Heat and Power Application Centers across 
the United States.

                         BUILDING TECHNOLOGIES

    With an annual price tag of over $250 billion, energy use by 
residential and commercial buildings accounts for nearly 40 percent of 
the Nation's total energy consumption, including two-thirds of the 
electricity sold in the United States. The $58 million included in this 
year's request for the Building Technologies Program is a decrease of 
$7.5 million from the fiscal year 2005 comparable appropriation, 
primarily due to reductions in space conditioning and building envelope 
R&D that is nearing commercialization. Fiscal year 2006 activities 
include solid state lighting, improved energy efficiency of other 
building components and equipment, and their effective integration 
using whole-building-system-design techniques, and the development of 
codes and standards for buildings, appliances, and equipment.
    The $18.3 million request for Residential Buildings Integration 
aims to develop design packages that enable residential buildings to 
use 40 to 50 percent less energy than current practice, and integrate 
renewable energy systems into highly efficient building designs and 
operations in working toward the ultimate goal in 2020 of net Zero 
Energy Buildings: houses that produce as much energy as they use on an 
annual basis.
    As part of the Department's focus on longer-term, high-risk 
activities with great potential for public benefit, in fiscal year 2006 
we are requesting $11 million for solid state lighting research. Solid 
state lighting holds the potential to more than double the efficiency 
of general lighting systems, revolutionizing the energy efficiency, 
appearance, visual comfort, and quality of lighting products.
    The fiscal year 2006 request also reflects the Department's 
continued commitment to advancing buildings codes and appliance 
standards. Because key analyses and peer reviews for several priority 
appliance rulemakings will be completed in fiscal year 2005, funding 
requirements for fiscal year 2006 will be reduced in this area.

                   FEDERAL ENERGY MANAGEMENT PROGRAM

    The Federal Energy Management Program (FEMP) and the Departmental 
Energy Management Program (DEMP) assist Federal agencies and the 
Department in increasing their use of energy efficiency and renewable 
energy technologies through alternative financing contract support, 
technical assistance, and funding for retrofit projects. By using 
existing energy efficiency and renewable energy technologies and 
techniques, the Federal Government can set an example and lead the 
Nation toward becoming a cleaner, more efficient energy consumer.
    FEMP's fiscal year 2006 request is $19.2 million, a $0.7 million 
reduction from the fiscal year 2005 comparable appropriation. We are 
requesting $6.8 million for FEMP technical support that promotes agency 
use of alternative financing tools, which allow Federal agencies to 
access private sector financing to fund energy improvements through 
Energy Savings Performance Contracts (ESPC) and Utility Energy Service 
Contracts (UESC) at no net cost to taxpayers. In addition, we are 
requesting $7.7 million for Technical Guidance and Assistance 
activities to help Federal energy managers identify, design, and 
implement new construction and facility improvement projects that 
incorporate energy efficiency and renewable energy.

                        INDUSTRIAL TECHNOLOGIES

    The Industrial Technologies Program seeks to reduce the energy 
intensity of the U.S. industrial sector through a coordinated program 
of R&D, validation, and dissemination of energy-efficiency technologies 
and operating practices. The Department is working to achieve the 
program's goals by partnering with domestic industry, its equipment 
manufacturers, and its many stakeholders.
    The Fiscal Year 2006 Budget Request is $56.5 million, an $18.3 
reduction from the fiscal year 2005 comparable appropriation. We 
strongly believe that this level of funding is sufficient because the 
Industrial Technologies Program is becoming more focused and more 
strategic in its investments in next-generation industrial 
technologies. The Program's strategic approach is based on developing a 
focused, multi-year plan that is designed to identify a limited number 
of high-priority, energy-saving research and development opportunities, 
characterize the technical barriers associated with each of those 
opportunities, and implement a multi-year development pathway to 
achieve success in each identified focus area. Many of these R&D 
efforts will be in exploratory phases in fiscal year 2006 as the 
program identifies the most promising technology areas and adopts a 
balanced portfolio of high-risk, high-return R&D.

                    PROGRAM MANAGEMENT AND DIRECTION

    The Program Management (Energy Conservation) and Program Direction 
(Energy Supply) budgets provide resources for executive and technical 
direction and oversight required for the implementation of EERE 
programs. The Budget Request covers Federal staff as well as the 
equipment, supplies, materials, information systems, technology 
equipment, and travel required to support management and oversight of 
programs. Also funded by this request are properties; public 
information activities; support service contractors; and crosscutting 
performance evaluation, analysis and planning.
    The Fiscal Year 2006 Budget requests for Program Management and 
Program Direction total $108.1 million, representing a $4.0 million 
(3.6 percent) decrease from the fiscal year 2005 comparable 
appropriations. The decrease primarily reflects completion of the 
National Academy of Science review, the absence of support for prior 
congressionally-directed activities, and the movement of support 
service funding for the Climate Change Technology Program out of this 
request. With these activities excluded, our request actually 
represents an increase of $4.9 million to support our efforts to 
improve project management and to more accurately report our true cost 
of doing business. We also request $2.9 million within Renewable 
Program Support for crosscutting analysis and planning, which was 
formerly funded within individual renewable program budgets.

                               CONCLUSION

    Mr. Chairman, we believe the administration's Fiscal Year 2006 
Budget for energy efficiency and renewable energy research, 
development, demonstration, and deployment programs will contribute to 
improved energy security by promoting a diverse supply of reliable, 
affordable, and environmentally sound energy, and by promoting the 
efficient use of energy.
    This completes my prepared statement, and I am happy to answer any 
questions the subcommittee may have.

    Senator Domenici. Thank you very much. Dr. Orbach, will you 
please abbreviate your statement, and we'll ask you some 
questions shortly.

                           Office of Science

STATEMENT OF RAYMOND L. ORBACH, DIRECTOR

    Dr. Orbach. Mr. Chairman, Senator Allard, thank you for 
giving me this opportunity to testify on the President's fiscal 
year 2006 budget request for the Office of Science.
    Mr. Chairman, you have laid out the major new initiatives 
that the 2006 budget contains. The budget is premised upon the 
maintenance of U.S. scientific leadership, of increased present 
and future research opportunities. In order to achieve this 
goal, difficult decisions had to be made within this budget 
climate, prioritizing core research funding, and facility 
construction and operation. The result augers well for U.S. 
science and scientists.
    This budget enables a breathtaking array of scientific 
initiatives and opportunities. There are costs working within 
the current budget climate, but they are balanced against the 
opportunities essential for continued U.S. scientific primacy.
    The Office of Science is committed to providing basic 
research support for the missions of the Department of Energy, 
leading to energy security for our country. Our programs 
contribute substantially to our Nation's economic development, 
to enhancing scientific literacy, and to our society's 
intellectual growth and excitement through scientific 
discovery. I believe this budget will accomplish these goals.
    Mr. Chairman, I'd like to thank you again for this 
opportunity to discuss the work of the Office of Science, and I 
would be pleased to answer your questions.
    [The statement follows:]

                Prepared Statement of Raymond L. Orbach

    Mr. Chairman and members of the subcommittee, thank you for the 
opportunity to testify today about the Office of Science's fiscal year 
2006 budget request. I am deeply appreciative of your support for basic 
research, Mr. Chairman, and the support we have received from the other 
members of this subcommittee. I am confident that our fiscal year 2006 
request represents a sound investment in our Nation's future. Through 
this budget we will position the Office of Science to be ready for the 
opportunities of the next decade.
    This budget, Mr. Chairman, will enable thousands of researchers 
located across our Nation to work on some of the most pressing 
scientific challenges of our age. These researchers will demonstrate 
the scientific and technological feasibility of creating and 
controlling a sustained burning plasma to generate energy through 
participation in ITER (Latin for the way, ITER is an international 
fusion collaboration); use advanced computation and modeling tools to 
resolve complex scientific problems; restore U.S. leadership in neutron 
science with the start of operations at the Spallation Neutron Source 
(SNS); expand the frontier of nanotechnology through operation of 
Nanoscale Science Research Centers (NSRC's); pursue an understanding of 
how the universe began; contribute to our understanding of climate 
change including the potential of carbon sequestration; develop the 
knowledge that may enable us to harness microbes and microbial 
communities to improve energy production and environmental remediation; 
and contribute basic research that underpins the President's Hydrogen 
Fuel Initiative.
    The Office of Science requests $3,462,718,000 for the fiscal year 
2006 science appropriation, a decrease of $136,828,000 from the fiscal 
year 2005 appropriation, for investments in basic research that are 
critical to the success of Department of Energy (DOE) missions in 
national security and energy security; advancement of the frontiers of 
knowledge in the physical sciences and areas of biological, 
environmental, and computational sciences; and provision of world-class 
research facilities for the Nation's science enterprise (see Figure 1).
    The Office of Science, within a period of budget stringency, has 
chosen its priorities so that the United States will continue its world 
primacy in science. We have made the hard decisions that will enable 
our scientists to work on the finest machines whose scale and magnitude 
will give them opportunities not found elsewhere. As a consequence, we 
have made difficult choices. But these have been taken with one end in 
mind: the Office of Science will support a world-class program in 
science and energy security research with this budget.
    This budget request supports the following programs: Basic Energy 
Sciences, Advanced Scientific Computing Research, Biological and 
Environmental Research, High Energy Physics, Nuclear Physics, Fusion 
Energy Sciences, Science Laboratories Infrastructure, Science Program 
Direction, Workforce Development for Teachers and Scientists, and 
Safeguards and Security.
    The Office of Science supports research across the scientific 
spectrum from high energy physics to biology and environmental 
research; from fusion energy sciences to nuclear physics, from basic 
energy sciences to advanced scientific computation research. We provide 
42 percent of the Federal funding for the physical sciences in the 
United States, and are the stewards of support for fields such as high 
energy physics, plasma physics, catalysis, and nuclear physics. We 
build and operate the large scientific facilities used by over 19,000 
faculty, students, and postdocs each year. They include synchrotron 
light sources, neutron sources, high energy and nuclear physics 
accelerators, fusion energy experiments, dedicated scientific computing 
resources, specialized environmental research capabilities, the 
Production Genome Facility, and will soon include the SNS, five NSRCs, 
and an X-ray free electron laser light source. Roughly half of our 
budget goes to the construction and operation of these facilities; the 
other half is split, roughly equally, between research at the DOE 
laboratories and research at universities. This supports the research 
of approximately 23,500 students, postdocs, and faculty throughout our 
Nation.

                        FIGURE 1.--OFFICE OF SCIENCE FISCAL YEAR 2006 PRESIDENT'S REQUEST
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                                   Fiscal Year
                                                                 Fiscal Year      Fiscal Year          2006
                                                               2004 Comparable  2005 Comparable    President's
                                                                   Approp.          Approp.          Request
----------------------------------------------------------------------------------------------------------------
Basic Energy Sciences........................................         991,262        1,104,632        1,146,017
Advanced Scientific Computing Research.......................         196,795          232,468          207,055
Biological and Environmental Research........................         624,048          581,912          455,688
    (Congressionally-directed projects)......................        (136,798)         (79,608)  ...............
    (Core Biological and Environmental Research).............        (487,250)        (502,304)        (455,688)
High Energy Physics..........................................         716,170          736,444          713,933
Nuclear Physics..............................................         379,792          404,778          370,741
Fusion Energy Sciences.......................................         255,859          273,903          290,550
Science Laboratories Infrastructure..........................          55,266           41,998           40,105
Science Program Direction....................................         150,277          153,706          162,725
Workforce Development for Teachers and Scientists............           6,432            7,599            7,192
Safeguards and Security......................................          56,730           67,168           68,712
Small Business Innovation Research/Technology Transfer.......         114,915   ...............  ...............
                                                              --------------------------------------------------
      Subtotal, Science......................................       3,547,546        3,604,608        3,462,718
Use of prior year balances...................................         -11,173           -5,062   ...............
                                                              --------------------------------------------------
      Total Science..........................................       3,536,373        3,599,546        3,462,718
                                                              --------------------------------------------------
      (Total, excluding Congressionally-directed projects)...      (3,399,575)      (3,519,938)      (3,462,718)
----------------------------------------------------------------------------------------------------------------

                  FISCAL YEAR 2006 SCIENCE PRIORITIES

    In his testimony before the House Science Committee, the 
President's Science Adviser, Dr. Jack Marburger indicated, ``Making 
choices is difficult even when budgets are generous. But tight budgets 
have the virtue of focusing on priorities and strengthening program 
management. This year's R&D budget proposal maintains levels of funding 
that allow America to maintain its leadership position in science and 
move ahead in selected priority areas.''
    The priorities the Office of Science has set within the overall 
Federal R&D effort and in support of DOE's mission are clear: Through 
the fiscal year 2006 budget, we will fully support Presidential 
initiatives in fusion and hydrogen; we will continue strong support for 
other administration priorities such as nanotechnology and information 
technology; we will complete--on time and within budget--unique 
scientific facilities that will maintain and enhance research in areas 
we believe offer the greatest potential for broad advances in future 
energy technologies. These scientific facilities were prioritized in 
our 20-year facilities outlook, announced in November 2003.
    We will continue moving ahead with our contributions to the 
President's Hydrogen Fuel Initiative. We are supporting U.S. 
participation in the ITER project to pursue the potential of energy 
from fusion.
    One of the biggest science stories of the year 2006 will be the 
start-up of the Spallation Neutron Source at our Oak Ridge National 
Lab, which will provide the most intense--by an order of magnitude--
neutron beam in the world for cutting-edge research.
    The fiscal year 2006 budget will also bring four of our five 
nanoscale science research centers on line, providing tools found 
nowhere else in the world for exploration at the atomic level, offering 
huge potential for the discovery of entirely new ways to build 
materials.
    We are fully funding construction of the Linac Coherent Light 
Source at the Stanford Linear Accelerator Center, a machine that will 
produce X-rays 10 billion times brighter than any existing X-ray source 
on Earth. When it comes on line in 2009, it essentially will allow 
stop-action photography of atomic motion. Just ask the pharmaceutical 
industry what they could do with a machine that shows them how the 
chemical bond forms during a chemical reaction.
    The Office of Science also will fully fund the National Energy 
Research Scientific Computing Center, a key center for capacity 
supercomputing used by roughly 2,000 researchers every year, and a 
separate open-access leadership class computing facility at Oak Ridge, 
focused on providing the capability to carry out a limited number of 
massive simulations not possible on any other civilian supercomputer in 
the United States.
    The Department will also expand research underpinning biotechnology 
solutions to the world's energy challenges and research supporting the 
President's climate change science program.
    Our research programs in high energy physics continue to receive 
strong support. We have increased funding for future accelerators such 
as the Large Hadron Collider, scheduled to begin operation in 2007, and 
the proposed International Linear Collider, which is now in an early 
R&D phase. Our nuclear physics program will continue to offer world-
class facilities for use by thousands of researchers from around the 
world.

                        SCIENCE ACCOMPLISHMENTS

    The Office of Science has proven its ability to deliver results 
over the past 50 years. That legacy includes 70 Office of Science 
sponsored Nobel Laureates since 1954. Our science has spawned entire 
new industries, including nuclear medicine technologies that save 
thousands of lives each year, and the nuclear power industry that now 
contributes 20 percent of the power to our Nation's electricity grid. 
It has also changed the way we see the universe and ourselves; for 
example--by identifying the ubiquitous and mysterious ``dark energy'' 
that is accelerating the expansion of the universe and by sequencing 
the human genome. The Office of Science has taken the lead on new 
research challenges, such as bringing the power of terascale computing 
to scientific discovery and industrial competitiveness. The Nation's 
investment in SC's basic research programs continues to pay dividends 
to the American taxpayer. Some of the past year's highlights include:
  --Promoting Science Literacy and Fostering the Next Generation of DOE 
        Scientists.--In fiscal year 2004, DOE launched a seven-part 
        program named STARS: Scientists Teaching and Reaching Students. 
        This program is designed to enhance the training of America's 
        mathematics and science teachers; boost student achievement in 
        science and math, especially in the critical middle school 
        years; and draw attention to the women and men who have done 
        DOE science so very well--and thereby encourage young people 
        and prospective teachers to pursue careers in math and science. 
        STARS is a critical step in leveraging the resources of DOE--
        and of all our national laboratories--to help create a new 
        generation of scientists who will achieve the scientific 
        breakthroughs and technological advances so essential to our 
        future security and prosperity.
  --Nobel Prize in Physics.--The 2004 Nobel Prize in physics was 
        awarded to David J. Gross (Kavli Institute, UC Santa Barbara), 
        H. David Politzer (Caltech), and Frank Wilczek (MIT) for their 
        discovery of ``asymptotic freedom'' in the strong force. What 
        they discovered was a surprising fact: as fundamental particles 
        get closer to each other, the strong force between them grows 
        weaker, and the further apart they are, the stronger it is, 
        like stretching a rubber band. This discovery is a key 
        component of the very successful Standard Model of particle 
        physics, which describes three of the four fundamental forces 
        of nature: electromagnetic, weak, and strong. Physicists dream 
        of extending the theory to include the fourth fundamental 
        force, gravity. The Office of Science has supported the 
        research of Wilczek since the 1980's at Princeton and the 
        Massachusetts Institute of Technology (MIT) and has supported 
        Politzer at Caltech from the 1970's.
  --Nobel Prize in Physics.--The 2003 Nobel Prize for Physics was 
        shared by Argonne National Laboratory (ANL) researcher Alexei 
        A. Abrikosov for his pioneering contributions to the theory of 
        superconductors. The Office of Science has long supported 
        Abrikosov's work on the mechanisms of high temperature 
        superconductivity. Amongst the myriad applications of 
        superconducting materials are the magnets used for magnetic 
        resonance imaging, or MRI, and potential applications in high 
        efficiency electricity transmission and high-speed trains.
  --New Physics Emerges From Quark-Gluon Plasma.--In 2004, the 
        Relativistic Heavy Ion Collider (RHIC) at the Brookhaven 
        National Laboratory (BNL) delivered gold beams at twice the 
        accelerator design limits and greatly exceeded the expectations 
        of the 1,000+ international physicists working on the four 
        experiments at RHIC. The goal of RHIC is to recreate the 
        predicted quark-gluon plasma, an extremely dense state of 
        matter thought to have last existed microseconds after the Big 
        Bang. RHIC data have revealed evidence of a quark-gluon state 
        of matter at high density and temperature, exhibiting the 
        properties of a highly correlated liquid--something new and 
        unexpected--as well as indications of a dense, weakly 
        interacting gluonic matter that has been called a ``Color Glass 
        Condensate''--again something new.
  --Wide Acceptance of Open-Source, High-End Cluster Software by 
        Industry and Users.--The Oak Ridge National Laboratory (ORNL) 
        Open Source Cluster Application Resources (OSCAR) computing 
        software for high-end computing continues to expand its 
        capability and to increase its user base. The software has been 
        downloaded by more than 130,000 groups around the world and is 
        promoted by vendors such as Dell and Intel. The adoption of 
        this system has expanded the number of software packages 
        available to the cluster community, and continues to reduce 
        cluster total cost of ownership. It has simplified the job of 
        software authors, system administrators, and ultimately the 
        application user by providing a timely and much simpler method 
        of supplying and applying software updates. The Scientific 
        Discovery through Advanced Computing (SciDAC) Scalable Systems 
        Software Integrated Software Infrastructure Center leverages 
        OSCAR technology to simplify deployment for the end-user as 
        well as application developers.
  --Advances in Fusion Energy Sciences Contribute to ITER.--Efficient 
        burning of the fusion's plasma fuel, a mixture of hydrogen 
        isotopes, requires stably confining the plasma at temperatures 
        of 50-100 million degrees, comparable to those found on the 
        Sun, with magnetic fields designed to hold the plasma in place. 
        Recent application of diagnostics that can measure the magnetic 
        fields deep inside this highly energetic plasma with great 
        precision and advanced computer codes that can model the 
        detailed behavior of the plasma has given scientists 
        unprecedented control over the behavior of the plasma. 
        Experiments on the DIII-D tokamak have led the way in 
        prototyping future experiments on ITER. Scientists are now able 
        to use feedback control systems to confidently operate the 
        plasma at pressures which optimize the fusion power output 
        within a given magnetic field. In addition, experiments and the 
        use of massively parallel computing to benchmark models that 
        validate a whole new theoretical understanding of how plasmas 
        can be insulated from loss of particles and energy give 
        confidence that ITER can achieve the needed gain of 10 (50 
        Megawatts of heating, 500 Megawatts of fusion power production) 
        required to enter the burning plasma regime.
  --Using DOE Technology and Know-how to Bring Sight to the Blind.--
        DOE's artificial retina project is a model for success in an 
        era when the boundaries of scientific disciplines, public and 
        private sector roles in science, and Federal agency 
        responsibilities are increasingly blurred. Success has come 
        through the strength of partnerships between scientists in the 
        public and private sectors, spanning scientific disciplines 
        from materials to medicine to engineering to surgery, and with 
        funds from both DOE and the National Institutes of Health 
        (NIH). In June 2004, the project reached a major milestone as a 
        sixth blind patient was successfully implanted with an 
        artificial retina device. One patient has had the device since 
        February 2002. All six patients can now read large letters (2-
        foot large letters 1 foot away) as well as tell the difference 
        between a paper cup, a plate, and a plastic knife. The patients 
        can also see colors although learning and understanding this 
        process is still a challenge for both patients and scientists. 
        Patients will soon begin using their retinal implants outside 
        the laboratory and will even be able to use them alone at home. 
        These initial patient studies are a key part of a Food and Drug 
        Administration Investigational Device Exemption trial.
  --Record Operations Advance Physics at the Frontier.--Both the Fermi 
        National Accelerator Laboratory (Fermilab) and the Stanford 
        Linear Accelerator Center (SLAC) set significant new records in 
        data delivery (``luminosity'') in 2004, with the accelerators 
        at each of these centers more than doubling their outstanding 
        performance levels from 2003. On Friday, July 16, the Tevatron 
        proton-antiproton collider at Fermilab set a new luminosity 
        record of 110\32\ cm-\2\ sec-\1\. The 
        use of the Recycler and Accumulator together to maximize the 
        number of antiprotons available for collisions helped to set 
        the new record. Since January 2004, the peak luminosity of the 
        Tevatron has increased 100 percent. The fiscal year 2004 PEP-
        II/Babar run at SLAC ended as scheduled on July 31, setting new 
        performance records. Since the SLAC facility for B meson 
        research began operations in 1999, its accumulated total number 
        of electron-positron collisions (integrated luminosity) has 
        steadily increased to a level about five times higher than the 
        design performance.

                   PROGRAM OBJECTIVES AND PERFORMANCE

    Underpinning all of SC's programs is a fundamental quest for 
knowledge. Our program history provides a compelling story of how this 
knowledge has already shaped the world around us, and the future 
appears even more promising.
    DOE's Strategic Plan identifies four strategic goals (one each for 
defense, energy, science, and the environment) and seven subordinate 
general goals. The Office of Science supports the Science Goals. 
Detailing Office of Science contributions to DOE's Science goals are 27 
annual performance goals. Progress toward the annual goals is tracked 
quarterly through the Department's Joule system and reported to the 
public annually through the Department's Performance and Accountability 
Report (PAR).
    The one Office of Science annual performance goal that was not met 
in fiscal year 2004 was: ``Focus usage of the primary supercomputer at 
the NERSC on capability computing. 50 percent of the computing time 
used will be accounted for by computations that require at least one-
eighth of the total resource.'' The allocation process for NERSC 
resources is based on the potential scientific impact of the work, 
rather than on how well the work scales to large numbers of processors. 
When we proposed this measure we did not understand the extent to which 
users who run large jobs also run small jobs. It is critical for users 
to be able to run their software at both scales on the same computer 
because it significantly simplifies their software management. 
Therefore we are reducing the percentage of time dedicated to large 
jobs at NERSC to 40 percent. In addition, we have tasked the NERSC 
Users Group to develop science-based measures to better assess NERSC 
performance.
    As a basic research program, the meaning and impact of our 
performance goals may not always be clear to those outside the research 
community. The Office of Science has created a website (www.sc.doe.gov/
measures) to better communicate what we are measuring and why it is 
important. We are committed to improving our performance information 
and will soon be expanding the information included on the website and 
simplifying the interface so that the program objectives and results 
will be accessible to a wide audience.

                              ORGANIZATION

    The OneSC Project was initiated to streamline the Office of Science 
structure and improve operations across the Office of Science complex 
in keeping with the principles of the President's Management Agenda. 
The first phase of this multiphase effort is now complete and we have 
realigned the Office of Science organization structure to establish a 
clear set of integrated roles and responsibilities for all Headquarters 
(HQ) and Field elements (Figure 2). Policy direction, scientific 
program development and management functions were defined as HQ 
responsibilities. Program execution, implementation, and support 
functions were defined as Field responsibilities. The major structural 
change implemented is the removal of a layer of management from the 
Office of Science Field structure, in effect removing the layer that 
existed between the Office of Science Director and the Site Office 
Managers located at Office of Science laboratories. In addition, the 
Chicago Office will now serve as the personnel office for Office of 
Science employees in HQ. The second phase of the OneSC initiative will 
entail a reengineering of our business processes and is in the 
preliminary stages of development.

                                FIGURE 2



                            SCIENCE PROGRAMS
                         BASIC ENERGY SCIENCES

Fiscal Year 2005 Comparable Appropriation--$1,104.6 Million; Fiscal 
        Year 2006 Request--$1,146.0 Million
    The Basic Energy Sciences (BES) program advances nanoscale science 
through atomic- and molecular-level studies in materials sciences and 
engineering, chemistry, geosciences, and energy biosciences. BES also 
provides the Nation's researchers with world-class research facilities, 
including reactor- and accelerator-based neutron sources, light sources 
soon to include the X-ray free electron laser, nanoscale science 
research centers, and micro-characterization centers. These facilities 
provide outstanding capabilities for imaging and characterizing 
materials of all kinds from metals, alloys, and ceramics to fragile 
biological samples. The next steps in the characterization and the 
ultimate control of materials properties and chemical reactivity are to 
improve spatial resolution of imaging techniques; to enable a wide 
variety of samples, sample sizes, and sample environments to be used in 
imaging experiments; and to make measurements on very short time 
scales, comparable to the time of a chemical reaction or the formation 
of a chemical bond. With these tools, we will be able to understand how 
the composition of materials affects their properties, to watch 
proteins fold, to see chemical reactions, and to understand and observe 
the nature of the chemical bond. Theory, modeling, and computer 
simulations will also play a major role in achieving these outcomes and 
will be a companion to experimental work. Also supported is basic 
research aimed at advancing hydrogen production, storage, and use for 
the coming hydrogen economy.
    Fiscal year 2006 will mark the completion of construction and the 
initial operation of the Spallation Neutron Source (SNS). The SNS will 
be significantly more powerful (by about a factor of 10) than the best 
spallation neutron source now in existence--ISIS at the Rutherford 
Laboratory in England. We estimate the facility will be used by 1,000-
2,000 scientists and engineers annually from academia, national and 
Federal labs, and industry for basic and applied research and for 
technology development. The high neutron flux (i.e., high neutron 
intensity) from the SNS will enable broad classes of experiments that 
cannot be done with today's low flux sources. For example, high flux 
enables studies of small samples, complex molecules and structures, 
time-dependent phenomena, and very weak interactions. The fiscal year 
2006 budget authority request completes funding for the SNS Project. 
This will involve procurement and installation of equipment for 
instrument systems, completion of an accelerator readiness review, 
commissioning of ring and target systems, and meeting all requirements 
to begin operations; and all SNS facilities will be turned over to 
operations. The estimated Total Project Cost remains constant at 
$1,411,700,000.
    Operations will begin in fiscal year 2006 at four of the five 
NSRCs: the Center for Nanophase Materials at ORNL, the Molecular 
Foundry at Lawrence Berkeley National Laboratory (LBNL), the Center for 
Integrated Nanotechnologies at Sandia National Laboratories/Los Alamos 
National Laboratory (SNL/LANL), and the Center for Nanoscale Materials 
at ANL. The exception is the Center for Functional Nanomaterials at 
BNL, which is scheduled to begin operations in fiscal year 2008. The 
NSRC's are user facilities for the synthesis, processing, fabrication, 
and analysis of materials at the nanoscale. They are designed to 
promote rapid advances in the various areas of nanoscale science and 
technology and are part of the DOE contribution to the National 
Nanotechnology Initiative. The NSRC's are sited adjacent to or near 
existing BES synchrotron or neutron scattering facilities to enable 
rapid characterization of newly fabricated materials. Fiscal year 2006 
funds are requested for construction of NSRC's located at LBNL, at SNL/
LANL, and at BNL. Funds are also requested to complete the Major Item 
of Equipment (MIE) for the NSRC at ANL.
    The Linac Coherent Light Source (LCLS) will continue Project 
Engineering Design (PED) and fiscal year 2006 budget authority is 
requested to initiate physical construction of the LCLS conventional 
facilities. Funding will be provided separately for preconceptual 
design of instruments for the facility. BES funding will also be 
provided to partially support, in conjunction with the High Energy 
Physics program, operation of the SLAC linac. This will mark the 
beginning of the transition to LCLS operations at SLAC. The LCLS 
project will provide the world's first demonstration of an X-ray free-
electron-laser (FEL) in the 1.5-15A (angstrom) range, 10 billion times 
greater in peak power and peak brightness than any existing coherent X-
ray light source, and that has pulse lengths measured in femtoseconds, 
the timescale of electronic and atomic motions. The advance in 
brightness is similar to that of a synchrotron over a 1960's laboratory 
X-ray tube. Synchrotrons have revolutionized science across disciplines 
ranging from atomic physics to structural biology. Advances from the 
LCLS are expected to be even more dramatic. The LCLS project leverages 
capital investments in the existing SLAC linac as well as technologies 
developed for linear colliders and for the production of intense 
electron beams with radio-frequency photocathode guns. The availability 
of the SLAC linac for the LCLS project creates a unique opportunity for 
demonstration and use of X-ray FEL radiation. The estimated Total 
Project Cost is $379,000,000.
    The fiscal year 2006 budget supports a Major Item of Equipment 
(MIE) for the Transmission Electron Aberration-corrected Microscope 
(TEAM). The Total Project Cost is in the range of $25,000,000 to 
$30,000,000. The TEAM project will construct and operate a new 
aberration-corrected electron microscope for materials and nanoscience 
research. The projected improvement in spatial resolution, contrast, 
sensitivity, and flexibility of design of electron optical instruments 
will provide unprecedented opportunities to observe directly the 
atomic-scale order, electronic structure, and dynamics of individual 
nanoscale structures.
    Research to realize the potential of a hydrogen economy will be 
increased from $29,183,000 to $32,500,000. This research program is 
based on the BES workshop report Basic Research Needs for the Hydrogen 
Economy. The 2003 report highlights the enormous gap between our 
present capabilities for hydrogen production, storage, and use and 
those required for a competitive hydrogen economy. To be economically 
competitive with the present fossil fuel economy, the cost of fuel 
cells must be lowered by a factor of five and the cost of producing 
hydrogen must be lowered by a factor of four. Moreover, the performance 
and reliability of hydrogen technology for transportation and other 
uses must be improved dramatically. Simple incremental advances in the 
present state-of-the-art cannot bridge this gap. Narrowing the gap 
significantly is the goal of a comprehensive, long-range program of 
innovative high-risk/high-payoff basic research that is intimately 
coupled to and coordinated with the DOE's applied programs.
    In order to accomplish these very high-priority, forefront 
activities, some difficult choices had to be made. In particular, the 
BES support for the Radiochemical Engineering and Development Center at 
ORNL will be terminated. The operations budgets of the remaining 
facilities will be at about the same level as in fiscal year 2005, 
decreasing available beam time and service for users. Core funding for 
university and national laboratory researchers decreases 7.8 percent 
compared to the fiscal year 2005 appropriation. While no research 
activities will be terminated, there will be reductions throughout.

                 ADVANCED SCIENTIFIC COMPUTING RESEARCH

Fiscal Year 2005 Comparable Appropriation--$232.5 Million; Fiscal Year 
        2006 Request--$207.1 Million
    The Advanced Scientific Computing Research (ASCR) program 
significantly advances scientific simulation and computation, applying 
new approaches, algorithms, and software and hardware combinations to 
address the critical science challenges of the future. ASCR also 
provides access to world-class scientific computation and networking 
facilities to the Nation's scientific community to support advancements 
in practically every field of science. ASCR will continue to advance 
the transformation of scientific simulation and computation into the 
third pillar of scientific discovery, enabling scientists to look 
inside an atom or across a galaxy; and inside a chemical reaction that 
takes a millionth of a billionth of a second or across a climate change 
process that lasts for a thousand years. In addition, ASCR will shrink 
the distance between scientists and the resources--experiments, data, 
and other scientists--they need, and accelerate scientific discovery by 
making interactions that used to take months happen on a much shorter 
timescale.
    The Mathematical, Information, and Computational Sciences (MICS) 
effort is responsible for carrying out the primary mission of the ASCR 
program. In addition, MICS research underpins the success of SciDAC. 
MICS supports both basic research and the development of the results 
from this basic research into software usable by scientists in other 
disciplines. MICS also supports partnerships with scientific discipline 
users to test the usefulness of the research--facilitating the transfer 
of research and helping to define promising areas for future research. 
This integrated approach is critical for MICS to succeed in providing 
the extraordinary computational and communications tools that DOE's 
civilian programs need to carry out their missions.
    Major elements of the ASCR portfolio related to the SciDAC will be 
re-competed in fiscal year 2006, with attention paid to support for the 
long term maintenance and support of software tools such as 
mathematical libraries, adaptive mesh refinement software, and 
scientific data management tools developed in the first 5 years of the 
effort. In addition, in fiscal year 2006 ASCR is changing the way in 
which it manages its Genomics: GTL partnership with the Biological and 
Environmental Research program. The management of these efforts will be 
integrated into the portfolio of successful SciDAC partnerships. The 
fiscal year 2006 budget request includes $7,500,000 for continued 
support of the Genomics: GTL research program. The fiscal year 2006 
budget request also includes $2,600,000 for the Nanoscale Science, 
Engineering and Technology initiative led by BES, and $1,350,000 for 
support of the Fusion Simulation Project, led by the Fusion Energy 
Sciences program. ASCR's contributions to these partnerships will 
consist of advancing the mathematics and developing new mathematical 
algorithms to simulate biological systems and physical systems at the 
nanoscale. The fiscal year 2006 budget request also provides $8,000,000 
to initiate a small number of competitively selected SciDAC institutes 
at universities which can become centers of excellence in high end 
computational science in areas that are critical to DOE missions.
    The fiscal year 2006 budget also includes $8,500,000 to continue 
the ``Atomic to Macroscopic Mathematics'' (AMM) research support in 
applied mathematics needed to break through the current barriers in our 
understanding of complex physics processes that occur on a wide range 
of interacting length- and timescales. Achieving this basic 
mathematical understanding will provide enabling technology to 
virtually every challenging computational problem faced by SC.
    The National Leadership Computing Facility acquired under the Next 
Generation Architecture (NGA) Leadership Class Computing Competition in 
fiscal year 2004 will be operated to provide high performance 
production capability to selected Office of Science researchers. The 
NGA effort will play a critical role in enabling Leadership Class 
Machines that could lead to solutions for scientific problems beyond 
what would be attainable through a continued simple extrapolation of 
current computational capabilities. NGA will continue its focus on 
research in operating systems and systems software and will initiate a 
new competition for Research and Evaluation Prototype Computer 
testbeds. ASCR research efforts in Collaboratory Tools and Pilots and 
Networking will be restructured into an integrated Distributed Network 
Environment activity focused on basic research in computer networks and 
the middleware needed to make these networks tools for science. This 
change will enable the reduced NGA effort to operate computers acquired 
in fiscal year 2004 and fiscal year 2005 at the ORNL Center for 
Computational Sciences (CCS) as tools for science and especially to 
satisfy the demand for resources that has resulted from the successful 
SciDAC efforts.

                 BIOLOGICAL AND ENVIRONMENTAL RESEARCH

Fiscal Year 2005 Comparable Appropriation--$581.9 Million; Fiscal Year 
        2006 Request--$455.7 Million
    The Biological and Environmental Research (BER) program advances 
energy-related biological and environmental research in genomics and 
our understanding of complete biological systems, such as microbes that 
produce hydrogen; develops models to predict climate over decades to 
centuries; develops science-based methods for cleaning up environmental 
contaminants; provides regulators with a stronger scientific basis for 
developing future radiation protection standards; and develops new 
diagnostic and therapeutic tools, technology for disease diagnosis and 
treatment, non-invasive medical imaging, and biomedical engineering 
such as an artificial retina that is restoring sight to the blind.
    The fiscal year 2006 budget includes funds for the continued 
expansion of the Genomics: GTL program--a program at the forefront of 
the biological revolution. This program employs a systems approach to 
biology at the interface of the biological, physical, and computational 
sciences to address DOE's energy, environment, and national security 
mission needs. This research will continue to more fully characterize 
the inventory of multi-protein molecular machines found in selected 
DOE-relevant microbes and higher organisms. It will determine the 
diverse biochemical capabilities of microbes and microbial communities, 
especially as they relate to potential biological solutions to DOE 
needs, found in populations of microbes isolated from DOE-relevant 
sites. Support for Microbial Genomics research as a separate research 
activity is terminated to consolidate all microbial research within 
Genomics: GTL. Support of structural biology, human genome, and health 
effects research is also reduced to support GTL research. GTL research 
will provide the scientific community with knowledge, resources, and 
tools that benefit large numbers of research projects with positive 
impacts on more scientists and students than are negatively impacted by 
the initial reduction.
    In 2003, the administration launched the Climate Change Research 
Initiative (CCRI) to focus research on areas where substantial progress 
in understanding and predicting climate change, including its causes 
and consequences, is possible over the next 5 years. In fiscal year 
2006, BER will contribute to the CCRI from four programs: Terrestrial 
Carbon Processes, Climate Change Prediction, Atmospheric Radiation 
Measurement (ARM), and Integrated Assessment. Activities will be 
focused on (1) helping to resolve the magnitude and location of the 
North American carbon sink; (2) deploying and operating of a mobile ARM 
Cloud and Radiation Testbed facility to provide data on the effects of 
clouds and aerosols on the atmospheric radiation budget in regions and 
locations of opportunity where data are lacking or sparse; (3) using 
advanced climate models to simulate potential effects of natural and 
human-induced climate forcing on global and regional climate and the 
potential effects on climate of alternative options for mitigating 
increases in human forcing of climate; and (4) developing and 
evaluating assessment tools needed to study costs and benefits of 
potential strategies for reducing net carbon dioxide emissions.
    The completion of the International Human Genome Project and the 
transition of BER's Human Genome research program from a human DNA 
sequencing program to a DNA sequencing user resource for the scientific 
community which focuses on the sequencing of scientifically important 
microbes, plants, and animals will bring BER's Human Genome Ethical, 
Legal, and Societal Issues (ELSI) program to an end. In fiscal year 
2006, ELSI research will include activities applicable to Office of 
Science issues in biotechnology and nanotechnology such as 
environmental or human health concerns associated with Genomics: GTL or 
nanotechnology research. Research with these funds will be coordinated 
across the Office of Science.
    BER will focus fiscal year 2006 research activities on higher 
priorities, including GTL and Climate Change Research, in support of 
DOE goals and objectives. Funding reductions are initiated in the 
Environmental Remediation Research subprogram and the Medical 
Applications and Measurement Science Research subprogram. Accordingly, 
some current research activities will be phased out in fiscal year 
2005. Based on findings of the BER Committee of Visitors for the 
Environmental Remediation Research subprogram, research activities are 
integrated into a single program to increase the efficiency of the 
activities and to better address the BER long term goals in 
environmental remediation research.

                          HIGH ENERGY PHYSICS

Fiscal Year 2005 Comparable Appropriation--$736.4 Million; Fiscal Year 
        2006 Request--$713.9 Million
    The High Energy Physics (HEP) program provides over 90 percent of 
the Federal support for the Nation's high energy physics research. This 
research advances our understanding of dark energy and dark matter, the 
lack of symmetry in the current universe, the basic constituents of 
matter, and the possible existence of other dimensions, collectively 
revealing key secrets of the universe. HEP expands the energy frontier 
with particle accelerators to study fundamental interactions at the 
highest possible energies, which may reveal new particles, new forces, 
or undiscovered dimensions of space and time; explain the origin of 
mass; and illuminate the pathway to the underlying simplicity of the 
universe. At the same time, the HEP program sheds new light on other 
mysteries of the cosmos, uncovering what holds galaxies together and 
what is pushing the universe apart; understanding why there is any 
matter in the universe at all; and exposing how the tiniest 
constituents of the universe may have the largest role in shaping its 
birth, growth, and ultimate fate.
    The HEP program in fiscal year 2006 will continue to lead the world 
with forefront user facilities producing data that help answer key 
scientific questions, but these facilities will complete their 
scientific missions by the end of the decade. Thus, we have structured 
the fiscal year 2006 HEP program not only to maximize the scientific 
returns on our investment in these facilities, but also to invest in 
R&D now for the most promising new facilities that will come online in 
the next decade. This has required a prioritization of our current R&D 
efforts to select those which will provide the most compelling science 
within the available resources. In making these decisions we have 
seriously considered the recommendations of the High Energy Physics 
Advisory Panel (HEPAP) and planning studies produced by the U.S. HEP 
community. This prioritization process will continue as the R&D 
programs evolve.
    Because of its broad relevance in addressing many of the long-term 
goals of HEP, and its unique potential for new discoveries, the highest 
priority is given to the planned operations, upgrades and 
infrastructure for the Tevatron program at Fermilab. This includes the 
completion of the upgrade to the Tevatron accelerator complex in 2007 
to provide increased luminosity and additional computational resources 
to support analysis of the anticipated larger volume of data. Over the 
last few years, the laboratory has developed and implemented a 
detailed, resource-loaded plan for Tevatron operations and 
improvements, which has resulted in more reliable luminosity 
projections. The Office of Science has reviewed the plan and is 
actively engaged in tracking its progress.
    The fiscal year 2006 request supports initial operations of the 
Neutrinos at the Main Injector (NuMI) project at Fermilab, which has 
just completed construction and will study the puzzling but fundamental 
physics of neutrino masses and mixings. The NuMI beam operates in 
parallel with the Tevatron, also at Fermilab, currently the highest 
energy accelerator in the world.
    In order to fully exploit the unique opportunity to expand our 
understanding of the asymmetry of matter and antimatter in the 
universe, a high priority is given to the operations, upgrades and 
infrastructure for the B-factory at SLAC. Support for B-factory will 
include an allowance for increased power costs and fully funded 
upgrades for the accelerator and detector which are currently scheduled 
for completion in 2006. This includes the completion of the upgrade to 
the accelerator complex and BaBar detector to provide more data; 
additional computational resources to support analysis of the larger 
volume of data; and, increased infrastructure spending to improve 
reliability. Funding for SLAC operations includes support from the BES 
program for the LCLS project, marking the beginning of the transition 
of Linac operations from HEP to BES as B-factory operations are 
terminated by fiscal year 2008 at the latest.
    As the Large Hadron Collider (LHC) accelerator in Europe nears its 
turn-on date of 2007, U.S. activities related to fabrication of 
detector components will be completed and new activities related to 
commissioning and pre-operations of these detectors, along with 
software and computing activities needed to analyze the data, will 
ramp-up significantly. Support of a leadership role for U.S. research 
groups in the LHC physics program will continue to be a high priority 
for the HEP program.
    In order to explore the nature of dark energy, pre-conceptual R&D 
for potential interagency sponsored experiments with NASA will continue 
in fiscal year 2006. These experiments will provide important new 
information about the nature of dark energy and dark matter that will 
in turn lead to a better understanding of the birth, evolution and 
ultimate fate of the universe. At this time, no funding for a space-
based DOE/NASA Joint Dark Energy Mission past the pre-conceptual stage 
has been identified.
    The engineering design of the BTeV (``B Physics at the Tevatron'') 
experiment, which was scheduled to begin in fiscal year 2005 as a new 
Major Item of Equipment, is cancelled. This is consistent with the 
guidance of HEPAP which rated BTeV as of lesser scientific potential 
than other projects, although still important scientifically and of the 
Particle Physics Project Prioritization Panel (P5) which supported BTeV 
but only if it could be completed by 2010, which is not feasible given 
schedule and funding constraints.
    The Linear Collider has been judged to be of the highest scientific 
importance by HEPAP as well as by scientific advisory bodies of the 
Asian and European HEP communities. In order to address the opportunity 
for significant new future research options, R&D in support of an 
international electron-positron linear collider is increased relative 
to fiscal year 2005 to support the continued international 
participation and leadership in linear collider R&D and planning by 
U.S. scientists.
    Recent discoveries and studies have pointed to neutrinos as being 
an extremely important area of research for deepening our understanding 
of the nature of matter and the structure of the universe, and HEP is 
working with the Nuclear Physics program and the National Science 
Foundation to plan a coordinated program in neutrino physics. To 
provide a nearer-term future program, and to preserve future research 
options, R&D for other new accelerator and detector technologies, 
particularly in the emerging area of neutrino physics, will increase.

                            NUCLEAR PHYSICS

Fiscal Year 2005 Comparable Appropriation--$404.8 Million; Fiscal Year 
        2006 Request--$370.7 Million
    The Nuclear Physics (NP) program is the major sponsor of 
fundamental nuclear physics research in the Nation, providing about 90 
percent of Federal support. NP builds and operates world-leading 
scientific facilities and state-of-the-art instrumentation to study the 
evolution and structure of nuclear matter, from the smallest building 
blocks, quarks and gluons, to the stable elements in the Universe 
created by stars and to understand how the quarks and gluons combine to 
form the nucleons (proton and neutron), what are the properties and 
behavior of nuclear matter under extreme conditions of temperature and 
pressure, and what are the properties and reaction rates for atomic 
nuclei up to their limits of stability. Results and insight from these 
studies are relevant to understanding how the universe evolved in its 
earliest moments, how the chemical elements were formed, and how the 
properties of one of nature's basic constituents, the neutrino, 
influences astrophysics phenomena such as supernovae. Scientific 
discoveries at the frontiers of nuclear physics further the Nation's 
energy related research capacity, in turn contributing to the Nation's 
security, economic growth and opportunities, and improved quality of 
life.
    In fiscal year 2006 the NP program will operate world-leading user 
facilities and make investments that will produce data and develop the 
research capabilities to achieve the scientific goals discussed above. 
The budget request reflects a balance in on-going facility operations 
and research support, and investments in capabilities. The fiscal year 
2006 budget request provides the resources to operate the program's 
user facilities at 65 percent of optimum utilization with investments 
allocated so as to optimize their scientific programs. Fiscal year 2006 
investments in capital equipment address opportunities identified in 
the 2002 Long Range Plan of the Nuclear Sciences Advisory Committee 
(NSAC) and in subsequent recommendations.
    In fiscal year 2006 the Relativistic Heavy Ion Collider's (RHIC) 
beams of relativistic heavy ions will be used by approximately 1,000 
scientists to continue the exploration of the nature of hot, dense 
matter and to recreate conditions under which nuclear matter dissolves 
into the predicted quark-gluon plasma. RHIC started operations in 
fiscal year 2000 and its first 3 runs have produced over 70 refereed 
journal papers, creating great interest in the scientific community 
with the observation of a new state of nuclear matter. In fiscal year 
2006 funds are provided for accelerator improvements that will increase 
accelerator reliability and reduce costs, for detector upgrades needed 
to characterize the new state of matter observed and for Research and 
Development to increase the luminosity of the collider. These 
investments are important for optimizing the scientific research and 
productivity of the facility. These investments are made at the expense 
of operating time. Fiscal year 2006 funding will support 1,400 hours of 
operations, a 31 percent utilization of the collider. Effective 
operation will be achieved by combining fiscal year 2006-fiscal year 
2007 running into a single back-to-back run bridging the 2 fiscal 
years.
    Operations of the Thomas Jefferson National Accelerator Facility 
(TJNAF) in fiscal year 2006 will continue to advance our knowledge of 
the internal structure of protons and neutrons, the basic constituents 
of all nuclear matter. By providing precision experimental information 
concerning the quarks and gluons that form the protons and neutrons, 
the approximately 1,000 experimental researchers, together with 
researchers in nuclear theory, seek to provide a quantitative 
description of nuclear matter in terms of the fundamental theory of the 
strong interaction, Quantum ChromoDynamics. In fiscal year 2006 funds 
are provided to continue R&D activities for a potential 12 GeV Upgrade 
of the Continuous Electron Beam Accelerator Facility (CEBAF). These 
investments will poise the facility for a cost-effective upgrade that 
would allow insight on the mechanism of ``quark confinement''--one of 
the compelling unanswered puzzles of physics.
    In the fiscal year 2006 request funds are provided for the 
operation of the Argonne Tandem Linac Accelerator System (ATLAS) at ANL 
and the Holifield Radioactive Ion Beam Facility (HRIBF) at ORNL, for 
studies of nuclear reactions, structure and fundamental interactions. 
Included in this funding are capital equipment and accelerator 
improvement project funds provided to each facility for the enhancement 
of the accelerator systems and experimental equipment. These low energy 
facilities will carry out about 80 experiments in fiscal year 2006 
involving about 300 U.S. and foreign researchers.
    In fiscal year 2006, funds are provided to continue the fabrication 
of a next generation gamma-ray detector array (GRETINA) and of the 
Fundamental Neutron Physics Beamline (FNPB) at the Spallation Neutron 
Source (SNS) that will provide the United States with world-leader 
capabilities in nuclear structure and fundamental neutron studies, 
respectively. Support continues for completion of the important 
neutrino experiments at the Sudbury Neutrino Observatory (SNO) and 
KamLAND.
    The research programs at the major user facilities are integrated 
partnerships between DOE scientific laboratories and the university 
community, and the planned experimental research activities are 
considered essential for scientific productivity of the facilities. 
Funding for university and national laboratory researchers and graduate 
students decreases 6.8 percent compared to the fiscal year 2005 
appropriation.
    While we have a relatively good understanding of the origin of the 
chemical elements in the cosmos lighter than iron, the production of 
the elements from iron to uranium remains a puzzle. The proposed Rare 
Isotope Accelerator (RIA) would enable study of exotic nuclei at the 
very limits of stability, advancing our knowledge of how the elements 
formed. In fiscal year 2006, R&D activities for the proposed RIA are 
maintained at the fiscal year 2005 Congressional budget request level.

                         FUSION ENERGY SCIENCES

Fiscal Year 2005 Comparable Appropriation--$273.9 Million; Fiscal Year 
        2006 Request--$290.6 Million
    The Fusion Energy Sciences (FES) program advances the theoretical 
and experimental understanding of plasma and fusion science, including 
a close collaboration with international partners in identifying and 
exploring plasma and fusion physics issues through specialized 
facilities. This includes: (1) exploring basic issues in plasma 
science; (2) developing the scientific basis and computational tools to 
predict the behavior of magnetically confined plasmas; (3) using the 
advances in tokamak research to enable the initiation of the burning 
plasma physics phase of the FES program; (4) exploring innovative 
confinement options that offer the potential of more attractive fusion 
energy sources in the long term; (5) focusing on the scientific issues 
of nonneutral plasma physics and High Energy Density Physics (HEDP); 
and (6) developing the cutting edge technologies that enable fusion 
facilities to achieve their scientific goals. FES also leads U.S. 
participation in ITER, an experiment to study and demonstrate the 
sustained burning of fusion fuel. This international collaboration will 
provide an unparalleled scientific research opportunity with a goal of 
demonstrating the scientific and technical feasibility of fusion power.
    The fiscal year 2006 request is $290,550,000, an increase of 
$16,647,000, 6.1 percent over the fiscal year 2005 appropriation. The 
fiscal year 2006 budget continues the redirection of the fusion program 
to prepare for and participate in the ITER project. The ITER 
International Agreement is currently being negotiated and is expected 
to be completed by the end of fiscal year 2005. Fiscal year 2006 FES 
funding of $49,500,000 is for the startup of the U.S. Contributions to 
ITER MIE. The total U.S. Contributions to the ITER MIE, $1,122,000,000, 
supports the fabrication of the equipment, provision of personnel, 
limited cash for the U.S. share of common project expenses at the ITER 
site, and ITER procurements. This MIE is augmented by the technical 
output from a significant portion of the U.S. Fusion Energy Sciences 
community research program. Virtually the entire FES program provides 
related contributions to such ITER relevant research and prepares the 
United States for effective participation in ITER when it starts 
operations.
    Within the overall priorities of the fiscal year 2006 FES budget, 
$15,900,000 is requested for the National Compact Stellarator 
Experiment (NCSX), a joint ORNL/Princeton Plasma Physics Laboratory 
(PPPL) advanced stellarator experiment being built at PPPL. This fusion 
confinement concept has the potential to be operated without plasma 
disruptions, leading to power plant designs that are simpler and more 
reliable than those based on the current lead concept, the tokamak. 
Fiscal year 2006 operation of the three major fusion research 
facilities will be reduced from a total of 48 weeks to 17 weeks.
    Fiscal year 2006 funding for the Inertial Fusion Energy/High Energy 
Density Physics program is $8,086,000, a reduction of $7,255,000 from 
the fiscal year 2005 level. This will be accomplished by reducing the 
level of research on heavy ion beams. In addition, the Materials 
Research program will be eliminated in favor of utilizing the general 
BES materials effort for scientific advances in areas of fusion 
interest.

                  SCIENCE LABORATORIES INFRASTRUCTURE

Fiscal Year 2005 Comparable Appropriation--$42.0 Million; Fiscal Year 
        2006 Request--$40.1 Million
    The mission of the Science Laboratories Infrastructure (SLI) 
program is to enable the conduct of DOE research missions at the Office 
of Science laboratories by funding line item construction projects to 
maintain the general purpose infrastructure and the clean up for reuse 
or removal of excess facilities. The program also supports Office of 
Science landlord responsibilities for the 24,000 acre Oak Ridge 
Reservation and provides Payments in Lieu of Taxes (PILT) to local 
communities around ANL-East, BNL, and ORNL.
    In fiscal year 2006, General Plant Projects (GPP) funding is 
requested to refurbish and rehabilitate the general purpose 
infrastructure necessary to perform cutting edge research throughout 
the Office of Science laboratory complex. Fiscal year 2006 funding of 
$3,000,000 is requested to support continued design of the Pacific 
Northwest National Laboratory (PNNL) Capabilities Replacement 
Laboratory project. Funding of $11,046,000 is requested to accelerate 
decontamination and decommissioning (D&D) of the Bevatron Complex at 
the LBNL.
    No funding is requested under the Health and Safety Improvements 
subprogram to continue health and safety improvements at the Office of 
Science laboratories identified in the Occupational Safety & Health 
Administration (OSHA) and Nuclear Regulatory Commission (NRC) reviews. 
If the administration determines that health and safety issues remain, 
resources will be requested in future years as necessary.

                       SCIENCE PROGRAM DIRECTION

Fiscal Year 2005 Comparable Appropriation--$153.7 Million; Fiscal Year 
        2006 Request--$162.7 Million
    Science Program Direction (SCPD) enables a skilled, highly 
motivated Federal workforce to manage the Office of Science's basic and 
applied research portfolio, programs, projects, and facilities in 
support of new and improved energy, environmental, and health 
technologies. SCPD consists of two subprograms: Program Direction and 
Field Operations.
    The Program Direction subprogram is the single funding source for 
the Office of Science Federal staff in headquarters responsible for 
managing, directing, administering, and supporting the broad spectrum 
of Office of Science disciplines. This subprogram includes planning and 
analysis activities, providing the capabilities needed to plan, 
evaluate, and communicate the scientific excellence, relevance, and 
performance of the Office of Science basic research programs. 
Additionally, Program Direction includes funding for the Office of 
Scientific and Technical Information (OSTI) which collects, preserves, 
and disseminates research and development (R&D) information of the 
Department of Energy (DOE) for use by DOE, the scientific community, 
academia, U.S. industry, and the public to expand the knowledge base of 
science and technology. The Field Operations subprogram is the funding 
source for the Federal workforce in the Field responsible for 
management and administrative functions performed within the Chicago 
and Oak Ridge Operations Offices, and site offices supporting the 
Office of Science laboratories and facilities.

           WORKFORCE DEVELOPMENT FOR TEACHERS AND SCIENTISTS

Fiscal Year 2005 Comparable Appropriation--$7.6 Million; Fiscal Year 
        2006 Request--$7.2 Million
    The mission of the Workforce Development for Teachers and 
Scientists (WDTS) program is to provide a continuum of educational 
opportunities to the Nation's students and teachers of science, 
technology, engineering, and mathematics (STEM).
    The Scientists Teaching and Reaching Students (STARS) education 
initiative was launched in fiscal year 2004 to promote science literacy 
and help develop the next generation of scientists and engineers. In 
support of this effort, additional fiscal year 2006 funding is 
requested for both the Laboratory Science Teacher Professional 
Development (LSTPD) activity and the Middle School Science Bowl. The 
LSTPD activity is a 3-year commitment experience for K-14 teachers and 
faculty. The LSTPD will run at five or more DOE national laboratories 
with about 105 participating STEM teachers, in response to the national 
need for science teachers who have strong content knowledge in the 
classes they teach.
    The Faculty Sabbatical activity, which is being initiated in fiscal 
year 2005 for 12 faculty members from Minority Serving Institutions 
(MSI), will have five positions available in fiscal year 2006. The 
Faculty Sabbatical is aimed at providing sabbatical opportunities to 
faculty members from MSIs to facilitate the entry of their faculty into 
the research funding mainstream. This activity is an extension of the 
successful Faculty and Student Teams (FaST) program where teams 
consisting of a faculty member and two or three undergraduate students 
from colleges and universities with limited prior research capabilities 
work with mentor scientists at a national laboratory on a research 
project that is formally documented in a paper or presentation.
    In the fiscal year 2006 request, the Pre-Service Teachers (PST) 
activity will be run at one national laboratory, as opposed to twelve 
national laboratories in fiscal year 2005, and students will be 
recruited from participating National Science Foundation (NSF) 
programs.

                        SAFEGUARDS AND SECURITY

Fiscal Year 2005 Comparable Appropriation--$67.2 Million; Fiscal Year 
        2006 Request--$68.7 Million
    The Safeguards and Security (S&S) program ensures appropriate 
levels of protection against unauthorized access, theft, diversion, 
loss of custody, or destruction of DOE assets and hostile acts that may 
cause adverse impacts on fundamental science, national security or the 
health and safety of DOE and contractor employees, the public or the 
environment. The SC's Integrated Safeguards and Security Management 
strategy encompasses a tailored approach to safeguards and security. As 
such, each site has a specific protection program that is analyzed and 
defined in its individual Security Plan. This approach allows each site 
to design varying degrees of protection commensurate with the risks and 
consequences described in their site-specific threat scenarios.
    The fiscal year 2006 request meets minimum, essential security 
requirements. Protection of employees and visitors is of primary 
concern, as well as protection of special nuclear material and research 
facilities, equipment and data. Priority attention is given to 
protective forces, physical security systems, and cyber security.

                               CONCLUSION

    The Office of Science occupies a unique and critical role within 
the U.S. scientific enterprise. We fund research projects in key areas 
of science that our Nation depends upon. We construct and operate major 
scientific user facilities that scientists from virtually every 
discipline are using on a daily basis, and we manage civilian national 
laboratories that are home to some of the best scientific minds in the 
world.
    Mr. Chairman, we have made some difficult decisions this year 
within the President's budget request for the Office of Science--
consistent with our research priorities--which will allow us to build 
on the solid foundation created over the last 4 years, propel us into 
new areas of great scientific promise, and maintain America's world-
class stature in science.
    I want to thank you, Mr. Chairman, for providing this opportunity 
to discuss the Office of Science research programs and our 
contributions to the Nation's scientific enterprise. On behalf of DOE, 
I am pleased to present this fiscal year 2006 budget request for the 
Office of Science.
    This concludes my testimony. I would be pleased to answer any 
questions you might have.

    Senator Domenici. Thank you very much. Director of the 
Office of Nuclear Energy, Science and Technology, it's good to 
have you with us again, would you please give us your 
testimony?

            Office of Nuclear Energy, Science and Technology

STATEMENT OF WILLIAM D. MAGWOOD, IV, DIRECTOR
    Mr. Magwood. It's a pleasure. It's a pleasure, Mr. 
Chairman, I was trying to count the number of times I've 
appeared before you. I think this is the seventh. Mr. Garman, I 
believe, holds the record in the Department for the number of 
hearings overall, but I think I may beat him in terms of 
Appropriations Hearings.
    It's a great pleasure to be here to talk about our fiscal 
year 2006 budget request. The Office of Nuclear Energy's 
request for 2006 totals $511 million, and it's a budget we 
believe will enable us to proceed to accomplish our mission of 
developing and deploying advanced energy technologies in the 
United States.

                    NUCLEAR ENERGY RESEARCH PROGRAM

    In fiscal year 1998--as I'm sure you recall, Mr. Chairman--
the Nation's Nuclear Energy Research Program came to a virtual 
standstill. In that year, our energy R&D budget in the Office 
of Nuclear Energy hit zero, and it was a year where the 
students who were taking nuclear engineering fell to a number 
that was below 500 for the first time. It was also a year that 
the international community began to turn away from the United 
States as a leader in nuclear technology.
    Since that time, with the great help of this subcommittee 
and your colleagues in the House, we've been able to turn that 
situation around considerably. We've invested a lot of effort 
into turning the program around, and I think the results speak 
for themselves.
    An important indicator is to look at the University 
community. Since 1998, when there were 480 students taking 
nuclear engineering in the United States, we're now seeing the 
number recovering to almost 1,600.
    Senator Domenici. From which?
    Mr. Magwood. It went from 480 in 1998, to almost 1,600 now. 
So, we feel quite good about that. And that's due to the strong 
programs in the schools, such as Ohio State, Purdue, Texas A&M 
and many others across the country, but also new programs at 
small schools, such as South Carolina State University, and 
Wilberforce University. We're very pleased with our progress to 
date, and we think there's more to be done.
    One thing, Mr. Chairman, that we'd like to alert you to is 
that we are, in fact, expanding our efforts to the high school 
level. Starting in 2 weeks, juniors and seniors from seven 
Pittsburgh high schools will begin a new nuclear science and 
technology curriculum that was developed by DOE and high school 
science teachers. These students will tour research reactors, 
participate in experiments, and receive lectures from national 
laboratory scientists. Once this pilot is complete, we plan to 
make this course available to high schools across the country, 
and we're very excited by that.
    Senator Domenici. Would you please hold for a minute? I 
think the Senator from Colorado has to leave, but he wanted to 
ask a question.

               PREPARED STATEMENT OF SENATOR WAYNE ALLARD

    Senator Allard. I do, thank you, Mr. Chairman. I just want 
to submit my statement for the record, if I may. I just want to 
congratulate you on your commitment to new science and 
technology in the energy field. I know you're a strong 
proponent of nuclear energy, and I stand shoulder to shoulder 
with that. I'm a strong proponent of renewables, and working 
hard on many a legislation there, and I just thank you for your 
effort, and thank the panel for their testimony.
    [The statement follows:]

               Prepared Statement of Senator Wayne Allard

    Mr. Chairman, thank you for holding this hearing today. As you 
know, I am co-chairman of the Senate Renewable Energy & Energy 
Efficiency Caucus and represent the State which the National Renewable 
Energy Laboratory calls home. And, as a scientist myself, I have always 
been a strong supporter of research funding in all areas. For these 
reasons, I have a special interest in today's hearing.
    Today more attention is being focused on clean energy and energy 
efficient technologies. This is a time when the development of 
alternative energy sources and increased energy efficiency technology 
are becoming more important than ever.
    We must also continue to provide incentives for the implementation 
of renewable technologies, and for the infrastructure necessary to 
support these renewable sources. These technologies are a necessary 
step in balancing our domestic energy portfolio, increasing our 
Nation's energy security and advancing our country's technological 
excellence.
    The National Renewable Energy Laboratory in Colorado can, and does, 
make an incredible contribution to the development of these resources. 
Technologies being developed at NREL--whether providing alternative 
fuels and power, or making our homes and vehicles more energy 
efficient--are vital to our Nation's energy progress.
    This is a step in the right direction. Renewable energy is a very 
important way that we can begin to reduce the demand for oil and, 
thereby, help to make our country more secure. There are great 
opportunities for solar, wind, geothermal, biomass, fuel cells and 
hydro to make significant contributions. Research and the input of both 
government and industry entities is very important to allowing these 
opportunities to live up to their potential.
    I look forward to working with the committee to ensure that R&D in 
all fields of energy technology are funded in a manner that is 
responsible, but sufficient to ensure that the development and 
implementation of new technologies continues.

    Senator Domenici. Thank you very much. Mr. Magwood.
    Mr. Magwood. Thank you.
    We have also reasserted U.S. leadership in the 
international community. One of the examples I note is that, as 
a representative of the United States, I've been elected by my 
colleagues internationally to serve as the chair of two 
international bodies. The Organization for Economic Cooperation 
and Development (OACD) Steering Committee for Nuclear Energy, 
and The Generation IV International Forum. And I wanted to 
recognize Helen Leiser who is with me here today, back there 
somewhere, who is an official with the United Kingdom's 
Department of Trade and Industry who has spent the last 2 years 
detailed to the Department of Energy, to serve as a Generation 
IV International Forum policy director. She's leaving us at the 
end of this month with a record of success, and we appreciate 
her accomplishments.

              NEXT GENERATION NUCLEAR ENERGY TECHNOLOGIES

    Last month Secretary Bodman joined ambassadors and senior 
officials from France, the United Kingdom, Japan and Canada to 
sign the world's first multi-lateral agreement for the 
development of next generation nuclear energy technologies. As 
this Gen IV agreement, and other actions, demonstrate, the 
United States is once again setting the pace for international 
cooperation and partnership.

                     NUCLEAR POWER 2010 INITIATIVE

    At the same time, we're working with U.S. utilities toward 
exploring the construction of new U.S. nuclear power plants for 
the first time in many decades. The discussions we've been 
having with these utilities are the most detailed and serious 
I've ever seen, and I believe they will eventually lead to the 
first new nuclear power plants we've seen since the 1970's.
    Mr. Chairman, I have no doubt that our work on the Nuclear 
Power 2010 program contributed to these positive developments. 
For this effort, we've helped the industry organize itself to 
take the vital steps towards building the next plants. The 
subcommittee's support has been essential to this progress, and 
the administration's request of $56 million for fiscal year 
2006 will enable this effort to proceed on schedule.

                       IDAHO NATIONAL LABORATORY

    Finally, Mr. Chairman, I'd like to note that in February we 
also successfully launched the new Idaho National Laboratory. 
The development of this new laboratory is an essential step in 
furthering our nuclear energy research agenda. We now--like 
each of the programs represented here today--have a core 
laboratory that can serve as the command center for our 
program's key research efforts. We are committed to the success 
of this laboratory, and working with Beth Sellers--the manager 
of the Idaho Operations Office, who's joined me here today--we 
are working towards making sure the Department is a good 
partner to work with the lab to make sure its goal of becoming 
the world's premier nuclear energy resource center in 10 years 
can be achieved.

                           PREPARED STATEMENT

    I conclude my remarks, Mr. Chairman, by recognizing and 
thanking you for your long leadership in this endeavor, and as 
I say, I think we've been an effective team in reviving the 
Federal Government's nuclear energy technology efforts. While 
much remains to be done, we should remember that we've 
accomplished quite a bit over the last several years. Thank you 
very much.
    [The statement follows:]

              Prepared Statement of William D. Magwood, IV

    Mr. Chairman, Senator Reid, and members of the subcommittee, it is 
a pleasure to be here to discuss the Fiscal Year 2006 Budget submission 
for DOE's Office of Nuclear Energy, Science and Technology.
    In his February 2 State of the Union Address, the President 
underscored the need to restrain spending in order to sustain our 
economic prosperity. As part of this restraint, it is important that 
total discretionary and non-security spending be held to levels 
proposed in the Fiscal Year 2006 Budget. The budget savings and reforms 
in the budget are important components of achieving the President's 
goal of cutting the budget deficit in half by 2009 and we urge the 
Congress to support these reforms. The Fiscal Year 2006 Budget includes 
more than 150 reductions, reforms, and terminations in non-defense 
discretionary programs, of which six affect Department of Energy 
programs. The Department wants to work with the Congress to achieve 
these savings.
    Of these six programs, two programs are from the Office of Nuclear 
Energy, Science and Technology: the Nuclear Energy Plant Optimization 
(NEPO) and the Nuclear Energy Research Initiative (NERI) programs. 
Research conducted under the NEPO program is designed to assure the 
ability of currently operating nuclear power plants to remain in 
service up to and beyond their licensed operating period. No funding is 
requested for the NEPO program in fiscal year 2006 because industry is 
committed to continuing the research begun under NEPO without DOE 
support, allowing DOE to focus on higher priority activities. No stand-
alone funding is requested for the NERI program as the Department's 
principal nuclear energy research and development (R&D) programs 
(Generation IV Nuclear Energy Systems Initiative, Advanced Fuel Cycle 
Initiative, and Nuclear Hydrogen Initiative) will be sponsoring NERI 
research projects within the Nation's university research community to 
enhance the research cooperation between academia and our national 
laboratories and to strengthen our mainline R&D programs.
    For most of our Nation's history, America's vibrant economy and 
society have benefited from the abundant energy options we have had 
available. Even though we experienced oil price shocks in the 1970's 
and 1980's, the vast majority of the energy used in the United States 
is, even today, produced in the United States. Our coal, oil, natural 
gas, nuclear, and renewable resources all contribute to a diversified 
and reliable energy picture.
    However, we are entering a new era in energy supply. As highlighted 
in the President's National Energy Policy, forecasts indicate that our 
need for energy--even with ambitious implementation of energy 
efficiency measures across all sectors of the economy--will continue to 
grow as our economy grows. The Energy Information Administration 
forecasts that by 2025, the United States will import 38 percent of all 
of its energy and 68 percent of its energy for transportation uses. 
Buried in these estimates is an ominous fact that has escaped casual 
notice--the United States will, over this period, begin a steadily 
increasing dependence on imports for fuels needed for electricity 
generation that may, over the coming decades, follow the patterns of 
our accelerating dependence on imports required for the transportation 
sector.
    To meet these challenges while still assuring America's access to 
reliable baseload electricity--while setting a path toward reduced 
emissions--we must apply advanced technologies. New technology can help 
us to exploit renewable energy sources when they are practical, and 
enable coal to continue as a viable, long-term element of our energy 
supply. And as the President conveyed in his State of the Union 
address, we must consider new nuclear energy as part of our long-term 
energy picture.
    The Department of Energy's nuclear energy program has made 
significant progress over the past several years. From the time, not so 
many years ago, when it appeared that the United States might abandon 
advanced nuclear research and development, we have been successful in 
reasserting U.S. leadership in this area around the world. Representing 
the United States, I have been elected by my international colleagues 
to serve as the chair of two important international bodies--the 
Organization of Economic Cooperation and Development Steering Committee 
on Nuclear Energy and the Generation IV International Forum.
    We continue to build on our leadership. Just a few weeks ago, we 
celebrated the launch of the Nation's central laboratory for nuclear 
research and development--the Idaho National Laboratory (INL). This new 
national laboratory combines the resources of the former Idaho National 
Engineering and Environmental Laboratory (INEEL) and the former Argonne 
National Laboratory-West (ANL-W). The INL will lead much of the 
Department's exploration into advanced nuclear reactor and fuel cycle 
technology. We have set an aggressive goal for the new INL to become 
the world's premier center for nuclear energy research and education 
within a decade.
    Developing a central research laboratory is a major step forward 
for the nuclear energy program. We, like other key energy programs at 
the Department, have created a central, dedicated research site at 
which we can consolidate our infrastructure investments and build the 
expertise needed to accomplish our long-term program goals. A central 
lab also helps us minimize the shipment of nuclear materials across the 
country and allows us to bring our nuclear materials together in a 
single, secure location. In addition, we expect that our new central, 
dedicated research laboratory will become a major player in the 
education of the next generation of nuclear energy technologists that 
this Nation will need to assure our energy security in the future.
    The Department's fiscal year 2006 request for the nuclear energy 
program proposes a $511 million (an increase of $25 million compared to 
fiscal year 2005) investment in nuclear research, development, 
education and infrastructure for the Nation's future that is designed 
to continue this progress. This budget request demonstrates our 
commitment to support the President's priorities of enhancing the 
Nation's energy independence and security while limiting air pollution. 
Our request supports the development of new nuclear generation 
technologies and advanced energy products that will provide significant 
improvements in the economics, sustainability, safety and reliability 
of nuclear-based energy, as well as its resistance to proliferation and 
terrorism.
    We are committed to efficiently managing the funds we are provided. 
We have abandoned outdated field office and laboratory management 
paradigms and have integrated the Idaho Operations Office with our 
headquarters organization, enabling us to closely manage our 
responsibilities in the field to achieve greater quality and 
efficiency. We are enhancing our expertise in critical areas such as 
project management through training and certification of existing staff 
and the acquisition of experienced, proven managers. We are also 
applying international and public-private partnerships in the 
implementation of our research and development programs as a way of 
leveraging our investments and assuring the utility of our programs. We 
believe these steps must be taken to assure our program's ability to 
make the best use of the taxpayer dollars.
    While we have made great progress in all these areas, much remains 
to be done. Our fiscal year 2006 request moves us in the right 
direction.

                           NUCLEAR POWER 2010

    Today, American utilities operate 103 nuclear power plants. These 
facilities operate reliably and efficiently and provide a fifth of the 
Nation's electricity. These plants are emissions-free and can operate 
year-round in all weather conditions.
    Over the last 15 years, nuclear utilities in the United States have 
been increasingly better managed, improving both efficiency and safety. 
In the early 1990's, U.S. plants were available to produce energy only 
70 percent of the time on average. These plants are now producing power 
over 90 percent of the time. More efficient operation has allowed 
nuclear plant operators to produce more energy than ever before, adding 
the equivalent of 25 new nuclear plants to the U.S. grid since 1990 
without building any new nuclear power plants.
    Consolidation of nuclear plant ownership to a fewer number of 
excellent operators has made the operation of U.S. plants safer than 
ever, more cost-effective, and more reliable. Companies acquiring 
nuclear plants are the leaders in the nuclear industry with high marks 
in operating performance. These utilities bring newly acquired plants 
the benefit of economies of scale, experienced staff, well-honed 
management processes. As a result of this success, essentially all U.S. 
nuclear plants are expected to apply for renewed licenses that will 
keep most plants in operation into the middle of the century. There 
will also be some new generation, with The Tennessee Valley Authority 
rebuilding a plant that ceased operating in 1985. TVA expects to invest 
$1.8 billion to bring a 1,065-megawatt plant on-line by 2007.
    With renewed interest from industry, the Department is investing in 
the Nuclear Power 2010 Program. This program's basic missions are to 
cost-share with industry demonstration of new, untested Nuclear 
Regulatory Commission licensing processes, finding sites on which to 
build new plants, and certifying state-of-the-art (or ``Generation 
III+'') designs for new nuclear power plants. The program also conducts 
economic studies and analysis that help point to the barriers facing 
the construction of new plants.
    While it is too early to determine success, this program appears to 
be on the right track. Three utilities are cooperating with the 
Department to obtain ``Early Site Permits'' for three sites across the 
country--the first time this important regulatory tool has ever been 
used. The Nuclear Regulatory Commission is currently reviewing the 
utilities' applications and is expected to issue these permits during 
fiscal year 2006. Once done, these utilities will have sites that are 
pre-approved by regulators to host new plants. This process will avoid 
the problems in siting that vastly escalated the cost of some plants in 
the 1980's and led to the abandonment of others (most notably the 
Shoreham plant in New York).
    In November 2004, the Nuclear Power 2010 program took its next 
major step by awarding two major projects to utility-led consortia to 
implement plans that could lead to the construction and operation of 
new U.S. nuclear plants. Central to this effort, these projects will 
demonstrate--again, for the first time--the Nuclear Regulatory 
Commission's combined Construction/Operating License (or ``one-step'' 
license) process. These projects could result in a new nuclear power 
plant order by 2009 and a new nuclear power plant constructed by the 
private sector and in operation by 2014.
    In addition to regulatory barriers, it is also important to deal 
with the financial barriers facing new nuclear power plant projects. 
Under the Nuclear Power 2010 program, DOE sponsored an independent 
study by the University of Chicago's Department of Economics. This 
study found that the first few nuclear power plants built in the United 
States would be too costly for utilities to build because of early 
plant costs. These high initial costs arise because the United States 
has not built nuclear plants in a very long time--the resulting new 
design, construction, licensing, and financial uncertainties are 
reflected as higher costs. However, the study found that once these 
early plant costs are absorbed, new nuclear power plants may be less 
expensive to build and operate than either coal-based power plants or 
natural gas-fired plants.
    The need to deal with these early plant costs is expected to become 
a central issue for the industry as the Nuclear Power 2010 program 
addresses the institutional barriers. Without the construction of new 
plants, the contribution of nuclear power as a percentage of the 
Nation's total energy mix will steadily decline. Supporting nuclear 
power helps to maintain a more diversified energy supply and, because 
it is emissions-free, will not contribute to air pollution--nuclear 
power today comprises almost 75 percent of all the non-emitting power 
generation in the country. The President's Budget supports continuation 
of the Nuclear Power 2010 initiative in fiscal year 2006 with a request 
of $56 million (an increase of $6.4 million compared to fiscal year 
2005).

            GENERATION IV NUCLEAR ENERGY SYSTEMS INITIATIVE

    Our Generation IV effort continues to make significant progress. 
Since the Generation IV International Forum (GIF) and the Nuclear 
Energy Research Advisory Committee (NERAC) issued their joint report, A 
Technology Roadmap for Generation IV Nuclear Energy Systems, the 
members of the Forum have expanded to include Switzerland and the 
European Union. The now eleven members (Argentina, Brazil, Canada, the 
European Union, France, Japan, the Republic of Korea, the Republic of 
South Africa, Switzerland, the United Kingdom and the United States) 
have organized into interest groups associated with each of the six 
selected Generation IV.
    A landmark international framework agreement for collaborative 
research and development among the GIF member countries was signed in 
Washington, DC, by the United States and its GIF partners on February 
28, 2005. The Framework Agreement for International Collaboration on 
Research and Development of Generation IV Nuclear Energy Systems, which 
has been under negotiation for the past year, will allow the United 
States and its partner countries to embark on joint, cost-shared 
research and development of Generation IV nuclear energy systems. These 
next-generation nuclear technologies offer the potential for 
significant improvements in sustainability, proliferation resistance, 
physical protection, safety and economics. The agreement will further 
the development of advanced technologies that are widely acceptable; 
enable the Department to access the best expertise in the world to 
develop complex new technologies; and allow us to leverage our scarce 
nuclear R&D resources.
    With this agreement in place, we are moving forward with these 
countries to develop advanced reactor technologies that could be made 
available in the 2020 to 2030 timeframe. Generation IV concepts offer 
significant improvements in the sustainability, proliferation 
resistance, physical protection, safety and economics of nuclear 
energy. These advanced systems will not only be safe, economic and 
secure, but will also include energy conversion systems that produce 
non-electricity products such as hydrogen, desalinated water and 
process heat. These features make Generation IV reactors ideal for 
meeting the President's energy and environmental objectives.
    We will explore a range of Generation IV concepts, including the 
Supercritical Water-Cooled Reactor, the Gas-Cooled Fast Reactor and the 
Lead-Cooled Fast Reactor. Our efforts will focus on establishing 
technical and economic viability, and developing core and fuel designs, 
and advanced materials for these concepts. We request $45 million (an 
increase of $5.3 million compared to fiscal year 2005) support our 
investigation of technical and economic challenges and risks, including 
waste products, to inform a decision on whether to proceed with a 
demonstration of the Next Generation Nuclear Plant (NGNP), which would 
use very high temperature reactor technologies to economically produce 
both electricity and hydrogen gas. The President's Budget supports 
advanced research into the systems, materials, and fuels that are 
needed to bring Generation IV concepts to fruition. Key to the strategy 
for conducting all Generation IV research and development is the 
multiplication effect derived from international collaboration. By 
coordinating U.S. efforts with those of the GIF partner nations, our 
funding is leveraged by a factor of 2 to 10, depending on the reactor 
concept involved.
    We are also working in close cooperation with the Department's 
Office of Science through the ``Materials for Advanced Energy Systems 
Initiative'' to coordinate the research advanced materials for use in 
Generation IV nuclear energy systems, fusion energy systems, and 
advanced energy technologies such as hydrogen production systems. 
Through a joint working group, the offices are coordinating on energy 
materials related issues with the purpose of investigating materials 
behavior in high temperature, radiation, and hostile corrosive 
environments, as well as the fabrication and non-destructive evaluation 
or monitoring of such materials. As common projects are identified, the 
offices will work to establish research objectives and cooperative work 
plans to leverage research funding.

                      NUCLEAR HYDROGEN INITIATIVE

    Hydrogen offers significant promise as a future domestic energy 
source, particularly for the transportation sector. The use of hydrogen 
in transportation will reduce U.S. dependence on foreign sources of 
petroleum, enhancing national security. Hydrogen can be combusted in a 
traditional internal combustion engine, or can produce electricity in a 
fuel cell. Significant progress in hydrogen combustion engines and fuel 
cells is bringing transportation using hydrogen closer to reality. 
Before hydrogen can become a significant part of the Nation's energy 
infrastructure, the cost associated with the production, storage, and 
delivery of hydrogen must be reduced considerably.
    Today, through electrolysis, we can convert water to hydrogen using 
electricity. Without using a non-emitting technology, such as nuclear 
or renewable energy, to produce the electricity, the environmental 
benefits of electrolysis are negated. We believe that for the future, 
Generation IV systems coupled with advanced hydrogen production 
technology offer a more efficient technology for production of large 
quantities of hydrogen without release of greenhouse gases. This 
technology could pave the way for the commercial production of clean-
burning hydrogen for transportation purposes--reducing our reliance on 
imported fossil fuels and supporting the President's vision for a 
future hydrogen economy.
    The DOE Hydrogen Posture Plan and the Nuclear Hydrogen R&D Plan 
outline our plan for integrating and implementing technology research, 
development and demonstration activities needed to cost-effectively 
produce, store, and distribute hydrogen for use in fuel cell vehicles 
and electricity generation. These documents are revised periodically 
and used to inform our annual budget requests. Technology development 
work to date, which has been conducted in accordance with these plans, 
has proven successful. For example, last year, experiments were 
successfully completed on individual high-temperature electrolysis 
cells for hydrogen production. Since the results show that the hydrogen 
output of the cells closely matched the theoretical calculations, this 
year we are evaluating the performance of stacks of cells to achieve 
higher hydrogen production rates. In fiscal year 2006, the program will 
proceed with the plan to test cell stacks for long-duration and 
transient operation. As a result of these achievements, the fiscal year 
2006 budget request includes an increase of $11 million to conduct 
research and development on processes that operate across a range of 
temperatures for various advanced reactors being considered under the 
Generation IV Nuclear Energy Systems Initiative.

                     ADVANCED FUEL CYCLE INITIATIVE

    In addition to leading the development of a new generation of 
nuclear power plants, the Department is developing and demonstrating 
technologies that will enable the United States and other advanced 
countries to implement an improved, long-term nuclear fuel cycle that 
provides substantial environmental, nonproliferation, and economic 
advantages over the current once-through nuclear fuel cycle. The 
Advanced Fuel Cycle Initiative is a research program to develop new 
technologies for reducing the volume, toxicity, and longevity of the 
high-level nuclear wastes that result from the production of energy 
from nuclear power plants. The initiative is designed so that these 
technologies can be made available to support the operation of current 
nuclear power plants, Generation III+ light-water reactors, and 
Generation IV advanced reactors in order to achieve a significant 
reduction in the amount of high-level radioactive waste requiring 
geologic disposal; to significantly reduce the amount of plutonium 
accumulated in civilian spent nuclear fuel; and to extract more useful 
energy from nuclear fuel.
    Under all scenarios, the Nation will need to establish a permanent 
geological repository to deal with the radioactive wastes resulting 
from the operation of nuclear power plants. Substantial growth in the 
use of nuclear energy in the United States will require the 
construction of additional geologic repositories to address the nuclear 
waste generated over time. The advanced research conducted under the 
Advanced Fuel Cycle Initiative, if successful, could provide an 
alternative to building multiple ``Yucca Mountains'' while still 
supporting an expanding role for nuclear power in the United States. In 
the longer term, the Advance Fuel Cycle Initiative could enable us to 
extend the useful life of the Yucca Mountain repository and reduce the 
radiotoxicity of the wastes it contains such that it would decay to the 
toxicity of natural uranium ore in less than 1,000 years--instead of 
over 100,000 years as is the case with untreated spent fuel. This 
technology could also allow nuclear plants to exploit a far higher 
fraction of the energy contained in uranium ore, potentially expanding 
the lifetime of the world's nuclear fuel resources from around 100 
years up to 1,000 years.
    The Advanced Fuel Cycle Initiative, with an investment of $70 
million for fiscal year 2006 (an increase of $2.5 million compared to 
fiscal year 2005), will continue the progress made in the development 
of proliferation-resistant treatment and transmutation technologies 
that can reduce both the volume and toxicity of spent nuclear fuel. 
These technologies would support both national security and energy 
independence by reducing inventories of commercially-generated 
plutonium while recovering residual energy value from spent nuclear 
fuel. If successful, these same technologies offer benefits of 
enhancing national security by reducing inventories of commercially-
generated plutonium and enhancing energy independence by recovering the 
energy value contained in spent nuclear fuel.
    The program has already enjoyed considerable success. We have 
proven the ability of our URanium EXtraction (UREX) technology to 
separate uranium from spent fuel at a very high level of purity. We 
have demonstrated the ability of a derivative technology, UREX+, to 
separate a combined mixture of plutonium and neptunium that can serve 
as the basis for a proliferation-resistant fuel for light water 
reactors. While the UREX+ process has great potential to address the 
spent fuel challenges associated with today's light water reactors, we 
have also been investigating an alternative separation technology 
called pyroprocessing. This technology is a highly efficient, 
proliferation-resistant non-aqueous approach to separate the actinides 
in spent fuel from fission products. Among other potential 
applications, pyroprocessing could support the reduction of the 
radiotoxicity of nuclear waste through the transmutation of minor 
actinides in future Generation IV fast spectrum reactors providing the 
means for closure of the fuel cycle for Generation IV fast reactors.
    For the Advanced Fuel Cycle Initiative to be successful, advanced 
fuel treatment and transmutation research and development must be 
integrated with the development of Generation IV nuclear energy 
systems, particularly with those reactor technologies that can produce 
the high energy neutrons needed to transmute a wide variety of toxic 
radioactive species. We have organized our national labs, universities, 
and international collaborations in a manner that will enable the 
success of the Advanced Fuel Cycle Initiative.

       UNIVERSITY REACTOR INFRASTRUCTURE AND EDUCATION ASSISTANCE

    In addition, the Department has paid close attention to 
developments impacting university research reactors. The research 
conducted using these facilities is critical to many national 
priorities. Currently, there are 27 operating university research 
reactors at 26 campuses in 20 States. These reactors are providing 
support for research in such diverse areas as medical isotopes, human 
health, life sciences, environmental protection, advanced materials, 
lasers, energy conversion and food irradiation.
    The most exciting development in University Reactor Infrastructure 
and Education Assistance is the Innovations in Nuclear Infrastructure 
and Education (INIE) Program established in fiscal year 2002. The 
consortia have demonstrated remarkable collaborative efforts and strong 
formation of strategic partnerships between universities, national 
laboratories, and industry. These partnerships have resulted in 
increased use of the university nuclear reactor research and training 
facilities, upgrading of facilities, increased support for students, 
and additional research opportunities for students, faculty and other 
interested researchers. Today, the Department funds six INIE consortia, 
providing support to 32 universities in 23 States across the Nation.
    To complement INIE and the other university assistance programs, 
the University Reactor Infrastructure and Education Assistance program 
provides assistance to universities to improve the operational and 
experimental capabilities of their research reactors and provides for 
the fabrication and shipment of fresh fuel to their research reactors.
    Grants are provided to universities to purchase equipment and 
services necessary to upgrade the reactor facilities, such as reactor 
instrumentation and control equipment, data recording devices, 
radiation, security and air monitoring equipment, and gamma 
spectroscopy hardware and software. Each year, as many as 25 
universities request and receive this assistance. The Reactor Sharing 
program enables universities with reactors to ``share'' access to their 
facilities with students and faculty at their own institutions, with 
universities that lack such a facility, and with visiting students from 
other local institutions including high schools and middle schools. The 
reactors are made available for use in research, experiments, material 
irradiations, neutron activation analysis and training, and for 
facility tours and other educational activities.
    The growth of nuclear energy in the United States is dependent on 
the preservation of the education and training infrastructure at 
universities. The Department has played a substantial role in reversing 
the decline in undergraduate enrollments in this area of study. In 
1998, the United States saw only around 450 students enroll as nuclear 
engineers--down from almost 1,500 in 1992. After several years of 
focused effort, the United States now has nearly 1,600 students 
studying nuclear engineering. That number is set to increase further, 
as strong programs--such as at Purdue and Texas A&M--continue to grow 
and we see new programs start at schools such as South Carolina State 
University, the University of South Carolina, and the University of 
Nevada-Las Vegas. Given the very large number of retirements expected 
in the nuclear field over the next 5 to 10 years, industry, government, 
and academia find that this upswing in student interest comes at a 
critical time.
    The Department provides tuition, stipends, and a practicum to 
outstanding graduate students studying nuclear engineering and health 
physics and scholarships and a practicum to undergraduate students 
pursuing a nuclear engineering course of study. This highly competitive 
program has produced outstanding graduates who have become leaders in 
nuclear research and university education. Also, within the fellowships 
and scholarships program is the University Partnership program, which 
encourages students enrolled at minority-serving institutions to pursue 
a nuclear engineering degree at universities with nuclear engineering 
programs. There are currently six university partnerships consisting of 
13 institutions working cooperatively in this innovative program. South 
Carolina State University (SCSU) and the University of Wisconsin were 
involved in the pilot program and now SCSU administers the program for 
all university partnership members. SCSU has also added two nuclear 
engineering faculty members and has become the only historically black 
college or university in the United States with an accredited nuclear 
engineering program.
    We continue our small but important effort to provide scholarships 
and graduate fellowships to students studying the vital and too-often 
overlooked discipline of health physics. The Department is concerned 
that the Nation may soon not have the trained health physicists who are 
needed to assure the safety of vital nuclear and radiological 
activities. This program will help heighten the visibility of health 
physics as a viable career opportunity and strengthen the health 
physics pipeline to replace retiring professionals.
    The Nuclear Engineering Education Support program prepares students 
for nuclear engineering and science careers and assists universities 
with special needs to improve their educational infrastructure. This 
program is helping to address the knowledge gap of incoming college 
freshmen in the area of nuclear science and engineering. In fiscal year 
2005 a nuclear science and technology education pilot was established 
between the Department and the Pittsburgh Public School System to 
provide advanced placement high school science students an intensive 
educational experience in the field of nuclear science and technology. 
This effort provides course materials, tours to nuclear facilities, and 
lectures from internationally-recognized experts. In fiscal year 2006, 
the program will expand its efforts to enlist local organizations in 
sponsoring the model used in the Pittsburgh pilot program to other 
school systems across the country, thereby strengthening the 
understanding of nuclear science in our public schools.
    The President's Budget supports continuation of the University 
Reactor Infrastructure and Education Assistance Program in fiscal year 
2006 with a request of $24 million (an increase $190,000 compared to 
fiscal year 2005).

                   RADIOLOGICAL FACILITIES MANAGEMENT

    In addition to nuclear research and development programs, we have 
the responsibility to maintain and enhance the Nation's nuclear science 
and technology infrastructure. This budget request also includes $64.8 
million (a decrease of $3.7 million compared to fiscal year 2005) to 
fund the management of the Department's vital resources and 
capabilities at Oak Ridge National Laboratory, Los Alamos National 
Laboratory, Sandia National Laboratory, and Brookhaven National 
Laboratory in a safe, secure, and cost effective manner to support 
national priorities. The mission of the Radiological Facilities 
Management program is to maintain these critical user facilities in a 
safe, environmentally-compliant and cost-effective manner to support 
national priorities. These funds assure that NE facilities meet 
essential safety and environmental requirements and are maintained at 
user-ready levels. Actual operations, production, research, or other 
additional activities are funded either by other DOE programs, by the 
private sector, or by other Federal agency users.
    The Department is responsible for maintaining the necessary nuclear 
material and infrastructure that is required to deliver plutonium-238 
fueled radioisotope power systems (using plutonium-238) to various 
Federal users. These systems are an irreplaceable enabling technology 
for deep space exploration missions and national security missions. As 
part of the Department's emphasis on consolidating nuclear material, 
increasing nuclear security, reducing nuclear risks, and addressing 
secure transportation issues, we are currently performing an 
environmental review to assess the consolidation of all of our 
plutonium-238 operations. DOE has identified consolidation at the Idaho 
National Laboratory as the preferred alternative for this proposed 
action.
    In addition, the Radiological Facilities Management program assures 
appropriate oversight of the operations and maintenance of the 
Department's Paducah Gaseous Diffusion Plant uranium enrichment 
facilities to assure that USEC Inc. meets its commitments under the 
2002 DOE-USEC Agreement and that the government's rights and options 
are being preserved.
    The fiscal year 2006 $64.8 million budget request includes $18.7 
million to prepare the final design, procure equipment, and begin 
facility modifications for the Uranium-233 Disposition Project at Oak 
Ridge National Laboratory. This project is aimed at stabilizing 
materials left over from the Cold War to address a Defense Nuclear 
Facilities Safety Board recommendation, while extracting isotopes from 
the uranium that are needed for very promising medical research.

 IDAHO FACILITIES MANAGEMENT AND IDAHO SITEWIDE SAFEGURDS AND SECURITY

    The Idaho Facilities Management program maintains the Department's 
facilities at Idaho in a safe, secure and environmentally compliant 
condition for a range of vital Federal missions. The Idaho Site-wide 
Safeguards and Security program supports activities that are required 
to protect the Department's Idaho complex assets from theft, diversion, 
sabotage, espionage, unauthorized access, compromise, and other hostile 
acts which may cause unacceptable adverse impacts on national security, 
program continuity, the health and safety of employees, the public, or 
the environment.
    We have now established the Idaho National Laboratory (INL), which 
combines the resources of the former Idaho National Engineering and 
Environmental Laboratory (INEEL) and the former Argonne National 
Laboratory-West (ANL-W). This new lab began operations on February 1, 
2005, and will lead much of the Department's exploration into advanced 
nuclear reactor and fuel cycle technology. We have set an aggressive 
goal for the new INL to become the world's premier center for nuclear 
energy research and education within a decade.
    Developing a central research laboratory is a major step forward 
for the nuclear energy program. We have now joined the other key energy 
programs at the Department by having a central, dedicated research site 
at which we can centralize our infrastructure investments and build the 
expertise needed to accomplish our program goals. A central lab also 
helps us minimize the shipment of nuclear materials across the country 
and allows us to bring our nuclear materials together in a single, 
secure location. In addition, we expect that our new central, dedicated 
research laboratory will become a major player in the education of the 
next generation of nuclear energy technologists that this Nation will 
need to assure our energy security in the future.
    Our funding request of $80.1 million from Energy Supply and $17.8 
million from Other Defense Activities for the Idaho Facilities 
Management program maintains and operates the Department's facilities 
at Idaho in a safe, reliable, and environmentally compliant condition 
for a range of vital Federal missions. The overall funding for the 
Idaho Facilities Management program decreases from fiscal year 2005 to 
fiscal year 2006 because of a $43.4 million one-time cost associated 
with restructuring the INL complex and supporting site infrastructure 
services. This decrease is offset by an increase of $19.7 million for 
maintenance and recapitalization projects to support the goal of 
achieving and maintaining an expenditure rate of 2 to 4 percent of 
Replacement Plant Value, a level recommended by the National Academy of 
Sciences and incorporated in Departmental guidance, for the facilities 
at INL. One of the essential facilities for ongoing and planned 
national security and energy research programs at the INL is the 
Advanced Test Reactor (ATR). Replacing the ATR with a new test reactor 
with similar capabilities would exceed $2 billion dollars and likely 
take at least 10 years to build. An independent review group of reactor 
experts studied the ATR and provided their perspectives on the life 
extension of the reactor. This review prompted several projects, most 
notably an exhaustive safety basis reconstitution to assure that all 
safety related systems meet modern standards. This project is in 
progress and results to date are favorable.
    The recommendations of this review and other analyses will be 
incorporated into the INL Ten-Year Site Plan (TYSP), which is the 
foundation for INL facilities and infrastructure strategic planning and 
the cornerstone of the Program's initiative to restore the INL and the 
other essential facilities on the site. The TYSP provides 
recommendations for short- and long-term recapitalization of existing 
mission essential facilities and infrastructure. The TYSP identifies 
and prioritizes the project, activities, and mission resource 
requirements for real property assets that cover a 10-year planning 
horizon as well as includes a prioritized list of maintenance, repair, 
and recapitalization projects necessary to correct the maintenance 
backlog.
    Our budget request of $75 million (an increase of $17.3 million 
compared to fiscal year 2005) from the Other Defense Activities 
appropriations account for the Idaho Sitewide Safeguards and Security 
program supports activities that are required to protect the 
Department's Idaho complex assets from theft, diversion, sabotage, 
espionage, unauthorized access, compromise, and other hostile acts 
which may cause unacceptable adverse impacts on national security, 
program continuity, the health and safety of employees, the public, or 
the environment. As a result of merging the former INEEL and ANL-W 
sites into the INL, the two existing safeguards and security programs 
at the Idaho site will be merged into a single program. This 
integration will continue in fiscal year 2005 with additional changes 
anticipated to increase efficiency and contain costs for safeguards and 
security for the site.
    The Department issued a revised Design Basis Threat in October 
2004. These requirements will be implemented using a risk-informed 
approach to physical upgrades and by seeking efficiencies associated 
with combining the two contracts. The Department believes that early 
investment in improved positions for defending forces, more capable 
detection systems, and technological deterrent devices at target 
locations will result in cost avoidance over the lifetime of enduring 
facilities by reducing the number of additional protective force 
members needed to counter the revised threat. The fiscal year 2006 
request reflects increased funding of $17.3 million to permit these 
investments.

                               CONCLUSION

    Our Nation cannot rely on any single energy technology to secure 
its future. A broadly diverse energy supply has served us well in the 
past and must be available for the future. Nuclear energy should be a 
part of that diverse portfolio as look to support our growing economy 
while limiting air emissions and enhancing America's energy 
independence.
    The Department of Energy's goal is to work with the private sector, 
our overseas partners, and other agencies to assure that the benefits 
of nuclear technology continue to increase the security and quality of 
life for Americans--and other citizens of the world--now and into the 
future.
    This concludes my prepared statement. Your leadership and guidance 
has been essential to the progress the program has achieved thus far 
and your support is needed as we engage the tasks ahead.
    I would be pleased to answer any questions you may have.

    Senator Domenici. Thank you. Dr. Orbach, we appreciate 
having you here, and even before you testify, I want to thank 
you and congratulate you on your excellent work on behalf of 
our country.
    Dr. Orbach. Thank you.
    Senator Domenici. Please proceed. You've already, did you 
have anything further to add, Doctor?
    Dr. Orbach. No, thank you.

                       LINEAR NO THRESHOLD MODEL

    Senator Domenici. Well, I wanted to start with you, Doctor, 
and just ask you--or congratulate you--and ask you to comment a 
little bit. As you know, this subcommittee started a research 
program to determine whether the low dose radiation standard 
that we had--which is commonly known as the Linear No Threshold 
model, LNT--whether it was the appropriate model to determine 
risk, and thus to use to set standards for clean up and 
exposure. You're familiar with the research that's been done in 
the Department, and are you the supervisor of that, or what is 
your role?
    Dr. Orbach. Yes, as Director of the Office of Science, I'm 
responsible for that program. It works through our Office of 
Biological and Environmental Research directed by Dr. Ari 
Patrinos. They have made major strides in that area, thanks to 
your support. They have now, I think, more or less laid to rest 
the LNT model. It is not an adequate method of determination of 
low dose effects, it works entirely on isolated cells--which we 
know not to be typical of tissue. We believe that the results 
of our own research that you have helped initiate and support, 
point to collective interactions in tissue, and as Dr. Patrinos 
informed you last week, we believe that within 5 years, we can 
determine the genetic susceptibility and also the difference of 
response between isolated cells and tissues, leading to--what 
we believe would be--robust models which could serve as 
vehicles for a credible prevention of radiation injury standard 
for this country.
    Senator Domenici. Now, all of this, from somebody who has 
been really looking at it, thinking about it, sounds like it's 
really something significant. In terms of what's going on in 
the country, what might it mean if there is a new standard? 
Take some things happening in the country that we might be 
overdoing, or that we might be doing that we don't need to do, 
and could you give us some examples?
    Dr. Orbach. I can think of two immediate examples, first of 
all, nuclear energy, where the low dose radiation is simply 
estimated incorrectly by the LNT model. Others would be in 
clean up areas----
    Senator Domenici. Let's just stop at the first one.
    Dr. Orbach. Yes.
    Senator Domenici. So, it's currently incorrect, which means 
that we are setting standards which are not necessary in terms 
of protecting public health from the low dose?
    Dr. Orbach. Yes, Senator.
    Senator Domenici. So, from a practical standpoint, what 
does that mean with reference to nuclear power, or nuclear 
activities?
    Dr. Orbach. It means that we could be spending a great deal 
more money than is necessary to protect human health. We still 
have to determine the effects of low dose, but we believe that 
there are differences between individuals, and that remarkably, 
tissues seem to be able to repair themselves by cell death when 
a cell does suffer radiation, something which is actually a 
measure of protection, built into the way tissues behave. But 
the consequence of that is that we do not have the appropriate 
standards, and we may be spending billions that we don't need 
to, to protect human health.
    Senator Domenici. You had a second one.
    Dr. Orbach. The second one is involved in clean up, where 
we have background radiation, and also radiation from the sites 
themselves. The same situation applies, we need to understand 
the real effects of low dose--this is low dose radiation--it is 
simply incorrect to use this isolated cell results to set that.
    I should say, with regard to the latter, again with your 
encouragement and support, we are developing microbes which can 
be very effective in terms of clean up, so we have a microbe 
called geobactor, which can change uranium from soluble to 
insoluble, so as to remove the problem of contamination in the 
soil over large distances. We believe through our Genomes to 
Life program, we can be very effective in both of these 
efforts.
    Senator Domenici. So, about 8 years ago, the Department of 
Energy brought us a flow sheet as to what it might cost to 
clean up Hanford, the great leftovers in the Savannah River, 
Rocky Flats, and the predictions were maybe over 20 years, $180 
billion--I'm just guessing--but huge. Now what we're talking 
about--maybe, most probably--those estimates, if they were 
using the Linear No Threshold dosage as the guide against which 
you would measure the cleanup, that may be a very inaccurate 
number in terms of cost. Is that, in a sense, what we're 
saying?
    Dr. Orbach. Yes, yes, Mr. Chairman, that is exactly what 
I'm saying.
    Senator Domenici. So that means without harming the public, 
we could do things completely different, or somewhat different, 
and it would cost a lot less money?
    Dr. Orbach. Yes.
    Senator Domenici. Well, I know this is kind of a threshold 
issue for a lot of people, especially those who are frightened 
to death of radiation, period, and thus oppose nuclear power, 
oppose anything like that. This is going to have to be 
scientifically sound, or it will be a useless endeavor. Are you 
taking care that this program is being properly peer reviewed, 
and only the best of scientists, and they are not--in any way--
prejudiced toward nuclear--or any other source--of radiation?
    Dr. Orbach. Mr. Chairman, all of the research that's done 
in this area is peer reviewed by the community, and only the 
highest ratings are funded. My statements on the failure of the 
LNT is a strong statement, but it is backed by the best 
research in science, and I will stand behind that research as 
fully supportive of scientific rigor.
    Senator Domenici. Your strong statement can be summarized 
one more time, with reference to the Linear No Threshold is 
what?
    Dr. Orbach. The results of our research, which show the 
Linear No Threshold radiation limits, or radiation dosage, and 
effect, are incorrect for low dose radiation, and--though 
supported by isolated cells--do not, in fact, describe what 
happens in tissue, or in groups of cells.
    Senator Domenici. Now, why do you need 5 more years?
    Dr. Orbach. Because of that very rigor which I mentioned to 
you. We need to establish models which will be based on the 
scientific results. I'm hopeful it could be more rapid, but I'm 
trying to be as careful as I can. These models, then, would be 
used to assess radiation levels which will protect human 
health.
    Senator Domenici. We have some other detailed questions; 
we'll submit them to you, Doctor.
    Mr. Magwood, let me ask you, I've been saying--not here for 
the first time--but, I've been saying that within 5 years, we 
should have a license application for a nuclear power plant in 
the United States, we should have one of those completed, and 
the site location plan improved and completed in 5 years. Is 
that a--in your opinion, as one who is working in that area--if 
that's not a correct statement, would you tell us what you 
think?
    Mr. Magwood. I think it's a very correct statement, I think 
it's entirely possible that we could see that happen before 5 
years. The utilities we're working with through the Nuclear 
Power 2010 program have established plans, that if they are 
brought to fruition, would see the one-step licenses for new 
nuclear power plants completed, around 2008, 2009, certainly 
within the 5 years you mentioned.
    Senator Domenici. Now, I guess there's always a risk when--
you're ready to move from a stalemated application of 
technology, which is where we've been, and you want to start up 
again--there's always a risk that in the meantime, you're 
trying to do something so new, and so different, that instead 
of expediting, you waste time, because you're trying to get the 
next, and then the next, and you don't decide on what you're 
going to use. I read a little bit that there might be a risk of 
us trying to prove up too much in terms of a new reactor, 
instead of being ready with something in this 
2-, 3-, 4-, 5-year range. What about that?
    Mr. Magwood. I don't think that's a danger, Mr. Chairman. 
The utilities, as a group have--in this country--concluded that 
they will build, most likely, one of three designs, and the 
very high probability of one of two designs, or maybe two of 
those designs, and I think that the field has narrowed 
considerably. There's always going to be discussion on other 
possible technologies, but the serious utilities are focused on 
a very, very small number of technologies that are out that are 
very much available to the market today.
    Senator Domenici. Mr. Garman, with reference to hydrogen 
and transportation, I notice you've told us how much the budget 
is, and it's a pretty robust program, at least it sounds like 
it. I would assume in terms of dollars the automobile 
manufacturers are spending in this area, there's a lot more 
money being spent than just our money.
    Mr. Garman. That's correct.
    Senator Domenici. Do you have any way of describing for us, 
for the record, what's going on overall?
    Mr. Garman. It's very difficult--with any precision -- to 
estimate what the private sector is spending, because it's 
proprietary, and a lot of automobile companies don't really 
want others, or their competitors to know, with precision, but 
I believe General Motors has made the public statement, for 
example, that they have committed over a half a billion dollars 
to fuel cell technology in vehicles. I have been to Japan, I 
have seen what Toyota, Nissan and other Japanese companies are 
doing; I've been to Europe and have seen what those companies 
are doing. I think it's fair to say that billions and billions 
of dollars have been committed for this effort.
    Senator Domenici. Okay, with all that going on, so that we 
have some idea what is probable, and what isn't, what do you 
think we're looking at in terms of the timeframe when we might 
have a variety, something to choose from, or the public might 
be involved in using?
    Mr. Garman. I think the original 2020 timeframe that we've 
expressed continues to hold true today. Some auto makers have 
said they might, General Motors in particular, maybe they can 
go a little quicker than that, but I still see substantial 
technical obstacles. We have some technical challenges, which 
include things such as storage on board the vehicles that have 
to be overcome. I think the 2020 estimate is a good one; I 
don't think auto makers will be in a position before 2015 to 
really be able to make a business case decision on whether or 
not to proceed with the investment that will be needed in both 
the infrastructure and the vehicles, so 2020 is still what 
we're looking at.
    Senator Domenici. We have CAFE standards which apply to 
fleets, but what's happening aside from that in terms of 
automobiles being produced that are either hybrids or get 
better mileage performance? Is there some headway being made by 
either American manufacturers, or by those who sell cars in 
America?
    Mr. Garman. There's a great deal of headway, it's just that 
the efficiency improvements have generally been turned into 
performance. The four cylinder vehicle that you buy today has 
the performance of the eight cylinder vehicle that I bought 
when I was a teenager. And there are a number of different 
technologies that are available, and in use today, such as 
hybridization, continuously variable transmission, variable 
valve timing, even people are beginning to think about camless 
engines, and a new trend on the horizon is what I call the 
``dieselization'' of the gasoline engine--a compression 
ignition engine. There are still a lot of efficiency 
improvements that can be made to internal combustion engines, 
and those types of technologies are--let me put it this way--
I've driven some things on automotive proving grounds that I 
can't talk about, because I signed a non-disclosure agreement, 
but technologies are being developed, they are available, and 
they can be geared toward greater efficiency, or greater 
performance, or both.
    Senator Domenici. We're going to have five stacked votes, 
so if we were to leave you here waiting, you'd be stacked here 
all afternoon, so I'm just going to ask Dr. Orbach a question.
    In your capacity as the head of the Office of Science, are 
you--in any way--charged with looking at what the state of 
dependence on crude oil by America, in terms of the future, 
might be? Or do you not involve yourself in that?
    Dr. Orbach. We are committed to support the Department of 
Energy's energy security responsibility. Two years ago we held 
a major conference on energy security, and basic research needs 
of this country in order to approach energy security. Last year 
we had a major conference on hydrogen. Mr. Garman has talked 
about the hydrogen initiative; we are working together with 
EERE on the issue of hydrogen generation, storage, and fuel 
cells, from a basic research perspective, and this spring we 
are having a solar energy conference to look at alternate ways, 
improved ways of taking solar energy and producing electricity, 
or hydrogen.
    We are attempting to support the full panoply of 
Departmental responsibilities through basic research, and 
through opportunities. In that sense, we are providing our own 
contribution to energy security for this country.
    Senator Domenici. Well, I would just like to share with 
you, and then we'll close the meeting down with some questions 
to all of you, and you can turn them in within a week, 10 days, 
something like that. In preparing for this ANWAR debate, I have 
had to gather up as much information as I can with reference to 
the United States--how much we use, how much we're projected to 
use by way of petroleum products, products from crude oil, and 
natural gas--and I've come to the conclusion that we are a 
country at great risk, right now. People don't have to--we 
don't have to ask you to tell us when--it's already here. Our 
production is going to go no where but down as a Nation, unless 
something dramatic happens in Alaska, and that's--every time 
you turn around, that's terribly difficult. We are the 12th 
largest, we have the 12th largest reserves of all the 
countries, in America, and our reserves are--from what we 
know--they're not going anywhere but down, because we've done 
everything we can, and the prices are about as high as they can 
be, and that's all we've got. It looks like we don't know how 
to cut down on the use very much. You can say conserve, 
therefore you won't need ANWAR, but seems to me you need both--
things are in such horrendous shape. I would think somebody has 
to be looking at, just in basic security, from a basic security 
standpoint, what should we do to produce some kind of oil from 
some source that we don't know get it, whether it be tar sands, 
or oil shale, something. Because we could be in a terribly 
dangerous condition if the supply of oil curtailed--worldwide, 
if it were curtailed just a few million barrels a day--the 
United States would be in terrible shape--and our balance of 
trade is just getting slaughtered by us having to buy oil--
nobody knows that--but soon we'll have 30 percent of our 
balance of trade will be, we keep worrying about, I think it's 
Chinese sales--it's crude oil as much as Chinese sales, it's 
almost 30 percent of the balance of trade is oil, and look at 
what's happening with the price.

                     ADDITIONAL COMMITTEE QUESTIONS

    So, I think that more than one person has to be concerned 
in the government, and you had the wherewithal to at least look 
at the numbers and do the science, because it is a very serious 
problem. I know of your great capacity to be far sighted, and 
yet be practical and that's why we've laid this one before you. 
The work you've done on the Linear No Threshold is dramatic, 
and we thank you for it, we think it will change a lot of 
things in the country, including spending a lot less money, but 
it also will get rid of some fears--I would think--once doctors 
and others begin to accept it.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

            Questions Submitted to the Department of Energy

            Questions Submitted by Senator Pete V. Domenici

                        NUCLEAR ENERGY PROGRAMS
                      NUCLEAR POWER 2010 (NP 2010)

    Question. Mr. Magwood, as I noted in my statement, I am 
disappointed in the delays in executing the NP 2010 program. It has 
been 4 months since the budget was passed, providing $50 million to 
execute the agreements. Two weeks ago in the Energy Committee, I asked 
Secretary Bodman to look into the delays in finalizing the agreements 
between your office and the two utility consortia. When will your 
office execute the agreements and begin funding the cooperative these 
agreements? What are the terms of the agreements?
    Answer. The Department has moved with diligence to issue the 
Nuclear Power 2010 cooperative agreements and associated fiscal year 
2005 funding to the industry. The cooperative agreement with Dominion 
Energy was issued on March 31, 2005, and a project kickoff meeting was 
held with Dominion Energy and their partners General Electric and 
Bechtel with Department staff on April 26, 2005. The cooperative 
agreement with NuStart was issued on April 26, 2005, and a project 
kickoff meeting is scheduled for May 3, 2005.
    The Dominion Energy decision to change its selected reactor 
technology to the General Electric Economic Simplified Boiling Water 
Reactor (ESBWR) design caused the Department and industry to re-
evaluate project cost, cost share, and annual funding for both the 
Dominion Energy and NuStart projects. This is due in part to the fact 
that the GE ESBWR reactor design is part of both projects. In addition, 
NuStart has increased their request for fiscal year 2005 funds to 
accelerate the Westinghouse AP-1000 work scope. Both of these 
conditions required re-submittal of detailed vendor and subcontractor 
cost information by both reactor vendors to the Department. In 
addition, intellectual property rights and royalty terms and conditions 
required complex and lengthy negotiation with the reactor vendors.
    The terms of the Dominion and NuStart agreements include a project 
period that begins in fiscal year 2005 and continues through December 
2011, with each project requiring a 50 percent industry cost-share. The 
current total estimated costs for the Dominion project is $426 million, 
and $519.8 million for the NuStart project. In light of the changes to 
the program over the past several months, as noted earlier, these 
figures may change. Detailed baseline project budgets and schedules 
will be developed to determine funding requirements for each project. 
As part of each agreement, a DOE interface and project oversight 
procedure will be established in fiscal year 2005 to implement an 
agreed upon and prudent project management control mechanism.

                     NEXT GENERATION NUCLEAR PLANT

    Question. Mr. Magwood, last year the Energy and Water bill 
contained a provision providing $25 million for the Next Generation 
Nuclear Plant to be located at Idaho National Lab. The language also 
required that the administration provide a plan as to how DOE will 
implement the NGNP strategy consistent with the President's hydrogen 
initiative. In reviewing the budget for fiscal year 2006, I find no 
mention of either the $25 million or the implementation plan. Is this 
administration committed to building a Next Generation Nuclear Plant at 
Idaho National Lab?
    Answer. The Department's fiscal year 2006 budget request provides 
$45 million for the Generation IV Nuclear Energy Systems Initiative. 
This represents a $5 million increase over the 2005 enacted level of 
funding and allows the Gen IV program to continue long-term, high 
reward research and development. This research and development work 
will investigate technical and economic challenges and risks and will 
help inform a decision on whether to proceed with a demonstration.
    Question. What has the administration done with the $25 million 
provided for the NGNP project? Does the administration intend to send 
up the required report?
    Answer. Our primary focus at this time is to assure that the 
Generation IV research program is able to answer the basic viability 
questions regarding this advanced technology. We will continue research 
and development on various Generation IV reactor designs to determine 
their compatibility with the desired goals of sustainability, 
economics, and proliferation resistance. This includes work on 
materials performance as well as evaluating the waste products 
associated with various reactor designs. As these questions are 
answered, we can consider additional steps in the future. The 
Department has provided the report titled ``U.S. Generation IV 
Implementation Strategy'', in response to Congressional direction 
contained in Senate Report 107-220.

                          ADVANCED FUEL CYCLE

    Question. Mr. Magwood, the Advanced Fuel Cycle Initiative coupled 
to fast reactors is needed to support a long-term diversified and 
sustainable energy policy. What is the Department's plan for the 
development of advanced fast spectrum systems, and will the Los Alamos 
National Lab's Material Test Station be an integral part of that 
program?
    Answer. The Department is investigating, through its Generation IV 
Initiative, the development of advanced fast-neutron spectrum reactors. 
We currently have an active R&D program for the development of a gas-
cooled fast reactor concept and a lead/lead alloy-cooled fast reactor 
concept. A third fast reactor concept under evaluation by the 
Department in consultation with the Generation IV International Forum 
is a sodium-cooled fast reactor concept. The U.S. interest in this 
concept is limited to the development of transmutation fuels--a mission 
of the Advanced Fuel Cycle Initiative (AFCI) program.
    The Material Test Station (MTS) has the potential to be an integral 
part of the Generation IV and AFCI programs due to its capability to 
provide fast reactor type irradiation conditions needed for advanced 
fuels and materials development. We have requested that Los Alamos 
National Laboratory and Idaho National Laboratory coordinate to develop 
analysis and plans that will inform the Department's future decisions 
regarding fast-neutron irradiating capabilities.

              ADVANCED FUEL CYCLE--EBR-II FUEL/EM CLEANUP

    Question. Mr. Magwood, I understand that your office is responsible 
for managing the EBR-II spent fuel treatment activities under the 
Advanced Fuel Cycle initiative. Does this fuel contribute to the 
underlying research program, or is this a way for the Office of 
Environmental Management to keep yet another waste stream out of their 
portfolio and off their books?
    Answer. Experience gained in processing spent metallic fuel from 
the EBR-II sodium-cooled fast reactor has contributed to the 
development of pyrochemical processing technology. We are working with 
Idaho National Laboratory to establish the most efficient approach to 
meeting our R&D goals while adhering to all the Department's 
commitments to the State of Idaho.
    Question. How much did the Office of Nuclear Energy pay to safely 
store this material last year? How could this funding could be better 
applied if it were not obligated to maintaining this cleanup 
responsibility?
    Answer. Twenty-five metric tons of EBR-II spent fuel are stored at 
the Idaho National Laboratory (INL). Two of these tons are located at 
the Idaho Nuclear Technology and Engineering Center (INTEC), which is 
the responsibility of the Office of Environmental Management; the 
Office of Nuclear Energy, Science and Technology (NE) does not fund the 
storage of that material. An additional 23 metric tons of EBR-II spent 
fuel is stored at the INL Materials and Fuels Complex and is the 
responsibility of NE. The annual storage cost to the Office of Nuclear 
Energy is $40,000. The charge is part of NE's general infrastructure 
maintenance function and is not the responsibility of its research 
programs.
    Question. Mr. Magwood, the Nuclear Energy Engineering Research 
(NEER) Program restarted in fiscal year 1998 has the goal of 
strengthening the academic community's nuclear engineering 
infrastructure. The mechanism for doing this is by funding research at 
U.S. universities and colleges with nuclear engineering degree 
programs. The Department announced in March 2004 that it was awarding 
$3.6 million from fiscal year 2004 funding to universities through the 
NEER. I have been told that the Department has still not released this 
$3.6 million--from fiscal year 2004. Have you disbursed funding fiscal 
year 2004?
    Answer. I believe your question relates to our Nuclear Energy 
Research Initiative (NERI). In fiscal year 2004, the Department issued 
a NERI solicitation and 160 proposals were received from U.S. 
universities. In December 2004, 35 projects were selected from the 160 
proposals after a rigorous peer review. The selected projects will be 
conducted at 25 U.S. universities in 22 different States and many of 
the participants represent institutions that have not participated in 
DOE nuclear technology programs in recent years. Funding for the 35 
projects included $3.6 million from fiscal year 2004 and $3.3 million 
from fiscal year 2005. As of April 15, 2005, all fiscal year 2004 funds 
have been disbursed, and all projects funded with fiscal year 2005 
appropriations, except one, have been awarded and appropriate funds 
disbursed.
    Question. What is the status of the fiscal year 2005 award process 
for this program?
    Answer. All projects funded with fiscal year 2005 appropriations, 
except one, have been awarded and the funds have been distributed. The 
Department plans to conduct a workshop in June 2005 to inform 
universities of our future research plans. A new solicitation will be 
issued in the summer of 2005 for awards scheduled for issuance in 
fiscal year 2006 with fiscal year 2006 appropriated funds.
    Question. Can you provide this subcommittee with a listing of which 
universities received an award and the status of those funds being 
disbursed?
    Answer. Yes, the list of universities that received Nuclear Energy 
Research Initiative awards is attached. All projects funded with fiscal 
year 2004 appropriations have been awarded. As of April 15, 2005, all 
fiscal year 2004 funds have been disbursed, and all projects funded 
with fiscal year 2005 appropriations, except one, have been awarded and 
appropriate funds disbursed.

    NUCLEAR ENERGY RESEARCH INITIATIVE--FISCAL YEAR 2005 APPLICATIONS
                     SELECTED FOR AWARD NEGOTIATIONS
                        [In thousands of dollars]
------------------------------------------------------------------------
                                                      Fiscal
           University                  Title        Year 2005    Total
                                                      Award
------------------------------------------------------------------------
University of California--       Development of a         148        457
 Berkeley.                        Risk-Based and
                                  Technology-
                                  Independent
                                  Safety Criteria
                                  for Generation
                                  IV Systems.
University of California--       Development and          191        576
 Berkeley.                        Analysis of
                                  Advanced High-
                                  Temperature
                                  Technology for
                                  Nuclear Heat
                                  Transport and
                                  Power Conversion.
Washington State University....  Selective                281        859
                                  Separation of
                                  Trivalent
                                  Actinides from
                                  Lanthanides by
                                  Aqueous
                                  Processing with
                                  Introduction of
                                  Soft Donor Atoms.
Washington State University....  Selective                245        847
                                  Separation of
                                  Americium from
                                  Lanthanides and
                                  curium By
                                  Aqueous
                                  Processing with
                                  Redox Adjustment.
Oregon State University........  Plutonium                272        764
                                  Chemistry in the
                                  UREX+ Separation
                                  Processes.
Rensselaer Polytechnic           Development of           119        374
 Institute.                       Modeling
                                  Capabilities for
                                  the Analysis of
                                  Supercritical
                                  Water-Cooled
                                  Reactor Thermal-
                                  Hydraulics and
                                  Dynamics.
State University of New York--   Novel Processing         272        817
 Stonybrooke.                     of Unique
                                  Ceramic-Based
                                  Nuclear
                                  Materials and
                                  Fuels.
University of California--Santa  Development of           180        549
 Barbara.                         High Temperature
                                  Ferritic Alloys
                                  and Performance
                                  Prediction
                                  Methods for
                                  Advanced Fission
                                  Energy Systems.
University of Cincinnati.......  BWR Assembly             129        400
                                  Optimization for
                                  Minor Actinide
                                  Recycling.
Utah State University..........  Validation and           217        600
                                  Enhancement of
                                  Computational
                                  Fluid Dynamics
                                  and Heat
                                  Transfer
                                  Predictive
                                  Capabilities for
                                  Generation IV
                                  Reactors Systems.
Arizona State University.......  Determination of         150        451
                                  Basic Structure-
                                  Property
                                  Relations for
                                  Processing and
                                  Modeling in
                                  Advanced Nuclear
                                  Fuels:
                                  Microstructure
                                  Evolution and
                                  Mechanical
                                  Properties.
Clemson University.............  The Sulfur-Iodine        289        856
                                  Cycle: Process
                                  Analysis and
                                  Design Using
                                  Comprehensive
                                  Phase
                                  Equilibrium
                                  Measurements and
                                  Modeling.
Colorado School of Mines.......  The Application          150        462
                                  of Self-
                                  Propagating-High-
                                  Temperature
                                  Synthesis (SHS)
                                  to the
                                  Fabrication of
                                  Actinide Bearing
                                  Nitride and
                                  Other Ceramic
                                  Nuclear Fuels.
Illinois Institute of            In-Situ X-ray            250        914
 Technology.                      Spectroscopic
                                  Studies of the
                                  Fundamental
                                  Chemistry of Pb
                                  and Pb-Bi
                                  Corrosion
                                  Processes at
                                  High
                                  Temperatures:
                                  Development and
                                  Assessment of
                                  Composite
                                  Corrosion
                                  Resistant
                                  Materials.
Iowa State University..........  Detailed Reactor         182        449
                                  Kinetics for CFD
                                  Modeling of
                                  Nuclear Fuel
                                  Pellet Coating
                                  for High-
                                  Temperature Gas-
                                  Cooled Reactors.
Johns Hopkins University.......  Silicon Carbide          300        902
                                  Ceramics for
                                  Compact Heat
                                  Exchangers.
                                                   ---------------------
      Total, Awards............  .................      6,870     21,077
------------------------------------------------------------------------

                      NATIONAL ACADEMY OF SCIENCES

    Question. Mr. Magwood, in the President's Budget Request, there is 
$1 million for the National Academy of Sciences to undertake an 
evaluation of the Office of Nuclear Energy's research programs. I asked 
Secretary Bodman 2 weeks ago about this request on the President's 
budget, and he didn't know. Do you know today why this request was 
made?
    Answer. The fiscal year 2006 Budget requests funding for the 
National Academy of Sciences, to undertake a comprehensive, independent 
evaluation of the nuclear energy program's goals and plans, and to 
validate the process for establishing program priorities and oversight 
(including the method for determining the relative distribution of 
budgetary resources). The evaluation will result in a comprehensive and 
detailed set of policy and research recommendations and associated 
priorities (including performance targets and metrics) for an 
integrated agenda of research activities that can best advance NE's 
fundamental mission of securing nuclear energy as a viable, long-term 
commercial energy option to provide diversity in energy supply. An 
interim evaluation will be completed in time to inform NE's 2008 budget 
planning, with a final report completed before May 2006.

                              URANIUM FUEL

    Question. Mr. Magwood, what are the Office of Nuclear Energy plans 
for ensuring that sufficient uranium supplies are available to power 
the future commercial nuclear facilities?
    Answer. The Department continually monitors the domestic and global 
nuclear fuel markets to ensure that U.S. utilities can obtain available 
supplies of uranium, conversion and enrichment to meet their needs now 
and in the future.
    Question. Has DoE looked at using blended-down material from 
nuclear weapons' program in a timeframe that would be of benefit to: 
new plants, non-proliferation and global nuclear security?
    Answer. The Department of Energy continues to review the 
disposition of its surplus highly enriched uranium in a manner that 
maximizes the return on the Government's uranium assets and contributes 
to the Department's mission of eliminating the proliferation threat 
from stockpiles of surplus fissionable materials. The National Nuclear 
Security Administration and the Office of Nuclear Energy, Science and 
Technology are beginning to explore whether a majority of the low-
enriched uranium derived from 17 metric tons of surplus highly enriched 
uranium planned to be down blended during 2006-2008 could be used in 
support of the Nuclear Power 2010 program. Legislation may be required 
to authorize the use of the material.
    Question. What issues are associated with such an idea? Does the 
DoE 2006 budget include proposals that would safely implement such a 
program while ensuring that current market is protected during such 
activities?
    Answer. The Department recognizes that the blending down of surplus 
highly enriched uranium to low-enriched uranium must be done in a 
manner that does not adversely impact the domestic uranium, conversion 
and enrichment industries. The Department's fiscal year 2006 budget 
does currently contain funding for down blending of surplus highly 
enriched uranium within the initially declared 174 metric tons. 
Specifically, the National Nuclear Security Administration has 
requested $103 million under the U.S. Uranium Disposition program for 
the down blending of highly enriched uranium to low-enriched uranium. 
This program already manages the amount of low-enriched uranium down 
blended in a safe manner that does not adversely impact the domestic 
uranium, conversion and enrichment industries. Any future efforts to 
down blend additional highly enriched uranium will take into 
consideration the same industries.

                       NUCLEAR PEBBLE BED REACTOR

    Question. Have you considered developing a high temperature gas 
cooled nuclear pebble bed reactor in the 5 to 50 MW range to power 
ships and ocean going tugs or as a portable generator in the field?
    Answer. The Office of Nuclear Energy has not investigated a high 
temperature gas-cooled reactor in the 5 to 50 Megawatt power range for 
portable land or sea application.

             ENERGY EFFICIENCY AND RENEWAL ENERGY PROGRAMS
                    ELIMINATING REDUNDANCY AMONG DOE

    Question. Mr. Garman, now that we have consolidated the 
jurisdiction for the Department of Energy within the Energy and Water 
subcommittee, we can work to eliminate redundancy and improve 
communication among program managers that may exist as a result of 
diving the jurisdiction between two subcommittees. Since you have 
managed the Energy Efficiency program for the past several years, and 
you have also served as the Under Secretary, you have a unique 
perspective on the management and scientific research ongoing among the 
offices of Science, Energy Efficiency, Fossil Energy, Energy 
Conservation and Electric Transmission. What offices or activities 
would you recommend the subcommittee focus on consolidating in order to 
reduce unnecessary overhead and focus additional resources on 
scientific research?
    Answer. The consolidation of the Office of Electric Transmission 
and Distribution and the Office of Energy Assurance, undertaken at the 
request of the Appropriations Committees, is a good example of an 
office consolidation that should reduce duplication and enhance 
coordination. I am not yet convinced that there are additional examples 
where complete office consolidations/eliminations will yield similar 
benefits, but I hope to explore the possibilities with you.
    We have also worked to reduce redundancies in our research 
activities. For instance, prior to EERE's reorganization, Biomass R&D 
activities were undertaken in each of the old offices of Power 
Technologies, Industrial Technologies, and Vehicle Technologies. While 
the program funding for biomass R&D had been artificially split between 
two appropriations accounts until last year, we have been managing it 
as a consolidated program since the reorganization. Similarly, we have 
been managing hydrogen R&D as an integrated activity among Energy 
Efficiency and Renewable Energy, the Office of Science, the Office of 
Nuclear Energy, and the Office of Fossil Energy.
    Should I be confirmed as Under Secretary, I expect to create an 
overarching Energy, Science and Environment (ESE) management and field 
management apparatus to meld these different organizations into a more 
coordinated ESE entity, with a goal to undertake better planning, 
budgeting and coordination. For example, all of the ESE offices engage 
in materials research of one kind or another that are probably not as 
coordinated and synergistic as they should be. By engaging in better 
portfolio management across the ESE office boundaries, we should be 
able to address duplication and unnecessary overhead.

                        HYDROGEN FUEL INITIATIVE

    Question. Mr. Garman, the President's budget makes the Hydrogen 
Fuel Initiative a top priority. The budget request provides $259 
million, up $33 million from fiscal year 2005 levels and up $104 
million from fiscal year 2004. Since DOE has failed to adopt a 5-year 
budget outlook as the NNSA has, it is unclear how much funding is 
necessary to develop hydrogen fuel as a competitive domestic energy 
resource in the future. What can you tell me about the budget for the 
Hydrogen Fuel Initiatives over the next 5 years?
    Answer. The President announced the Hydrogen Fuel Initiative (HFI) 
with a budget of $1.2 billion over the 5-year period from fiscal year 
2004 through fiscal year 2008. The Office of Management and Budget 
maintains a funding profile for the HFI through fiscal year 2008 that 
meets this commitment. To date, $381 million has been appropriated by 
Congress for fiscal year 2004 ($156 million) and fiscal year 2005 ($225 
million). The fiscal year 2006 budget request is $260 million, and 
similar increases are planned for fiscal year 2007 and 2008 budgets. 
Funding beyond fiscal year 2008 will be required to meet the HFI goal 
of developing the technologies to enable an industry commercialization 
decision by 2015.

                           HYDROGEN RESEARCH

    Question. Mr. Garman, the budget supports funding for Hydrogen 
research from renewable resources, nuclear energy and fossil energy. 
Which fuel do you believe shows the most promise in producing hydrogen 
in a cost-effective fashion?
    Answer. Currently, the most cost-effective and mature technology 
for producing hydrogen is the reforming of natural gas. Distributed 
production of hydrogen from natural gas will likely be the predominant 
approach during the initial transition to a hydrogen infrastructure. 
Research is underway to make other promising approaches cost-effective 
to ensure that the large quantities of hydrogen needed in the longer 
term are produced from diverse, domestic resources with near-zero 
greenhouse gas emissions. These approaches include the use of coal with 
carbon sequestration; renewables such as biomass, wind, and solar; and 
nuclear. The ultimate mix of resources and technologies that will be 
utilized for hydrogen production will depend on the degree of technical 
advancements and relative costs of the various options over the next 
decade.

                          HYDROGEN PRODUCTION

    Question. Mr. Garman, what other factors other than economics 
should be considered in producing hydrogen?
    Answer. The key drivers for the President's Hydrogen Fuel 
Initiative are energy security and environmental quality. It is 
important to ensure that when large quantities of hydrogen are 
produced, it is produced from domestic resources with technologies that 
result in near-zero net greenhouse gas emissions. ``Well-to-wheels'' 
energy efficiency, the measure of the energy efficiency of the complete 
energy chain from the production of hydrogen from basic feedstocks to 
its consumption in the vehicle, is also a consideration.

                    HYDROGEN TECHNOLOGY DEVELOPMENT

    Question. Mr. Garman, which technologies show the most promise, and 
which office within DOE will be responsible for supporting hydrogen 
technology development?
    Answer. Currently, the lowest cost option for hydrogen production 
is natural gas reformation. Using ``well-to-wheels'' analysis, this 
option results in a 60 percent reduction in greenhouse gas emissions 
when utilized in a fuel cell vehicle compared with a conventional 
gasoline internal combustion engine vehicle.
    Promising approaches for the production of the large quantities of 
hydrogen needed to power a hydrogen economy with near-zero greenhouse 
gas emissions include coal-based production with carbon sequestration, 
supported by the Office of Fossil Energy (FE); nuclear-based 
production, supported by the Office of Nuclear Energy, Science and 
Technology (NE); and renewable-based production such as biomass, wind, 
and solar, supported by the Office of Energy Efficiency and Renewable 
Energy (EERE). In addition, the Office of Science (SC) supports basic 
research addressing the more long-term methods of photoelectrochemical 
and biological hydrogen production. All of these approaches show at 
least some promise. It's too early to tell which is the ``most 
promising.'' Indeed, depending on R&D advances and region-specific 
economics, more than one approach may ultimately be used for 
commercial-scale hydrogen production.
    The DOE Hydrogen Program Manager, located in EERE, is responsible 
for coordinating all the Department's hydrogen activities, including 
the FE, NE, and SC work.

                          SOLID STATE LIGHTING

    Question. Mr. Garman, it is my understanding that you have an 
active technology program for solid state lighting with the Energy 
Conservation, building technologies account. Can you please explain why 
this program is important for the U.S. lighting industry and what 
impact this may have on our Nation's energy security?
    Answer. The Department emphasizes the importance of efficiency, 
cost and lifetime of solid state lighting (SSL) technologies in its 
work, enhancing the value to consumers and the lighting industry. SSL 
sources have already replaced conventional technologies in niche 
applications such as traffic lights, exit signs, and airplane taxiway 
edge-lights. Further technology advances will drive the development of 
``white-light'' sources that could ultimately replace incandescent and 
fluorescent lamps used for general illumination. Cost-effective 
``white-light'' has the potential to significantly affect the baseload 
requirement for electricity generation. SSL technology can improve the 
Nation's energy security by reducing demand for natural gas, imports of 
which the Energy Information Administration (EIA) projects will 
increase over time.

                        INDUSTRIAL TECHNOLOGIES

    Question. The President's funding request for Industrial 
Technologies is $56.5 million, a reduction of $18.3 million from fiscal 
year 2005. The Industrial Technologies Program seeks to reduce the 
energy intensity of the U.S. industrial sector through research, 
development, validation, and deployment of energy efficient 
technologies and operating practices. The current budget proposes to 
focus less on specific energy intensive industries--such as forest and 
paper products, metals, glass, and chemicals--than it has in recent 
years. Why does the Department propose to decrease energy efficiency 
efforts in specific, key industries that provide basic materials?
    Answer. Industries, particularly our core domestic energy-intensive 
industries, are succeeding in their attempts to be more energy 
efficient, in part because of the past successes of the Industrial 
Technologies Program and because of the obvious economic incentives 
they face to cut energy costs. Continuing activities in the Industries 
of the Future (Specific) program that you reference will focus on 
bringing existing projects to successful commercialization and 
evaluating opportunities for greater performance in fiscal year 2006.

                          CONSERVATION EFFORTS

    Question. Aren't these the industries that should be emphasized in 
energy conservation efforts, to maximize the return on our Federal 
investment?
    Answer. Because industry is less likely to invest in R&D toward 
long-term energy-savings technologies, our Industrial Technologies 
Program is focusing on a fewer number of higher-risk, higher-reward 
technologies, and our budget reflects that. Fortunately, the industrial 
sector of the economy is already quite energy efficient, since it has 
an economic incentive and the financial means to reduce energy use as a 
component of its overall cost of production.

                         FREEDOMCAR INITIATIVE

    Question. Mr. Garman, it is my understanding that vehicles account 
for 54 percent of total oil usage. The FreedomCAR initiative and the 
Vehicle Technologies accounts support R&D efforts to improve gas 
mileage, create cleaner burning fuels, and improve materials to safety 
without impacting mileage. The budget provides $166 million to support 
research and development to improve engine technology, increase 
efficiency and lower emissions. Can you please update the subcommittee 
on the FreedomCAR initiative and the results your office achieved to 
increase efficiency and reduce our dependence on foreign oil?
    Answer. The Department's FreedomCAR activities, representing 61 
percent of the Vehicle Technologies Program budget, are on track to 
meet their 2010 and 2015 technology goals. The goals of FreedomCAR are 
to develop the component and infrastructure technologies necessary to 
enable significant improvements to the energy efficiency of the full 
range of affordable cars and light trucks.
    FreedomCAR has already been instrumental in developing and 
transferring to the automotive industry a range of technologies that 
can help achieve higher energy efficiencies. Examples of these 
successes include the development of: nickel metal hydride battery 
technologies used in all commercially-available hybrid electric 
vehicles; the super plastic forming of metals, a process used by 
General Motors to manufacture body parts at lower cost and with lighter 
materials; and the technical foundation for low sulfur fuels, enabling 
a new generation of high efficiency diesel engines to enter the market 
with potential large oil savings within the United States.
    Cost-competitive advances in batteries, power electronics, electric 
motors, lightweight materials, renewable fuels and advanced combustion 
that are supported by FreedomCAR could contribute to future vehicles 
being significantly more efficient than those sold today. However, it 
is important to note that technological advances we develop with 
industry will not necessarily translate into a more fuel efficient 
fleet. For this reason, the administration supports incentives to help 
accelerate the large-scale introduction of more efficient hybrid and 
advanced combustion technologies.

                        BIOMASS FUNDING PROGRAM

    Question. Mr. Garman, I have noticed that the Biomass funding 
within the Energy Supply account has dropped and you have recalibrated 
your program to support the improvement of existing technology, as 
opposed to using funds to support new ideas or the thermo-chemical 
platform. What is the rationale behind these reductions, and how much 
funding is required to support thermo-chemical platform research 
efforts in order for the Department to begin considering next 
generation biomass technology?
    Answer. Since fiscal year 2002, the Biomass Program has experienced 
a significant increase in Congressionally-directed activities that has 
limited the program's ability to focus on a full biomass R&D portfolio, 
including thermochemical platform research. Due to this reduction, the 
Office of Energy Efficiency and Renewable Energy (EERE) has focused its 
biomass efforts to meet its top priority, reducing our dependence on 
foreign oil, and funded those efforts most likely to increase 
alternative fuels production. We are leveraging Federal dollars to 
lower the technical and financial risks of developing new biorefineries 
along with the chemicals and products needed for cost-effective and 
efficient biorefineries.

                 ENERGY CONSERVATION PROGRAM DIRECTION

    Question. Contained in the fiscal year 2006 budget request is $2.9 
million to improve budget transparency and accuracy within the Energy 
Efficiency budget. Please explain how you intend to use this funding 
and if you intend to use a portion of this funding to determine how you 
can merge the various activities, functions and offices that have been 
separate as a result of the dual committee jurisdiction.
    Answer. The $2.9 million funds the Office of Energy Efficiency and 
Renewable Energy's (EERE) cross-cutting planning, analysis and 
evaluation activities in support of renewable energy programs. EERE's 
Office of Planning, Budget and Analysis has traditionally conducted 
these activities in the past and will continue to do so. No merging of 
functions or offices is planned. Funding for these activities, however, 
will now be requested at the corporate level, rather than funded 
through the budgets of individual renewable energy programs as was done 
in the past. Explicitly budgeting for these cross-cutting activities 
will provide increased transparency and more accurate organizational 
alignment. In addition, the merging of activities funded by the Energy 
and Water Development and the Interior and Related Agencies 
Appropriations should result in more consistent funding allocations for 
these cross-cutting activities.

                         FOSSIL ENERGY PROGRAMS

    Question. In the administration's budget request, we see an 
important new effort within the Solid State Energy Conversion Alliance 
(SECA) fuel cells program to develop megawatt-scale SECA Hybrid 
Systems. As I understand this, the program envisions combining a fuel 
cell with a turbine in a hybrid system that will achieve new levels of 
electric power generation efficiency with low emissions. What 
activities in this area do you envision in fiscal year 2006, and what 
is the Department's plan for this program beyond fiscal year 2006?
    Answer. The SECA program is aimed at developing advanced enabling 
fuel cell technology at relatively small modules (3 to 10 kilowatts), 
which can be used as the building blocks for larger fuel cell systems. 
In fiscal year 2006, the program will continue developing SECA core 
technology R&D to resolve crosscutting technical issues and to enhance 
individual subsystem components and overall system performance, with 
small and large-scale applications to independent modules and 
integrated ``hybrid'' systems.
    In fiscal year 2006, the SECA program will also continue MW-scale 
SECA fuel cell and fuel cell hybrids work in support of coal-derived 
gas-based systems. The hybrid program is focused on translating the 
SECA results into large scale systems for use in central coal plants, 
like FutureGen. The hybrid activities in fiscal year 2006 will include 
continuation of work under the recent solicitation for Fuel Cell Coal-
Based Systems, addresses large (>100 MWe) fuel cell power systems that 
can contribute to systems that produce affordable, efficient and 
environmentally-friendly electrical power at greater than 50 percent 
overall efficiency (HHV) from coal to ac-power, including 
CO2 separation preparatory to sequestration.
    Beyond fiscal year 2006, the Department plans to continue research 
on a cost-shared basis with its industry partners on core technologies 
for distributed generation applications and on fuel cell hybrids. 
Potential areas of research on fuel cell hybrids could include stack 
scale-up, pressurization, aggregation, selection of reforming 
technology, development of control/operating strategy, coupling air 
flow to fuel cell with turbine, elimination of components like air 
blower, simplifying operation and cost reduction, assessing tradeoffs 
among all subsystems, simplifying operation and cost reduction, and 
addressing the turbine development needs for hybrid use. The hybrid 
part of the SECA program is targeted to providing proof-of-concept fuel 
cell hybrid systems beginning in 2012 in concert with FutureGen.
    Question. The administration's budget request for Distributed 
Generation--Fuel Cells provides that funding in the Solid State Energy 
Conversion Alliance (SECA) program will be used to ``continue MW-scale 
SECA fuel cell and fuel cell hybrids work.'' What activities in this 
area do you envision in fiscal year 2006, and what is the Department's 
plan for this program beyond fiscal year 2006?
    Answer. The SECA program is aimed at developing advanced enabling 
fuel cell technology at relatively small modules (3 to 10 kilowatts), 
which can be used as the building blocks for larger fuel cell systems. 
In fiscal year 2006, the program will continue developing SECA core 
technology R&D to resolve crosscutting technical issues and to enhance 
individual subsystem components and overall system performance, with 
small and large-scale applications to independent modules and 
integrated ``hybrid'' systems.
    In fiscal year 2006, the SECA program will also continue MW-scale 
SECA fuel cell and fuel cell hybrids work in support of coal-derived 
gas-based systems. The hybrid program is focused on translating the 
SECA results into large scale systems for use in central coal plants, 
like FutureGen. The hybrid activities in fiscal year 2006 will include 
continuation of work under the recent solicitation for Fuel Cell Coal-
Based Systems, addresses large (>100 MWe) fuel cell power systems that 
can contribute to systems that produce affordable, efficient and 
environmentally-friendly electrical power at greater than 50 percent 
overall efficiency (HHV) from coal to ac-power, including 
CO2 separation preparatory to sequestration.
    Beyond fiscal year 2006, the Department plans to continue research 
on a cost-shared basis with its industry partners on core technologies 
for distributed generation applications and on fuel cell hybrids. 
Potential areas of research on fuel cell hybrids could include stack 
scale-up, pressurization, aggregation, selection of reforming 
technology, development of control/operating strategy, coupling air 
flow to fuel cell with turbine, elimination of components like air 
blower, simplifying operation and cost reduction, assessing tradeoffs 
among all subsystems, simplifying operation and cost reduction, and 
addressing the turbine development needs for hybrid use. The hybrid 
part of the SECA program is targeted to providing proof-of-concept fuel 
cell hybrid systems beginning in 2012 in concert with FutureGen.
    Question. Integrated Gasification Combined Cycle (IGCC) technology 
is a key to enabling the nationwide use of our abundant coal resources 
for electric power generation. One challenge to the deployment of IGCC 
technology on a large commercial scale is the need for engineering for 
first of a kind plant designs and technology integration. Unique 
engineering challenges must be resolved if this technology is to be 
capable of using all ranks of coal. What do you see as the Department 
of Energy's role in addressing these engineering challenges?
    Answer. The Department's role in addressing these engineering 
challenges is to conduct research, development and demonstration in a 
cost-shared partnership with industry to improve the performance and 
cost of IGCC. That research will be aimed at subsystem and component 
improvements that enhance the overall system's environmental 
performance, improve the reliability and the cost-competitiveness, and 
to provide concepts that will allow for the adaptation of these systems 
to carbon dioxide capture as the foundation for essentially zero 
emission coal based gasification plants for the future. This research 
includes the development of low-cost, longer life refractory materials 
for the gasifier that can improve reliability and also be used for 
different ranks of coal; advanced oxygen membrane technology to lower 
cost and improve efficiency; low-cost, ultra-clean gas stream cleanup 
systems; development of more efficient, low-cost gasifiers that can run 
on low rank coals; advanced catalysts for shift reactions to produce 
hydrogen and synthesis gas for use in advanced turbines; advanced 
combustion turbines that can run on high hydrogen content while 
producing ultra-low levels of nitrogen oxides (less than 3 parts per 
million). Also, innovative design configurations that include advanced 
sensors and controls will provide the basis for follow-on generations 
of lower-cost, more efficient, and higher reliability IGCCs. Finally, 
component integration and system scaling issues can be addressed, along 
with over system viability, by integrating system demonstration under 
the Clean Coal Power Initiative, including the FutureGen project.
    Question. There is renewed and growing interest in all regions of 
the country in the use of coal for baseload electricity generation. DOE 
programs in the mid-1990's demonstrated the technical feasibility of 
Integrated Gasification Combined Cycle (IGCC) technology, but not the 
commercial viability of the technology using all ranks of coal. The 
Department has a number of coal programs that focus on long term, high 
risk technologies for coal utilization. At the same time that the 
Department is addressing the development of new technologies for coal-
based power generation through FutureGen and the Clean Coal Power 
Initiative, shouldn't we also be taking steps to assure that the 
nearest term technology--IGCC--is deployed as rapidly as possible?
    Answer. We agree that we should and we are taking steps to conduct 
research, development, and demonstration that will foster deployment of 
IGCC technology. The primary impediment to early deployment of IGCC is 
its higher cost compared to conventional power plants, somewhat lower 
reliability (which is true of all new technologies until they mature) 
and the historic absence of a utility system supplier prepared to 
provide a ``wrap-around'' warranty for IGCC performance. In this 
context, the Department is pursuing the development of technology that 
would drive down the costs of IGCC and improve the reliability of 
initial systems. In addition, the Department greatly accelerates IGCC 
deployment by providing up to 50 percent of the cost for new IGCC 
plants proposed under the Clean Coal Power Initiative (CCPI). Two such 
IGCC plants demonstrated under the Clean Coal Demonstration Program 
have entered commercial service (and are the only two commercially 
operating IGCCs in the Nation). Two more IGCCs were selected to be 
demonstrated under the CCPI Program and will enter commercial service 
upon completion of their demonstration phase. With regard to ``wrap-
around'' warranties, one U.S. equipment supplier has informally 
indicated plans to do so shortly. Considerable progress is being made 
across the board.
    In the R&D Program, the Department, working with its industrial 
partners, is developing new materials (e.g., refractory liners, high 
temperature measurement and control instrumentation) that will lower 
operating and maintenance costs and improve equipment reliability, and 
plant availability, which are key steps for improving today's IGCC 
technology. Additionally, the Department is actively engaged with the 
gasification industry to develop new technologies to significantly 
reduce the cost and improve the operational effectiveness and thermal 
efficiency of future plants.
    Question. What role can DOE play in getting IGCC technology that is 
commercially ready now into operation at a number of sites across the 
country?
    Answer. In addition to the DOE actions already taken and discussed 
in the answer above, there are several possibilities, which include:
  --Share information.--We can make available relevant non-proprietary 
        information on IGCC in a useful structure and summarize the 
        information in formats useful to various decision-makers that 
        play a role power plant approval, or other important decisions 
        regarding IGCC. These decision-makers would include Public 
        Utility Commissions, State Legislators, media organizations, 
        and permitting authorities.
  --Work with regulators.--We have been meeting for several months with 
        EPA on ways we can facilitate permitting of new IGCCs.
    Question. The Office of Fossil Energy will have spent $324 million 
on fuel cell research and development (R&D) over the past 5 years 
(including the fiscal year 2006 request of $65 million--fiscal year 
2006 Congressional Budget page 103). The fuel cell ``SECA'' R&D effort 
has six participants, many of whom are not meeting programmatically 
imposed technical and financial metrics. When will there be a 
significant down-select of partners?
    Answer. The SECA program is structured with three phases. Each 
phase has progressive goals to ensure that appropriate progress is made 
before approval to continue to the next phase. At this time SECA is 
entering a critical evaluation period for the first phase. All teams 
that qualify will be permitted to continue, subject to the availability 
of funds.
    The SECA teams are pursuing various designs for stationary and 
auxiliary power market applications. Having multiple teams 
significantly reduces the overall risk of the government's investment, 
creates competitions among the teams for early market entry, increases 
the potential range of products and public benefits associated with 
those products, and should create competitive pricing that will make 
fuel cells affordable to consumers.
    The development efforts of each team are described below:
    General Electric (GE) is developing a compact natural gas 5-kW, 
planar, 700 C to 800 C, anode-supported solid oxide fuel cell (SOFC) 
unit for residential power markets. GE is evaluating several stack 
designs, and is especially interested in extending planar SOFCs to 
large hybrid systems. GE has achieved 307 mW/cm\2\ in a radial planar, 
21-cell 800C stack. GE has already achieved over 400 mW/cm\2\ in a 
single cell exceeding its Phase I SECA targets for stack power density 
and utilization. Prototype testing will occur in 2005.
    Delphi, in partnership with Battelle/PNNL, is developing a compact 
5-kW, planar, 700 C to 800 C, anode-supported SOFC unit for the 
distributed generation and auxiliary power unit (APU) markets. Delphi 
is working on a third generation design that has achieved 420 mW/cm\2\ 
in two 30-cell stacks. Delphi is expert at system integration and high-
volume manufacturing and cost reduction. They are focused on making a 
very compact and light-weight system suitable for auxiliary power in 
transportation applications. Prototype testing will occur in 2005.
    Cummins is the world's largest manufacturer of generators to the 
recreational vehicle market. Cummins and SOFCo EFS are developing a 10-
kW product for recreational vehicles that would run on natural gas, 
diesel and propane using a catalytic partial oxidation reformer. The 
team has produced a conceptual design for a multilayer electrolyte-
supported SOFC stack assembled from low-cost building block components. 
The basic cell is a thin electrolyte layer (70 to 120 microns), 
fabricated by tape casting. Anode ink is screen-printed onto one side 
of the electrolyte tape, and cathode ink onto the other. The printed 
cell is sandwiched between layers of dense ceramic that will 
accommodate reactant gas flow and electrical conduction. The assembly 
is then co-fired to form a single repeat unit.
    Siemens Westinghouse Power Corporation (SWPC) is developing 5- to 
10-kW products to satisfy multiple markets. SWPC has developed a new 
tube design for their 5-kW units that use flattened oval, high power 
density, cathode-supported tubes. This allows for a shorter tube length 
with twice the power output, compared to their current cylindrical 
tube. The SWPC flattened high power density tubes have achieved a 300 
mW/cm\2\ at 85 percent fuel utilization at 1,000 C.
    Acumentrics uses a micro-tubular anode-supported design, and is 
already offering early units for field testing. They are interested in 
the information technology applications and uninterruptible power 
supply markets, and have conducted over a dozen early unit field tests. 
The advantages of smaller diameter tubes are higher volumetric power 
density and rapid start-up because they are less susceptible to thermal 
shock. Acumentrics units have already achieved 63 thermal cycles.
    FuelCell Energy Inc., (FCE) has brought its history of successful 
fuel cell development to a team that includes Gas Technology Institute 
(GTI) and Versa Power Systems. The acquisition of Canada's Global 
Thermoelectric, provided a 5 MW per year manufacturing facility and 
over 25,000 hours of testing experience on their RP-2, 2 kW units. At 
the beginning of fiscal year 2005, FCE combined its Canadian SOFC 
operations, into its lead product development sub-contractor, Versa 
Power Systems. This consolidation provides a greater opportunity to 
commercialize SOFC products under SECA.
    Question. The Office of Fossil Energy has requested an $11 million 
increase over fiscal year 2005 for its Innovative System Concepts 
Subactivity (``Hybrid Program'') (fiscal year 2006 request is $64.3 
million--fiscal year 2006 Congressional Budget page 104 and 105). This 
program's goal for fiscal year 2006 is the issuance of a competitive 
solicitation to advance megawatt-scale fuel cell hybrids. However, 
according to the Fuel Cell Power Association and meetings with a number 
of Fortune 500 stakeholders, we've learned that the upcoming 
solicitation is once again focusing on and requiring work on basic 
``cell and stack''. Why after investing 5 years and $324 million 
through the fuel cell program does the Innovative System Concepts 
activity (Hybrid Program) need to spend more time and another $64.3 
million on basic ``cell and stack'' R&D?
    Answer. The focus on cell and stack research is the key to 
providing fuel cell systems, whether as SECA fuel cells or in a hybrid 
system, that can achieve the power and durability performance at a cost 
target of $400 per kilowatt. This continues to be the most challenging 
part of the fuel cells program, and the industry is making substantial 
progress towards that goal. In fiscal year 2006, the program will 
continue developing SECA core technology R&D to resolve crosscutting 
technical issues and to enhance individual subsystem components and 
overall system performance, with small and large-scale applications to 
independent modules and integrated ``hybrid'' systems. The recent 
solicitation for Fuel Cell Coal-Based Systems, is focused on the 
development of large (>100 MWe) fuel cell power systems that will 
produce affordable, efficient and environmentally-friendly electrical 
power at greater than 50 percent overall efficiency (HHV) from coal to 
AC power, including CO2 separation preparatory to 
sequestration.
    The large scale, low cost fuel cell systems subprogram element is 
developing technologies for fuel cells that utilize coal gases to 
produce electricity for applications that are currently serviced by 
natural gas fueled gas turbines and diesel generators, but with 
significantly lower emissions.
    This subprogram element will address stack scale-up, 
pressurization, aggregation, selection of reforming technology, 
development of control/operating strategy, coupling air flow to fuel 
cell with turbine, elimination of components like air blower, assessing 
tradeoffs among all subsystems, and addressing the turbine development 
needs for hybrid use.
    The overall goals of this subprogram element are to simplify 
operation and lower cost by pursuing a systems approach that 
iteratively explores tradeoffs between system and subsystem. Subsystem 
development is done with the objective of determining operating 
parameters and development goals for each subsystem that optimize the 
entire system in cost/performance.

                       OFFICE OF SCIENCE PROGRAMS
                  HYDROGEN RESEARCH--OFFICE OF SCIENCE

    Question. Dr. Orbach, the President's budget provides $259 million 
in total funding for the Hydrogen Fuel Initiative. Much of the basic 
research to support the hydrogen program is done through the Basic 
Energy Sciences (BES) program within the Office of Science. The budget 
proposes $32.5 million for BES research to support the Hydrogen Fuel 
initiative. Enormous gaps remain between our capabilities in hydrogen 
production and storage, and the capabilities required for a competitive 
hydrogen economy. Given the need for basic research to generate 
breakthroughs, does the President's budget provide sufficient funding 
for basic research?
    Answer. Yes, the fiscal year 2006 request provides sufficient 
funding for basic research in hydrogen. The Department believes, as 
does the National Research Council, that a continuum of basic science, 
applied research, development, and ``learning'' demonstrations is 
necessary for the successful transition to a hydrogen economy. Applied 
research and technology demonstrations are critical to meeting the 
technology milestones leading to the 2015 industry commercialization 
decision and to begin the transition to a hydrogen economy. Basic 
research is critical to understanding the underlying science that will 
lead to more economical production, greatly improved storage, and 
improvements in fuel cell technology in the near-term and potentially 
``breakthroughs'' in the long-term. The President's Budget Request for 
fiscal year 2006 puts forward a balanced portfolio of basic science, 
applied research, development, and demonstrations that seeks to address 
both the short-term showstoppers and the long-term grand challenges.

                      LOW DOSE RADIATION RESEARCH

    Question. Dr. Orbach, last week I received an update on the 
progress of the low dose radiation research your office has been 
conducting over the past 3 years. I proposed this study because I 
believe policy makers were setting radiation standards based on poor 
quality data, especially when it came to low dose radiation. The Linear 
No-Threshold model became the basis for policy decisions since 
scientists knew very little about the effects of low-dose radiation on 
the human body. That model assumes that every unit of radiation 
exposure will result in an incremental increase in damage. Many experts 
believed this model to be flawed, but didn't have enough data to 
support their conclusions. In order to fill in the gaps, I initiated 
the low-dose research program in 1998. What are the significant 
findings of the DOE Low Dose Radiation Program and how do these finds 
affect the Linear No-Threshold Model?
    Answer. Low dose radiation studies have traditionally been 
conducted on isolated cells, the majority of which have been conducted 
by the DOE Low Dose Radiation Research Program. The responses of those 
cells were then used to estimate low dose radiation effects in tissues 
and whole organisms. DOE-funded research has shown that cells in 
tissues respond very differently to radiation than isolated cells. 
These differences are greatest for very low dose radiation exposures or 
for very low dose rate exposures where most cells in a tissue are not 
irradiated at all and the few irradiated and potentially-damaged cells 
are generally surrounded and outnumbered by unirradiated/undamaged 
cells. We now know that tissues can ``protect'' themselves from 
abnormal cells, such as radiation damaged cells, by stimulating 
defective cells to undergo ``altruistic suicide.'' If cell ``suicide'' 
occurs after tissue irradiation, the effect of that radiation would be 
less than predicted from simply knowing the number of irradiated cells 
and the biological effect of radiation on isolated cells.
    The DOE Low Dose Radiation research program is beginning to use 
these whole system or tissue concepts to understand and interpret 
radiation induced biological effects such as bystander effects, 
adaptive response, and genomic instability. The program has shown that 
bystander effects result from communication between irradiated and 
unirradiated cells. Bystander effects are an early biological response 
that seems to be programmed into tissues as tissues attempt to re-
establish homeostasis and eliminate abnormal cells. The program has 
also shown that adaptive response and radiation-induced genomic 
instability appear to result from persistent perturbations of normal 
regulatory networks that control cell and tissue behavior following 
radiation exposures. Using genome-based technologies we are now 
learning how cells communicate with each other in tissues in response 
to radiation, what causes cells and tissue to undergo different 
biological responses to radiation at different times, and how some 
people may be more sensitive to radiation while others are relatively 
resistant.
    Emerging data from the DOE Low Dose Radiation research program 
suggest that for low dose radiation exposures it is the networked, 
multicellular responses, rather than the damage to the individual cells 
per se, that dictate whether homeostasis is restored or if pathology 
ensues. High dose exposures may corrupt normal signaling and moderate 
doses of chronic irradiation may persistently alter cell phenotypes, 
compromising the surveillance of abnormal cells and enabling aberrant 
cells to accumulate and proliferate. Taken together, these new data are 
no longer consistent with the Linear No-Threshold (LNT) Model for 
cancer risk for low doses and dose rates of radiation.
    Question. If the Linear No-Threshold model is inaccurate, when will 
we have enough information from the new biological studies to 
confidently set radiation protection standards?
    Answer. This new paradigm for understanding radiation response, 
based on systems biology principles of interconnectivity and the cell 
microenvironment, is founded on the research currently supported by the 
DOE Low Dose Radiation Research Program. These critical new studies are 
rapidly evolving, stimulating new research as well as the new concepts 
for developing computational models of the effects of low doses of 
radiation on biological systems. We anticipate that scientific advances 
during the next 5 years will enable regulators to critically re-
evaluate and, if appropriate, begin to modify current radiation 
protection standards.

                        GENOMES TO LIFE PROGRAM

    Question. Dr. Orbach, It is my understanding that one of the 
results of the Human Genome Program was the creation of the Genomes to 
Life project. One goal of the program is to develop biotechnology-based 
solutions to aid in the cleanup of the Department of Energy 
environmental legacy. What are your scientists working on, and will 
these microbe solutions be safer than current environmental cleanup 
methods so that risks to workers and the public are reduced?
    Answer. Common approaches to environmental remediation involve the 
excavation, transport and disposal of contaminated media in an 
engineered structure. This approach is safe, effective, relatively 
inexpensive and has regulatory acceptance for small areas of high level 
contamination. However, there are many areas for which such an approach 
is not practical for financial or engineering reasons, including large 
areas of low-level contamination and inaccessible areas such as 
underground aquifers and deep subsurface sediments. Currently, such 
areas are managed through access controls or via expensive active 
technologies such as pump and treat. Microbial-based solutions are 
particularly attractive for such areas because they offer the 
possibility of remediating contaminants in place in otherwise 
intractable settings. Microbes naturally found in the subsurface 
possess a diverse set of metabolic capabilities which include the 
capability to degrade organic contaminants and to transform many 
inorganic contaminants to insoluble forms. Understanding the 
biomolecular processes that control such microbial activities promises 
the ability to take advantage of such capabilities in a given 
environment or to introduce such capabilities where they do not 
otherwise exist. As such, microbial-based solutions may offer 
remediation solutions where none currently exists, thereby reducing 
otherwise unmanageable risks to workers and the public. Anticipated 
microbe-based solutions would involve the conversion of contaminants 
from toxic forms or mobile forms that can move into groundwater 
supplies to nontoxic forms or immobile forms that stay in place and do 
not move into ground water supplies. These remediation approaches would 
reduce risks of human and environmental exposure that result from 
digging up, and thus disturbing, contaminants. However, the overall 
safety and desirability of these microbe-based remediation strategies 
will need to be independently investigated as part of the Ethical, 
Legal, and Societal Issues (ELSI) research component of the Genomics: 
GTL research program.

               INTERNATIONAL THERMONUCLEAR REACTOR (ITER)

    Question. Dr. Orbach, the administration continues to support ITER, 
but at the expense of the U.S. Fusion research program. Funding for the 
international partnership to build a large-scale fusion reactor is $46 
million fiscal year 2006. By prioritizing funding for ITER, it will 
delay the completion of Princeton University's fusion facility, reduce 
facility run-time to just 17 weeks a year and eliminate materials 
research funding--a critical component when dealing with the intense 
heat from fusion energy. For the past 2 years the six ITER partners 
have been unable to break the 3-to-3 tie vote to locate ITER in either 
Japan or France. Based on the current delays and tight budgets, I don't 
believe this is the best time to send our initial U.S. investment to 
the ITER project. Can you give us a status of the ITER project and the 
rationale for cutting the underlying domestic fusion research and 
education program to funding a project with no site location?
    Answer. Regarding the status of the ITER project, all six Parties 
are proceeding with technical preparations for the project in the areas 
of design, R&D and qualification of industrial vendors. The 
negotiations on the site selection have been delayed; however, recently 
the two principal Parties involved, the European Union and Japan, have 
agreed that their views are converging towards a common position and 
that they will aim at reaching an international agreement involving all 
six Parties on the ITER site issue before the G-8 summit in early July 
2005. As of May 5, the European Union and Japan have agreed on a common 
statement of the roles of the Host and Non-Host, defining the terms of 
a win-win solution for both of them. Now, each side will consider these 
terms and prepare for a political decision on who is Host and Non-Host 
by the end of June, as agreed earlier by Prime Minister Koizumi and 
President Chirac.
    In the fiscal year 2006 President's Budget we are beginning the 
transition of the domestic fusion program around a central focus on 
burning plasma physics (i.e., full U.S. participation in ITER as the 
major fusion research facility world-wide), which is a change 
repeatedly endorsed by the National Academy of Science. In making this 
transition, we have chosen to preserve the critical program areas so 
that we will be prepared to participate in ITER when it operates.

                       OFFICE OF SCIENCE FUNDING

    Question. Dr. Orbach, I am disappointed to see the President's 
budget would decrease funding to the Office of Science by nearly 4 
percent. The Office of Science is the largest source of government 
support for research in the physical sciences. Although we are clearly 
in a period of budget constraints, I question whether cuts in physical 
science research are in the long-term interests of the United States. 
The Office of Science budget request also reflects a higher priority 
placed on operating funds for scientific user facilities than on grants 
to researchers. In fact, the Office of Science budget proposes a 10 
percent cut for research grant funding overall. What are the reasons 
for the larger cuts in research grant programs relative to user 
facility operating funds?
    Answer. In this overall budget climate, we are continuing to 
position the Office of Science for the future, with investments in new 
facilities needed to stay at the forefront of science. However, these 
investments in facilities and their operations have short-term 
consequences affecting our ability to fund research. Facility 
operations are not reduced as much as research in fiscal year 2006 
primarily because we have several new facilities coming on line. The 
Spallation Neutron Source at Oak Ridge National Laboratory will begin 
operations in fiscal year 2006, as will 4 of the 5 Nanoscale Science 
Research Centers: the Center for Nanophase Materials Sciences at Oak 
Ridge National Laboratory, the Center for Integrated Nanotechnologies 
at Sandia and Los Alamos National Laboratories, the Molecular Foundry 
at Lawrence Berkeley National Laboratory, and the Center for Nanoscale 
Materials at Argonne National Laboratory. The Spallation Neutron Source 
will provide the most intense, by an order of magnitude, neutron beam 
in the world for cutting-edge research, while the Nanoscale Science 
Research Centers will provide tools found nowhere else in the world for 
exploration at the atomic level, offering huge potential for the 
discovery of entirely new ways to build materials.
    Question. Do you expect this trend to continue in future years?
    Answer. Over the next several years, we will work to ensure that an 
appropriate balance between research and facility operations is 
maintained.

                       JOINT DARK ENERGY MISSION

    Question. Dr. Orbach, I am very interested to learn more about the 
Department's commitment to the Joint Dark Energy Mission (JDEM). This 
committee has articulated its support for this program in our past 
three appropriations bills recognizing that JDEM will help scientists 
answer the most fundamental question of the day--what is the universe 
made of. Although multi-agency collaborations are wonderful when they 
work properly, they can be disastrous when the agencies don't 
cooperate, when funding levels are not appropriately matched and when 
the commitment of one agency doesn't match the commitment of the other. 
Is DOE serious about seeing this program succeed?
    Answer. Yes. The Department is very much dedicated to the science 
of the JDEM experiment. Determining the nature of dark energy is one of 
the most exciting areas of particle physics today. The Department plans 
to spend $3 million in fiscal year 2006 on R&D for the SuperNova/
Acceleration Probe, or SNAP as it is called, which will be one of the 
proposals for the dark energy science investigation for JDEM. These 
funds will be used to finalize the SNAP R&D for technology needed to 
provide a mission concept. The DOE needs NASA as a partner for critical 
financial, intellectual, and technical reasons; in particular, DOE 
needs NASA's expertise in the development of space-flight qualified 
hardware. It is our understanding that NASA plans to continue to 
support ongoing planning efforts for the project, including appropriate 
research and development, technology development, and mission concept 
studies.
    Question. What is your strategy to ensure that both DOE and NASA 
move forward to make this project happen in a timely manner?
    Answer. With the help and guidance of the White House Office of 
Science and Technology Policy, NASA and DOE are continuing a dialogue 
on this subject. At a recent meeting with NASA to discuss their 
strategic plan development, we emphasized the importance of JDEM to DOE 
and our commitment to the project. NASA assured us that JDEM is very 
important to them as well. We will continue discussions with NASA aimed 
at bringing this very important science project to fruition.
    Question. As described in the fiscal year 2005 Energy and Water 
bill, this program has organized a tremendous team of talented 
scientists and engineers; failure to move forward quickly may endanger 
this dynamic group. Does DOE intend to move forward aggressively to 
ensure this program does not wither on the vine?
    Answer. Yes. DOE plans to continue to provide R&D funds for SNAP, 
and we continue to pursue discussions with NASA about this exciting 
program.

                          SOLID STATE LIGHTING

    Question. Dr. Orbach, you had a very important workshop last March 
on the ``Nanoscience Research for Energy Needs'', and you know that one 
of Nanoscience Research Centers is located in New Mexico. Can you 
please explain the importance of solid state lighting as a nanoscience 
thrust area from this workshop and these Nanoscience Research Centers?
    Answer. ``Solid state lighting at 50 percent of the present power 
consumption'' emerged from this interagency workshop as one of nine 
research targets in energy-related research in which nanoscience is 
expected to play a key role. At present, electricity use accounts for 
about one-third of total energy consumption in the United States. Of 
that, about 20 percent of all electricity consumed goes for lighting. 
However, today's lighting is remarkably inefficient. For incandescent 
lighting, only about 5 percent of the electrical energy is converted to 
visible light; for fluorescent lighting, this increases to 25 percent. 
By comparison, building heating is typically 70 percent efficient, and 
electrical motors typically 85-95 percent efficient. Lighting therefore 
represents a large target for improved energy efficiency. Cutting the 
amount of electricity needed for lighting in half would result in a 
savings roughly equivalent to the annual energy production of 50 
nuclear reactors. The use of semiconductor-based light emitting diodes 
(LEDs) for general illumination is a rapidly developing technology that 
offers the potential of immense energy savings to the Nation and the 
world within a decade or two. For colored lighting, LED's have already 
replaced over one third of the traffic lights in the United States, 
resulting in a savings of about $1,000 per intersection per year. 
However, a number of science and technology obstacles must be overcome 
in order for solid-state lighting to reach its potential. The research 
target now is to bring this new technology to the general white-
lighting applications where the potential impacts are tremendous. 
However, before new devices can be made commercially available, 
improvements are required, particularly involving materials designed at 
the nanoscale and integrated into real-world devices. We expect one or 
more of our Nanoscale Science Research Centers to become actively 
involved in this energy challenge.

                            NUCLEAR PHYSICS

    Question. Dr. Orbach, the Office of Science 20-year facilities 
plan, released in November 2003, ranks the Rare Isotope Accelerator B 
called RIA B as one of its highest priorities. Yet the Department 
recently removed the draft RFP for RIA from its website. What is your 
timeline for proceeding with RIA?
    Answer. The Department published a draft Request for Proposal (RFP) 
for RIA and comments from potential offerors have been incorporated 
into a final version. However, a Request for Proposals will not be 
issued at this time.
    As you know funding for domestic programs will be constrained in 
the future and the decision to proceed with RIA must be made in the 
context of competing priorities and the needs of the Nation. Before 
proceeding with a project like RIA that requires a significant 
investment by the U.S. Government, the funding to construct and operate 
the proposed facility needs to be identified and the decision to 
proceed must be made in the context of other Departmental and national 
needs and priorities. Under the fiscal year 2006 request, necessary 
research and development work will continue on the RIA project. The 
Nuclear Science Advisory Committee has been asked to examine the future 
of RIA in the context of constrained budgets and competing priorities. 
Their report is due in the summer of 2005.

                     STRATEGY ON ADVANCED COMPUTING

    Question. Dr. Orbach, the Department has made a significant 
investment in both NNSA's and the Office of Science's efforts to 
improve speed, efficiency and capacity in advanced computing. Can you 
give us your strategy for the Civilian Computing Program, and what is 
your plan for reaching a 100 teraflop machine for non-weapons related 
research?
    Answer. The Office of Science strategy for advanced computing is 
focused on delivering the best science for the United States. This 
strategy is built on four principal elements:
  --(1) The Office of Science's world leading research program in 
        applied mathematics and the computer science of high 
        performance computers. These efforts have resulted in most of 
        the mathematical algorithms and software that underpin high 
        performance computing for science. The improvements in 
        scientific computing that have resulted from these efforts have 
        yielded an increase in capability over the past 2 decades that 
        equals all of the increases due to Moore's law for 
        microprocessors.
  --(2) Our investments across the Office of Science in the Scientific 
        Discovery through Advanced Computing (SciDAC) effort. This 
        effort, which we initiated in fiscal year 2001, ensures that we 
        transfer the results of our research in applied mathematics and 
        computer science to the other scientific disciplines as quickly 
        and effectively as possible. This effort has resulted in 
        significant improvements to many scientific applications, in 
        fields that range from astrophysics to magnetic fusion to 
        global change. For example, in one astrophysics code the time 
        to solution was reduced by 75 percent. We are expanding SciDAC 
        in fiscal year 2006 with a competition for SciDAC institutes 
        that can be high performance computing software centers.
  --(3) Significant enhancements to our high performance capacity 
        computing at NERSC and our connectivity to the research 
        community through ESnet. We expect to nearly double the 
        capacity available for scientific discovery at NERSC by the end 
        of fiscal year 2006.
  --(4) Finally, we have established the Leadership Computing Facility 
        (LCF) at Oak Ridge National Laboratory, which will field a 20 
        Tflop Cray X1e and a 20 Tflop Cray Red Storm (now called XT3) 
        computer as resources for science. These computers will each 
        support a small number of competitively selected teams that are 
        poised to use these resources for breakthrough science.
    Our programs balance all of these elements to deliver the most and 
best science for the country; therefore, we are not focused on 
achieving a specific level of peak performance. We hope to be able to 
increase the capability of the LCF in future years as improved 
computers that can deliver their performance on scientific applications 
become available; however, we believe that these increases must be part 
of a balanced program to deliver the mathematical, software and 
computer hardware tools that computational scientists will need.
                                 ______
                                 
              Questions Submitted by Senator Thad Cochran

                    BIOMASS RESEARCH AND DEVELOPMENT

    Question. Mr. Garman, it is important to implement a regional 
approach to biomass research because of the diversity in the United 
States. Biomass sources and techniques in Mississippi are much 
different than the biomass opportunities available in the Midwest. How 
do you perceive the Department's role in facilitating a regional 
approach to research and development?
    Answer. The Department strongly supports State and regional 
partnerships to advance our biomass research. In looking at developing 
our domestic energy resources from a national perspective, the 
Department can help to identify and support State and regional efforts 
that contribute to meeting our national energy needs. State-regional 
partnerships are currently conducting work in many areas of biomass 
research, including bio-renewable fuels, bio-based lubricants, and bio-
chemicals. Such partnerships will continue to be critically important 
to our efforts to develop technologies that will enable a robust 
biomass-based industry.

                   BUILDING NEW NUCLEAR POWER PLANTS

    Question. Mr. Magwood, Mississippi is home to the Grand Gulf 
Nuclear Station. What do you see as the main issues facing U.S. 
generating companies who might wish to build new nuclear plants? Do you 
believe Congress can help the Department of Energy to build new nuclear 
plants?
    Answer. We believe that the main issues facing U.S. generating 
companies are:
  --Permanent Nuclear Waste Disposition.--Orders of new nuclear plants 
        are dependent upon steady progress toward a clear disposition 
        path for spent nuclear fuel;
  --Price-Anderson Indemnification.--Although plants currently 
        operating continue to be indemnified through the terms of their 
        licenses, coverage is not currently available for any new 
        nuclear power plant licensed after December 31, 2003;
  --Regulatory Uncertainty.--Power companies lack confidence that the 
        new licensing processes specified in 10 CFR Part 52 will 
        prevent unnecessary and excessive delays in the construction 
        and commissioning of new plants; and,
  --Economic Uncertainty.--Although power companies' confidence in the 
        estimated cost of new nuclear power plants is growing, no new 
        nuclear plant has been ordered and built in the United States 
        for over 30 years.
    With your continued support, the Department's Nuclear Power 2010 
program is making progress in addressing some of the regulatory and 
economic uncertainties.
                                 ______
                                 
             Questions Submitted by Senator Larry E. Craig

   NEXT GENERATION NUCLEAR PLANT (NGNP) AT IDAHO NATIONAL LABORATORY

    Question. Mr. Magwood, in recent testimony, Secretary Bodman has 
expressed concern about the cost of building the Next Generation 
Nuclear Plant at the Idaho National Laboratory. As you know, Senator 
Domenici and I view the NGNP as the cornerstone of the U.S. effort to 
remain a leader in innovative nuclear technologies for the future. I 
know the NGNP plan you have developed includes significant cost sharing 
with private industry. Can you help explain for the subcommittee how 
you would like the private sector to help share in the cost of building 
NGNP and why you think they would do it?
    Answer. Before any private sector investment can be contemplated, 
we must complete the viability research and development anticipated by 
our Generation IV program. Our primary focus at this time is to assure 
that the Generation IV research program is able to answer the basic 
viability questions regarding this advanced technology. We will 
continue research and development on various Generation IV reactor 
designs to determine their compatibility with the desired goals of 
sustainability, economics, and proliferation resistance. This includes 
work on materials performance as well as evaluating the waste products 
associated with various reactor designs. As these questions are 
answered, we can consider additional steps in the future. If the 
Department ultimately decides to proceed with a demonstration of a 
nuclear reactor technology, we would look to consult with the private 
sector.

                       IDAHO NATIONAL LABORATORY

    Question. Mr. Garman, I know this is a little out of your area but 
as the former acting Under Secretary at DOE you have been engaged in 
this issue. Yesterday, I was informed that the Department of Energy 
would miss the self-imposed March 15 deadline to award the Idaho 
Cleanup Project contract. DOE will apparently miss the deadline even 
though the Idaho delegation urged DOE to expedite the contract award 
and Secretary Bodman assured us DOE would meet or beat the deadline. 
Can you tell me why the deadline has been missed and when DOE will make 
the contract award?
    Answer. The Idaho Cleanup Project contract award was officially 
announced on March 23, 2005. Although the Department had every 
intention of meeting the earlier March deadline, the additional delay 
was necessary to allow for the completion of administrative 
requirements that will ensure the integrity of the procurement process 
and ensure the execution of a sound contract, given its magnitude and 
scope.

                       IDAHO NATIONAL LABORATORY

    Question. Mr. Magwood, congratulations on a successful transition 
at the Idaho National Lab. I think the Battelle Energy Alliance is off 
to a good start and I want to work with you, Secretary Bodman, Clay 
Sell, Dave Garman and others to make sure we continue to make progress 
at the lab. Can you identify areas where you think we need to focus our 
attention to make sure the INL becomes the world class nuclear energy 
lab we want?
    Answer. The laboratory will consolidate operations and the site's 
footprint this fiscal year, a key step in enabling a successful 
transformation. In concert with the consolidation, the Battelle Energy 
Alliance (BEA) seeks to make changes in areas that will support the 
laboratory within a fiscally responsible budget envelope. Areas in 
which the BEA could direct its attention include: attracting the best 
scientists and engineers to participate in the laboratory's research 
initiatives; building extensive international and national partnerships 
and robust synergistic programs in areas such as homeland security and 
national security; and continuing research on breakthrough nuclear 
technologies. In addition, the laboratory seeks to modernize and align 
its infrastructure with the laboratory's research portfolio and 
potentially invest in nuclear science and technology education. 
Investments in the infrastructure will be prioritized and developed in 
concert with the Department's budget formulation process.
    Question. Mr. Magwood, I know your office has put together a 10-
year site plan that assesses the infrastructure needs at the INL. Do 
you think future budgets will be adequate to recapitalize the 
infrastructure at the INL or will we need options like third party 
financing to get where we need to go?
    Answer. Future budgets will be determined by using the Department's 
annual budget formulation process. This process will be used to 
prioritize recapitalization projects at INL and to reduce the 
maintenance backlog. As we develop future budgets, we will continue to 
update the plan to carefully prioritize the allocation of funding to 
the most important infrastructure projects. In addition, if 
appropriate, the Department may consider using third party financing.

                  CELLULOSIC ETHANOL COMMERCIALIZATION

    Question. Mr. Garman, I believe that you are aware that a company 
called Iogen has developed a technology that enables them to produce 
ethanol from agricultural wastes such as wheat, straw, and corn stalks. 
They have demonstrated their technology in a 50,000 gallon facility 
that is producing ethanol for sale every day. Now Iogen wants to start 
building commercial-scale ethanol plants that will produce 50 million 
gallons of ethanol per year. Those plants will provide $15 or $20 of 
additional revenue per acre for farmers who are selling them wheat 
straw, and create hundreds of quality jobs in rural America. The 
ethanol from those plants will reduce our dependence on foreign oil and 
reduce our emissions of greenhouse gas. The USDA has estimated that 
existing residues from farming activities would support hundreds of 
such plants, and could offset 10 percent or more of our foreign oil 
consumption. You also know Iogen has gotten substantial financial 
backing from a multinational oil company--Shell Oil--to develop this 
technology. Despite this, it can not get a commercial loan for the 
project because lenders will not go near new technology. Like some 
others, this technology is trapped in the ``valley of death''--the time 
when it is past the research and development phase--but not yet 
commercially proven. In the ``valley of death'', government grants are 
useless, and commercial loans are out of reach. How can the U.S. 
Government step up its commitment and accelerate the advent of this 
incredibly important new technology?
    Answer. The Biomass Program within our Office of Energy Efficiency 
and Renewable Energy is working with commercial lending institutions to 
determine the additional requirements needed to turn demonstrated 
technology into financially viable projects. As appropriate, the 
Department funds cost-shared competitive solicitations aimed at 
demonstrating technologies to the satisfaction of commercial lenders.
    Question. How can we bring this well-demonstrated technology out of 
the ``valley of death'' and into the marketplace now--and not wait 2 or 
3 or 4 years?
    Answer. The Department is not convinced that this technology is 
commercially viable at this time and therefore is unwilling to commit 
to accelerated deployment activities.
                                 ______
                                 
              Questions Submitted by Senator Patty Murray

    REPLACEMENT FACILITIES AT PACIFIC NORTHWEST NATIONAL LABORATORY

    Question. Dr. Orbach, for the past 2 years, Pacific Northwest 
National Laboratory (PNNL) has been working with the Department of 
Energy (DOE) Office of Science, NNSA, and DHS to prevent the loss of 
important R&D capabilities at risk because of accelerated cleanup of 
the 300 Area of the Hanford Reservation. There has been progress: in 
September 2004, DOE, with input from NNSA and DHS, confirmed the 
critical need for the capabilities housed in 300 Area through approval 
of Critical Decision 0 (CD-0). The Department has also requested funds 
in the fiscal year 2006 administration request. I want to thank you, 
Dr. Orbach, for your support and leadership on this critical effort. 
That said, the amount of funding requested is not sufficient to allow 
PNNL to meet the aggressive exit schedule required by the River 
Corridor Cleanup contract, which is still expected to be released this 
spring, and will require shutdown of work in the 300 Area by 2009. Can 
you detail the Department's plan and schedule for constructing the 
replacement facilities needed at PNNL?
    Answer. The Office of Science fiscal year 2006 requested funding of 
$3 million is to complete its share of the funding of the Project 
Engineering and Design (PED) for the potential PNNL replacement 
facilities. The amount would be consistent with the overall plan for 
constructing the facilities by the September 2009 deadline. NNSA is 
also requesting $5 million of PED in fiscal year 2006 to support the 
project. A summary table of funding to date is shown below.

                                        PNNL REPLACEMENT FACILITY FUNDING
                                   [Budget authority in thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal Year     Fiscal Year     Fiscal Year
                                                                   2004 Approp.    2005 Approp.    2006 Request
----------------------------------------------------------------------------------------------------------------
Office of Science...............................................             986           4,960           3,000
NNSA............................................................             600           5,000           5,000
                                                                 -----------------------------------------------
      Total, DOE................................................           1,586           9,960           8,000
----------------------------------------------------------------------------------------------------------------

    It is too early in the formal DOE project management process (i.e., 
the Critical Decision 1 review is scheduled for this summer) to fully 
address your question about the future schedule for this facility, 
though we are quite confident about our ability to deliver a potential 
replacement facility by end of fiscal year 2009 if necessary.

           ENVIRONMENTAL MOLECULAR SCIENCE LABORATORY FUNDING

    Question. Dr. Orbach, the Environmental Molecular Science 
Laboratory (EMSL), a national scientific user facility operated for the 
DOE and located at Pacific Northwest National Laboratory, has been 
operating for 7 years. Over that time, EMSL has a sustained growth rate 
of about 25 percent per year, and is currently fully subscribed. In 
2004, more than 2,100 scientists from all 50 States and around the 
world utilized EMSL's extraordinary capabilities. Unfortunately, since 
its inception, the EMSL operations budget has remained flat except for 
one increase to replace its super computer. With inflation and 
increased space and labor costs, the ``buying power'' of the EMSL 
operations budget is now less than 84 percent of what it was in fiscal 
year 1998. There is thus no remaining flexibility in the operations 
budget, and without at least modest increases, user time and 
experiments will almost certainly be curtailed. How do you plan to 
address shortfalls in user facility funding such as those faced by 
EMSL?
    Answer. The Biological and Environmental Research (BER) program 
recognizes the value that EMSL brings to scientific users engaged in 
molecular level research, and that the ever increasing number of users 
reflects that value. As a result of this recognition, the BER program 
has scheduled an expert peer review of EMSL's operations and funding by 
a subcommittee of the BER Advisory Committee in mid-May 2005. One of 
the purposes of this upcoming review is to examine EMSL's current 
capabilities and areas of scientific expertise and to make 
recommendations to refine the focus of molecular-level research, 
identify the most important capabilities to maintain and to examine 
opportunities to increase the efficiency of operations.
    Question. Can you commit that you will support efforts in Congress 
to provide additional funds for Office of Science user facilities, 
including EMSL?
    Answer. We fully support the fiscal year 2006 President's Budget 
request for the Office of Science.

                 DOE SUPPORT FOR TRAINING RADIOCHEMISTS

    Question. Mr. Magwood, all of the DOE's national laboratories are 
projecting the need for hiring chemists with expertise in nuclear 
science and nuclear applications, e.g. radiochemists. These 
radiochemists are needed by the national laboratories to address 
problems such as advance nuclear fuel cycles, nuclear forensics for 
proliferation detection and prevention, resolving legacy environmental 
issues from the Cold War, etc. At the same time, most universities have 
allowed their programs in radiochemistry to end due to perceived 
limited long-term funding opportunities in the area, especially in 
comparison to other Federal agencies. Because of this decline in 
academic radiochemistry programs, universities in the United States 
will likely not be able to produce enough radiochemists to meet DOE's 
work force needs without assistance from DOE. Mr. Magwood, what plans 
are being made by DOE to support our Nation's universities that are 
currently training radiochemists and to enable those universities to 
significantly increase the number of students they are training?
    Answer. The Department's Office of Nuclear Energy, Science and 
Technology initiated a grant program designed to arrest the decline in 
the radiochemistry discipline at U.S. universities in fiscal year 1999. 
We are continuing this program and expect to make awards to three or 
four schools in 2005. We have allocated $300,000 per year for this 
program. These funds will be used for recruiting and retaining graduate 
and post-graduate students and for the support of faculty and 
radiochemistry research. Our radiochemistry program continues to 
strengthen the discipline in the United States.
    Question. Mr. Magwood, what is DOE's plan to invest in research 
programs at these universities and to assist these institutions in 
upgrading their laboratories for hands-on work with radioactive 
materials?
    Answer. Our plans for fiscal years 2005/2006 are to continue the 
support of the Nuclear Engineering Research and Education (NEER) 
program at about $5.0 million with the number of awards varying between 
15-26 each year to the Nation's universities. We will continue to 
upgrade facilities, including laboratories and research reactors to 
enable students and faculty to conduct research at universities through 
the Innovations in Nuclear Infrastructure and Education (INIE), 
involving 33 institutions in six distinct research consortia. INIE has 
provided and will continue to provide the means for universities to 
cooperate with each other in achieving research that benefits not one 
university but many. In addition, the University Reactor 
Instrumentation program will provide funding for equipment upgrades at 
university reactors and associated facilities as well as for the 
purchase of security equipment to ensure increased facility security. 
All of these programs are designed to provide students the 
opportunities to have hands-on research throughout their academic 
careers.
    Question. Mr. Magwood, our university research reactors in the 
United States are playing a vital role in supporting essential nuclear 
infrastructure for our country. For example, some are used by 
scientists in the national laboratories for nuclear security purposes, 
by other industries for various commercial applications, and by medical 
communities to develop new technologies for the diagnosis and treatment 
of diseases. Most of the Nation's university research reactors benefit 
significantly from the regional university reactor consortia described 
above, but some do not, especially when they are not associated with a 
nuclear engineering program. The facility at Washington State 
University serves our Nation very effectively, especially in detecting 
nuclear proliferation, but benefits only marginally from the Western 
States University reactor consortium because WSU does not have a 
nuclear engineering program. Mr. Magwood, what plans are being made by 
DOE to assist such university programs in the maintenance of this 
critical infrastructure for the Nation while also providing nuclear 
science education in areas such as radiochemistry?
    Answer. The DOE Office of Nuclear Energy, Science and Technology 
(NE) University Programs effort is designed to support a wide variety 
of universities including those with radiochemistry, health physics and 
nuclear engineering programs. In addition, there are approximately 12 
schools receiving support from NE that do not possess a nuclear 
engineering program. These schools, either through the Innovations in 
Nuclear Infrastructure and Education (INIE) program or other 
educational programs, are receiving funding to support students, 
faculty and research. We consider these institutions to be vital to the 
scientific infrastructure of our universities and the Nation.

                          SUBCOMMITTEE RECESS

    Senator Domenici. With that, thanks for your efforts, and 
for your testimony, and we stand in recess.
    [Whereupon, at 3:08 p.m., Tuesday, March 15, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


 ENERGY AND WATER, AND RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 
                                  2006

                              ----------                              


                        THURSDAY, APRIL 7, 2005

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2 p.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Christopher S. Bond, presiding.
    Present: Senators Burns, Craig, Bond, Allard, Murray, 
Dorgan, and Johnson.

                      DEPARTMENT OF DEFENSE--CIVIL

                         DEPARTMENT OF THE ARMY

                       Corps of Engineers--Civil

STATEMENT OF JOHN PAUL WOODLEY, JR., PRINCIPAL DEPUTY 
            ASSISTANT SECRETARY OF THE ARMY (CIVIL 
            WORKS)

ACCOMPANIED BY:
        LIEUTENANT GENERAL CARL STROCK, CHIEF OF ENGINEERS
        MAJOR GENERAL DON RILEY, DIRECTOR, CIVIL WORKS
        ROB VINING, CHIEF, CIVIL WORKS PROGRAMS, INTEGRATION DIVISION

            OPENING STATEMENT OF SENATOR CHRISTOPHER S. BOND

    Senator Bond. Good afternoon. The hearing of the 
Subcommittee on Energy and Water, and Related Agencies, the 
Committee on Appropriations, will come to order. The chairman 
has gone with the delegation to Rome, and he was kind enough to 
ask if I would be willing to sit in for him. It's a great honor 
because of my interest in this area. I had the opportunity to 
deliver a full statement on the floor today, in support of our 
reauthorization. I will not bore you with it again this 
afternoon. For the three or four of you who may be interested 
it should be in the Congressional Record.
    Today the subcommittee will take testimony on the Fiscal 
Year 2006 Budget request for the U.S. Army Corps of Engineers 
and the Bureau of Reclamation. Our hearing will be in two 
panels. The first panel will consist of witnesses from the 
Corps of Engineers. Testifying for them will be John Paul 
Woodley, Principal Deputy Assistant Secretary of the Army for 
Civil Works and Lieutenant Carl Strock, Chief of Engineers for 
the U.S. Army Corps of Engineers. The second panel will consist 
of witnesses from the Bureau of Reclamation.

                     ADDITIONAL PREPARED STATEMENTS

    I will ask unanimous consent to place the entire opening 
statements of the Chairman Senator Domenici and Senators 
Cochran and Landrieu into the record.
    [The statements follow:]
             Prepared Statement of Senator Pete V. Domenici
    Good afternoon--the hearing will come to order.
    Today, the subcommittee will take testimony on the fiscal year 2006 
budget request for the U.S. Army Corps of Engineers and the Bureau of 
Reclamation.
    Our hearing today is broken into two panels.
    The first panel will consist of witnesses from the U.S. Army Corps 
of Engineers.
    Testifying for them will be: John Paul Woodley, Principle Deputy, 
Assistant Secretary of the Army for Civil Works, and Lieutenant General 
Carl A. Strock, Chief of Engineers for the U.S. Army Corps of 
Engineers.
    The second panel will consist of witnesses from the Bureau of 
Reclamation.
    Testifying for them will be: Mr. R. Thomas Weimer, Acting Assistant 
Secretary for Water and Science, Bureau of Reclamation, and Mr. John W. 
Keys, III, Commissioner, Bureau of Reclamation.
    I want to thank all the witnesses for appearing today.
    As you are aware, the President has made deficit reduction a top 
priority and as a result budgets are tight.

                         THE CORPS OF ENGINEERS

    The President's budget for the Corps of Engineers proposes $4.3 
billion, down nearly 8 percent ($336 million) from the current year 
appropriation.
    The Corps has taken an unfair, radical approach to developing a 
budget that rewards large and urban projects and punishes more rural 
projects and those closer to completion. By applying a one-size-fits-
all formula for funding prioritization, the Corps will end up focusing 
on a few projects while allowing others to be terminated.
    Several of the highlights for fiscal year 2006 budget include:
  --General Investigations is funded at $95 million, down 33 percent 
        ($48 million) from the current year.
  --Construction, General is funded at $1.637 billion, a decrease of 9 
        percent ($145 million) from the current year which certainly 
        doesn't help to reduce the more than $40 billion backlog in 
        unconstructed projects.
  --Mississippi River and Tributaries is funded at $270 million, a 
        decrease of 17 percent ($51.9 million) from the current year.
  --Operation and Maintenance, General is funded at $1.979 billion, an 
        increase of about 2 percent ($35.6 million) which is 
        essentially flat and does nothing to reduce the maintenance 
        backlog that has grown to more than $1 billion.
          remaining benefits to remaining costs ratio (rbrcr)
    As I mentioned earlier, this is your first budget assembled by 
business lines (navigation, flood control, environmental restoration) 
and prioritized by the use of the remaining benefit to remaining cost 
ratio (RBRCR). Based on my review of the budget, I believe you should 
choose another budgeting model for the fiscal year 2007 budget cycle.
    Thirty-one projects that you budgeted for in fiscal year 2005 were 
not budgeted in fiscal year 2006 because they did not meet your 
formula. However, you budgeted $80 million to suspend these 31 
projects. It is my understanding that had you included another $120 
million, you could have budgeted for all 31 of the projects.
    The appalling part of this budgetary decision is that six of these 
unbudgeted projects could be completed in fiscal year 2006. Yet you 
chose to schedule them for termination. I am amazed that you thought 
this was either reasonable or prudent.
    This budget relies heavily on a one-size-fits-all formula. My 
understanding of your criteria is that you have disregarded sunk costs 
and are only comparing the remaining project costs to the remaining 
project benefits and using solely that criteria to determine where 
funding should be spent. However, in a few cases, projects that didn't 
meet your criteria that you wanted to fund anyway were included in your 
budget. Further, if one looks at the distribution of projects in the 
budget proposal, the only conclusion that can be drawn is that the 
budget favors urban areas over rural areas.

                            BUDGET PROPOSALS

    The fiscal year 2006 budget has a number of proposals, some new for 
this year, some recycled from previous years.
    The budget has again assumed $181 million in hydropower revenues 
from the Power Marketing Administrations will be available to the Corps 
to for maintenance of hydropower facilities at Corps' projects. Once 
again, we will be forced to find funding to cover this proposal. We 
have tried several times to enact this proposal without success. Yet 
you continue to propose it annually.
    The budget has proposed the elimination of continuing contracts 
after fiscal year 2005 in favor of multiple year contracting. As I 
understand it, adoption of this proposal would severely limit your 
flexibility to manage the Corps' program. Not only is the use of 
continuing contracts mandated in law, we believe the use of continuing 
contracts along with reprogramming of project funds allows the Corps to 
efficiently utilize scarce funding and effectively manage a national 
program.
    The budget proposes a modification of the fiscal year 2005 beach 
policy that was rejected by the Congress. I think it is safe to assume 
that the modified policy will also be rejected.
    One other interesting proposal in the budget is that $200 million 
would be available only if the Secretary of the Army determines that 
the overall funding allocation among projects is substantially 
consistent with the performance budgeting guidelines set forth in the 
President's budget. How does the Corps plan to enforce this?

                BALANCE OF CORPS MISSIONS AND WORKFORCE

    Over the last 30 years, Congress has always attempted to balance 
the Corps program, not only among all of its competing missions but 
geographically as well.
    The value to the Nation of the Corps of Engineers' Civil Works 
water resource program has been debated for more than 150 years, 
however, the consensus has always been that the Civil Works program not 
only contributes to our national economy and it adds to our national 
defense.
    More than 3,000 Corps civilian employees have volunteered to serve 
in Iraq and Afghanistan in order to help with rebuilding efforts in 
those two countries. Most of the 200 or so uniformed services within 
the Corps have also served.
    This ability to project this type of expertise is what makes the 
Corps of Engineers unique and valuable among Federal Agencies.

                       THE BUREAU OF RECLAMATION

    The two major project accounts for the Bureau of Reclamation budget 
request are the Central Utah Completion Act Account and the Water and 
Related Resources Account.

                        THE CENTRAL UTAH PROJECT

    The Central Utah Project Completion Account is funded at $32.6 
million for fiscal year 2006, a decrease of 29 percent ($13.3 million) 
from the current year.
           bureau of reclamation, water and related resources
    The Water and Related Resources account is funded at $916.7 
million, a decrease of 5.5 percent ($52.8 million) from the current 
year.
    This account includes:
  --$128 million for the Central Valley Project;
  --$52.2 million for the Central Valley Project Restoration Fund;
  --$35 million for the California Bay-Delta Restoration;
  --$52 million for the Animas-La Plata project; and,
  --$30 million for the Water 2025 account.

                      ISSUES FOR FISCAL YEAR 2006

    The fiscal year 2006 budget proposes direct funding of routine 
Operations and Maintenance from the Power Marketing Administrations for 
the Bureau of Reclamation as well. Enabling legislation would be 
required to obtain this $30 million in revenues. If enacted on the E&W 
Bill, it would score against this subcommittee's allocation. As such, 
this is $30 million that will have to be accommodated within our 
allocation.
    Funding for rural water projects that are closer to completion are 
funded at average levels for fiscal year 2006. Rural water projects 
that were initiated within the last 3 years are not funded. This budget 
will further drag out completion of these projects and the delivery of 
fresh water to these communities.
    Two areas of your budget that I believe you have again seriously 
underfunded are Advanced Water Treatment technologies and water 
reclamation and reuse.
    Under Water 2025 you have included $2 million for advanced water 
treatment technologies. Perhaps under some of your challenge grants you 
anticipate work in this area as well. However, I believe that research 
and development on desalination and other advanced water treatment 
concepts is an important part of the West's future water supply.
    Likewise, water reclamation and reuse is a vital component of 
increasing near term water supplies for the West. The Federal share for 
most of these projects is about 25 percent or $20 million whichever is 
less. In many cases, the few Federal dollars involved are the 
difference as to whether these projects can move forward or not. The 
Federal dollars are leveraged against other funding to make these 
projects a success.
    The tight fiscal constraints under which we will be working this 
year will make it especially hard to find additional funds for both the 
Corps and Reclamation. We will do the best that we can.
                                 ______
                                 
               Prepared Statement of Senator Thad Cochran

    Mr. Chairman, I join you in welcoming the witnesses to this 
hearing.
    I appreciate the good work the Corps of Engineers does in the State 
of Mississippi. I do, however, have some serious concerns with the 
Corps' ability to continue to carry out its responsibilities due to 
declining levels of funding. The Civil Works program appears to be 
funded at a level that is insufficient.
    Locks and dams are deteriorating, and the Corps doesn't have the 
resources needed to dredge the waterways that carry commercial cargo, 
such as the Mississippi River, not to mention many other waterways. The 
maintenance backlog also continues to grow and become more serious.
    In addition, we are not adequately constructing or maintaining 
important flood control structures that are needed in any areas.
    Another area of concern is the recent change in the way the Corps 
of Engineers approaches reprogramming guidelines that were provided in 
the fiscal year 2005 Omnibus Appropriations bill. As you know, I signed 
a letter yesterday with Chairman Domenici and Ranking Member Reid 
expressing my concerns over the sudden change in this program and the 
change in the way you use the continuing contract clause. I look 
forward to hearing your explanation regarding these new policies.
    I appreciate the efforts of the Corps of Engineers but worry about 
inadequate funding of your important missions. The Corps is charged 
with improving safety and security for our Nation's citizens, and I 
hope that this committee will provide the resources necessary complete 
these missions.
                                 ______
                                 
             Prepared Statement of Senator Mary L. Landrieu

    Mr. Chairman, thank you for calling this hearing to review the 
President's budget for the Army Corps of Engineers and the Bureau of 
Reclamation.
    Before I comment on any specific budget matters, I wish to express 
my appreciation for being a member of this subcommittee. Its 
jurisdiction over both energy and water are matters of monumental 
concern to my State of Louisiana and our Nation. For these reasons and 
because of the relationships which we have built, I sincerely look 
forward to working with all of you.
    For many years, Congress has provided more funding for the Civil 
Works program of the Army Corps of Engineers than requested by the 
administration. In recent years, Congress has appropriated 
approximately 10 percent more funding; however, last year Congress 
enacted 14 percent more than requested. Once again, the administration 
has requested less funding for fiscal year 2006 for the Corps than was 
provided by Congress for the current fiscal year.
    The impact of the administration's inadequate Corps funding 
requests are felt throughout the Nation on vital projects causing a 
delay in their completion and resulting benefits. Many of these 
projects are physically located in Louisiana but greatly impact the 
entire Nation. The most notable project is the coastal restoration 
effort in Louisiana to save America's Wetland.
    The Louisiana Coastal Area comprises one of the Nation's largest 
expanses of coastal wetlands. As an environmental treasure, it supports 
a diverse collection of migratory birds, fish, and other species. As a 
productive natural asset, the Louisiana Coastal Area supports an 
extensive energy infrastructure network responsible for an estimated 20 
percent of our Nation's energy and provides over 20 percent of the 
seafood consumed in the United States. Additionally, offshore oil and 
gas production off of Louisiana's coast is one of the U.S. Treasury's 
largest revenue sources. In 2001, this production contributed 
approximately $5.1 billion to the Federal Government.
    Despite these significant national contributions made by the 
Louisiana Coastal Area and its resulting standing as America's Wetland, 
it accounts for 90 percent of the Nation's total coastal marsh loss. 
This destruction puts all of its national benefits at risks. 
Accordingly, the Corps along with the State of Louisiana has been 
engaged in the development of a comprehensive coastal restoration plan. 
Hopefully, implementation of this plan will begin soon, and this 
Congress will provide the Corps with the funding necessary to do the 
job. I will continue to work with all of you toward achieving this 
vital goal.
    Another example of a project physically located in Louisiana having 
national implications is the Inner Harbor Navigation Canal (IHNC) lock 
project. This project at the Port of New Orleans was improperly zeroed 
out in the President's budget, even though its ``Remaining Benefits to 
Remaining Costs'' ratio meets and exceeds the threshold established by 
the administration for projects such as this to be included in the 
budget. Congress first authorized the replacement of this lock in 1956! 
It is a project of national significance that impacts trade in over 25 
States on a daily basis. In fact, over 16 million tons of cargo move 
through this lock each year. I understand from the Corps that the 
fiscal year 2006 capability for this project is $25 million. I look 
forward to working with the chairman to fund this lock project at the 
best possible level in this year's Energy and Water bill.
    Another Louisiana project of major significance is the Southeast 
Louisiana Flood Control Project, otherwise known as the SELA project. 
It is only funded at $10.49 million in the President's budget request, 
even though the Corps' stated capability for this project is $63 
million. Mr. Chairman, you will remember from your visit to Louisiana 
in the past few years the importance of this project to the safety and 
well-being of literally millions of people in my State. Over 30 percent 
of the population of my State reside in the flood prone areas of south 
Louisiana. Only last year, we all watched with horror as four separate 
hurricanes battered the Gulf South, including, of course, Louisiana. 
That experience reminded us all of the urgent need to complete the SELA 
project as soon as possible. Thanks to your support, Mr. Chairman, this 
project has been a priority of this subcommittee for many years. I am 
again looking forward to working with you and your staff to ensure that 
the SELA project is funded at the highest possible level in this year's 
bill.
    Besides these and many other ongoing Corps construction projects in 
Louisiana, the Corps is presently engaged in two studies involving non-
traditional ports in Louisiana known as the Port of Iberia and the Port 
of Morgan City. These non-traditional ports serve as the host sites for 
fabrication of large offshore oil and gas platforms but do not move 
cargo as traditional ports do. Because of existing channel limitations, 
these fabrication ports are unable to deliver the large offshore 
structures that are currently needed in the deep waters of the Outer 
Continental Shelf. Consequently, the fabrication contracts for these 
structures are being lost to foreign ports. To protect the Nation's 
energy supply and these regional economies, these studies must be 
completed on time.
    Another Louisiana port that is vital to the Nation's energy supply 
is Port Fourchon. This port is the intermodal support base for over 75 
percent of the Gulf of Mexico's deepwater hydrocarbon development. 
Essentially, Port Fourchon serves as the jumping off point for 
personnel and supplies to operate offshore oil and gas platforms as 
well as a gateway for much of the oil and gas that is produced.
    Port Fourchon is serviced by the Leon Theriot Floodgate. In 1996, 
the Corps was asked to study the conversion of this gate into a lock to 
eliminate traffic interruptions during flood events. Because of the 
importance of this project and delays in the completion of the study, 
Congress provided the authority to the Secretary in WRDA 1999 to 
construct the conversion project upon his determination of its 
justification. Although the study has been favorably completed, the 
Secretary has not acted to make the justification determination so that 
the project can move forward. Accordingly, I encourage the Secretary to 
act on this vital project.
    In closing, Mr. Chairman, I thank you for your continued leadership 
on the Nation's water issues. I look forward to the testimony of our 
witnesses and would like to submit some questions for the record when 
appropriate.

    Senator Bond. Mr. Woodley, this is the second time in as 
many days, welcome. And General Strock, thank you for appearing 
before us. The programs administered by the U.S. Army Corps of 
Engineers are invaluable to this Nation, and provide drinking 
water, electric power, production, river transportation, 
environmental protection and restoration, protection from 
floods, emergency response and recreation.
    Few agencies in the Federal Government touch so many 
citizens with so few people who appreciate what they do, and 
they do it on a relatively small budget. In my State we have 
the high honor of working with five Corps Districts in three 
Divisions. In a water State like Missouri, we see the Corps as 
an indispensable partner in providing safety and economic 
development. The budget is ugly but this is not the only agency 
where cuts are proposed and Chairman Domenici and Senator Reid 
will do the best they can under the difficult circumstances and 
they will have broad bipartisan support in doing so. Your full 
statement will be included in the record. So I would ask you to 
summarize briefly your statements. And I would call on Senator 
Craig to see if he has an opening statement.

                    STATEMENT OF SENATOR LARRY CRAIG

    Senator Craig. Mr. Chairman, what I would do, is I have an 
opening statement that is tied to a series of questions I would 
like to ask. So why don't we take their opening testimony and 
then we can proceed into questions, if you don't mind?
    Senator Bond. Thank you very much. Now we will turn to Mr. 
Woodley.

                  STATEMENT OF JOHN PAUL WOODLEY, JR.

    Mr. Woodley. Mr. Chairman, members of the subcommittee, I 
appreciate the opportunity to testify before you today. I'm 
delighted to be accompanied this morning by Lieutenant General 
Carl Strock, the very distinguished Chief of Engineers, by 
Major General Don Riley, the Director of Civil Works for the 
Army Corps of Engineers, and Rob Vining, Chief of the Civil 
Works Programs, Integration Division.
    The fiscal year 2006 Budget for the Army Civil Works 
Program includes about $4.5 billion in Federal funding. My 
complete statement includes a breakout of this funding by Corps 
mission area, or business program as defined in the Civil Works 
Strategic Plan. In addition to the budget justification 
materials already provided, we plan to provide a 5-year budget 
plan later this month. This budget plan will help with long-
range planning for this program.
    The allocations from fiscal year 2006 Budget for planning, 
design and construction reflect a focus on those studies and 
projects with the highest expected returns in the Corps' 
primary mission areas, commercial navigation, flood and storm 
damage reduction, and aquatic ecosystem restoration.
    The budget sets priorities for construction using seven 
performance-based guidelines. A copy of the guidelines is 
attached to my complete statement.
    For the 105 projects that are funded, the budget bases the 
level of funding on relative performance. For 35 lower 
performing, previously budgeted projects that will have ongoing 
contracts, the budget has funding to either complete or 
terminate each contract, depending on the Corps of Engineers 
assessment of the relative cost of completion versus 
termination of that contract.
    The budget also proposes to place existing authority to 
award continuing contracts with new authority to award multi-
year contracts, to gain greater control over future costs.
    The Corps regulatory program to protect the aquatic 
resources receives $160 million, an increase of $10 million 
from the fiscal year 2005 Budget, and an increase of $15 
million from the fiscal year 2005 enacted appropriations. This 
funding will enable more effective protection for water and 
wetlands and more timely permit evaluations.
    The funding in the budget for other business programs such 
as recreation and emergency management is based on recent 
assessments of effectiveness.

                           PREPARED STATEMENT

    In summary Mr. Chairman, this budget and the forthcoming 5-
year plan incorporate performance budgeting principles. Many 
high performing activities would be well funded and it is true 
that many other activities, although highly justified and 
worthy, would be deferred, at least for the time being. In all, 
the budget moves ahead with many important investments that 
will yield enormous returns for the Nation's citizens. Thank 
you Mr. Chairman.
    [The statement follows:]

              Prepared Statement of John Paul Woodley, Jr.

    Mr. Chairman and distinguished members of the subcommittee, thank 
you for the opportunity to testify before the Subcommittee on Energy 
and Water Development of the Appropriations Committee and to present 
the President's budget for the Civil Works program of the Army Corps of 
Engineers for fiscal year 2006.

          OVERVIEW OF FISCAL YEAR 2006 ARMY CIVIL WORKS BUDGET

    The fiscal year 2006 budget for Army Civil Works provides funding 
to continue development and restoration of the Nation's water and 
related resources, operation and maintenance of existing navigation, 
flood damage reduction, and multiple-purpose projects, protection of 
the Nation's regulated waters and wetlands, and cleanup of sites 
contaminated as a result of the Nation's early efforts to develop 
atomic weapons.
    The budget continues the administration's focus on those activities 
within the Corps main mission areas that have high expected net 
economic and environmental returns. Building upon the administration's 
Principles for Improving Program Performance in the Civil Works 
program, which were announced in the fiscal year 2004 budget, the 
fiscal year 2006 budget uses performance criteria to allocate funding 
within each program area, in order to achieve a greater overall net 
return to the Nation from the total to be invested in fiscal year 2006.
    The budget emphasizes ongoing studies, projects and programs within 
the three main missions of the Civil Works program, namely, commercial 
navigation, flood and coastal storm damage reduction, and aquatic 
ecosystem restoration. As in the past, to be supported in the budget, a 
study or project must also meet current economic and environmental 
performance standards and be otherwise consistent with established 
policies.
    The budget provides funding for other activities as well, including 
regulatory protection of waters and wetlands, cleanup of sites 
contaminated by the Nation's early atomic weapons program, and the 
management of natural resources and provision of hydroelectric power 
and recreation services at Federally operated Civil Works projects. 
However, it does not include funding for work that should be the 
responsibility of non-Federal interests or other Federal agencies, such 
as wastewater treatment, irrigation water supply, and municipal and 
industrial water supply treatment and distribution.
    The budget includes new discretionary funding of $4.513 billion. 
This includes $200 million for the Construction account that is over 
and above the amount in last year's budget and that would be available 
if the overall allocation of funding among projects under the enacted 
legislation is substantially consistent with the performance budgeting 
guidelines proposed in the budget. The estimate for associated outlays 
is $4.643 billion.
    The budget also includes proposed appropriations language to 
reclassify certain receipts collected by three of the Federal power 
marketing administrations. The appropriations language, if enacted, 
would enable the power marketing administrations to directly fund the 
operation and maintenance costs associated with the power functions of 
the Civil Works projects that generate the power that these agencies 
sell. The budget proposes to make available $181 million in offsetting 
collections in fiscal year 2006 for this purpose, reducing the total 
discretionary funding request for the Civil Works program to $4.332 
billion.
    The first attachment to this testimony displays the current 
estimate for the distribution of the discretionary funding request by 
appropriation account, business program, and source.

                      PERFORMANCE-BASED BUDGETING

    Budget and Performance Integration, one of the initiatives of the 
President's Management Agenda, is central to the preparation of the 
fiscal year 2006 Army Civil Works budget. The budget targets funding to 
studies and projects with high returns, and incorporates performance 
planning into budget planning by program area.

Targeting Funding to Water Resources Studies and Projects with High 
        Returns
    For many years, there have been too many projects authorized and 
initiated without funding for timely completion, which has led to 
protracted construction schedules and the deferral of benefits for the 
most worthy projects. Consequently, the overall performance of the 
Civil Works program has suffered. The budget addresses this problem by 
allocations for planning, design, and construction that reflect a focus 
on those studies and construction projects with the highest expected 
returns in the Corps' primary mission areas, which are commercial 
navigation, flood and storm damage reduction, and aquatic ecosystem 
restoration. The budget also targets funding for operation and 
maintenance to the highest-return activities. These considerations are 
discussed below.
    Studies and Design.--The fiscal year 2006 budget supports funding 
for the most promising studies and preconstruction engineering and 
design (PED) activities.
    For the navigation and flood and storm damage reduction studies, 
performance was assessed based primarily on potential economic benefits 
and costs. For PED activities for such projects, the estimated ratio of 
remaining benefits to remaining costs is known, and PED activities for 
projects with ratios of 3.0 to 1 or greater at a 7 percent discount 
rate were funded. For aquatic ecosystem restoration studies and PED 
activities, performance was assessed based on relative cost-
effectiveness in solving regional and national aquatic ecosystem 
problems. In all cases, the likelihood of implementation also was 
considered, including the existence of an executed cost sharing or 
concurrent financing agreement. The fiscal year 2006 budget 
concentrates funding on the 142 most promising studies and PED 
activities. This compares to 272 studies and PED activities that were 
funded in the fiscal year 2005 budget.
    The budget for the General Investigations account is $95 million. 
Of this amount, $55 million is for studies, $6 million is for PED 
activities, and $34 million is for planning coordination, technical 
assistance, and research and development. In addition, the Flood 
Control, Mississippi and Tributaries (MR&T) account includes about $1 
million for studies and $720,000 for the collection and study of basic 
data.
    The budget provides a total of $20 million to continue planning and 
design work under the very high priority Louisiana Coastal Area study, 
which is needed to address the continuing loss of wetlands along the 
Louisiana coast. This increase of $12 million over the budget 
allocation for fiscal year 2005 reflects the progress that the Corps 
has been making in working with the State to establish priorities for 
implementation of restoration and related science and technology 
efforts over a 10-year period.
    The budget also includes funding to initiate four reconnaissance 
studies that competed successfully with the highest performing of the 
ongoing studies. Three of these studies are funded in the General 
Investigations account: Coyote Creek, California; Neches River, Texas; 
and St. Louis, Missouri. The fourth is funded in the MR&T account: a 
high priority study of opportunities to reduce flood damages and 
restore the aquatic ecosystem through the further acquisition of real 
property interests in the Atchafalaya Basin.
    One of my priorities is to improve analytical tools to support 
water resource planning and decision-making. The budget addresses this, 
for instance, by increasing funding for research and development on 
modeling and forecasting tools, including $2.4 million for the 
Navigation Economic Technologies research program funded in the General 
Investigations account.
    Construction.--The budget uses seven performance budgeting 
guidelines to allocate funds among projects in the Construction 
account, in order to achieve greater value to the Nation from the 
construction program. In conjunction, the budget proposes the repeal of 
existing continuing contract authorities and their replacement with 
modern, multi-year contracting authorities, as discussed in the section 
on ``Proposals for Programmatic Changes.''
    The performance guidelines are spelled out in the Appendix to the 
President's fiscal year 2006 budget and are provided as the second 
attachment to this testimony. Under the performance guidelines, 
construction projects are ranked and funded based on their estimated 
economic and environmental returns. The net effect is to redirect 
funding away from the lowest priority projects to accelerate completion 
of the highest priority projects. The guidelines are based on sound 
financial management principles similar to those used by private 
industry to rank and select investments.
    The budget provides $1.637 billion dollars for the Construction 
account, including $200 million that would be available only if the 
overall funding allocation among projects under the enacted 
appropriations legislation is substantially consistent with the seven 
proposed performance guidelines. The budget also provides $111 million 
dollars for construction activities in the MR&T account after a 
reduction for anticipated savings and slippages. The total of $1.748 
billion is the highest amount ever included for construction in a Civil 
Works budget. In all, the budget provides funding for 105 specifically 
authorized projects in the two accounts.
    Under the performance guidelines, all construction projects are 
ranked within their program area by their remaining benefits relative 
to their remaining costs, or, in the case of aquatic ecosystem 
restoration projects, by the extent to which they cost-effectively 
address a significant national or regional aquatic ecological problem. 
However, dam safety, seepage correction, and static instability 
correction projects are given the highest priority without regard to 
these rankings. The budget provides 100 percent of the maximum that the 
Corps can use to carry out work efficiently on 14 dam safety, seepage 
correction, and static instability correction projects.
    Based on these performance rankings, the budget identifies a total 
of 47 high priority projects. Among the 47 high priority projects are 
nine projects that the administration views as a national priority and 
38 other projects that have a high ratio of remaining benefits to 
remaining costs, or that are very cost effective in addressing a 
significant regional or national aquatic ecosystem restoration problem. 
To accelerate completion of the high priority projects, the guidelines 
provide that the budget must allocate at least 80 percent of the 
maximum that the Corps could use to carry out work on these projects 
efficiently. The Corps provided the estimates for the maximum that the 
Corps could use to carry out work on these projects efficiently in mid-
January, 2005.
    The national priority projects include eight that the 
administration previously has identified: Columbia River Fish Recovery; 
South Florida Everglades Ecosystem Restoration; Missouri River Fish and 
Wildlife Recovery; New York and New Jersey Harbor; Olmsted Locks and 
Dam; Sims Bayou, Texas; Upper Mississippi River Restoration; and West 
Bank and Vicinity, Louisiana. In addition, for the first time, Oakland 
Harbor, California, is included as a national priority.
    The budget includes $137 million for the Corps contribution to the 
Everglades restoration effort. Of this amount, $35 million is for the 
Corps to participate financially in the Modified Water Delivery 
project, along with the National Park Service. The administration has 
proposed appropriations language in the Construction account and 
companion appropriations language for the National Park Service to 
clarify that both agencies would be contributing financially to the 
Modified Water Delivery project. In addition, the budget proposes 
funding of the pilot projects program for the Comprehensive Everglades 
Restoration Plan (CERP) component of the Everglades program as part of 
design for the CERP features because the need to prove these 
technologies is central to the success of this restoration effort.
    The budget proposes funding to initiate construction of the 
Washington, DC and Vicinity flood damage reduction project, which is 
one of the highest-return projects in the Nation. The initiation of 
this project is necessary to reduce the risk of flood damage to the 
museums on the National Mall, the Franklin Delano Roosevelt Memorial, 
and the World War II Memorial.
    The budget also includes funding for an additional 44 construction 
projects. The funding is to continue work on contracts awarded before 
fiscal year 2006, and to initiate contracts in the instances of several 
beach nourishment projects to mitigate sand loss impacts due to the 
operation and maintenance of Federal navigation projects.
    The amount budgeted for the construction and major rehabilitation 
of inland waterway projects, $353 million, is the highest amount ever 
included in a Civil Works budget. This funding will help ensure the 
continued efficiency and reliability of the major locks and dams on the 
inland waterways system.
    The budget proposes that 35 previously budgeted construction 
projects with lower returns be examined for possible suspension. The 
budget provides a suspension fund of $80 million in the Construction 
account and a suspension fund of $8 million in the MR&T account for 
these projects. Where it would be less costly to complete an ongoing 
contract, that course would be pursued. Otherwise, the contract would 
not be funded, and the suspension fund would be used to pay the Federal 
share of settled claims. Construction of the suspended projects could 
be restarted in the future, to the extent that they compete 
successfully for future funding based on their relative economic and 
environmental returns.
    Operation and Maintenance.--The budget for operation and 
maintenance emphasizes essential operation and maintenance activities 
at key Corps facilities, including maintenance dredging and structural 
repairs. The program areas of navigation, flood control, hydropower, 
recreation, and natural resources management receive operation and 
maintenance funding. The overall budget for the Operation and 
Maintenance account is $1.979 billion, the highest ever included in a 
Civil Works budget. The budget provides an additional $157 million for 
operation and maintenance activities in the MR&T account, after a 
reduction for anticipated savings and slippages.
    In general, the budget provides funding for ``must-have'' operation 
and maintenance activities at Civil Works facilities. These include 
operations and time-sensitive maintenance necessary for meeting 
performance objectives at important facilities, plus efforts to comply 
with Federal environmental and other mandates.
    The budget continues the policy of establishing priorities for 
funding navigation maintenance based primarily on the extent to which a 
channel and harbor project or waterway segment supports high volumes of 
commercial traffic. The budget also funds channel and harbor projects 
that have low commercial traffic but support significant commercial 
fishing, subsistence, or public transportation benefits. Navigation 
operation and maintenance at other facilities is funded to support 
surveys and other caretaker activities.
    The budget includes funding for an assessment of the economics and 
long-term policy options for navigation facilities with relatively low 
levels of commercial traffic. The study will identify the universe of 
Federal channel and harbor projects and inland waterways segments that 
support lower levels of commercial use, classify these projects based 
on the kinds of contributions that they make, develop methods to 
quantify the differences in their attributes, and examine possible 
criteria for determining when a continued investment in operation and 
maintenance would produce a significant net return to the Nation. The 
study also will formulate a range of possible long-term options for the 
funding and management of navigation projects with lower levels of 
commercial use, evaluate these options, and examine their applicability 
to the various types of such projects.
    Since the events of September 11, 2001, the Civil Works program has 
received appropriations of $362 million to provide facility protection 
measures that have recurring costs (such as guards), to perform 
assessments of threats and consequences at critical facilities, and to 
design and implement the appropriate ``hard'' protection at those 
critical facilities. The administration is continuing its commitment to 
facility protection in fiscal year 2006, with an allocation of $72 
million for facility protection in the Operation and Maintenance 
account. Of the $72 million, about $30 million is for recurring costs, 
about $30 million is hard protection at operating projects, and $12 
million is included as a ``remaining item'' in the Operation and 
Maintenance account for recurring costs and hard protection at 
laboratory, administrative, and other facilities.
    The budget includes $20 million for an emergency maintenance 
reserve fund, from which the Assistant Secretary of the Army (Civil 
Works) would make allocations to meet high-priority, unexpected, and 
urgent maintenance needs at key facilities. When an unexpected 
emergency occurs under current practice, it is sometimes difficult to 
find the needed funds on a timely basis. The new arrangement will 
enable the Civil Works program to respond to these situations promptly, 
without interfering with other program commitments.

Incorporating Performance Planning by Program Area
    The findings and recommendations of program evaluations using the 
Program Assessment Rating Tool (PART) informed budget decisions. To the 
extent that performance data were available, the Corps used this 
information during the budget development process to allocate funding.
    The Corps also uses the PART to evaluate the performance of its 
program areas and determine whether they are achieving the desired 
results, and to improve the overall effectiveness and efficiency of 
these program areas. This year the recreation, storm damage reduction, 
and coastal channels and harbors program areas were assessed, and the 
hydropower program area was reassessed.
    On March 22, 2004, the then-Chief of Engineers and I provided the 
Civil Works Strategic Plan to the committees and subcommittees of 
Congress responsible for water development authorizations and 
appropriations, including this subcommittee. That plan included an 
effort to suggest some program-specific goals, objectives, and 
performance measures, as well as some that are crosscutting.
    Both the Civil Works Strategic Plan and the PART-based program 
evaluations are works in progress. As Civil Works programs are newly 
assessed and reassessed, the resulting findings will be addressed and 
recommendations implemented. Further, as new performance measures are 
identified and existing measures refined through the PART process, 
these changes will be reflected in the Strategic Plan through periodic 
updates.
    To illustrate how the fiscal year 2006 budget for Civil Works 
reflects performance planning, I would like next to discuss the 
Regulatory Program and the Emergency Management program.
    Regulatory Program.--The activities funded in the budget include 
permit evaluation, enforcement, oversight of mitigation efforts, 
administrative appeals, watershed studies, special area management 
plans, and environmental impact statements.
    The recent performance assessment for this program concluded that 
it is moderately effective. Better efforts are needed to ensure 
compliance with permit conditions and mitigation requirements. The 
volume of permits is growing, and billions of dollars of investments 
are affected by permit processing times. One of my priorities for the 
Civil Works program is to improve the effectiveness of aquatic resource 
protection and the efficiency of permit reviews and decision-making.
    For the regulatory program, the performance measures reflect a 
strong linkage between funding decisions and performance. The budget 
provides $160 million, which is $10 million more than included in the 
fiscal year 2005 budget, $16 million more than the enacted amount for 
fiscal year 2005, and more than has been budgeted for the regulatory 
program ever before. This increase is needed and will enable the Army 
to improve protection of aquatic resources and reduce permit evaluation 
times.
    Emergency Management.--The Emergency Management program includes 
work funded in the Flood Control and Coastal Emergencies (FCCE) account 
and the National Emergency Preparedness program, with FCCE comprising 
the bulk of the program. The FCCE account finances response and 
recovery activities for flood, storm, and hurricane events, 
preparedness for natural events, and preparedness to support to the 
Federal Emergency Management Agency through the Federal Response Plan.
    The recent performance assessment of FCCE activities concluded that 
they are moderately effective, and should be funded at the average 
annual cost of doing business so as to improve program management and 
reduce the likelihood of having to borrow from other accounts or obtain 
supplemental appropriations when disaster events occur. Accordingly, 
the fiscal year 2006 budget includes $70 million, which is 
approximately the amount that the Corps has spent in a typical year on 
flood and coastal storm emergency preparedness, response, and recovery 
activities.

                FOUR PROPOSALS FOR PROGRAMMATIC CHANGES

    Programmatic changes proposed in the budget include the following: 
the funding of beach nourishment and renourishment to address the 
impacts of navigation projects; replacement of continuing contracts 
with multi-year contracts; direct funding of hydropower operation and 
maintenance costs; and raising additional revenues to finance 
recreation modernization.

Beach Renourishment
    This year the coastal storm damage reduction program area of the 
Army Corps of Engineers (Corps) was evaluated using the Program 
Assessment Rating Tool (PART). That evaluation addressed concerns with 
having a long-term Federal involvement in periodic beach renourishment, 
which ties up out-year funds that in many instances could be invested 
in other projects that yield a greater return to the Nation. This 
finding supports a policy of not providing Federal funding for the 
costs of renourishment to replace sand lost due to ordinary, expected 
natural erosion. Therefore, the administration's view remains that non-
Federal interests should be responsible for those costs once the 
initial nourishment has been accomplished, just as they operate and 
maintain other types of projects once the installation is complete.
    The administration continues to support Federal participation in 
the initial phase of authorized beach nourishment projects for storm 
damage reduction and ecosystem restoration.
    The budget also includes funding for beach nourishment and 
renourishment to mitigate sand loss impacts to shorelines due to the 
operation and maintenance of Federal navigation projects. The budget 
proposes that both the initial nourishment and renourishment phases be 
funded by Civil Works 100 percent, but only to the extent that they 
address the impacts of Federal navigation operation and maintenance. 
The budget also proposes that this Civil Works funding be derived from 
the Harbor Maintenance Trust Fund. The budget recommends enacting this 
proposal through appropriations language for the Construction account.
    The Army will continue to participate financially in other coastal 
activities. These include the following: planning and design of coastal 
storm damage reduction and ecosystem restoration projects; deposition 
of dredged material from navigation projects on the adjacent shores 
when it is the least-cost, environmentally acceptable disposal method; 
one-time placements of dredged material for the beneficial use of storm 
damage reduction; and regional sediment management research.
    The budget also provides funding to continue renourishment-related 
activities for the Westhampton Shores area of the Fire Island Inlet to 
Montauk Point, New York, project, as called for by a court order in the 
settlement of the case of Rapf et al. vs. Suffolk County of New York et 
al.

Construction Contracting
    The budget proposes to replace the special continuing contract 
authorities of the Civil Works program with the authority to issue 
standard multi-year contracts, as are used elsewhere in the Federal 
Government. This change to multi-year contracting is needed to increase 
control over future contract costs, make more funding available in the 
out-years to complete Civil Works projects that have a high net return 
to the Nation, and subject contracting in the Civil Works program to 
the same rules and oversight that apply in other Federal agencies. The 
budget recommends enacting this proposal through an appropriations 
general provision.
    Continuing contracts involve unfunded obligations that sometimes 
can be large. This long-term commitment to fund projects regardless of 
their relative performance has reduced the overall performance of the 
Civil Works program. In addition, under continuing contracts, 
contractors may accelerate their earnings, which increases the 
immediate cost to the government of the accelerated work performed and 
could lead to contract termination, inefficient progress on remaining 
work, or the deferral or slowdown of important work on other projects.

Direct Financing of Hydropower Operation and Maintenance Costs
    In the past, the Congress generally has financed the operation and 
maintenance costs of Civil Works hydroelectric facilities from the 
General Fund, and the Federal power marketing agencies have repaid the 
Treasury for these costs from the revenues provided by ratepayers. The 
exception has been in the Pacific Northwest where, under section 2406 
of the National Energy Policy Act of 1992, Public Law 102-486, the 
Bonneville Power Administration (BPA) has directly financed the costs 
of operating and maintaining the Corps' hydroelectric facilities from 
which it receives power. BPA funds have been used in this manner since 
fiscal year 1999.
    Each year, Corps facilities experience unplanned outages around 3 
percent of the time. In 1999, the General Accounting Office found that 
the Corps' hydropower facilities are more likely to experience 
unplanned outages as private sector facilities, because the Corps does 
not always have sufficient funds appropriated from the General Fund to 
schedule the needed preventive maintenance. To address this problem, 
the budget proposes that the Southeastern Power Administration, the 
Southwestern Power Administration, and the Western Area Power 
Administration finance hydropower operation and maintenance costs 
directly, in a manner similar to the mechanism used by Bonneville. The 
budget contemplates that these power marketing administrations, in 
consultation with the Corps, would make more funding available for 
hydropower operation and maintenance in order to provide economical, 
reliable power to their customers. Unplanned outages would be expected 
to decline over time.
    The budget recommends enacting this proposal through appropriations 
language for the Operation and Maintenance account. The proposal, if 
enacted, would reclassify certain receipts collected by the power 
marketing agencies, and use the receipts to directly fund a category of 
expenses now being paid out of the General Fund.

Recreation Modernization
    The fiscal year 2006 budget proposes a recreation modernization 
initiative for Civil Works recreation facilities, based on a promising 
model now used by other major Federal recreation providers such as the 
National Park Service and the Forest Service. The goal of the 
modernization initiative is to ensure that quality public outdoor 
recreation opportunities may be provided on Corps lands into the 
future.
    The administration will propose legislation to allow the Corps to 
use additional fees and other revenues to upgrade and modernize 
recreation facilities at the sites where this money is collected. The 
legislation will include authority for the Corps to charge entrance 
fees and other types of user fees where appropriate.
    Specifically, the Corps would use the additional collections above 
a $37 million per year baseline to improve the Corps recreation 
program. This will give the Corps staff who manage Civil Works 
recreation facilities a stronger incentive to collect fees and develop 
other sources of revenue. I would expect that the people who enjoy 
recreation at Corps facilities will support this proposal as well, 
since they will know that the additional money would be used to improve 
the program.
    In conjunction with the proposed legislation, the Corps will focus 
on the following areas of interest: adjustments to fees and user 
charges under existing authority; new planning, financing, and 
management partnerships with local units of government such as Lake 
Improvement Districts; and expanded cooperation with local volunteers, 
other stakeholders, and interest groups. Demonstration projects in 
urban areas will be investigated, and the six demonstration projects 
initiated in fiscal year 2005 will be continued.

                        MANAGEMENT AND OVERSIGHT

    The Assistant Secretary of the Army (Civil Works) oversees Civil 
Works budget and policy. Corps executive direction and management of 
the Civil Works program are funded from the General Expenses account. 
The President's Management Agenda is the centerpiece of the Army's and 
the Corps' efforts to improve the effectiveness of program management.
Office of the Assistant Secretary of the Army for Civil Works
    Congress funded the Assistant Secretary's office from Energy and 
Water Development appropriations for the first time in fiscal year 
2005. The budget proposes that the Assistant Secretary's office be 
funded from the Operation and Maintenance, Army account in defense 
appropriations, as had been the custom until fiscal year 2005. The 
reasons are that the Assistant Secretary, as an advisor to the 
Secretary of the Army, has some oversight responsibilities outside the 
purview of the Subcommittee on Energy and Water Development, and the 
Assistant Secretary's office is a part of the Army headquarters, where 
many expenses are centrally funded and managed.

General Expenses
    Funding budgeted for the General Expenses account is $162 million. 
These funds will be used for executive direction and management 
activities of the Corps headquarters, the Corps division offices, and 
related support organizations that pertain to Civil Works.
    Audit activities will be financed by the Revolving Fund rather than 
under General Expenses. The fiscal year 2005 budget and enacted amount 
of $167 million includes $7 million for an audit of the Civil Works 
financial statements by the Department of Defense Inspector General. 
Financial audit activities formerly were carried out by the Army Audit 
Agency (AAA) using its own funding, but under new General Accounting 
Office auditing standards the AAA is not sufficiently independent of 
the Corps to conduct this audit. The balance statement audit being 
performed in fiscal year 2005 includes extensive review of historical 
data to remedy findings of the Inspector General. This type of review 
is appropriate for funding from the General Expenses account and is 
expected to be completed with the fiscal year 2005 funds. The costs of 
annual audits beginning in fiscal year 2006 will be considered normal 
costs of doing business and, as such, will be financed from the 
Revolving Fund and appropriately distributed to the appropriation 
accounts.

President's Management Agenda
    The Civil Works program is making progress on the President's 
Management Agenda. Like many agencies, the Corps of Engineers started 
out in 2002 with ``red'' ratings across the board.
    The Civil Works program is striving to attain ``green'' or 
``yellow'' status scores for most initiatives by July 2005. For the 
human capital initiative, significant progress is expected in reducing 
hiring time lags and integrating the accountability system into 
decisions. For competitive sourcing, the Corps has two ongoing 
competitions and is conducting preliminary planning for three more. For 
financial management, no change in status is expected until audit 
issues have been resolved and historical data have been collected. For 
e-government, efforts are underway to establish an effective Enterprise 
Architecture, adhere to cost and schedule goals, secure currently 
unsecured information technology systems, and implement applicable e-
government initiatives. For integration of budget and performance, 
efforts are under way to prepare additional program assessments and 
reassessments, to improve performance measures, and to begin to use 
performance information in short-range decision processes. For real 
property asset management, the goal is to develop and obtain approval 
of an asset management plan, an accurate and current asset inventory, 
and real property performance measures.
    I am confident that this work on the President's initiatives will 
yield greater program efficiency and effectiveness in the years to 
come.

                               CONCLUSION

    In his State of the Union Address of February 2, 2005, the 
President underscored the need to restrain spending in order to sustain 
our economic prosperity. As part of this restraint, it is important 
that total discretionary and non-security spending be held to levels 
proposed in the fiscal year 2006 budget. The budget savings and reforms 
in the budget are important components of achieving the President's 
goal of cutting the budget deficit in half by 2009, and we urge 
Congress to support these reforms. The fiscal year 2006 budget includes 
more than 150 reductions, reforms, and terminations in non-defense 
discretionary programs, one of which affects the Civil Works program, 
specifically, the Civil Works construction program: the adoption of 
performance guidelines and reduction in funding compared to fiscal year 
2005 enacted amounts. The Army wants to work with the Congress to 
achieve these savings.
    The fiscal year 2006 budget for the Army Civil Works program was 
developed using the modern management concept of performance-based 
budgeting, in line with the President's management principles.
    At $4.513 billion, this is the highest Civil Works budget in 
history. Specifically, the amounts for construction, operation and 
maintenance, and the Regulatory Program are the highest ever submitted 
to Congress.
    Nonetheless, the budget reflects explicit choices based on 
performance, particularly insofar as funding is targeted for high 
performing studies, design, and construction, and for areas where 
additional funding can make a real difference such as in the emergency 
management program and the regulatory program.
    As I have testified before, I have three priorities in mind for the 
Civil Works program. One priority is to develop the Civil Works budget 
and manage the program based on objective performance measures. My 
second priority is to improve the analytical tools that we use for 
water resources planning and decision-making, and my third priority is 
to improve the effectiveness and efficiency of the regulatory program. 
This budget contributes to the advancement of all three goals.
    The Army Civil Works budget for fiscal year 2006 will enable the 
Civil Works program to move ahead with many important investments that 
will yield good returns for the Nation in the future.
    Thank you, Mr. Chairman and members of the subcommittee, for this 
opportunity to testify on the President's fiscal year 2006 budget for 
the Civil Works program of the Army Corps of Engineers.

                              Attachment 1

 DEPARTMENT OF THE ARMY--CORPS OF ENGINEERS--CIVIL WORKS BUDGET, FISCAL
                                YEAR 2006
------------------------------------------------------------------------
                                                              Amount
------------------------------------------------------------------------
Requested New Appropriations by Account:
    General Investigations.............................     $95,000,000
    Construction.......................................   1,637,000,000
    Operation and Maintenance..........................   1,979,000,000
    Regulatory Program.................................     160,000,000
    Flood Control, Mississippi River and Tributaries...     270,000,000
    General Expenses...................................     162,000,000
    Flood Control and Coastal Emergencies..............      70,000,000
    Formerly Utilized Sites Remedial Action Program....     140,000,000
                                                        ----------------
      TOTAL............................................   4,513,000,000
                                                        ================
Requested New Appropriations by Business Program:
    Commercial Navigation..............................   1,796,000,000
        Channels and Harbors...........................    (882,000,000)
        Inland Waterways...............................    (914,000,000)
    Flood and Coastal Storm Damage Reduction...........   1,085,000,000
        (Flood Damage Reduction).......................    (998,000,000)
        (Coastal Storm Damage Reduction)...............     (87,000,000)
    Environment........................................     716,000,000
        (Aquatic Ecosystem Restoration)................    (483,000,000)
        (FUSRAP).......................................    (140,000,000)
        (Natural Resources)............................     (93,000,000)
    Hydropower.........................................     249,000,000
    Recreation.........................................     268,000,000
    Water Supply.......................................       2,000,000
    Emergency Management...............................      75,000,000
    Regulatory Program.................................     160,000,000
    Executive Direction and Management.................     162,000,000
                                                        ----------------
      TOTAL............................................   4,513,000,000
                                                        ================
Sources of New Appropriations:
    General Fund.......................................   3,436,000,000
    Harbor Maintenance Trust Fund......................     674,000,000
    Inland Waterways Trust Fund........................     184,000,000
    Special Recreation User Fees.......................      37,000,000
    Disposal Facilities User Fees......................       1,000,000
    Power Marketing Administration Direct Funding......     181,000,000
                                                        ----------------
      TOTAL............................................   4,513,000,000
                                                        ----------------
Additional New Resources:
    Rivers and Harbors Contributed Funds...............     445,000,000
    Coastal Wetlands Restoration Trust Fund............      61,000,000
    Permanent Appropriations...........................      18,000,000
                                                        ----------------
      TOTAL............................................     524,000,000
                                                        ----------------
      Total New Program Funding........................   5,037,000,000
------------------------------------------------------------------------

Attachment 2.--Department of the Army--Corps of Engineers--Civil Works 
                        Budget, Fiscal Year 2006

     PERFORMANCE BUDGETING GUIDELINES FOR CIVIL WORKS CONSTRUCTION

    1. Funding distribution and project ranking.--(a) All ongoing 
construction projects, including those not previously funded in the 
budget, will be classified as being primarily in one of the following 
program-based categories: Coastal Navigation; Inland Navigation; Flood 
Damage Reduction; Storm Damage Reduction; Aquatic Ecosystem 
Restoration; or All Other (including the major rehabilitation of 
existing commercial navigation, flood damage reduction, and hydropower 
facilities). (b) At least 70 percent of the construction budget will be 
allocated to projects in the first four of these categories. At least 5 
percent of the construction budget will be allocated to ``all other'' 
work. The funding allocated for the construction of aquatic ecosystem 
restoration projects will not exceed 25 percent of the budget in the 
construction program. Changes to these percentages are, however, 
permitted under the seventh guideline. (c) Projects in all categories 
except aquatic ecosystem restoration will be ranked by their remaining 
benefits divided by their remaining costs (RBRC). All RBRCs will be 
calculated using a 7 percent real discount rate, reflect the benefits 
and costs estimated in the most recent Corps design document, and 
account for the benefits already realized by partially completed 
projects. Aquatic ecosystem restoration projects will be ranked 
primarily based on the extent to which they cost-effectively address a 
significant regional or national aquatic ecological problem. (d) Dam 
safety, seepage, and static instability projects will be treated 
separately. They will receive the maximum level of funding that the 
Corps can spend efficiently in each fiscal year, including work that 
requires executing new contracts.
    2. Projects with very high RBRCs.--The budget will provide funds to 
accelerate work on the projects with the highest RBRCs within each 
category (or the most cost-effectiveness in addressing a significant 
regional or national aquatic ecological problem, for aquatic ecosystem 
restoration). Each of these projects will receive not less than 80 
percent or the maximum level of funding that the Corps can spend 
efficiently in each fiscal year, including work that requires executing 
new contracts.
    3. New starts and resumptions.--The budget will provide funds to 
start new construction projects, and to resume work on projects on 
which the Corps has not performed any physical construction work during 
the past 3 consecutive fiscal years, only if the project would be 
ranked in the top 20 percent of the ongoing construction projects in 
its category that year and appears likely to continue to qualify for 
funding as a project with very high RBRC under the second guideline 
thereafter.
    4. Continuing contracts.--Except for projects considered for 
deferral, the budget will continue to support work under continuing 
contracts executed prior to 2006. From 2006 onward, the Corps will 
issue contracts based only on the kinds of authorities that are 
available to other Federal agencies. All new contracts will include 
clauses to minimize termination penalties, cap cancellation fees, and 
ensure that the Corps is able to limit the amount of work performed 
under each contract each year to stay within the overall funding 
provided for the project during the fiscal year. The Corps will also 
reduce out-year funding commitments by using contracts whose duration 
is limited to the period needed to achieve a substantial reduction in 
costs on the margin.
    5. Lower priority projects.--All projects with an RBRC below 3.0 
will be considered for deferral, except for aquatic ecosystem 
restoration projects. Aquatic ecosystem restoration projects that do 
not primarily address a significant regional or national aquatic 
ecological problem and are less than 50 percent complete will be 
considered for deferral, except for those that are highly cost-
effective in addressing such problems. Where a project considered for 
deferral was previously funded, the budget will cover the cost of 
terminating or completing each ongoing contract, whichever is less.
    6. Redirection of funding.--Any budget year and all future year 
savings from the suspension of ongoing construction projects, after 
covering the cost of termination or completing ongoing contracts, will 
be used to accelerate projects with high RBRCs. The savings will be 
allocated to the projects with the highest RBRCs and the highest 
environmental returns in the construction program.
    7. Ten percent rule.--The budget may allocate up to a total of 10 
percent of the available funding to ongoing construction projects 
regardless of the requirements stated above. However, this may not be 
used to start or resume any new projects.

    Senator Bond. Thank you Mr. Woodley. Lieutenant General 
Strock.

              STATEMENT OF LIEUTENANT GENERAL CARL STROCK

    General Strock. Mr. Chairman and distinguished members of 
the committee. I too am honored to testify here before you 
today, along with Mr. Woodley and my colleagues from the U.S. 
Army Corps of Engineers on the President's fiscal year 2006 
Budget for the Army Civil Works Program.
    This budget is a performance-based budget that reflects the 
realities of the national budget supporting the global war on 
terror. This budget focuses construction funding on 47 projects 
that will provide the highest returns on the Nation's 
investment, plus 14 dam safety projects.
    Funds will be used for critical water resources 
infrastructure that improves the quality of our citizens' lives 
and provides a foundation for national economic growth and 
development. The budget incorporates performance-based metrics 
for continued efficient operation of the Nation's waterborne 
navigation, flood protection, and other water resource 
management infrastructure, fair regulation of wetlands, and 
restoration of important environmental resources, such as the 
Florida Everglades, the Upper Mississippi River, and Coastal 
Louisiana. It also improves the quality of recreation services 
through stronger partnerships and modernization.
    This budget provides approximately $48.9 million to 
complete 13 projects by the end of 2006. And as part of a 
comprehensive strategy to reduce the construction backlog, the 
fiscal year 2006 budget funds 44 other projects that provide 
high returns and are consistent with current policies.
    In all, 105 projects are funded so that we can provide 
benefits to the Nation sooner. The fiscal year 2006 budget 
includes $2.142 billion for the Operations and Maintenance 
program. And I can assure you that I will continue to do all I 
can to make these programs as cost effective as possible.
    The Corps is undergoing sweeping transformational changes 
as a result of our customer and stakeholder input. We have 
implemented USACE 2012 within the Corps, becoming a major team, 
and our business processes are now focused on eight Corps 
regional business centers to more efficiently serve the public 
and the armed forces.
    We continue to strengthen our management of resources, 
streamline our planning processes, and invite the involvement 
of other Federal, State, tribal, and local agencies sponsors, 
and interested organizations to participate early in the 
planning process to ensure concerns are addressed up front 
rather than at the end of the process.
    The Corps continues to strengthen its regulatory program, 
to ensure that Wetland mitigation is effective in retaining the 
quantity, quality and functions of those critical resources. We 
also look to continue the use of external independent review on 
major Corps project studies to help ensure those studies 
sufficiently address national economic and environmental 
concerns.
    Domestically, more than 2000 USACE volunteers from around 
the Nation responded to the call to help their fellow citizens 
when four hurricanes struck the southeast last fall, and again 
after this winter's heavy rains across the Nation. Corps dams, 
levees and reservoirs provided billions of dollars in flood 
damage reduction to protect lives, homes and businesses. The 
Corps has played an integral part in the global effort to 
provide relief to the victims of the massive tsunamis triggered 
by the December 26 earthquake off the coast of Indonesia.
    Corps engineers from the Engineering Research and 
Development Center in Vicksburg, Mississippi, three Forward 
Engineering Support Teams from Japan, Alaska and Arkansas, and 
the Corps 249th Prime Power Battalion were sent to help in the 
area's recovery and we're presently supporting the U.S. Agency 
for International Developments and their continuing recovery 
efforts.
    Finally the Corps' Civil Works experience is proving 
invaluable as soldiers and civilians with the Corps of 
Engineers help to rebuild infrastructure in Iraq and 
Afghanistan. Approximately 600 civilian members are currently 
serving in Afghanistan and Iraq, sharing their knowledge and 
expertise with local engineers and other professions. To date 
over 3,000 Corps civilians have volunteered and served in the 
theater of operations, sharing the dangers and hardships of the 
soldiers that they support.

                           PREPARED STATEMENT

    Almost as important, we're using technology in support of 
our deployed team members with the full capability of our 
organization.
    So in closing, the Corps is committed to selflessly serving 
the Nation. I truly appreciate your continued support to this 
end. Thank you Mr. Chairman, members of the committee; this 
concludes my statement.
    [The statement follows:]

          Prepared Statement of Lieutenant General Carl Strock

                              INTRODUCTION

    Mr. Chairman and distinguished members of the subcommittee, I am 
honored to be testifying before your subcommittee today, along with the 
Principal Deputy Assistant Secretary of the Army (Civil Works), the 
Honorable John Paul Woodley, Jr., on the President's fiscal year 2006 
budget for the United States Army Corps of Engineers' Civil Works 
Program.
    My statement covers the following 5 topics:
  --Summary of fiscal year 2006 Program Budget,
  --Civil Works Construction Backlog,
  --Civil Works Program Transformation,
  --Value of the Civil Works Program to the Nation's Economy, and
  --Value of the Civil Works Program to the Nation's Defense.

               SUMMARY OF FISCAL YEAR 2006 PROGRAM BUDGET

Introduction
    The Fiscal Year 2006 Civil Works Budget is a performance-based 
budget that reflects the realities of a national budget supporting the 
war on terror while cutting the deficit in half. The Corps used 
performance based criteria in developing this budget, which resulted in 
a focus on the projects and activities that provide the highest-net 
economic and environmental returns on the Nation's investment. The 
Civil Works Program, including the Direct and Reimbursed programs, is 
expected to approach $6.037 billion.
    Direct Program funding, including discretionary and mandatory 
funding appropriated directly to the Corps, totals $5.037 billion. 
Discretionary funding, plus the direct funding of hydropower operation 
and maintenance expenses totals $4.513 billion; additional mandatory 
funding totals $524 million.
    Reimbursed Program funding is projected to be $1 billion.

Direct Program
    The budget reflects the administration's commitment to continued 
sound development and management of the Nation's water and related land 
resources. It incorporates performance-based metrics for continued 
efficient operation of the Nation's navigation, flood protection, and 
other water resource management infrastructure, fair regulation of the 
Nation's wetlands, and restoration of the Nation's important 
environmental resources, such as the Florida Everglades, the Upper 
Mississippi River, and Coastal Louisiana. It also improves the quality 
of recreation services through stronger partnerships and modernization.
    The budget emphasizes funding for 61 projects including 14 dam 
safety, seepage correction, and static instability projects. Funding 
for 47 projects will provide the highest-net economic and environmental 
returns on the Nation's investment. Nine of the 47 projects are 
identified as national priorities. The 47 projects include a new 
construction start, Washington DC and Vicinity, to reduce the risk of 
flood damages to the museums on the National Mall, the Franklin Delano 
Roosevelt Memorial, and the World War II Memorial. There are also 3 new 
studies under the General Investigations (GI) program and 1 under the 
Mississippi River and Tributaries (MR&T) program.

Reimbursed Program
    Through the Interagency and Intergovernmental Support Program we 
help non-DOD Federal agencies, State, and other countries with timely, 
cost-effective implementation of their programs, while maintaining and 
enhancing capabilities for execution of our Civil and Military Program 
missions. These customers rely on our extensive capabilities, 
experience, and successful track record. The work is principally 
technical oversight and management of engineering, environmental, and 
construction contracts performed by private sector firms, and is fully 
funded by the customers.
    Currently, we provide reimbursable support for about 60 other 
Federal agencies and several State and local governments. Total 
reimbursement for such work in fiscal year 2006 is projected to be $1 
billion. The largest share--nearly $388 million--is expected from the 
Federal Emergency Management Agency (FEMA) for hurricane disaster 
relief. These numbers represent and update to the President's Budget 
using the Corps internal Consolidated Civil Automated Budget accounting 
system.

                    CIVIL WORKS CONSTRUCTION BACKLOG

    The budget addresses the construction backlog primarily by 
proposing that the administration and the Congress use objective 
performance measures--the ratio of remaining benefits to remaining 
costs or, for aquatic ecosystem restoration projects, the extent to 
which the project cost-effectively addresses a significant regional or 
national ecological problem--to establish priorities among projects 
including potential new starts, and through a change in Corps contract 
authorities that would increase control over future costs. While up to 
10 percent of the available funds could be allocated to any project 
under construction regardless of performance, a greater proportion of 
the resources would be allocated to the projects that the Corps 
estimates will yield the highest returns. Over time, this approach 
would significantly improve the benefits to the Nation from the Civil 
Works construction program.
    This Budget includes $48.9 million to complete 13 projects 
(including 1 MR&T project) by the end of 2006. The figures are an 
update to the President's Budget contained in the main volume. This 
investment will enable each of these projects to begin delivering 
benefits. In all, 105 projects are funded. There are 47 projects that 
provide the highest-net economic and environmental returns on the 
Nation's investment, 14 dam safety, seepage correction, and static 
instability correction projects, and 44 ongoing construction projects.
    We believe that narrowing the focus on funding and completing a 
smaller, more beneficial set of projects will bring higher net benefits 
to the Nation sooner. That is why the Budget proposes only one new, 
high priority construction start and accelerates completion of the 
highest-return projects in each program area.

Maintenance Program
    Water and related land resource management facilities of the Civil 
Works Program are aging. As stewards of this infrastructure, we are 
working to ensure that it continues to provide an appropriate level of 
service to the Nation. Sustaining such service poses a technical 
challenge in some cases, and proper operation and maintenance, also is 
becoming more expensive as this infrastructure ages.
    The operation and maintenance program supports the operation, 
maintenance and security of existing river and harbor, flood and storm 
damage reduction and, aquatic ecosystem restoration, owned and operated 
by, or on behalf of, the Corps of Engineers, including administrative 
buildings and laboratories. Funds are also included for surveys and 
charting of northern and northwestern lakes and connecting waters, 
clearing and straightening channels, and removal of obstructions to 
navigation. Work to be accomplished includes dredging, repair, and 
operation of structures and other facilities, as authorized in the 
various River and Harbor, Flood Control, and Water Resources 
Development Acts. Related activities include aquatic plant control, 
monitoring of completed coastal projects and, removal of sunken 
vessels.
    In both the Operation and Maintenance and the Mississippi River and 
Tributaries accounts the fiscal year 2006 budget includes a total of 
$2.142 billion for operation and maintenance. To improve the efficiency 
of the investment in operation and maintenance, we will give priority 
to key features of our infrastructure and determine an appropriate 
level of service for others, considering the benefits to the Nation and 
the funding needed to support that level of service. Furthermore, we 
are searching for ways to reduce costs and thereby accomplish more with 
available resources.

                   CIVIL WORKS PROGRAM TRANSFORMATION

    Throughout its long history, the Civil Works Program has 
continually changed in response to advances in science, methods, and 
processes, changing public values and priorities, and laws. For our 
program to remain a viable contributor to national welfare, we must 
remain sensitive to such factors, and continue to reorient, rescope, 
and refocus the program in light of them. To that end, I am committed 
to reforming the Civil Works Program to meet the Nation's current water 
and related land resource management needs.
    The recently implemented USACE 2012 creates a team of teams within 
the organization. Our business processes are now being led by a 
business center within each of the eight Corps regions, in order to 
more efficiently serve the public and the armed forces. Our processes 
are more open and more collaborative. We are working to revitalize our 
planning capabilities to become more efficient, more centralized, with 
one planning center for each of our eight divisions.
    We continue to strengthen and streamline our planning processes, 
and to invite the involvement of other Federal, tribal, State and local 
agencies, sponsors, and interested parties to participate early in the 
planning process to ensure concerns are addressed up front rather than 
at the end of a plan.
    The Corps Regulatory Program is working to achieve our goal of ``no 
net loss of wetlands'', through measures that avoid and minimize 
impacts and by requiring effective mitigation to replace the functions 
of these critical resources, while making timely permit decisions.
    We also look to continue the use of external independent review on 
major Corps project studies where appropriate, to help ensure they are 
technically sound and properly address national economic and 
environmental concerns.
    Let me tell you about some of the major steps we took last year:
  --We are continuing to spread the spirit and the word of the Corps' 
        Environmental Operating Principles--a clear commitment to 
        accomplishing our work in environmentally sustainable ways--
        with the express purpose of instilling the principles as 
        individual values in all members of the Corps team.
  --The Corps of Engineers and the Office of the Assistant Secretary of 
        the Army for Civil Works have allocated additional resources to 
        strengthen our internal review capabilities, and are 
        considering other measures to further improve such capability. 
        With our restructuring under USACE 2012, we have created an 
        Office of Water Project Review in our Headquarters which 
        effectively doubled the size of our policy compliance review 
        staff. The goal is to have our economists, plan formulation 
        specialists, and environmental reviewers focus on early 
        involvement in study development to assure compliance with 
        established policy as projects are being developed. I am 
        committed to working with field commanders to provide training, 
        lessons learned and other tools to strengthen the policy 
        compliance quality control/quality assurance process.
  --We completed a Civil Works Strategic Plan that emphasizes the 
        sustainable development, management and protection of our 
        Nation's water and related land resources. This Strategic Plan 
        is a work in progress, and will be updated as performance 
        measures and objectives are developed and refined.
  --We established five national planning centers of expertise staffed 
        with some of our top engineers and scientists--a step that is 
        essential for successfully addressing the issues that 
        increasingly arise in planning a water resources project, 
        especially those that are costly, complex, or controversial, or 
        which otherwise require very specialized planning work.
  --I believe we have made progress on the President's Management 
        Agenda this year, particularly in the area of Budget and 
        Performance Integration. Specifically, we used objective 
        criteria to establish priorities for allocating funds among 
        projects in order to increase the overall net economic and 
        environmental return to the Nation from our construction and 
        general investigations programs.
    We are committed to change that leads to open and transparent 
modernization of the Civil Works Program. To this end, we are committed 
to continuing the dialogue with you and your staff. I have issued 
communication principles to ensure open, effective, and timely two-way 
communication with the entire community of water resources interests. 
We know well that we must continue to listen and communicate 
effectively in order to remain an effective origination.
  value of the civil works program to the nation's economy and defense
    We are privileged to be part of an organization that directly 
supports the President's priorities of winning the global war on 
terror, securing the homeland and contributing to the economy.

The National Welfare
    Water resources management infrastructure has improved the quality 
of our citizens' lives and supported the economic growth and 
development of this country. Our systems for navigation, flood and 
storm damage reduction projects, and efforts to restore aquatic 
ecosystems contribute to our national welfare.
    Domestically, more than 2,000 USACE volunteers from around the 
Nation responded to the call to help their fellow citizens when four 
hurricanes struck Florida and the rest of the Southeast this last fall.
    Similarly, during this winter's heavy rains across parts of the 
Nation--Corps dams, levees and reservoirs operated as designed to flood 
damages and protect lives, homes and businesses.

Research and Development
    Civil Works Program research and development provides the Nation 
with innovative engineering products, some of which can have 
applications in both civil and military infrastructure spheres. By 
creating products that improve the efficiency and competitiveness of 
the Nation's engineering and construction industry and providing more 
cost-effective ways to operate and maintain infrastructure, Civil Works 
Program research and development contributes to the national economy.

The National Defense
    The Civil Works Program is a valuable asset in support of Homeland 
Security in that it helps to maintain a trained engineering workforce, 
with world-class expertise, capable of responding to a variety of 
situations across the spectrum of our operations. This force is 
familiar with the Army culture and responsive to the chain of command. 
Skills developed in managing large water and land resource management 
projects transfer to most tactical engineering-related operations. As a 
byproduct, Army Engineer officers assigned to the Civil Works Program 
receive valuable training, in managing large projects.
    The Corps of Engineers continues to contribute to the ongoing 
global war on terror, as our civil works experience proves invaluable 
in restoring and rebuilding the infrastructure of Iraq and Afghanistan. 
More than 3,000 civilians have voluntarily deployed and approximately 
600 are currently serving along with soldiers to provide engineering 
expertise and quality construction management in these nations.
    In Iraq, the Gulf Region Division has overseen the initiation of 
more than 2,000 reconstruction projects valued at over $4 billion. More 
than 500 projects are complete. These projects provide employment and 
hope for the Iraqi people. They are visible signs of progress.
    In Afghanistan, the Corps is spearheading a comprehensive 
infrastructure program for the Afghan national army, and is also aiding 
in important public infrastructure projects.
    The Corps has also played an integral part in the global effort to 
provide relief to the victims of the massive tsunamis triggered by the 
Dec. 26 earthquake off the coast of Indonesia. Corps engineers from the 
Engineering Research and Development Center in Vicksburg, Mississippi, 
three Forward Engineering Support Teams from Japan, Alaska, and 
Arkansas, and the Corps 249th Primary Power Battalion were sent to help 
in the area's recovery.

Homeland Security
    In addition to playing an important role in supporting the global 
war on terror, we are providing security for physical infrastructure 
owned or operated by the Corps throughout the Nation, based on risk 
assessment at each of our critical facilities. The Corps is also a 
member of the National Response Plan team with proven experience in 
support of disaster response.
    The Civil Works Program has completed over 300 security reviews and 
assessments of our inventory of locks, dams, hydropower projects and 
other facilities. We have improved our security engineering capability 
and prioritized infrastructure and are currently implementing 
recommended features at the highest priority security improvement 
projects.
    For fiscal year 2006, $72 million is targeted for recurring 
security costs and security enhancements at key Corps facilities. 
Facility security systems can include cameras, lighting, fencing, 
structure hardening, and access control devices designed to improve 
detection and delay at each facility.

                               CONCLUSION

    The Corps of Engineers is committed to staying at the leading edge 
in service to the Nation. In support of that, we are working with 
others to transform our Civil Works Program. We're committed to change 
that leads to open, transparent modernization, and a performance-based 
Civil Works Program.
    Thank you, Mr. Chairman and members of the committee. This 
concludes my statement.

    Senator Bond. Thank you very much General Strock. Do we 
have a timing device available? Well I will try to be 
judicious. First Mr. Woodley, I would be interested in knowing 
how the Corps budget was formulated this year. And I'm aware of 
the President, without getting yourselves in trouble. Can you 
generally explain the challenges you face in the field because 
of tight budgets in recent years, Mr. Woodley, first?
    Mr. Woodley. Absolutely, yes, sir, Mr. Chairman. The budget 
this year was a continuation of our efforts of the past 2. That 
began really with the submission for the Fiscal Year 2005 
budget to inaugurate, or incorporate, performance based 
principles based on the business lines within our program. 
Those are the broad mission areas, such as navigation, flood 
control and the like. The test that was used--what we set for 
those--was a set of performance metrics. In the construction 
arena, for example, that was based largely on our analysis of 
the benefit-cost ratio for each ongoing construction activity.
    Now, that of course does not apply in the area of ecosystem 
improvement and restoration. So we were unable to take that to 
one side, but in the other areas in which we were able to do 
cost-benefit analysis we wanted to fund those best performing 
projects. What we had found in the past had been that we had 
numerous projects ongoing, and insufficient funding to continue 
all of our projects at an efficient level. And so what we had 
was a constant effort to keep a large number of projects going 
at a very inefficient level, constantly pushing the time of 
their completion out into the out-years and therefore delaying 
the reaping of the benefits for the public. Instead of doing 
that, we asked this year that the constructions funds be 
strictly prioritized by remaining cost to remaining benefit, 
and that is a measure that takes into account the benefits that 
are yet to be gained from the project compared to the remaining 
costs that are needed to be invested to reap those benefits. So 
the idea is, we want the best bang for the buck, in each 
individual project.
    Now our difficulty there, of course, is that when we fund 
those projects that are best performing at efficient levels, we 
have to necessarily suspend, or in some cases terminate, some 
worthy and fully justified and good projects, Mr. Chairman. We 
have to leave them on the table.
    Senator Bond. Are there penalties assessed with those 
cancellations and deferments?
    Mr. Woodley. In many cases there would be. Although we 
would seek to manage the draw down of those and the wind down 
of those, to certainly minimize those penalties as much as we 
possibly can. You're exactly right, Mr. Chairman. You put your 
finger right on it.
    Senator Bond. Are there reprogramming restrictions that are 
not sufficiently flexible that may cause some problems? I would 
ask both of you to comment very briefly on that. Do you need 
more flexibility in reprogramming?
    Mr. Woodley. I would say that the way our program--or the 
way that construction in the construction arena and also in the 
operations and maintenance arena--that reprogramming 
flexibility is a very important part of our ability to manage 
day to day. And I would certainly ask the Chief to chime in on 
that.
    Senator Bond. General, do you have any comment on that?
    General Strock. Yes sir. It certainly is very important for 
us to be able to move the resources available around and to be 
able to manage this as a national program. Sir, I feel the 
guidance in last year's budget was sufficient; it is clear and 
we're complying with that guidance and we're not having any 
problems with that, sir.
    Senator Bond. Yesterday gentlemen, the nominee to be Deputy 
Secretary of Agriculture testified before the Agriculture 
Committee, where Senator Talent asked him if he would be an 
advocate in the administration for modernizing our Mississippi 
and Illinois river lots. His response was--this is from the to-
be-confirmed Deputy Secretary. He said, I will. It is not just 
important Senator it is absolutely essential. If we flat out 
have to get our agriculture commodities out of the Midwest down 
to New Orleans to a point of export, where we're absolutely 
dead in the water. So I will be an advocate of that within the 
administration, I assure you.
    When we get him confirmed you should have a partner, and I 
trust they will use him. If he doesn't meet that commitment I 
will be calling him, and I will be calling you, if I make 
myself clear. At this point I will turn under the Early Bird 
Rule to Senator Craig.
    Senator Craig. Mr. Chairman thank you. And gentlemen thank 
you very much for being with us today. There are several issues 
that I would like to take up with you, especially with you 
Secretary Woodley today.
    The first issue is one that I pursued for over a year with 
your agency. It is the issue of energy infrastructure reform. 
As I made clear to the Corps the last time we met in this room 
there is a growing concern about the natural gas infrastructure 
in the country. The market for natural gas has grown 
considerably. Its pricing is creating substantial dislocation 
in our economy at this moment. And that is particularly true in 
the northeast. This is a western Senator but senior member on 
the Energy Committee. Clearly, new pipeline construction is 
critical no matter where it is proposed.
    FERC is the agency jurisdictionally responsible for 
reviewing and approving natural gas pipeline construction in 
the United States. As we expressed to you last year Mr. 
Secretary, the pipeline construction process that FERC--at FERC 
is complicated. It has become even more so because other 
agencies like the Corps are also involved in the pipeline 
construction process, and bringing their own understanding of 
purpose and need for the project.
    One example used to portray the dysfunction of the current 
process is the extraordinary length of time it has taken to get 
a Corps Section 404 permit for the Islander East project in the 
northeast. FERC issued the certificate of construction for the 
line over 2 years ago, and today still, no permit has been 
issued by the Corps. Under any set of facts, that in my opinion 
is simply unacceptable. And there are other examples. But 
frankly, I don't have to describe them today, because of 
something you most recently did and I want to thank you very 
much for that action Mr. Secretary, though it has taken too 
long to get there.
    Mr. Secretary I do believe that what you've issued on April 
14 moves us in right direction, and I'm speaking to the 2005 
memorandum for Director of Civil Works. And I want to thank you 
again for taking that action. Let me just for a moment ask you 
a question about a statement in the memo.
    The memo states first that the Federal lead NEPA agency has 
the authority for, and the responsibility to define the purpose 
and need under NEPA. And second that the Corps will defer to 
the maximum extent allowable by law to the project purpose, 
project need and project alternatives that FERC determines to 
be appropriate for the project. Can you envision any instance 
where the Corps would not accept the determination by FERC, an 
agency that possesses energy expertise of what the need and the 
purpose of the project would be and the appropriate 
alternatives?
    Mr. Woodley. Senator, it would be difficult for me to 
imagine such a thing. That language is in there because 
advisedly, because I have on my staff numerous and very capable 
and learned attorneys--and I speak as one myself--whose 
imaginations are far more fertile than mine has been able to be 
in this area. So they wrestled me to the ground and made me put 
that language in there. I can't imagine it--how it would get--
how you get the thing from FERC that was the agency responsible 
for Federal energy policy and that it would not adequately and 
appropriately state the purpose and need in line with the 
Nation's energy needs in this arena.
    Senator Craig. Well, let's work on that a little bit.
    Mr. Woodley. I don't know how I would go about imagining 
it.
    Senator Craig. If so, and I'm talking about what those 
fertile minds might conceive, what do you think would dictate 
those circumstances? And if not, what would keep the Corps from 
developing an MOU with FERC, deferring to FERC in these areas?
    Mr. Woodley. Senator I can say that we have been working 
with FERC on an MOU since shortly after we met in this room 
last year. I called Chairman Wood--we had an excellent 
conversation about the parameters of the problem and the things 
that needed to be brought to bear in this area, and why some of 
the actions of some of our District offices were taken, were 
causing impediments in the development in the Nation's energy 
resources and infrastructure.
    I began with him at that time a process that has led to the 
exchange of drafts. His group that does this would do a draft, 
my group would do a draft. We said why don't we do it this way, 
why don't we do it that way. There were some delays in meetings 
between each draft. They had their preferred approach, we had 
ours. I can only say that I expect an MOU is in our future. My 
feeling was that an MOU is an excellent thing. We have MOU's 
with FERC in other arenas. We have some that, I think, would 
even be useful in this arena, but my thought was that the time 
had come to state as a matter of Corps regulatory policy what 
the appropriate rule should be, and that is what I did in the 
memorandum that you have.
    Senator Craig. Well I guess in looking at all of this and 
trying to grab the totality of it, if there's any reason that 
you may not be able to meet the time frames that FERC needs in 
authorizing energy infrastructure when they have the entire 
project to consider and you have the aspect of the project, 
like wetlands, I can't understand why you all can't come to an 
understanding that divides up that authority. You have 
responsibility, I don't dispute that. But I can't in anyway 
possibly imagine why it takes you 2+ years, to do something 
that they did in substantially less time.
    Mr. Woodley. In the case you described I believe that we 
were not following the concept that I've laid out in the 
memorandum.
    Senator Craig. I believe that's correct.
    Mr. Woodley. And I believe that was the particular sticking 
point. I certainly agree with you that that is not acceptable 
and that our regulatory process needs should dovetail with the 
FERC's process, and that is our goal. And that is what I have 
discussed with Chairman Wood.
    Senator Craig. I have some more questions. But for the sake 
of time and fairness, we have a crew here.
    Senator Bond. Thank you Senator Craig, we have a good 
turnout for this day and we want to move on, and we would call 
on Senator Johnson, after I congratulate him on winning the 
March of Dimes Gourmet Gala competition last night, even though 
he beat out one of my favorite recipes. I won't hold it against 
you, much.
    Senator Johnson.
    Senator Johnson. Thank you Mr. Chairman, and I would like 
to claim great credit for my wife's work on South Dakota 
buffalo chili. I would have to concede that the best of show 
award however is due to her work and not mine. I helped to dish 
it out and that is about the extent of my effort.
    I have only one question that I in particular want to ask 
in this hearing, in this case Mr. Woodley. We have, as Mr. 
Woodley knows we have an absolute crisis in South Dakota right 
now, particularly affecting the Cheyenne River Indian 
Reservation and some 14,000 individuals in that region. The 
looming crisis we have has to do with the Mni Waste drinking 
water intake in the Oahe reservoir, and the Oahe reservoir 
being of course one of the impoundments of the Missouri River 
that flows adjacent to the Cheyenne River Indian Reservation.
    As you know the entire basin is in severe drought, the 
mountain snow pack and precipitation less than 50 percent of 
normal. In August the water level elevation in the Oahe 
reservoirs is projected to be at an all time record low. The 
low water level poses an extraordinary threat to the Mni Waste 
water intake at Eagle Butte South Dakota.
    Members of this reservation and surrounding communities 
receive virtually all of their drinking water from that water 
intake. The Corps of Engineers is completing a PIR to identify 
solutions should water levels continue to fall, and that report 
as I understand it is due to be complete on April 18 and we 
will need approval then from the Corps Headquarters in 
Washington, DC.
    There's a great deal in jeopardy here, not only the literal 
access to water for thousands of citizens, but the proposed 
housing and construction of a hospital in Eagle Butte which has 
long been on the books and the funding is now available to go 
forward with those projects. Though without water, it simply is 
not possible to proceed. So you have some of the poorest of the 
poor in all of America under an extraordinarily difficult 
circumstance and Mr. Woodley can you ensure this subcommittee 
that the PIR will receive absolutely the utmost attention by 
Headquarters? And also can you assure the subcommittee that the 
Corps will provide the necessary funding to ensure the 
continued operation of the intake? Clearly long term we simply 
need to replace the entire water system for the Cheyenne River 
Reservation is going to be a costly and long-term project that 
is going to have to be done. That's not today's issue. But 
right now, the urgency of this water intake problem is just 
extraordinary. There are 14,000 people or more, who literally 
will not have water in their taps, in their schools, in their 
health clinics, in their senior citizen facilities, at all if 
something isn't done very very soon. Mr. Woodley.
    Mr. Woodley. Yes sir. The PIR will receive the absolute top 
priority in the Corps Headquarters and in my office. We have 
been briefed on this. The District Engineer at Omaha is in 
daily contact with this issue--in daily contact with the Tribe 
and with the other agencies that are concerned, and will do 
everything--we will first of all give that top priority and 
there will not be any slippage on the time. I have today been 
briefed by the Division Engineer, as well as the Chief himself, 
on this crisis. Having done that, we will commit to do 
everything within our power to achieve the--to put together the 
resources necessary to implement whatever recommendation of the 
PIR, which will identify alternatives--the recommendation that 
is selected by the tribe and the other authorities involved. We 
will do everything in our power to achieve the resources to 
undertake that recommendation, and to ensure that the viability 
of that intake now and in the future.
    Senator Johnson. Well thank you Mr. Woodley we will be in 
close communication with you, and as you can imagine there 
really is no plan B here. Trying to truck water to 14,000 
people or more, over an enormous expansive land would be just 
an almost impossible endeavor.
    We simply have got to have that intake in a place where it 
will work. And hopefully that emergency intake will dovetail 
with the longer term strategy for a new water system in that 
area, and hopefully we won't have to replicate, although I 
would appreciate that the first goal is simply to make sure 
these people get water as quickly as they can under an 
emergency circumstance. But thank you Mr. Woodley, Mr. 
Chairman.
    Senator Bond. Thank you very much, Senator Johnson. Now I 
turn to my ranking member on the THUD committee, Senator 
Murray.
    Senator Murray. Thank you Mr. Chairman, thank all of you 
for being here today. General Strock, the administration's 
budget has $15 million for the Columbia River Channel 
improvement project in it. And I really appreciate the 
inclusion of that money. Many of the folks out there tell us 
that it would move ahead much more effectively if $40 million 
were provided for that project. I just wanted to ask you today, 
can you confirm for me, that the Corps could actually spend $40 
million on the Columbia River deepening in fiscal year 2006, if 
those funds were provided.
    General Strock. Yes ma'am. The Division Commander reported 
that they have the capability of $41 million in fiscal year 
2006.
    Senator Murray. Well let me also ask you, in addition to 
that $15 million for the Columbia River deepening, there's $11 
million a year for ongoing yearly dredging. Both of those 
projects are up river of the mouth of the Columbia River, and 
it concerns me that while the budget provides funding for those 
dredging activities which I agree with and support, it doesn't 
provide any funding for the repair of the jetties that are at 
the mouth of the Columbia River. And I understand that there's 
real concern on the south jettie, in particular two areas that 
could fail. And it's pretty obvious to me that deepening the 
channel and channel dredging will be all for naught, if those 
jetties, can you talk to me about why money for repairing those 
jetties was not in the budget?
    General Strock. Well ma'am we certainly share your concerns 
and we do understand that this must be operated as a system, 
that without the jetties the deep channel does not function. 
Those jetties are in a very poor state of repair and we have an 
ongoing study now to do some interim upgrades to those jetties 
and have the capability to do that if we're provided funding, 
but we have not included a request for that in this year's 
budget.
    Senator Murray. Well that is very concerning to me, because 
if those jetties fail, all the money that we've put into 
channel deepening and other projects are not going to be worth 
it. So I will continue to work with this committee and with you 
on that. General you also know that we marked up the 
supplemental, emergency supplemental yesterday. It didn't 
include any money for the $30 million that is needed, $30 
million I understand for the Fern Ridge Dam that is in Oregon. 
Not in my State Mr. Chairman, but I am concerned about it, 
because I am told that this is an active state of failure. And 
if the Corps doesn't get the money, it's going to have to take 
it from all of the other active projects that are out there to 
fund that because it is an emergency, and so can you tell me 
General how much funding is needed to the Fern Ridge Dam in 
Oregon.
    General Strock. I might have to answer that for that record 
ma'am. We are, and want to make sure that you understand, that 
while we do describe that as an active state of failure we are 
taking measures in the operation of the reservoir to make sure 
that it is safe and the public is not in danger as a result.
    Senator Murray. I understand, but my point of that, to this 
Fern Project, is that is going to come out of all of the Corps 
projects in order to fund that, because it is failing?
    General Strock. That is correct. I am notified that we're 
going to reprogram about $31 million this year.
    Senator Murray. So, $31 million will be reprogrammed. Mr. 
Chairman, that's why I am--have discussed with Senator Cochran 
yesterday at the committee markup about getting an emergency 
supplemental for that, otherwise all the rest of us will see 
our money gone for projects that we think is going to be there, 
because it's failing.
    One last question General Strock. Do budget cuts, about 
third of the operation and maintenance funding for the Lake 
Washington ship canal. Can you explain to us how that project 
is going to be operated and maintained at this reduced funding 
level, and will that mean that the hours of operation of the 
locks themselves will be reduced?
    General Strock. Ma'am, we're looking at alternatives to 
address this inability to fund, to fully fund the operation of 
those locks, and we are considering alternatives such as 
limited operations, potentially user fees and that sort of 
thing.
    Senator Murray. User fees?
    General Strock. Yes ma'am.
    Senator Murray. Okay. I will tell you this is a huge issue 
out there. As you know, the locks are absolutely critical for a 
lot of shipping within the Puget Sound region and I want to 
hear from you more if you can in writing please, on what you're 
considering for funding that.
    General Strock. Ma'am we have committed to about $6.5 
million that would be required to keep those locks in 24 hour 
operations.
    Senator Murray. Thank you.
    Senator Bond. Thank you very much, Senator Murray. Senator 
Allard.

                           PREPARED STATEMENT

    Senator Allard. Thank you Mr. Chairman, I look forward to 
working with the committee and the Army Corps of Engineers on a 
number of projects important to the State of Colorado. Just to 
start off with, I have a prepared statement I would like to 
make a part of the record.
    Senator Bond. Without objection.
    [The statement follows:]

               Prepared Statement of Senator Wayne Allard

    Mr. Chairman, I want to thank you for holding this important 
hearing today.
    The Army Corps of Engineers and the Bureau of Reclamation are both 
important to Colorado.
    Throughout the West, water is one of our most important resources; 
this makes the role of the Bureau of Reclamation and the Army Corps of 
Engineers vital. When dealing with water I have a simple theory with 
several key principles that I keep in mind. These principles are: the 
Federal Government should ultimately defer to the States and their 
water rights, when the Federal Government does become involved it 
should be as a conduit of funding, and strategic water conservation and 
storage is necessary. The individuals here today each play a role in 
this theory, especially the final two points, and I thank them for 
appearing before us.
    As a conduit of funding, the Corps of Engineers plays a role as an 
important resource for communities to access funding and technical 
expertise for local projects. Through Civil Works Projects and The 
Continuing Authorities Program funding is made available to States and 
local communities to fund water projects. There are many of these 
projects currently underway in Colorado, including one in the Colorado 
Springs area, The Fountain Creek Tributaries project. I wanted to take 
a moment to thank you for the attention you have paid to this project, 
it is very important to me. Several years ago severe thunderstorms 
caused Fountain Creek to flood which caused a significant amount of 
damage to roads, homes, and business. My constituents in this area and 
I greatly appreciate the efforts taken on their behalf. And I would ask 
that the Corps continue to move forward with the local community on 
this project.
    Both organizations act as a tool for water storage and conservation 
and there is a good example of this in Colorado. The Bureau of 
Reclamation has an important project in Durango Colorado, the Animas-La 
Plata Project. In the past this committee has held hearings on The 
Animas-La Plata Project where concerns for discrepancies in the 
programs projected cost were raised. I am of the understanding that 
much has been done to address these concerns; I ask that the Bureau 
maintain diligence on this project.
    There is another project in Colorado which I would like to briefly 
mention. I look forward to working with all of you on the Arkansas 
Valley Conduit. I have appreciated the Corps willingness to work with 
us to this project. This same enthusiasm is not shared by the Bureau, 
but I hope to soon convince you otherwise.
    There are many examples of good Bureau and Corps leadership in 
Colorado--I look forward to a cooperative relationship with all of you.
    Again, thank you Mr. Chairman for holding this hearing and thank 
you gentlemen for appearing before us today.

    Senator Allard. Just to summarize what I said in the 
statement--first of all I want to let you know what a pleasure 
it is for me to be on this committee, because water is really 
important and a precious commodity as far as the State of 
Colorado is concerned, and our water law dates back to the late 
1800's. The doctrine of prior appropriation, which basically 
stated that the Federal Government defers to the States on the 
management of the water, and the Federal Government works to 
help provide funding and work with the States in meeting 
whatever the needs are within the State. That's important to 
the State of Colorado, in the fact that we have some seven 
bases in the State, and four Districts in our State, I will 
follow-up with that on my questions a little bit later.
    We have some projects that are ongoing right now. I want to 
thank the Corps for working with our office in the past and I 
know you've worked with Senator Campbell's office on some of 
these projects. I'll mention a few, the Fountain Creek 
Tributaries project, which is on bank stabilization. Some local 
communities are impacted as a result of a flood we had in 
Colorado. I want to thank you for working on that project, and 
we'll continue to follow the progress on that. The Animas-La 
Plata project, I understand has had some problems with cost 
overruns; there have been hearings on that in this committee. 
It is just my feeling that it requires a lot of diligence and a 
lot of oversight. We would like to work with the Corps as that 
project moves forward to make sure that we have adequate 
oversight there to keep our costs down. My understanding is 
that they've worked and taken care of some of their problems 
and we just have to make sure that those policies are carried 
forward.
    Another thing that I'm working on is the Arkansas Valley 
Conduit, which you have not been particularly excited about, 
but is something that we're working, and something we think 
might be essential for the Arkansas Valley so we'll continue to 
stay in touch and work with the Corps on that particular issue. 
Related to whole Arkansas River, we have a number of issues 
down below there, and I would talk to you about those.
    And then on my questions, I think you've done some things 
according to my briefings that have improved communications 
between the four Districts within Colorado. There was a 
problem, I think, with communication between the four of those 
in some cases. There is a problem with my constituents 
communicating with the various offices. My understanding is 
that it has improved. But we continue to get some concerns 
raised, from my constituents, about communicating with the 
various offices. And so my question is, while you seem to have 
done a pretty good job of improving communication between the 
offices, the problem remains between my constituents and the 
offices. What have you done there to make sure that their 
concerns get heard? I think a lot of their offices are outside 
of the State of Colorado, so they're not particularly handy for 
my constituents. I would like to hear any comments you might 
have in that regard.
    Mr. Woodley. Senator, this is something that, you will 
recall, that you raised with me at least 2 years ago when we 
discussed the needs of Colorado, vis-a-vis the Corps of 
Engineers, at that time. And inspired by that leadership, once 
I took office and began to work in this arena, I went to Denver 
and met with many of the people concerned--people in 
aggregates, and development, and people with environmental 
concerns, just a considerable cross section. And what I learned 
was that there was an office in Omaha, and one in Albuquerque 
and another in--I'm getting to Sacramento, but another in 
Arizona I guess--and then Sacramento. And they asked me, Mr. 
Woodley, do you have any idea where Sacramento is located, and 
naturally I said, well it's out here someplace, isn't it. And 
they said sir, you are now almost as far from Sacramento as you 
are from Washington, DC. That's about right. And so that was a 
real epiphany for this young easterner. And so I got back to 
town and got to work on putting together the concept of having 
a lead District. Now the Corps--what happens, the way that 
happens is the Corps is divided by watershed and that's a good 
thing. I'm not opposed to that, it's a good thing, and we get 
enormous benefits from that. But Sacramento's a long way from 
Denver nonetheless, and so you have to try and craft a solution 
that maintains the benefit so we can work on a watershed basis, 
we can understand the needs of each separate area, and so that 
we can have--also have at the same time a powerful liaison and 
link up with the State Government and the State leadership in 
environmental and watershed, water related issues. And have 
consistency across the State. Because the people, your 
constituents, talk to one another, and the regulated community 
they talk to one another. If they get a deal in one part of the 
State, if they get a deal in Boulder that they can't get in 
Colorado Springs, then we hear about it. And so we established 
that assignment to Albuquerque, returned to Denver, and made 
that announcement there at the capital with the State 
regulatory authorities, and it was very very well received, I 
thought. We just began the year, so I'm confident that we have 
not reaped all the benefits we're going to reap. But I'm 
absolutely committed to improve our communication across the 
board with the regulated, with the land owners, essentially in 
this area, businesses, people that are concerned about 
preserving wetlands, and getting effective permits done on a 
consistent and a timely--consistent and predictable manner.
    Senator Allard. I appreciate your efforts, and I want to 
recognize what you've done. The chairman is showing me his 
wristwatch here so I know my time is up, but I do want to wrap 
it up here. As we run across specific instances I may share 
those with you, because I think you've made some strides. We 
just have to identify specifics, as I run across those I will 
bring them to you in a friendly manner, because we want to 
provide good services.
    Mr. Woodley. Senator, you know we're always at your 
disposal.
    Senator Bond. Thank you very much Senator Allard. Senator 
Burns.
    Senator Burns. Thank you Mr. Chairman, I don't have a lot 
of questions for the Corps other than the Missouri River. We 
are learning now in our eighth year of drought, that whiskey is 
for drinking and water is for fighting, and we've got a real 
problem up-stream as you well know. We've got three main 
reservoirs up-stream that are imperilment areas, that we're 
going to have to look at a different management module or 
something because we cannot have a healthy river unless we have 
healthy reservoirs. And right now we don't have healthy 
reservoirs as you well know. And so we've got Oahe Garrison and 
PET that are the major focus right now, and we've got about a 
60 percent snow pack. We know that your runoff this year is not 
going to be what we had hoped for this year, even though we're 
getting moisture now, we might get rain, we may get a little 
snow, but that's all going to go underground, there's not going 
to be any runoff this year, that river is going to stay low all 
year. And I would tell you right now, I appreciate the 
cooperation and the communications we've got with the Corps 
right now, I feel very good that we can solve some of these 
problems up there. But it's going to be tough on everybody on 
that Missouri River. Now, I was raised on one end of it, I'll 
probably die on the other, and I've traveled that river up and 
down, and I know a little bit about it, and the issues that 
surround it. We're very fortunate to have a great river like 
that in the center of our continent because as that sustains a 
lot of life and does a lot of great things for this great 
Nation. So I just came here today to say, thank you. Now we 
know we've got our little differences and all that, but we're 
trying to communicate them, we're trying to fix them. And as 
long as we keep talking I think we can get it done, but you've 
got all the way from Three Forks, Montana to Lake Oahe, South 
Dakota, we have a problem. And we'll never get it solved if we 
just kind of keep beating on one another and I would open up 
these communications and do some things that should have been 
done quite a while ago. So I appreciate the lines of 
communications and everything that we are trying to do to make 
that a healthy river. And there ain't nothing you can do on 
that river, except water.
    We've got to have a snow pack. And if we don't have it, 
then we've all got to work together to make the impact the same 
all the way to St. Louis. So I thank you, and I just want to 
continue to work with you and our State, and especially those 
three reservoirs. I'm concerned about those three reservoirs 
because they mean so much for the upper Midwest and the high 
plains. And I thank the chairman. Do you want to react to that, 
or General Strock?
    General Strock. Sir, I would just like to thank you, as you 
know I served on the Missouri River for a number of years, and 
I'm delighted to know that we're moving in the right direction. 
It is a tough problem. We put our best minds on it I know and 
the best minds of the States involved have also been at this 
and will continue to work very hard. But sir, thank you very 
much.
    Senator Burns. I think our lines of communication are as 
probably open now as they've ever been, so we just appreciate 
that, and we continue to work on it.
    General Strock. Thank you sir.
    Senator Bond. Thank you very much, Senator Burns. Having 
gotten the 50 percent increase in the minimum level I can see 
why you're expressing appreciation. We have had a slight 
difference but I would remind you that the difference is not 
just down to St. Louis that water flows into something called 
the Mississippi, and that shuts down when the river shuts down. 
And I will join you in praying for more rain, but I'm going to 
pray on one knee because last we did it was 1993 and we got the 
100-year floods in 1993. But we've got to be careful what we 
pray for. Along that line I would like to call on Senator 
Dorgan.
    Senator Dorgan. Mr. Chairman, thank you. I was surprised to 
see you in the chair when I came in the room. Not pleasantly 
surprised, but surprised nonetheless.
    I was thinking, we will discuss the Missouri River and you 
and I and Senator Burns have had long, tortured discussions 
about that.
    But, at any rate welcome to the chairmanship today. I guess 
I've had less sugar today than my colleague from Montana. I'm 
not prepared to thank anybody. And I remain enormously 
frustrated, as do my constituents about the Missouri. I share 
the statements that my colleague from Montana made. We're short 
of water, we're going to have less runoff, and our reservoir in 
North Dakota is down 30 feet. And what I would like to do is 
just run you through a couple of questions if I might, just 
before making a conclusion and asking you to comment. At this 
time of the year if we were not in a drought condition, and 
we're in repeated years of drought, what would we expect? What 
kind of quantity of water would we expect in the Missouri River 
system this time of year generally? I'm told it's about 50 
million acre-feet.
    Mr. Woodley. I would have said between 54 and 58 million 
acre-feet, Senator.
    Senator Dorgan. And what quantity of water exists in the 
Missouri water system now?
    Mr. Woodley. Less than 35 million acre-feet.
    Senator Dorgan. So normally we would have 58 million acre-
feet, and now there are less than 35 million acre-feet. My 
colleague from Missouri just referred to a change in the 
drought conservation level. It went from 21 to 31 million acre-
feet, which is a 50 percent increase. The 31 million acre-feet 
is largely an irrelevancy, to me anyway. That change from 21 to 
31 million acre-feet was that change a result of legislation, 
or a result of a determination through the master manual 
rewrite without legislation?
    Mr. Woodley. That was not determined by legislation, 
Senator, that was a master manual.
    Senator Dorgan. So the judgment in the master manual that 
drought conservation should be employed in the Missouri River 
system is not a function of the Congress, it's a function of 
the Corps and the people who live along the river, and who are 
involved the process to make these decisions, is that correct?
    Mr. Woodley. Yes, sir.
    Senator Dorgan. And so at this point, for a river that 
would have 58 million acre-feet normally, we're at 34 million 
acre-feet roughly, it sounds like less than 35 million acre-
feet and we don't have drought conservation measures yet, 
because it hasn't triggered the 31 million acre-feet. You might 
see why I'm not very thankful about the 21 to 31, I think it's 
irrelevant at this moment for the people in Montana and North 
Dakota who see nothing where they expect to see water. And I 
would just like to ask the question in the construct of the 
master manual, did you determine the net economic benefit of 
the barge industry on this river?
    Mr. Woodley. I believe that we did, yes.
    Senator Dorgan. Can you tell me what that was?
    Mr. Woodley. I believe that the net economic benefit figure 
was in the neighborhood of between $7 million and $8 million on 
an annual basis.
    Senator Dorgan. The net economic benefit of the barge 
industry is between $7 million and $8 million?
    Mr. Woodley. As we define that within the guidelines we're 
given under the Principles and Guidelines.
    Senator Dorgan. And for that we've written and rewritten 
the master manual that establishes that a level below 31 
million is the first time we would employ drought conservation 
measures, why? To protect an enterprise, down-stream with a net 
economic benefit of $8 million a year? That's unbelievable to 
me.
    Mr. Woodley. Senator, I will say that if--I certainly am 
not seeking to minimize the difficulty, nor seeking to justify 
the unjustifiable. But I am saying, and would like to suggest, 
that under the new master manual many drought conservation 
measures are employed well before the storage arrives at the 
navigation preclude level of 31 million acre-feet.
    One example of that is a reduction in the level of 
navigation support that is given in terms of the depth of 
channel that is supported from Sioux City to St. Louis. Another 
is that--and we are now at the minimum level for that. Another 
is that we began to shorten the length of the navigation 
season, the length of time during which navigation is supported 
on an annual basis. A full year would allow navigation support 
from April 1 to December 1. Last year it was curtailed and this 
year it will again be curtailed.
    Senator Dorgan. I understand all of that.
    Mr. Woodley. So I don't want to leave the impression that 
no conservation measures are taken prior to the 31 million 
acre-feet.
    Senator Dorgan. I wasn't alleging that. My point is during 
the navigation season that does exist, about one-third of the 
water that is flushed from the upper reservoirs is for the 
support of an industry that has an net economic benefit of $8 
million a year. Is that a signal?
    Senator Bond. Well your time is up, but go ahead, because I 
want to answer a little bit.
    Senator Dorgan. I understand that. Let me just make this 
point. I believe very strongly that the State of Missouri, all 
of the economic interests on the river, including the up-stream 
and down-stream States would have been benefited, had we during 
all of the years of this drought been storing water, rather 
than using it for an industry that has a net economic benefit 
of $8 million a year. And I'm not suggesting that that economic 
benefit should have been ignored. You could have doubled it, in 
simply payments to them and still been far ahead for everybody 
on that river including the citizens of Missouri. Now I have a 
great respect for my colleague. We have a disagreement on this. 
I don't intend in anyway to be personal. But I feel very 
strongly as do many of the up-stream States that we're 
systematically cheated, Mother Nature is part of this, I 
understand it. But the management of the river is another part 
of it, and we're tired of it and it needs to be solved.
    Mr. Woodley. And I'm deeply sympathetic with your views, 
Senator. The support for navigation is a statutorily created 
and Congressionally mandated project purpose, which within--as 
we formulate a master manual, as the Corps of Engineers 
formulates a master manual--they are absolutely required to 
consider and support. And they arrive at a balance that seems 
good at the time, but are certainly not--anxious not to 
consider any given balance as the final balance, and to await 
and to receive further instructions from the Congress and from 
the leaders of the basin, the Governors, the tribes, the 
agriculture people who earn their living on the land in 
agriculture and elsewhere. And certainly those who earn their 
living on the water in the great recreational industries that 
are supported on the lakes and reservoirs.
    Senator Bond. Thank you very much Mr. Woodley. Thank you, 
Senator Dorgan. I would point out Mr. Woodley, that the Eighth 
Circuit confirmed that one of the two purposes was to maintain 
river transportation. I think your statement about $7 million 
to $8 million being the impact on transportation is wildly out 
of whack. You well know, as I know, that 65 percent of the flow 
of the Mississippi River at St. Louis comes from the Missouri 
River and that when the flow was shut off on the Missouri River 
2 years ago, barge--all transportation in the mid-Mississippi 
was shut off as well.
    Furthermore I think you overlooked the fact that a study of 
the impact on barge traffic and the ability to get ship 
commodities by barge traffic means a $200 million saving for 
Missouri and Midwest farmers exporting to the world market. 
Because the exporters who are one of the few who actually 
provide a budget surplus, a trade balance surplus for us, 
depends upon the river to keep the rail costs from going 
through the ceiling which they have, because there's been 
adequate rail service.
    So water, water transportation saves $200 million. There 
are many other industries that depend upon getting inputs up 
the river, and I've got to believe that $7 million to $8 
million doesn't even touch it. You also should probably think 
about what almost happened in 19--or 2003 when the river was 
shut down, it came within 36 hours of shutting down power 
production on four major electric generating facilities. Three 
on the Missouri and one on the Mississippi River, and if you 
don't think there's going to be a cost to shutting down power 
cooling by shutting down the river then you've got another 
thing coming.
    We are already as you pointed out in drought conservations 
situations, have minimum loads on the Missouri River, 
shortening it, shortening the season by 2 months and I think 
that the situation is very serious on both the up-stream and 
the down-stream States.
    And I personally think, going from 21 million acre-feet to 
31 million acre-feet was unwarranted. You made that decision, 
so it stands. But there's going to a significant hardship all 
the way to New Orleans if we hit that 31 million acre-feet.
    I would ask General Strock about one possible solution that 
might be helpful to up- and down-stream States, and that is the 
flow to target regime. That could have saved a million acre-
feet of water last year, so that during the abbreviated season 
you release no more than necessary. You keep more water in the 
reservoirs. I would ask that you raise this as a real 
possibility when we're facing this catastrophic drought 
effecting the up-stream and the down-stream States that you 
raise this with the Fish and Wildlife Service who seem to be 
the ones who object to it. While many human activities, on both 
ends of the area are suffering. General Strock, would you like 
to comment on that?
    General Strock. Sir, at risk of exceeding my memory here, 
we are considering the flow to target and we do think that this 
year if the conditions are the same as last summer, that we 
could possibly save between 0.5 and 1 million acre-feet of 
water using flow to target. But our ability to do that is 
dependant upon our ability to meet the ESA restrictions on the 
support of--nesting. But it's certainly something that we will 
continue to examine and consider.
    Senator Bond. Thank you very much General Strock. Now we'll 
start back for a second round to Senator Craig.
    Senator Craig. Thank you very much Mr. Chairman, I know 
we're all struggling with lack of water, that is true in the 
Snake River and the Columbia River basins as it is on both 
sides of the Continental Divide and it is a very real 
management problem. Mr. Secretary let me go back to the line of 
questioning I was pursuing with you earlier as it relates to 
Section 404 permits. Section 404 permits, the Section 404 
permit program at the Corps as it relates to the policies 
addressing canals, drains, and other irrigations works. I'm 
going to focus on the Corps treatment of those water facilities 
as effecting navigable waters, or waters of the United States 
for the purpose of the Clean Water Act, and jurisdiction under 
Section 404. At the national level, has the Corps adopted any 
written policies on this matter?
    Mr. Woodley. No Senator, not specific to--not specific to 
canals, drains and the irrigation structures. I believe that 
the documents that we have are--express themselves in more 
general terms.
    Senator Craig. Isn't this jurisdiction only an issue 
properly addressed within the context of a proposed rule 
making?
    Mr. Woodley. I would say that a proposed rule making is 
certainly one of the possibilities. I don't think it's 
necessarily, Senator, the only possibility that can be 
effective administratively.
    Senator Craig. Well, if so I guess my question then is, why 
hasn't the Corps commenced that process, and let me go beyond 
that because you partially answered that. The Corps withdrew a 
notice of proposed rule making regarding waters of the United 
States in December of 2003; perhaps it is time that that effort 
be looked at again. Until this issue is resolved through rule 
making or other direction from the national level, what is the 
direction being provided in individual Districts?
    Mr. Woodley. The individual Districts are not given any 
more specific guidance than is in the general guidance that is 
in the existing rule. We have underway--we are very concerned 
about the issue of consistency and the appropriate scope of our 
jurisdiction in the aftermath of the Supreme Court's decision 
in the Solid Waste Authority of Northern Cook County. And we 
have subsequent to that received--as you know, we've had the 
effort that was initiated or inaugurated with the proposed rule 
making announcement. And we said that, after looking at the 
wide variety of comments that we had received on that, we 
decided that there was just not enough support behind any given 
approach to how to resolve the question to make rule making a 
useful endeavor at this time. The alternative--subsequent to 
that, we have received a study from the Government 
Accountability Office that indicated to us that there appeared 
to be a difficulty with consistency across our program.
    I confess I was not profoundly surprised by that finding, 
given that the rule that we were undertaking to enforce had 
several terms in it that appeared to me to need greater clarity 
and definition. Our thought at that time was that the 
appropriate thing for us to do would be to conduct a full scale 
study across the board of all of the professionals and experts 
that we have in the field conducting these determinations day 
by day. That would determine a level of those areas at which we 
had consistency. We could see then, those areas where we needed 
greater consistency. We would be able to develop that based 
upon the best practices from the people in the field.
    Senator Craig. Why don't we continue to pursue this and 
here's why I'm pursuing it. I think that you might receive 
assurances that activities and canals and drains can be covered 
under normal operation and maintenance exemptions. For ditches 
in Section 404 however, there does not seem to be routine 
nature to this, and my question is one you probably can't 
answer but we will pursue it, why is the Walla Walla District 
which covers Idaho, so aggressively asserting jurisdiction over 
irrigation delivery systems in the absence of a national 
direction. Now some believe, and I tend to be in that group 
that this is a result of a Ninth Circuit Court March 12, 2001 
decision in the Talent irrigation District case. However that 
case was very fact-specific. Also the so-called rule from that 
case is not being applied evenly across the Ninth Circuit for 
example. The focus seems to be in Idaho, and Washington. 
Washington the latter, pursuant to a court settlement by a 
Seattle Court which doesn't have jurisdiction over Idaho. I 
think this begs for some Headquarter guidance. It appears to be 
sporadic. One size should fit all in this situation and it 
doesn't appear to be that. And you're causing confusion and 
chaos in Idaho in many instances at this moment because what 
appears to be a rather arbitrary approach to decision-making 
based on what the broader sense of a Ninth Circuit Court 
decision was, versus the specifics of that case. And uniformity 
is important here for our operators in our large irrigation 
Districts and systems to understand that. It isn't an issue 
they won't comply; it is an issue of consistency of operation, 
and direction. And I'll continue to pursue this with you, 
because I think it is important, General and Mr. Secretary, 
that we get some uniformity here. And I do think it is 
appropriate that rule-making go forward in this area.
    Senator Bond. Thank you very much Senator Craig. Senator 
Allard.
    Senator Allard. Mr. Chairman, I don't have anything further 
for this panel.
    Senator Bond. Okay. Senator Dorgan, anything further?
    Senator Dorgan. Mr. Chairman, let me ask, I would like to 
submit some questions for General Strock on the issue of 
contracting in Iraq, sole source and other questions and I'll 
just submit those in writing relating to some issues that I 
raised yesterday.
    Let me say this, although I feel very strongly about the 
management of the Missouri River, I'm angry about it, and 
frustrated. I do want to say that we have had some help outside 
of the management of the river itself. We've had some good 
assistance from the Corps on some boat ramp issues, and other 
related issues that have been helpful to some local folks to 
deal with the consequences of the drought.
    So I don't want my angst to tarnish all the work of 
everybody in the Corps, but neither do I want to sound 
reasonable, and let you believe that I'm leaving the room 
completely satisfied with the Corps. This is a big, big, big 
problem. It's not going to go away, it's going to get worse 
this year, and how it's dealt with is critically important to 
my constituents. I understand the chairman has his constituents 
who are very concerned as well. But this conversation will last 
much longer than this hearing, Mr. Chairman, as you know. And I 
appreciate the conversation that we will continue to have about 
it.
    I would like to also ask, and send if I might, to submit 
some questions for the Bureau of Reclamation on the next panel.
    Senator Bond. Thank you very much Senator Dorgan. I've only 
been involved in these discussions now for 32 years. And I 
unfortunately if future generations come along I think they 
will probably continue to discuss them. But perhaps a little 
bit of help we can find in things like Flow to Target, which 
could provide some relief to both sides.
    Senator Craig. Mr. Chairman, can we just appropriate money 
to buy some rain, governments can do everything, can't they?
    Senator Bond. By unanimous consent in the Senate, we would 
make it rain without appropriating, but I don't want to try it.

                     ADDITIONAL COMMITTEE QUESTIONS

    I would like to thank our first panel. Gentlemen we will be 
continuing this discussion, you will be having some questions 
from us, as well as other members. The record will be open for 
questions to be submitted.
    As always, we appreciate your prompt response and then we 
will be calling you as always. Thank you very much Gentlemen.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

            Questions Submitted by Senator Pete V. Domenici

    Question. Can you tell us how the Corps budget was formulated this 
year?
    Mr. Woodley. The Corps developed its fiscal year 2006 budget by 
program area and then disaggregated the projects to the existing 
account structure. Studies and Preconstruction Engineering and Design 
(PED) were funded based on the likelihood they will result in high-
performing projects. For construction, the budget used seven 
performance guidelines to allocate funds among projects in order to 
achieve greater value to the Nation overall from the construction 
program. Under the performance guidelines, construction projects were 
ranked and funded based on their estimated economic and environmental 
returns. The effect is to redirect funding away from the lowest return 
projects to accelerate completion of the highest performing projects. 
For operation and maintenance work, the budget emphasizes essential 
operation and maintenance activities at key Corps facilities, including 
maintenance dredging and structural repairs that are necessary to keep 
projects operational in fiscal year 2006.
    Question. Can you explain a little about the methodology?
    Mr. Woodley. Studies and Preconstruction Engineering and Design 
(PED) efforts are funded based on the likelihood that they will result 
in high-performing projects. This involves consideration of two 
factors: (1) The likelihood that the study or PED would result in a 
project. This is largely determined by whether there is a willing cost 
sharing sponsor for the study or PED who will have signed a cost 
sharing agreement by the end of fiscal year 2005. (2) The expected 
relative performance of the project. For PEDs producing economic 
outputs, remaining benefit-remaining cost ratios (RBRCR's) are 
available. For aquatic ecosystem restoration PEDs, cost effectiveness 
in addressing significant regional or national ecosystem problems is 
considered. For studies, the Divisions were asked to identify the 
highest-performing projects.
    Studies and PEDs that are less likely to result in a high-
performing project are suspended or deferred. In particular, PEDs with 
remaining benefit to remaining cost ratios (RBRCRs) of less then 3 to 1 
are not funded in the budget.
    Construction projects producing economic benefits competed based on 
their RBRCRs. Those with RBRCRs below 3 to 1 would be considered for 
contract suspension. Aquatic ecosystem restoration projects compete 
based on their relative cost effectiveness in addressing significant 
regional or national ecosystem problems. Those that are not relatively 
cost effective, are limited in scope, and do not address relatively 
significant problems would be considered for suspension.
    A ``suspension fund'' of $80 million would be created in the 
Construction account for the projects considered for suspension, and a 
suspension fund of $8 million would be created in the Flood Control, 
Mississippi River and Tributaries account. If it would be less costly 
to continue or complete a contract than to pay claims, the contract 
would receive funding from the suspension fund. For other contracts, 
settled claims would be paid from the suspension fund.
    All projects that are individually funded (i.e. are not suspended) 
receive enough to pay earnings on ongoing contracts awarded before 
fiscal year 2006, plus associated in-house costs.
    Projects compete against each other within each mission area. Those 
projects that are the highest performing in each mission area receive 
at least 80 percent of the amount that could be expended efficiently on 
the project in fiscal year 2006. (In some cases the projects already 
are receiving at least 80 percent to fund earnings on already-awarded 
contracts, whereas in others the projects receive additional funding 
under this ``80 percent rule'' and can award additional contracts.)
    The highest performing projects include 14 dam safety projects, 9 
national priority projects, and 38 other projects.
    New projects or resumptions (projects not under physical 
construction for 3 years) are eligible for funding only if their 
estimated return is on par with the top 20 percent of other projects in 
their mission area. One such new start is in the fiscal year 2006 
budget: Washington, DC and Vicinity, a flood damage reduction project 
that is one of the highest-return projects in the Nation. The 
initiation of this project is necessary to reduce the risk of flood 
damage to the museums on the National Mall, the Franklin Delano 
Roosevelt Memorial, and the World War II Memorial.
    Under the performance guidelines, at least 70 percent of the 
funding in the construction account should be allocated for navigation 
and damage reduction, at least 5 percent for major rehabilitations, and 
no more than 25 percent for aquatic ecosystem restoration.
    Up to 10 percent of the funding in the account may be allocated to 
projects that do not meet the above performance criteria and allocation 
guidelines, but which, for extenuating reasons, warrant funding in the 
budget. However, none of the ``ten percent'' funds may be used for new 
starts and resumptions.
    The budget funds the highest performing operation and maintenance 
work.
    In general, ``must have'' operation and maintenance costs are 
funded. These are the costs that must be incurred to keep projects 
operational in fiscal year 2006. Any work that must be performed in 
fiscal year 2006 to meet a legal mandate would be carried out. In 
addition, all facility protection needs in fiscal year 2006 will be 
met. These include funding for completion of work to establish baseline 
security conditions at over 200 key projects, for recurring anti-
terrorism costs at water resources projects, and for continued 
protection of administration buildings and laboratories.
    The budget continues the policy of establishing priorities for 
funding navigation maintenance primarily on the extent to which a 
channel, harbor or waterway segment supports high volumes of commercial 
traffic. The budget also funds channel and harbor projects that have 
low commercial traffic but support significant commercial fishing, 
subsistence or public transportation benefits.
    The budget also includes funding for an assessment of the economics 
and long-term policy options for navigation facilities with relatively 
low levels of commercial traffic. The study will identify the universe 
of Federal channel and harbor projects and inland waterways segments 
that support lower levels of commercial use, classify these projects 
based on the kinds of contributions that they make, develop methods to 
quantify the differences in their attributes and examine possible 
criteria for determining when a continued investment in operation and 
maintenance would produce a significant net return to the Nation. The 
study will also formulate a range of possible long-term options for the 
funding and management of navigation projects with lower levels of 
commercial use, evaluate these options, and examine their applicability 
to the various types of such projects.
    An emergency reserve would be funded so that, if high-priority, 
unexpected, and urgent maintenance needs arise at key facilities, those 
needs can be met without disrupting other work.
    The hydropower operation and maintenance work that is programmed 
for fiscal year 2006 is the operation and maintenance work that the 
Federal power marketing administrations are willing to finance under 
the administration's proposal for direct funding of hydropower. The 
willingness of the party receiving the power to pay for some operation 
and maintenance activities and not others is a market-based performance 
test.
    Question. What do you believe is the traditional mission of the 
Corps of Engineers Civil Works program?
    General Strock. Army involvement in works of a civil nature goes 
back to 1824. Over the years, as the Nation's needs have changed, so 
have the Army's Civil Works missions. The Corps Civil Works program has 
three main missions: (1) facilitating commercial navigation; (2) 
reducing damages caused by floods and storms; and (3) restoring aquatic 
ecosystems. The Corps also performs related work through the emergency 
management and regulatory programs, and by providing hydropower and 
water supply from Corps multi-purpose reservoirs.
    Question. Would you agree that part of that mission includes having 
a trained, geographically dispersed workforce?
    General Strock. Yes, Sir. However, their current distribution is 
not necessarily optimal. We need to periodically assess whether our 
workforce is distributed in the best way to carry out the current and 
expected workload.
    Question. Are you aware that the Congress has directed that all of 
the Corps field offices be maintained?
    General Strock. Yes, Sir.
    Question. Do you feel that the methodology that you used to 
formulate the budget allows you to meet this mandate?
    General Strock. Yes, Sir.
    Question. How?
    General Strock. While some Districts are adversely impacted, the 
Regional Business Center concept enables cross-leveling of effort among 
districts and regions to optimize the use of expertise, wherever 
located.
    Question. It appears to me that a number of your field offices 
would not have enough work to maintain their workforce if this budget 
were implemented. What is your view?
    General Strock. We recognize that the budget could impact workload 
among the Districts. As I mentioned, however, we feel that through the 
use of the Regional Business Centers we will be able to manage any 
potential decline in FTEs and minimize the impacts of imbalances on 
particular districts.
    Question. Assuming you were aware that your budget assumptions 
would cause imbalances in your workforce, did you prepare accompanying 
plans for reductions in force or management directed employee moves to 
accompany the budget request? Why not?
    General Strock. The divisions and districts will do workforce 
analyses over the next few months. We would not finalize our plans 
until Congress has acted on fiscal year 2006 appropriations.
    Question. How did you plan to address these imbalances?
    General Strock. As stated earlier, our divisions will address 
geographic shifts in workload through the cross-level efforts of our 
Regional Business Centers.
    Question. In the fiscal year 2005 Omnibus Appropriations Act, we 
directed you to provide your Report on any action on which the Chief of 
Engineers has reported. Instead, you provided the Chief of Engineers 
Report. Why didn't you provide your report?
    Mr. Woodley. First let me say, without equivocation, that as a 
matter of principle and practice, I am fully committed to complying 
with all Federal laws. As a member of the Executive Branch, I am also 
compelled to execute my obligations, duties, and responsibilities in 
accordance with all authorized directions and orders from the 
President. As I believe you are aware, Executive Order 12322 requires 
that I coordinate my draft report on water resources projects with OMB 
prior to submitting my report and recommendations to Congress, ensuring 
that a proposed water resources project is consistent with the policies 
and programs of the administration. Within the time period provided, 
however, I could only inform the Committees, consistent with Section 
113 of the Omnibus Act, Public Law 108-77, that the administration's 
review of the applicable reports of the Chief of Engineers is still 
pending.
    Question. I believe the law as signed by the President, requires 
that you send us your Report. I would recommend that you comply with 
the law.
    Mr. Woodley. Sir, for a number of the projects in question, I did 
not have a report as of March 8, 2005.
    Question. In fiscal year 2005, we provided you comprehensive 
guidance as to how reprogramming actions should be undertaken for 
implementing the fiscal year 2005 program. I believe this was the first 
time that we had addressed reprogramming on a comprehensive basis. Has 
the new guidance affected the Corps' ability to efficiently and 
effectively manage the Civil Works program?
    General Strock. No, Sir.
    Question. It is my understanding that for fiscal year 2005, the 
Headquarters office of the Corps has taken a more active role in 
construction contract execution. Can you explain the traditional 
process that had been used and the changes you have implemented for 
fiscal year 2005?
    General Strock. The traditional process requires the contractor to 
develop a schedule and update it regularly through contract completion. 
These schedules are usually used by the District to compute a 
contractor's expected earnings per fiscal year and these earnings 
estimates are used by Headquarters in developing the annual budget 
requests for the project.
    For fiscal year 2005 we are requiring submittal of proposed new 
continuing contracts to HQ for review and approval prior to award. 
These submittals must address whether alternate contract options have 
been explored, the budgetability of the project, and reasonableness of 
out-year funding availability to meet those contract funding 
requirements. We also are notifying the appropriations committees prior 
to award of such contracts.
    Question. Have you recently made any changes to this process? Why?
    General Strock. Yes, Sir, prior to the award of new continuing 
contracts we are requiring HQ approval and we are notifying the 
appropriations committees. We are taking these steps to ensure that, in 
the aggregate, the out-year tails on continuing contracts are 
affordable.
                                 ______
                                 
             Questions Submitted by Senator Mitch McConnell

    Question. The U.S. Army Corps of Engineers has been working to 
construct an additional chamber at the Kentucky Lock facility since 
fiscal year 1998 and has spent over $165 million to date. The 
administration, however, did not recommend funding for this project in 
its fiscal year 2006 budget proposal.
    The administration's lack of proposed funding for fiscal year 2006 
impacts the ability of the U.S. Army Corps of Engineers to execute 
fiscal year 2005 funds. The award of critical construction contracts, 
in particular, likely will be delayed.
    What is the estimated economic impact of such delays expected to 
occur in fiscal year 2005?
    General Strock. Compared to the capability level of funding, any 
funding level could be viewed as causing ``delays.'' However, the Civil 
Works program has not received the maximum amount that it could 
efficiently spend in any recent fiscal year. In the administration's 
view, devoting the capability level of funding to the Corps would not 
produce the best return for the Nation, considering the potential 
alternative uses of funds. The overall Budget allocation for the Civil 
Works program as well as the performance-based allocations for 
construction projects reflects, in the administration's view, the best 
way to realize overall net benefits for the Nation. If the award of 
contracts is delayed, there would be a corresponding deferral of 
benefits achieved from the project's completion.
    Question. What is the potential impact on the completion date of 
the project caused by a delay in awarding the ``critical path'' 
contract for the superstructure in 2005?
    General Strock. Any delay to a contract such as the Bridge 
Superstructure will have a corresponding direct delay to the completion 
date of the project.
    Question. How quickly can the contract for the superstructure be 
awarded to ensure that as much of the fiscal year 2005 appropriation 
for Kentucky Lock is utilized fully in a manner that contributes to the 
completion of this project sooner rather than later?
    General Strock. The earliest that the superstructure contract could 
be awarded is the middle of August, 2005. We would expect the fiscal 
year 2005 earnings for this contract to be no more than $2 million, 
subject to the usual qualifications on capability estimates.
    Question. What is the estimated economic impact of terminating 
construction of the Kentucky Lock Addition project in fiscal year 2006?
    General Strock. The Budget has not proposed termination of the 
project. Instead, the Budget proposed that this and other relatively 
lower-performing projects be considered for possible suspension at this 
time in order to direct available resources to projects producing 
higher benefits. If project construction were terminated in fiscal year 
2006, some portion of the project's total average annual benefits, 
estimated at $71 million (October 2003 prices), would be deferred to 
future years, assuming the project later resumed construction.
    Question. What is the estimated economic benefit of continuing to 
construct the Kentucky Lock Addition project in fiscal year 2006 and 
beyond on a funding schedule of expenditure levels equal to the average 
of actual expenditures over the course of the past 5 years?
    General Strock. In 4 of the last 5 fiscal years, an average of $30 
million per year has been appropriated to the project. If project 
funding remains in this range, then the project completion date would 
be 2022. Continued funding on this level would realize some portion of 
the $71 million in average annual benefits estimated in the Corps 
report on the project.
    Question. What is the estimated economic benefit of continuing to 
construct the Kentucky Lock Addition project in fiscal year 2006 and 
beyond on an efficient funding schedule?
    General Strock. Subject to the usual qualifications on capability 
estimates, if the Corps were to receive the maximum amount that it 
could efficiently spend in every fiscal year, the earliest possible 
completion date would be 2012. Based on the Corps' analysis of the 
economic impacts of the project and assuming an unconstrained funding 
schedule, about $71 million in navigation benefits could be realized by 
the project's completion.
                                 ______
                                 
            Questions Submitted by Senator Mary L. Landrieu

    Question. When will the Secretary determine whether the lock 
conversion for the Larose to Golden Meadow, Louisiana project is 
justified pursuant to Sec. 325 of Public Law 106-53 (WRDA 1999)?
    Mr. Woodley. The Leon Theriot Lock evaluation report is at the 
Office of the Assistant Secretary of the Army for Civil Works for 
review. The review is expected to be completed in June 2005.
    Question. The Corps owns and operates four hopper dredges which are 
to be used for urgent and emergency dredging and for national defense 
purposes. Do we really need four government hoppers in light of the 
current private hopper dredge capacity that exists?
    General Strock. The Corps of Engineers does own four hopper 
dredges, however, the WHEELER is maintained in a ready reserve status, 
and is not scheduled for work unless industry is fully engaged and is 
unable to respond. Industry has increased its capacity, and we are 
currently evaluating the need for the remaining three hopper dredges 
and the appropriate configuration of the Corps hopper dredge fleet.
    Question. I am told that the Corps is preparing a report to 
Congress to address use of its minimum dredge fleet. Can you tell me 
what progress you are making and when Congress can expect to receive 
that report? Will it arrive on the Hill in time to have an impact on 
this year's legislation?
    Mr. Woodley. The Corps is currently finalizing the report, which I 
expect to complete and, upon final clearance, forward to Congress in a 
timely manner.
    Question. I understand that since the Dredge Wheeler has been in 
ready reserve, you have improved the nationwide management of all 
hopper dredges through a public-private partnership with industry. Does 
the Corps view the partnership favorably, and what does it mean with 
regard to the number of dredges the Government must continue to 
operate?
    General Strock. The Corps and the hopper dredge industry have 
established a partnership called the Industry-Corps Hopper Dredge 
Management Group (ICHDMG). This partnership has effectively developed a 
process for managing the combined Corps and industry hopper dredges in 
a manner that ensures reliable service to ports and waterways requiring 
hopper dredging. The effectiveness of the partnership is being 
considered with regard to the report's recommendations for the final 
configuration of the Corps hopper dredge fleet.
    Question. I am told that $8 million is needed to keep the Wheeler 
in ready reserve. Is that correct? And, is it cost effective in terms 
of private investment in hopper dredges it has engendered?
    General Strock. Yes, $8 million is the estimated amount that is 
required to keep the WHEELER in ready reserve. The cost effectiveness 
and resultant industry investments are being considered in the 
evaluation and recommendations of the Corps future hopper dredge 
configuration.
                       DEPARTMENT OF THE INTERIOR

                         Bureau of Reclamation

STATEMENTS OF:
        R. THOMAS WEIMER, ACTING ASSISTANT SECRETARY FOR WATER AND 
            SCIENCE, DEPARTMENT OF THE INTERIOR
        JOHN W. KEYS, III, COMMISSIONER

ACCOMPANIED BY:
        BOB WOLF, DIRECTOR, PROGRAM AND BUDGET, BUREAU OF RECLAMATION, 
            DEPARTMENT OF THE INTERIOR
        JOHN TREZISE, DIRECTOR, BUDGET, DEPARTMENT OF INTERIOR
        J. RONALD JOHNSTON, PROGRAM DIRECTOR, CENTRAL UTAH PROJECT 
            COMPLETION ACT OFFICE
    Senator Bond. Now we would like to call forward our second 
panel. All right. If everyone will take their seats, we will 
begin panel two to take testimony on fiscal year 2006 budget 
requests for the Bureau of Reclamation. Testifying on behalf of 
the budget of the Bureau will be Mr. R. Thomas Weimer, Acting 
Assistant Secretary for Water and Science, U.S. Department of 
the Interior, and Mr. John W. Keys III, Commissioner of the 
Bureau of Reclamation.
    Gentlemen, we welcome both of you, your full statements 
will be included in the record, and we would ask that you 
summarize briefly your statements, and with that Mr. Weimer.
    Mr. Weimer. Thank you, good afternoon Mr. Chairman, and 
members of the subcommittee. I'm very pleased to be here today 
on behalf of Secretary Norton to introduce the Interior 
Department's 2006 Budget to you, and specifically those 
portions related to the Bureau of Reclamation and the Central 
Utah Project. As you noted, I'm joined by John Keys the 
Commissioner of the Bureau of Reclamation. May I also introduce 
Bob Wolf, to John's right. He is the Director of Budget for the 
Bureau and behind me, John Trezise, who is Director of Budget 
for the Department of the Interior. We also have Ron Johnston, 
again behind me, who is the Program Director of the Central 
Utah Project, and he's available for any questions on that 
project that you may have.

      DEPARTMENT OF THE INTERIOR'S FISCAL YEAR 2006 BUDGET REQUEST

    To briefly summarize, the Department's overall 2006 request 
for programs funded by the Energy and Water Development 
Subcommittee is $981 million. This is $32 million below the 
2005 enacted level. This includes $947 million for the Bureau 
of Reclamation, and $34 million for the Central Utah Project. 
In crafting the budget, four overarching principles were used 
to shape both the Department's budget, the Bureau's budget, and 
Central Utah Project's budgets. First is the power of 
partnerships to leverage resources and achieve results. Second 
is the imperative for fiscal restraint to maintain a dynamic 
economy. Our budget is consistent with the President's goal to 
cut the Federal deficit in half by 2009. Third is an emphasis 
on investments that will help Interior work smarter, more 
efficiently, and more effectively. Fourth is the importance of 
funding activities and programs linked to core Departmental and 
Bureau responsibilities. I want to briefly highlight just one 
of the Secretary's priority efforts that is underway in the 
Department, and that is the Water 2025 initiative. With the 
support of the subcommittee, we're able to report on the early 
successes, with funding provided last year. We're promoting 
conservation efforts through grant and cost sharing programs 
that emphasize local initiatives and partnerships. The 
overarching goal of Water 2025 is to reduce crises and 
conflicts over water. The 2006 budget includes $30 million for 
Water 2025, an increase of $11 million. We feel that this 
increase is due to the very positive response to the challenge 
grant program that we have seen last year, and this year, we 
think that that increase of support validates the success of 
the partnership approach that the Secretary has initiated. I 
will briefly mention the Central Utah Project budget request of 
$34 million, a decrease of $13 million below the 2005 enacted 
level. The decrease is for the Mitigation Commission and is 
primarily due to the transfer of budget authority from the 
Department to the Western Area Power Administration. Due to 
projected carryover balances in the Commission's account, we 
believe the work of the Mitigation Commission will not be 
adversely affected.

                         MANAGEMENT INITIATIVES

    Before closing, let me just mention that throughout the 
Department's and Bureau's budgets are a number of management 
initiatives. As public demands for Interior services increased, 
from Indian children who need schools, to water districts that 
depend on the water delivered by Reclamation, Interior must 
continue to find ways to enhance service and spend dollars 
wisely. Behind all of our programs, out of the limelight, rests 
the management foundation through which we strive to improve 
program efficiency and effectiveness.

                           PREPARED STATEMENT

    Mr. Chairman, that concludes my opening remarks. I'm 
available to the subcommittee for any questions you may have.
    [The statement follows:]

                 Prepared Statement of R. Thomas Weimer

    Good afternoon. On behalf of the Secretary of the Interior, I am 
pleased to be here today before the Subcommittee on Energy and Water 
Development to discuss the fiscal year 2006 budget for the Department 
of the Interior. I appreciate the opportunity to highlight our 
priorities and key goals.
    The Department of the Interior's mission is complex and 
multifaceted. Our 70,000 employees contribute to the Nation's 
environmental quality, economic vitality, and the well being of 
communities. Our mission encompasses resource protection, resource use, 
recreation, and scientific, educational, and other services to 
communities.
    The Department's geographically dispersed responsibilities are 
inspiring and sometimes challenging. Through our programs, we have 
close connections to America's lands and people. We protect some of the 
Nation's most significant cultural, historic, and natural places. We 
provide access to resources to help meet the Nation's energy and water 
needs, while protecting natural and cultural resources. We provide 
recreation opportunities to over 477 million people annually at our 
parks, refuges, and the public lands we manage. In addition, we fulfill 
trust and other responsibilities to American Indians, Alaska natives, 
and the Nation's affiliated island communities.
    Four principles shape our 2006 budget. First is the power of 
partnerships to leverage resources and achieve results. Second is the 
imperative of fiscal constraint. Third is an emphasis on investments 
that will help Interior work smarter, more efficiently, and more 
effectively. Fourth is the importance of funding activities and 
programs linked to core Departmental responsibilities.

                            BUDGET OVERVIEW

    Performance lies at the center of the President's 2006 budget 
request. The President's proposal also demonstrates the fiscal 
restraint necessary to halve the deficit by 2009 and maintain the 
Nation's dynamic economy.
    The 2006 budget request for current appropriations is $10.8 
billion. Permanent funding that becomes available as a result of 
existing legislation without further action by the Congress will 
provide an additional $4.2 billion, for a total 2006 Interior budget of 
$15 billion. We estimate that the Department will collect $13.8 billion 
in receipts.
    Our budget includes $981.1 million for programs funded in the 
Energy and Water Development Appropriations Act, a reduction of $31.5 
million or 3.1 percent below the 2005 enacted level.
    The 2006 Bureau of Reclamation request for current appropriations 
is $946.7 million, a net decrease of $18.2 million below the 2005 
enacted level. The request for current appropriations is offset by 
discretionary receipts in the Central Valley Project Restoration Fund 
and by a proposal to offset $30.0 million through direct funding of 
certain hydropower operations and maintenance activities, resulting in 
a net discretionary request of $872.8 million, a decrease of $45.8 
million below the 2005 enacted level. This decrease is primarily due to 
the 2006 hydropower direct funding proposal. The request for permanent 
appropriations in 2006 totals $80.0 million.
    Our budget also includes $9.8 billion for programs funded in the 
Interior and Related Agencies Appropriations Act, a decrease of $69.7 
million or 0.7 percent from the 2005 level.
    In his February 2 State of the Union Address, the President 
underscored the need to restrain spending in order to sustain our 
economic prosperity. As part of this restraint, it is important that 
total discretionary and non-security spending be held to levels 
proposed in the 2006 budget. The budget savings and reforms in the 
budget are important components of achieving the President's goal of 
cutting the budget deficit in half by 2009 and we urge the Congress to 
support these reforms. The Department will continually work with the 
Congress to achieve these savings.

                  CENTRAL UTAH PROJECT COMPLETION ACT

    The 2006 request for the Central Utah Project Completion Account 
provides $34.4 million for use by the District, the Commission, and the 
Department to implement Titles II-IV of the Act, which is $13.3 million 
less than the 2005 enacted level. A substantial portion of this 
decrease is due to a transfer of budgetary authority and responsibility 
from the Department of the Interior to the Western Area Power 
Administration (WAPA). WAPA is requesting $6.7 million for this 
purpose, and will transfer it to the Department of the Interior for use 
on the CUP. Of those funds, some will go to administrative expenses for 
the Mitigation Commission, and the balance will be added to the corpus 
of the Utah Reclamation Mitigation and Conservation Account, which is 
projected to have a balance of $150 million by the end of fiscal year 
2006. The reduced request for the Mitigation Commission reflects the 
Commission's substantial carryover balances from prior year 
appropriations.
    The funds requested for the District ($31.3 million) will be used 
to fund the balance of the Federal share of the completed Diamond Fork 
System ($14.6 million); to continue construction on Uinta Basin 
Replacement Project ($12.2 million); and to implement water 
conservation measures, local development projects, and continue 
planning and NEPA compliance for the Utah Lake System ($4.5 million).

                              RECLAMATION

    The Bureau of Reclamation is the largest supplier of water in the 
17 western States. It maintains 471 dams and 348 reservoirs with the 
capacity to store 245 million acre-feet of water. These facilities 
deliver water to one in every five western farmers covering about 10 
million acres of irrigated land and provides water to over 31 million 
people for municipal, and industrial uses. Reclamation is also the 
Nation's second largest producer of hydroelectric power, generating 42 
billion kilowatt hours of energy each year from 58 power plants. In 
addition, Reclamation's facilities provide substantial flood control, 
as well as many recreation and fish and wildlife benefits.
    Since its establishment in 1902, Reclamation has developed water 
supply facilities that have contributed to sustained economic growth 
and an enhanced quality of life in the western States. Lands and 
communities served by Reclamation projects have been developed to meet 
agricultural, tribal, urban, and industrial needs. Reclamation 
continues to develop authorized facilities to store and convey new 
water supplies.
    The 2006 request for Water and Related Resources, Reclamation's 
principal operating account is $801.6 million, which is $51.0 million 
below the enacted amount for fiscal year 2005. The account total 
includes an undistributed underfinancing reduction of $30.2 million in 
anticipation of delays in construction schedules and other planned 
activities.
    The budget proposal continues to emphasize assuring operation and 
maintenance of Bureau of Reclamation facilities in a safe, efficient, 
economic, and reliable manner; ensuring systems and safety measures are 
in place to protect the public and Reclamation facilities; working 
smarter to address the water needs of a growing population in an 
environmentally responsible and cost-efficient manner; and assisting 
States, Tribes, and local entities in addressing contemporary water 
resource issues. During development of Reclamation's budget request, 
funding for every project is reviewed based on Departmental and Bureau 
priorities and for compliance with the strategic plan.
    The 2006 budget request for Water and Related Resources provides a 
total of $391.7 million for facility operations, maintenance, and 
rehabilitation. Providing adequate funding for these activities 
continues to be one of Reclamation's highest priorities. The Bureau 
continues to work closely with its water customers and other 
stakeholders to ensure these funds are used to allow the timely and 
effective delivery of project benefits; ensure the reliability and 
operational readiness of Reclamation's facilities; identify, plan, and 
implement dam safety corrective actions and site security improvements; 
and undertake work to enhance environmental values.
    A total of $69.9 million is requested for the safety of dams 
program, an increase of $6.4 million. This funding includes $44.6 
million to initiate safety of dams corrective actions and $18.5 million 
for safety evaluations of existing dams.
    The 2006 request for Water and Related Resources also includes a 
total of $440.1 million for resource management and development 
activities.

         WATER 2025--PREVENTING CRISES AND CONFLICT IN THE WEST

    Meeting water needs is one of the most pressing resource challenges 
in some of the fastest growing areas of the Nation. In the West, 
demands for water for cities, Tribes, farms, and the environment exceed 
the available supply in many basins even under normal water supply 
conditions, as currently managed. Severe drought conditions over the 
past several years in the West have amplified water supply and 
management challenges. Without improved water management, conflicts and 
crises surrounding water supplies will likely increase.
    The overarching goal of Water 2025 is to meet the challenge of 
reducing crises and conflict over water. To minimize or avoid these 
water crises and enhance water delivery, Water 2025 advances three 
basic concepts in the 2006 budget request:
  --The implementation of water monitoring, measuring, conservation, 
        and management technologies will provide some of the most cost-
        effective gains in the ability to meet the demand for water in 
        the future.
  --The attainment of economic, social, and environmental goals 
        relating to water supply requires long-term stability that is 
        more likely to be provided by collaborative solutions than by 
        litigation.
  --Market-based tools that rely on willing buyer/willing seller 
        transactions are far more likely to provide stability and avoid 
        conflict than are regulatory or litigation-based alternatives 
        for meeting unmet and emerging needs for water.
    Solutions developed through Water 2025 must be based on and 
recognize interstate compacts and U.S. Supreme Court decrees that 
allocate water among States, water rights established under State and 
Federal law, tribal water rights, and contracts for the use of water.
    The 2006 budget requests $30.0 million for Water 2025, an increase 
of $10.5 million above the 2005 enacted level. The request includes 
funds for system optimization reviews, the Water 2025 challenge grant 
program, and improved technology.

                         CALFED IMPLEMENTATION

    The Sacramento-San Joaquin Delta serves as the hub of the State's 
water management system. The Sacramento and San Joaquin Rivers and 
their tributaries, provide potable water for two-thirds of California's 
homes and businesses, and irrigate more than 7 million acres of 
farmland on which 45 percent of the Nation's fruits and vegetables are 
grown. The Delta its tributaries and downstream service areas also 
provide habitat for 750 plant and animal species, some listed as 
threatened or endangered.
    Established in May 1995, the California-Federal Bay-Delta Program 
(CALFED) is a comprehensive program to address the complex and 
interrelated problems in the Bay-Delta system, the watersheds that feed 
it, and the areas served by waters diverted out of it. A consortium of 
Federal and State agencies fund and participate in the CALFED program, 
focusing on ecosystem improvements and improving water management and 
supplies. In addition, CALFED addresses issues related to flood 
control, levees, water quality and watersheds.
    After preparation of environmental documentation, the CALFED 
parties, including Interior, signed a record of decision formally 
approving a long-term programmatic plan for restoring ecosystem values 
and improving water management in the solution area. Approximately $68 
million was specifically provided to Reclamation in 2001 through 2005 
within various authorized programs of the Central Valley Project for 
activities that support the goals of the CALFED program. Beyond these 
funds, Reclamation and the other Federal agencies participating in the 
CALFED program fund numerous other programs and activities that are 
closely aligned with the CALFED program.
    On October 25, 2004, the President signed into law the Calfed Bay-
Delta Authorization Act. The legislation provides a 6-year Federal 
authorization to implement the collaborative plan for restoration and 
enhancement of the San Francisco Bay/Sacramento-San Joaquin Delta 
estuary.
    The 2006 budget includes $35.0 million for Reclamation to implement 
CALFED activities.

              OTHER BUREAU OF RECLAMATION PROJECT REQUESTS

    The $128.0 million request for the Central Valley Project includes 
a $3.1 million increase for the CVP replacements, additions, and 
maintenance program. Maintaining strong funding for these activities is 
critical to maintaining the long-term integrity of Reclamation's 
infrastructure. The 2006 request includes $16.6 million for the 
Colorado-Big Thompson project, an increase of $5.6 million.
    A total of $50.0 million is requested for site security to ensure 
the safety and security of facilities, an increase of $6.8 million. The 
2006 budget proposes that the operation and maintenance-related 
security costs for Reclamation facilities be reimbursed by project 
beneficiaries, consistent with the practice for other operation and 
maintenance expenses.
    The budget includes $52.0 million for the Animas-La Plata project 
to continue implementation of the Colorado Ute Settlement Act. This 
will provide for continued construction of the Ridges Basin Dam and the 
Durango pumping plant.
    The request funds rural water supply projects at $57.5 million, 
$29.5 million below the 2005 enacted level. Funding is requested for 
the Mni Wiconi, Garrison, and Lewis and Clark projects. The overall 
reduction is due, in part, to a decrease of $17.0 million resulting 
from the projected completion of the Mid-Dakota rural water project in 
2005. The balance of the reduction results from a decision to focus 
primarily on ongoing rural water projects until establishment of a 
formal Reclamation rural water program, as recommended in earlier PART 
and common measures evaluations. The administration submitted 
legislation to the 108th Congress to establish such a program, and 
looks forward to working with the 109th Congress to create a program 
that addresses the present programmatic problems.
    The budget proposes to re-allocate repayment of capital costs of 
the Pick-Sloan Missouri Basin program. Power customers would be 
responsible for repayment of all construction from which they benefit, 
whereas to date they have only been responsible for a portion of the 
costs. This change would increase reimbursements from power customers 
by $33.0 million in 2006, and declining amounts in future years. Rate 
increases for power customers could be phased in over time. Authorizing 
legislation will be submitted.

                         MANAGEMENT EXCELLENCE

    As public demands for Interior services increase--from Indian 
children who need schools to visitors who seek more outdoor 
recreational opportunities on our public lands--Interior must continue 
to enhance service and spend dollars wisely. Behind all our programs, 
out of the limelight, rests a management foundation through which we 
strive to improve program efficiency and effectiveness. The Departments 
and its bureaus continue to implement performance improvements.
    Reclamation and the Central Utah Project continue to strive for 
excellence in the President's management initiatives, which include 
competitive sourcing, strategic work force management, improved 
financial performance, expanded electronic government, and integrated 
budget and performance. The Bureau of Reclamation is committed to the 
administration's management reform agenda and has developed road maps 
for getting green ratings on its scorecards. Reclamation's use of 
activity-based cost management data, together with modifications to 
Reclamation's field-driven budget formulation process, will integrate 
performance and budget in Reclamation's decision-making process.
    As part of its 2006 budget development process, Reclamation and OMB 
evaluated the recreation program and the water management/supply 
planning and construction program using the Program Assessment Rating 
Tool process. The recreation program was rated adequate. The water 
management/supply planning and construction program was rated results 
not demonstrated, pending development of performance measures and base 
line data that assess progress toward bureau and strategic plan goals. 
The operations and maintenance portion of the water management/supply 
program, the site security program, the safety of dams program, and the 
Central Utah Project will be evaluated by PART during the development 
of the 2007 budget.
    The National Academies' National Research Council is reviewing 
Reclamation's organizational infrastructure as it relates to its core 
mission of delivering water and power. The NRC held its first committee 
meeting February 28 to March 1, 2005, and should conclude its report 
during 2005.
    Our 2006 budget also includes investments in tools to enable our 
employees to do their jobs more efficiently and generate cost savings 
by implementing standardized systems.
    The Department currently uses 26 different financial management 
systems and over 100 different property systems. Employees must enter 
procurement transactions multiple times in different systems so that 
the data are captured in real property inventories, financial systems, 
and acquisition systems. This fractured approach is both costly and 
burdensome to manage. We have underway an integration of our financial 
and business management systems to streamline and modernize basic 
administrative activities.
    The Department's budget request includes an increase of $9.5 
million to support continued implementation of the Financial and 
Business Management System, which is integrating financial management, 
procurement, property management and other systems and will be the 
basis for reengineered administrative processes throughout the 
Department. As FBMS becomes fully operational, over 80 legacy systems 
will be retired and their functionality replaced by standardized 
business processes within FBMS. In 2006, the National Park Service and 
Fish and Wildlife Service are scheduled to transition to FBMS. The 
Bureau of Reclamation will transition to FBMS in 2007.
    The 2006 Department budget also includes an increase of $7.0 
million to continue implementation of the Enterprise Services Network. 
ESN leverages the existing BIA Trustnet, expanding it Department-wide, 
to provide secure, state-of-the-art internet and intranet connections 
and a fully functional operational center for data communications. In 
addition to providing better services for many Interior offices, the 
system will provide a uniformly secure environment, standardized and 
efficient 24-hour/7-day operations, and improved technical support. The 
Reclamation budget includes $1.1 million for ESN.

                ADDRESSING OTHER DEPARTMENTAL CHALLENGES

    Over the past 4 years, the Interior Department has encouraged 
cooperative conservation through various grant programs, administrative 
actions, and policies. These efforts emphasize innovation, local 
action, and private stewardship. Water 2025 is an excellent example. 
They achieve conservation goals while maintaining private and local 
land ownership. They foster species protection through land management 
and cooperative, on-the-ground habitat improvements, complementing 
traditional funding of ESA regulatory programs.
    Two proposals in the Interior Appropriations Act are of particular 
relevance to this subcommittee--Klamath River Basin and Everglades, 
which demonstrate our ability to work across the landscape 
cooperatively to accomplish our goals.
    Klamath River Basin.--The 2006 budget commits $62.9 million toward 
addressing water issues in the Klamath Basin and proposes an 8.4 
percent increase for Interior Department programs in the basin. In the 
short-term, water-supply conditions will continue to present 
challenges. As of mid-February, the snow pack in the upper Klamath 
River basin was 47 percent below average. With depleted groundwater 
supplies and expected continued drought conditions, the risks to 
endangered and threatened fish in the basin persist. We also anticipate 
impacts to the people and communities dependent on the river, including 
upper basin irrigators and downstream Indian and commercial fishermen. 
Federal efforts in the basin will continue to focus on long-term 
solutions to resolving conflicts between the many competing uses for 
scarce water.
    Everglades Restoration.--Interior is also continuing its work with 
the Corps of Engineers and the State of Florida to complete the 
Modified Water Deliveries Project (Mod Water), a key to restoring 
natural flows in the Everglades. The Mod Water project includes water 
control structures to restore more natural hydrologic conditions within 
the Park as well as a flood mitigation system to protect adjacent 
residential and agricultural areas. The ability to deliver adequate 
supplies of clean water at the right time of the year is critical to 
the restoration of the Park's natural resources. Once completed, this 
project will provide much needed flexibility to water managers and 
serve as a strong foundation for future benefits under the 
Comprehensive Everglades Restoration Plan (CERP).
    Under a new agreement between the Department and the Corps of 
Engineers, the cost to complete the project will be shared by NPS and 
the Corps. Within the 2006 request for NPS construction is $25.0 
million. The NPS contribution consists of $8.0 million in new funding 
and $17.0 million redirected from unobligated balances for Everglades 
land acquisition not currently needed for high-priority acquisitions. 
The 2006 budget for the Corps includes $35.0 million for the project. 
Over the period 2007 to 2009, the Corps will contribute an estimated 
additional $88.0 million and the NPS an additional $41.0 million.
    Other Cooperative Conservation Programs.--Through partnerships, 
Interior works with landowners and others to achieve conservation goals 
across the Nation and to benefit America's national parks, wildlife 
refuges, and other public lands. The 2006 budget includes $381.3 
million for the Department's cooperative conservation programs. These 
programs leverage limited Federal funding, typically providing a non-
Federal match of 50 percent or more. They provide a foundation for 
cooperative efforts to protect endangered and at-risk species; engage 
local communities, organizations, and citizens in conservation; foster 
innovation; and achieve conservation goals while maintaining working 
landscapes.
    Our budget proposes funding for the Landowner Incentive and Private 
Stewardship programs at a total of $50.0 million, an increase of $21.4 
million from 2005. Through these programs, our agencies work with 
States, Tribes, communities, and landowners to provide incentives to 
conserve sensitive habitats in concert with traditional land management 
practices such as farming and ranching, thus maintaining the social and 
economic fabric of local communities.
    Our budget proposes to fund challenge cost-share programs in BLM, 
FWS and NPS at $44.8 million. These cost-share programs better enable 
Interior's land management agencies to work together and with adjacent 
communities, landowners, and other citizens to achieve common 
conservation goals. The 2006 proposal represents an increase of $25.7 
million.
    The challenge cost-share program includes $21.5 million for 
projects that are targeted to natural resource conservation. In 2004, 
the Congress provided $21.2 million for these cost-share grants. 
Leveraged with matching funds this provided a total of $52 million for 
on-the-ground projects including more than $19 million for projects to 
eradicate and control invasive species and weeds.
    For example, in New Mexico, the Bosque del Apache refuge is working 
with the local community to restore riparian habitat along the Rio 
Grande River by eliminating tamarisk on over 1,100 acres.
    We also propose level or increased funding for a suite of other FWS 
cooperative programs: the Partners for Fish and Wildlife program, the 
Coastal program, the Migratory Bird Joint Ventures program, the North 
American Wetlands Conservation Fund, the State and Tribal Wildlife 
grants program, and the Cooperative Endangered Species Conservation 
Fund. These programs support a cooperative approach to conservation 
that emphasizes voluntary partnerships with private landowners, local 
governments, Tribes, and community organizations.

                               CONCLUSION

    The budget plays a key role in advancing our vision of healthy 
lands, thriving communities, and dynamic economies. Behind these 
numbers lie people, places, and partnerships. Our goals become reality 
through the energy and creativity efforts of our employees, volunteers, 
and partners. They provide the foundation for achieving the goals 
highlighted in our 2006 budget.
    This concludes my overview of the 2006 budget proposal for the 
Department of the Interior and my written statement. I will be happy to 
answer any questions that you may have.

    Senator Bond. Thank you. Mr. Keys.

                     STATEMENT OF JOHN W. KEYS, III

    Mr. Keys. Mr. Chairman, it's my pleasure to be here this 
afternoon, and we do appreciate the opportunity to come and 
talk to you about our fiscal year 2006 budget. As Tom said, 
with me today is Bob Wolf, my Director of Program and Budget. 
Before I go ahead with the statement, let me tell you how much 
we appreciate working with your committee staff and the 
committee members. They have been very understanding of what we 
tried to do and how we tried to do it. Before I get into the 
2006 budget discussion, I would just like to take a minute to 
update you on water supply conditions in the West.

                                DROUGHT

    We put out these charts for you before we got started. 
Unfortunately, the drought continues this year, and we are 
extremely concerned about it. 



    The chart that you have there--shows the typical El Nino 
setup for the western United States, rain in the southwest and 
almost nothing across the northern tier. For example, the 
Columbia River basin expects about 60 percent of normal runoff. 
In Eastern Oregon, Western Idaho, and parts of Montana, it's 
about 50 percent. Some parts of Montana and Wyoming are even 
less than 50 percent, and the Yakima basin, in the middle of 
the chart, is about 35 percent.
    Those are just some of the typical numbers that we're 
working with, and the drought continues in that part of the 
country. Now, I'd like to turn to the fiscal year 2006 budget. 
The overall Reclamation request totals about $947 million in 
current authority and is offset by discretionary receipts: for 
the Central Valley Project restoration fund of about $44 
million, and Hydropower direct financing is about $30 million. 
The request continues to emphasize the operation and 
maintenance of Reclamation facilities in a safe, efficient, 
economic, and reliable manner, while sustaining the health and 
integrity of ecosystems that address the water needs of a 
growing population in the West. As part of this emphasis, $65 
million is requested for our Safety of Dams program. Our fiscal 
year 2006 request has been designed to support Reclamation's 
mission of delivering water and generating hydropower 
consistent with the applicable State and Federal law in an 
environmentally responsible and cost efficient manner.

           HIGHLIGHTS OF THE FISCAL YEAR 2006 BUDGET REQUEST

    Some highlights of this budget proposal: Water 2025 request 
$30 million for fiscal year 2006. It builds off of the fiscal 
year 2005 Water 2025 effort that we feel has been very 
successful. It is a high priority in Reclamation, both 
financial and technical, and it has focused resources into 
those areas of the West where conflict and crisis over water 
exists now or could be predicted in the near future.
    The hotspot map that we also passed out for you, shows some 
of those areas in the West that are most likely to experience 
water supply crisis. These potentially water-short areas are 
the focus of the Water 2025 effort.



    In the Klamath project in Oregon and California, we're 
asking for $22 million. The fiscal year 2006 request continues 
and increases funding for our efforts in the Klamath basin that 
will improve water supplies to meet competing demands for water 
in the basin and ensure continued delivery of water to our 
project. The 2005 water supply forecast to date shows that 2005 
will be a challenging year for irrigators and resource 
managers. These early forecasts depict snow packs at about 47 
percent of normal. We're currently anticipating a dry water 
year operation and a dry water year in the Klamath River.
    For the Middle Rio Grande project in New Mexico, we're 
requesting $19 million. The 2006 request continues support of 
endangered species, through participation in the collaborative 
program. These efforts support the protection and recovery of 
the Rio Grande Silvery Minnow and the Southwestern Willow 
Flycatcher, and it requests funding for supplemental water 
channel maintenance, and government-to-government consultations 
with Pueblos and tribes.
    On the Animas-La Plata project in Colorado and New Mexico, 
we're asking for $52 million. The Animas-La Plata project is 
almost 21 percent complete and resolves, through authorizing 
legislation passed by the Congress in 2000, longstanding Indian 
water rights claims in the basin.
    In our rural water program we're asking for $57.5 million. 
The 2006 funding for rural water projects emphasizes a 
commitment to completing ongoing municipal, rural and 
industrial systems. Funding is included for the Mni Wiconi, 
Garrison, and Lewis and Clark projects. The administration 
submitted a proposal to Congress last year to authorize a 
formal rural water program, and while it did not pass in the 
last Congress, we're working closely with the authorizing 
committees to move this forward. Until such legislation is 
enacted, funding is only requested for ongoing rural water 
projects.
    For the CALFED Bay-Delta program, we're asking $35 million. 
President Bush signed the historic legislation on October 25, 
2004, authorizing the CALFED Bay-Delta program. The funding is 
intended for the following areas: $10 million for environmental 
water account, $10 million for the storage program, $3 million 
for water conveyance, $4 million for water use efficiency, $4 
million for ecosystem restoration, and $4 million for program 
and management, and Reclamation's oversight.

                           PREPARED STATEMENT

    Mr. Chairman, in conclusion I want to strongly reiterate 
that the fiscal year 2006 budget request demonstrates 
Reclamation's commitment in meeting the water and power needs 
of the West in a fiscally responsible manner. Thanks again for 
your continued support, and we would certainly try to answer 
any questions you might have.
    [The statement follows:]

                Prepared Statement of John W. Keys, III

    Thank you, Mr. Chairman, Mr. Reid, and members of the subcommittee, 
for the opportunity to appear before you today to support the 
President's fiscal year 2006 budget request for the Bureau of 
Reclamation. With me today is Bob Wolf, Director of Program and Budget.
    Our fiscal year 2006 request has been designed to support 
Reclamation's mission of delivering water and generating hydropower, 
consistent with applicable State and Federal law, in an environmentally 
responsible and cost efficient manner.
    Funding is proposed for key projects that are important to the 
Department and in line with administration objectives. The budget 
request also supports Reclamation's participation in efforts to meet 
emerging water supply needs to promote water conservation and sound 
water resource management, and help prevent conflict and crises over 
water in the west.
    The fiscal year 2006 request for Reclamation totals $946.7 million 
and is offset by discretionary receipts in the Central Valley Project 
Restoration Fund of $43.9 million and proposed hydropower direct 
financing of $30.0 million. In addition, Reclamation's program includes 
permanent authority of $80.0 million. The total program, after offsets 
to current authority and the inclusion of permanent authority, is 
$952.8 million.

                      WATER AND RELATED RESOURCES

    The fiscal year 2006 request for the Water and Related Resources 
account is $801.6 million. The request provides funding for five major 
program activities: Water and Energy Management and Development ($320.8 
million); Land Management and Development ($35.3 million); Fish and 
Wildlife Management and Development ($84.0 million); Facility 
Operations ($206.5 million); and Facility Maintenance and 
Rehabilitation ($185.2 million). The request is partially offset by an 
undistributed reduction of $30.2 million, commonly referred to as 
underfinancing, in anticipation of delays in construction schedules and 
other planned activities.
    The request continues to emphasize the operation and maintenance of 
Reclamation facilities in a safe, efficient, economic, and reliable 
manner, while meeting our requirements to sustain the health and 
integrity of ecosystems that are connected to those operations. It will 
also assist the States, Tribes, and local entities in solving 
contemporary water resource issues in advance of crises over water.
    Highlights of the fiscal year 2006 request for Water and Related 
Resources include:
    Water 2025 ($30 million).--Water 2025 allows Reclamation to 
continue playing an important role in working with State and local 
communities to develop solutions that will help meet the increased 
demands for limited water resources in the West, and avoid water 
conflicts in areas particularly susceptible to an imbalance between 
supply and demand. As in fiscal year 2004 and fiscal year 2005, funding 
will be directed to on-the-ground projects selected through a 
competitive challenge grant program with a 50:50 match.
    Klamath Project in Oregon and California ($22.0 million).--The 
fiscal year 2006 funding request continues on-the-ground initiatives to 
improve water supplies to meet agricultural, tribal, wildlife refuge, 
and environmental needs in the Klamath Basin and to improve fish 
passage and habitat. This is part of a $62.9 million Department of the 
Interior request that includes the collaborative efforts of several 
bureaus. The initiative is focused on achieving immediate on-the-ground 
benefits. The 2005 water supply forecasts show that 2005 will be a 
challenging year for irrigators and resource managers. These early 
forecasts depict snow pack at 47 percent below average. We are 
currently anticipating a dry water year in the lake and in the river.
    Lower Colorado River Operations Program ($17.9 million).--The 
fiscal year 2006 request will provide funding to continue work on 
development and anticipated implementation of the Lower Colorado River 
Multi-Species Conservation Program (MSCP). The MSCP will provide 
Endangered Species Act compliance for operations and maintenance 
activities associated with the Colorado River from the upper end of 
Lake Mead to the southern border with Mexico for 50 years. The 
Secretary of Interior, acting through the Bureau of Reclamation, has 
the unique role of ``water master'' for the lower Colorado River. LCROP 
includes river operations, water service contracting and repayment, 
decree accounting, oversight of hydropower activities, and fulfilling 
the requirements of the Secretary's role as water master.
    Middle Rio Grande ($19.0 million).--The fiscal year 2006 request 
continues funding in support of the Endangered Species Collaborative 
Program. In addition, the request continues funding for acquiring 
supplemental water, channel maintenance, and pursuing government-to-
government consultations with Pueblos and Tribes. Finally, the funding 
will continue efforts that support the protection and contribute to the 
recovery of the Rio Grande silvery minnow and southwestern willow 
flycatcher. One effort that may assist the silvery minnow is a proposed 
sanctuary that will support all life stages of the minnow. Reclamation, 
the U.S. Fish and Wildlife Service, and the Middle Rio Grande 
Conservancy District are cooperating in the planning of a sanctuary, 
and design is continuing. A site has been selected and is undergoing 
detailed evaluation for suitability.
    Animas-La Plata in Colorado and New Mexico ($52.0 million).--The 
fiscal year 2006 request includes $52.0 million for the continued 
construction of Ridges Basin Dam and Durango Pumping Plant and project 
support activities.
    Columbia/Snake River Salmon Recovery in Idaho, Oregon, Montana, and 
Washington ($17.5 million).--This program addresses the implementation 
of Reasonable and Prudent Alternatives (RPAs) included in two 
Biological Opinions issued in December 2000. The fiscal year 2006 
funding will address significantly increased regional coordination, 
off-site mitigation activities in selected sub-basins to offset 
hydrosystem impacts, and continue research, monitoring and evaluation 
efforts.
    Site Security ($50.0 million).--Since September 11, 2001, 
Reclamation has maintained heightened security at its facilities to 
protect the public, its employees, and infrastructure.
    The funding in fiscal year 2006 is necessary to cover the costs of 
site security activities including:
  --Surveillance and law enforcement;
  --Anti-terrorism activities that include monitoring of information, 
        personnel security, and threat management; and
  --Physical security upgrades, with a primary focus on our National 
        Critical Infrastructure facilities.
    The fiscal year 2006 budget request proposes that annual costs 
associated with activities for guarding Reclamation facilities be 
treated as project O&M costs and be subject to reimbursement based upon 
project cost allocations. A report with a breakout of planned 
reimbursable and non-reimbursable costs by project, by region, will be 
provided to the subcommittee by May 1, 2005.
    Rural Water ($57.5 million).--The fiscal year 2006 funding for 
rural water projects emphasizes a commitment to completing ongoing 
municipal, rural, and industrial systems that were previously included 
in the President's Budget. Funding is included for the Mni Wiconi, 
Garrison and Lewis and Clark projects. The administration submitted a 
proposal to Congress last year to authorize a formal rural water 
program in Reclamation and while it did not pass in the last Congress, 
we are working closely with the authorizing committees to again move 
this forward; and until such legislation is enacted, funding is only 
requested for on-going rural water projects.
    Hydropower Direct Financing ($30.0 million).--The fiscal year 2006 
budget proposes to finance the costs of operation and maintenance of 
certain Reclamation hydropower facilities directly from receipts 
collected by the Western Area Power Administration (WAPA) from the sale 
of electricity. Under this reclassification proposal, WAPA would 
transfer an agreed upon amount to the Bureau of Reclamation for deposit 
in its Water and Related Resources account. The transferred funds would 
be treated as an offsetting collection. A direct funding arrangement is 
already in place for the Bonneville Power Administration and some 
Western Area Power Administration facilities.
    Safety of Dams ($69.9 million).--The safety and reliability of 
Reclamation dams is one of Reclamation's highest priorities. 
Approximately 50 percent of Reclamation's dams were built between 1900 
and 1950, and 90 percent of those dams were built before the advent of 
current state-of-the-art foundation treatment, and before filter 
techniques were incorporated in embankment dams to control seepage. 
Safe performance of Reclamation's dams continues to be of great concern 
and requires a greater emphasis on the risk management activities 
provided by the program. The fiscal year 2006 request of $69.9 million 
for the Safety of Dams Program will reduce risks to public safety at 
Reclamation dams. The increase from the fiscal year 2005 level is for 
the purpose of initiating three Safety of Dams corrective actions.

                       POLICY AND ADMINISTRATION

    The request for Policy and Administration is $57.9 million. These 
funds are used to develop and implement Reclamation-wide policies, 
rules and regulations and to perform functions which, by statute, 
cannot be charged to specific project or program activities covered by 
separate funding authority. These funds support general administrative 
and management functions.

                CENTRAL VALLEY PROJECT RESTORATION FUND

    The fiscal year 2006 Reclamation budget includes a request for the 
CVP Restoration Fund of $52.2 million, and is expected to be offset by 
discretionary receipts totaling $43.9 million collected from project 
beneficiaries under provisions of Section 3407(d) of the Act. These 
funds will be used for habitat restoration, improvement and 
acquisition, and other fish and wildlife restoration activities in the 
Central Valley Project area of California. This fund was established by 
the Central Valley Project Improvement Act, Title 34 of Public Law 102-
575, October 30, 1992. The funding request is calculated based on a 3-
year rolling average of collections. The net amount requested for 
fiscal year 2006, after the offset, is the same as fiscal year 2005.

               CALIFORNIA BAY-DELTA RESTORATION (CALFED)

    CALFED legislation was signed into law on October 25, 2004, and the 
activities authorized in the legislation include water storage 
investigation, conveyance program activities, continuation of the 
environmental water account, levee construction activities, and 
oversight and coordination of the program. A total of $35.0 million is 
requested for California Bay-Delta Restoration in the following areas: 
$10.0 million for the environmental water account; $10.0 million for 
the storage program; $3.0 million for water conveyance; $4.0 million 
for water use efficiency; $4.0 million for ecosystem restoration; and 
$4.0 million for program and management and Reclamation's oversight 
function.

                 PROGRAM ASSESSMENT RATING TOOL (PART)

    As part of the fiscal year 2006 budget, Reclamation's Water 
Management/Supply--Planning and Construction and Recreation and 
Concessions programs were evaluated by the PART. The entire Water 
Management/Supply program has been separated into three components that 
will be reviewed over 3 years. The 3 components include: (1) Planning 
and Construction, fiscal year 2006; (2) Operations and Maintenance, 
fiscal year 2007; and (3) Environmental Protection and Mitigation, 
fiscal year 2008. In addition, Reclamation intends to PART the Site 
Security and Safety of Dams programs in fiscal year 2007.

                     PRESIDENT'S MANAGEMENT AGENDA

    E-Government.--Reclamation continues to support Federal and 
Departmental E-Gov and Web initiatives, and anticipates increased 
coordination as we adopt the Department's E-Gov Strategy and scorecard 
for rating progress in this area. This support includes participation 
in planning groups, such as the Web Council, e-Authentication and E-Gov 
teams, as well as implementation and integration of content. Some 
specific initiatives requiring Reclamation involvement are the 
Department's Financial and Business Management System, Recreation.gov, 
and the Geospatial One-stop efforts. In addition, Reclamation has 
partnerships with numerous local, State, and Federal organizations to 
share water management information and facilitate coordination using E-
Gov technology.
    Financial Management Improvement.--To support the President's 
Management Agenda on improving financial performance, Reclamation will 
continue to:
  --Provide management with accurate and timely financial information 
        to support operating, budget, and policy decisions;
  --Improve financial and performance information integration;
  --Ensure our financial information is fairly stated to achieve 
        ``unqualified'' opinions from auditors; and
  --Ensure our financial management systems fully comply with Federal 
        financial system requirements and accounting standards.
    Reclamation will continue to work closely with the Department of 
the Interior to improve financial processes and help consolidate 
information. To continue to achieve the President's and the 
Department's objectives for increased accountability, we will enhance 
our financial policies and procedures in support of the Department's 
Transformation of Interior Financial Management. This integrated 
business management plan, which is designed to achieve a consistent 
approach that will provide managers and employees with financial, 
performance, budget, and cost data that is timely and reliable, has 
many facets, including:
  --The Financial and Business Management System (FBMS) which will 
        combine various business management systems into one overall 
        system linking planning and budget data to information 
        performance and results;
  --New processes and procedures that will allow monthly, quarterly, 
        and annual reporting, analysis, and auditing to meet the 
        November 15 report and audit date;
  --Improving the process for issuing financial policies and procedures 
        to help ensure consistency throughout the Department; and
  --Performance measures and quality control procedures to provide 
        standards for evaluating our processes.
    Reclamation has made significant progress addressing financial 
management issues, including:
  --Meeting OMB's accelerated November 15 deadline for completion of 
        Reclamation's financial statements and receiving an unqualified 
        opinion on the statements;
  --Meeting and/or exceeding the Department's financial performance 
        standards;
  --Actively participating in the Department's FBMS initiative to 
        include the functional design requirements and project 
        management support;
  --Completing 11 of 12 financial statement audit findings;
  --Successfully implementing the Department's Activity Based Costing 
        (ABC) initiative in an effort to improve budget and performance 
        integration; and
  --Completing an erroneous payment risk assessment as required by the 
        Improper Payments Information Act of 2002.
    Reclamation has received an ``unqualified'' opinion on all reports 
issued, which demonstrates our strong commitment to accurate and timely 
reporting. We will continue providing timely and useful information for 
management, the administration, and Congress to forge effective 
decision-making and providing reliable and accurate information for our 
publics and partners to forge effective relationships.
    Reclamation has been actively involved in the Department's FBMS 
initiative to replace its existing legacy systems with an integrated 
financial and business management system, and has committed staff on a 
full-time basis to assist the Department with the implementation of 
FBMS in all bureaus over the next 4 years. Reclamation staff has also 
participated in the Department's fiscal year 2004 Blueprint effort to 
determine how to best design the functionality of the new enterprise 
system on a Department-wide basis. Reclamation will implement FBMS in a 
deployment to take place at the beginning of fiscal year 2008, and will 
use fiscal year 2007 to plan and prepare for the implementation.
    Competitive Sourcing.--Reclamation continues to comply with the 
Federal Activities Inventory Reform Act and OMB competitive sourcing 
requirement needs, e.g., training, contractor support and employee 
related competitive sourcing support costs. Under the revised OMB 
Circular A-76, Performance of Commercial Activities, all A-76 studies 
must now focus on either standard or streamlined competition, thus 
eliminating previously used direct conversion studies. Reclamation 
developed a ``Green Plan'' for fiscal year 2005-2008 to guide future 
efforts.
    Human Capital.--In support of the President's Management Agenda, 
Human Capital Initiative and the Department's Strategic Human Capital 
Management Plan (fiscal year 2003-2007), the Strategic Human Capital 
Management Implementation Plan (December 12, 2002), and Reclamation's 
Workforce Plan (2004 to 2008), numerous action items have been 
developed that identify implementation plans and expected results. 
Reclamation will dedicate staff and align human resources strategically 
in support of efforts necessary to close mission-critical competency 
gaps. It will do so by: successfully competing for talent and 
developing an accountability system to ensure that human capital 
management is merit based, effective, efficient and supportive of 
Reclamation's mission accomplishment.
    Reclamation is implementing a new performance management system in 
2005 that applies to all non-SES employees and provides for a five-
level system in contrast to the previous two-level system of pass/fail. 
It gives management the tools to reward exceptional performance and the 
ability to address performance problems. This system also assures the 
linkage of individual accomplishments with organizational goals. SES 
managers converted to this goal in 2004.
    In addition, there are plans to fully implement QuickHire, an 
automated staffing program by fiscal year 2006. Funding will also be 
directed to support additional e-Gov initiatives such as the Learning 
Management System for training and development.
    Performance and Budget Integration.--Reclamation continues to make 
strides in its budget and performance integration initiative. This 
progress includes strengthening its performance based budgeting 
framework through the use of integrated cost, budget and performance 
data to support decisionmaking. During the initial stages of budget 
development, budget and performance guidance are integrated and 
distributed to regional and area offices. The guidance sets forth 
requirements for integrating budget and performance on a project by 
project and/or program basis.
    Performance targets are set during the preliminary phase of budget 
development, and regions are required to link all funding requests to 
the Department's Strategic Plan and its associated goals and measures. 
Throughout the 2006 budget process, performance targets are adjusted 
for increases/decreases in funding and analysis of project/program 
impacts.
    During the 2006 budget development process, ABC data was used for 
the first time to help establish funding baselines. Implemented in 2003 
in conjunction with Department's system, Reclamation has refined its 
ABC activities and processes over the past year, and completed a trial 
run of ABC reporting. During the 2007 budget development process, cost 
data will be further refined, analyzed and presented to Reclamation 
leadership with recommendations for its use in the decision making 
process.

                  FISCAL YEAR 2006 PLANNED ACTIVITIES

    In fiscal year 2006, Reclamation plans to continue striving for 
excellence in the President's management initiatives, which include 
competitive sourcing, strategic work force management, improved 
financial performance, expanded electronic government, and integrated 
budget and performance and asset management. The Bureau of Reclamation 
is committed to the administration's management reform agenda.
    Reclamation's use of activity-based cost management data, together 
with modifications to making the required deliveries of water under 
Reclamation contracts; optimize hydropower generation, consistent with 
other project purposes, agreements, and the President's energy policy; 
and incorporate environmental, recreational, land management, fish and 
wildlife management and enhancement, water quality control, cultural 
resources management, and other concerns into the water supply and 
power generation actions of Reclamation, are one example. Reclamation 
also plans to identify water supply needs for consumptive and non-
consumptive purposes in Reclamation States in the next 25 years that 
are likely to be unmet with existing resources.
    The fiscal year 2006 budget proposes to re-allocate repayment of 
capital costs of the Pick-Sloan Missouri Basin program. Power customers 
would be responsible for repayment of all construction from which they 
benefit, whereas to date they have only been responsible for a portion 
of the costs. This change would increase reimbursements from power 
customers by $33.0 million in 2006, and declining amounts in future 
years. Rate increases for power customers could be phased in over time. 
Authorizing legislation will be submitted.
    The fiscal year 2006 budget request demonstrates Reclamation's 
commitment in meeting the water and power needs of the West in a 
fiscally responsible manner. This budget continues Reclamation's 
emphasis on delivering and managing those valuable public resources. In 
cooperation and consultation with the State, tribal, and local 
governments, along with other stakeholders and the public at large, 
Reclamation offers workable solutions regarding water and power 
resource issues that are consistent with the demands for power and 
water. With the need to pursue cost effective and environmentally sound 
approaches, Reclamation's strategy is to continue to use the 
Secretary's four ``C's:'' ``Conservation through Cooperation, 
Communication, and Consultation''. These principles provide Reclamation 
an opportunity, in consultation with our stakeholders, to use decision 
support tools, including risk analyses, in order to develop the most 
efficient and cost-effective solutions to the complex challenges that 
we face.
    Moreover, Reclamation's request reflects the need to address an 
aging infrastructure and the rising costs and management challenges 
associated with scarce water resources. As our infrastructure ages, we 
must direct increasing resources toward technological upgrades, new 
science and technologies; and preventative maintenance to ensure 
reliability; which will increase output, and improve safety.

                               CONCLUSION

    Mr. Chairman, please allow me to express my sincere appreciation 
for the continued support that this committee has provided Reclamation. 
This completes my statement. I would be happy to answer any questions 
you may have at this time.

                PREPARED STATEMENT OF J. RONALD JOHNSTON

    Senator Bond. Thank you very much Mr. Keys. Ronald Johnston 
has submitted a statement which will be included in the record 
as well.
    [The statement follows:]

                 Prepared Statement of Ronald Johnston

    My name is Ronald Johnston. I serve as the Program Director of the 
Central Utah Project Completion Act Office under the Assistant 
Secretary--Water and Science in the Department of the Interior. I am 
pleased to provide the following information about the President's 
fiscal year 2006 budget for implementation of the Central Utah Project 
Completion Act.
    The Central Utah Project Completion Act, Titles II-VI of Public Law 
102-575, provides for completion of the Central Utah Project (CUP) by 
the Central Utah Water Conservancy District. The Act also authorizes 
funding for fish, wildlife, and recreation mitigation and conservation; 
establishes an account in the Treasury for deposit of these funds and 
other contributions; establishes the Utah Reclamation Mitigation and 
Conservation Commission to coordinate mitigation and conservation 
activities; and provides for the Ute Indian Rights Settlement.
    The Act provides that the Secretary may not delegate her 
responsibilities under the Act to the Bureau of Reclamation. As a 
result, the Department has established an office in Provo, Utah, with a 
Program Director to provide oversight, review, and liaison with the 
District, the Commission, and the Ute Indian Tribe, and to assist in 
administering the responsibilities of the Secretary under the Act.
    The 2006 request for the Central Utah Project Completion Account 
provides $34.4 million for use by the District, the Commission, and the 
Department to implement Titles II-IV of the Act, which is $13.3 million 
less than the 2005 enacted level. A substantial portion of this 
decrease is due to a transfer of budgetary authority and responsibility 
from the Department of the Interior to the Western Area Power 
Administration (WAPA). WAPA is requesting $6.7 million for this 
purpose, and will transfer it to the Department of the Interior for use 
on the CUP. Of those funds, some will go to administrative expenses for 
the Mitigation Commission, and the balance will be added to the corpus 
of the Utah Reclamation Mitigation and Conservation Account, which is 
projected to have a balance of $150 million by the end of fiscal year 
2006.
    The funds requested for the District ($31.3 million) will be used 
to fund the balance of the Federal share of the completed Diamond Fork 
System ($14.6 million); to continue construction on Uinta Basin 
Replacement Project ($12.2 million); and to implement water 
conservation measures, local development projects, and continue 
planning and NEPA compliance for the Utah Lake System ($4.5 million).
    The funds requested for the Mitigation Commission ($946,000) will 
be used to implement the fish, wildlife, and recreation mitigation and 
conservation projects authorized in Title III ($475,000); to implement 
the fish and wildlife activities associated with the Uinta Basin 
Replacement Project ($210,000); and to complete mitigation measures 
committed to in pre-1992 Bureau of Reclamation planning documents 
($261,000). We note that the Mitigation Commission has approximately 
$19 million in prior year carryover balances that will make it possible 
to carry out a wide array of scheduled activities in 2006.
    Finally, the request includes $2.1 million for the Program Office. 
This includes $1.7 million for program administration, and $397,000 for 
mitigation and conservation projects outside the State of Utah and for 
operation and maintenance costs associated with instream flows and fish 
hatchery facilities.
    In conclusion, we appreciate the opportunity to testify before the 
committee and would be happy to respond to any questions.

                               WATER 2025

    Senator Bond. I would ask you how you respond to claims 
made by environmental groups that Water 2025 does not do enough 
to restore rivers and is therefore a missed opportunity, and 
that the initiative is merely a repackaging of previous Bureau 
activities.
    Mr. Keys. Well, Mr. Chairman, that's a good question. The 
approach that we've taken is to look throughout the western 
United States to find those areas where there are crises 
looming on the horizon, if they're not there already, because 
of exploding populations, because of new water requirements for 
industry or the Endangered Species Act or other recreational 
needs. They're hotspots on our map in that people could be 
short of water within the next 20 to 25 years.
    What we're trying to do there is through water 
conservation, use of new technologies, other cooperative 
agreements, and the infusion of seed money for projects 
encourage those people to stretch the existing water supplies 
much further than they have been doing. So to say that it's 
repackaging, let me just give you an example from the fiscal 
year 2004 program. We had $4.5 million for challenge grant 
programs that money was leveraged in projects that exceeded $30 
million in total cost. So the monies we put into it were 
leveraged in excess of seven times to address water 
conservation. So I would certainly not see that as repackaging 
of old ideas.
    Mr. Weimer. Mr. Chairman, may I add to that?
    Senator Bond. Please.
    Mr. Weimer. When we worked with Secretary Norton to craft 
this program, we targeted it, and we have been criticized for 
doing that. We've been criticized by environmentalists for not 
including in the program some of the things that they thought 
were important. We've also been criticized by people on the 
water supply side for not including in our grants new 
substantial water storage. We had to target it because it was a 
small program, a growing program that we wanted to have an 
impact. As Commissioner Keys said, we believe that through 
leveraging, we are beginning to see that impact now that we're 
in the third year of the program.

                             WATER STORAGE

    Senator Bond. Thank you. A general question on the 
administration's 2006 budget proposal, how does it address the 
ever increasing water needs in the West, particularly the need 
for increased water storage, and what is the administration's 
position, I think you mentioned to it, and alternative funding 
mechanism such as allowing guarantee program or water trust 
fund?
    Mr. Keys. Mr. Chairman, we have a number of efforts 
underway. Looking at new storage in the CALFED bill we talked 
about, there's $10 million for new storage studies. There are 
four main projects there: the raising of Shasta Dam, the 
enlarging of Los Vaqueros reservoir, working with the State on 
Sites Reservoir, and looking at new storage in the San Joaquin 
basin and the Temperance Flats area. We're working in the State 
of Washington in the Yakima basin on a storage study for that 
basin. We're building a new project in Southwestern Colorado, 
the Animas-La Plata Project, so there are studies of storage 
going on there.
    I would certainly say that we are looking in those areas 
where we might need new storage. The water conservation efforts 
that we have underway at sometime will point to where we need 
new storage.
    Senator Bond. Alternative funding?
    Mr. Keys. I'm sorry, I almost forgot. Thank you for 
reminding me. One of the things that we're trying to see is how 
we can keep our aging infrastructure functioning for years to 
come. Over the years in Reclamation, we lost those funding 
mechanisms we had: the Small Reclamation Project Loan, the 
Rehabilitation and Loan Program, and Drainage and Minor 
Construction Program. We're trying to look at a guaranteed loan 
program that we will work with the Department of Agriculture to 
implement the program would give us and our water users funding 
mechanisms to address maintenance work that may be overdue on 
some of their projects and to look at new storage.
    I was asked the other day, what a dam in the future might 
look like, or a reservoir. I think if you look at the physical 
structure, it will be almost the same, but if you look at the 
funding mechanism behind it and the storage in the reservoir, 
it will probably be much different because of the cooperative 
agreements between the Federal Government and the States, the 
counties, municipalities, and other groups that fund the 
project and have water in there to operate. Certainly the 
challenge grant program would fit very well into that.
    Senator Bond. Thank you very much gentlemen, I have a 3:30 
compelling appointment that is set up, so I'm going to turn the 
gavel over to Senator Allard, a distinguished member of the 
committee and I would ask him to continue as long as he feels 
it's necessary and then to conclude the hearing. And I thank 
you very much for your testimony, thank you Senator Allard.
    Senator Allard [presiding]. Thank you, Mr. Chairman. I want 
to start off with a question that's a little bit astray. But 
you do, the Bureau of Reclamation, control water releases from 
Lake Powell, is that correct?
    Mr. Keys. That is correct.

                              LAKE POWELL

    Senator Allard. Then you're familiar with the 8.23 release 
requirement--8.23 million release requirement there at Lake 
Powell?
    Mr. Weimer. Yes, we are.
    Senator Allard. Apparently there's an argument going on as 
to whether you have the authority or not to, in some cases not 
to release that water. The water interest in Colorado think you 
have the authority to hold the water to restore levels in Lake 
Powell up to where they're adequate, and apparently there are 
some other interests that are arguing otherwise. I just want to 
know what you feel about that particular issue. Because 
everybody on our side is in agreement that you should be 
holding that so we don't get a draw that breaks the Colorado 
River compact agreement in Colorado. I'd like to hear your 
comments on that, if you would, please.

                             COLORADO RIVER

    Mr. Weimer. Senator Allard, we are spending a substantial 
amount of time looking at this issue right now. In fact, John 
and I were both on a teleconference call with the seven basin 
States yesterday, monitoring their progress and discussions on 
how to handle a shortage on the Colorado River.
    The Secretary has committed this month, April, to 
conducting a mid-year review of the annual operating plan for 
the Colorado River. One of the key elements of that is how much 
water should go through Glen Canyon Dam. We have been working 
with her, with the seven States in trying to identify what the 
options are. Clearly, if the drought were to deepen and 
continue, Lake Powell will continue to go down and you could 
lose the ability to generate power there within a couple of 
years. There's a little bit of good news in that this year, the 
April 1 runoff reports we just received for both the upper and 
lower basins indicate that we have a better-than-normal year. 
We will be getting some more inflows into Powell and the lake 
is projected now to come up about 45 feet.
    Senator Allard. Southern Colorado has had their snow fall 
at about 200 percent of normal, northern Colorado I think we're 
at normal, maybe just a little bit below normal. This is an 
important issue to the State. So I wanted to get that question 
out there on the record and let you know that I'm concerned 
about it.
    Mr. Weimer. Yesterday, we offered to meet with the States 
in the lower and upper basins, and the seven individual States 
throughout this month, and we're beginning to set those 
meetings up to have those discussions.

                             COST OVERRUNS

    Senator Allard. Very good, thank you. Now the other 
question I have is, at a recent Energy Committee meeting on 
water, the Family Farm Alliance stated that a number of its 
members had dealt with situations where cost estimates for work 
that would be done by the Bureau substantially were over the 
cost of having had the work done, if it had been done by 
consultants. This is part of the public record apparently in 
the committee, I didn't happen to be there at the time. Are 
there situations where you feel it can be done better in the 
private sector, and what is your reaction to that comment?
    Mr. Weimer. Let me start, if I may Senator, and then invite 
Commissioner Keys to respond. We're well aware of those 
criticisms, and some of them are valid. We have commissioned a 
study by the National Research Council, National Academy of 
Sciences, which began last month and which we hope to have 
finished before the end of the year, looking at this very 
issue, which is the future organization of the Construction 
Management components of the Bureau of Reclamation. We've 
certainly heard criticisms over the last several years, that's 
one of the reasons we went to the Secretary and said we really 
think we need to get an independent study. That is what we're 
doing this year.
    Senator Allard. So your plan right now is that you're going 
to have a study and see what that shows, and if that shows some 
validity to it, then you move forward?
    Mr. Weimer. That's correct, although we have had some 
internal studies as well, and I might invite Commissioner Keys 
to comment on those.
    Mr. Keys. Mr. Chairman, the management of costs estimates 
is one of the most tricky things that an engineer has to do 
because the first thing when you talk to a water user they want 
to know is how much it's going to cost. Of course, we try to 
accommodate and give them a cost estimate. Typically, it takes 
several years to get the project up to where it's going, and 
you reiterate the design several times, and we end up having 
different cost estimates at the end.
    The construction industry is pretty much ``on its ear'' 
right now, with the cost of materials around the world. The 
steel industry, the cement industry, and the diesel fuel costs 
are just ``out of the roof'' these days. China has had a severe 
impact on the supply of both cement and steel. That's a good 
excuse for a portion of it, but it's not all of it. That is why 
we're looking for the results of this study.

                     PERFORMANCE-BASED CONTRACTING

    Senator Allard. Do you look at performance-based 
contracting on some of this? We've had some big projects in 
Colorado, they're cleanup projects, one is transportation--it 
is a combination of roads and mass transit, and another one is 
the cleanup of Rocky Flats. These projects had performance-
based contracts and it helps them be more forthright on their 
bidding. Once they get the bid there are incentives in there to 
do better than what the bid provides for. Do you look at using 
that kind of mechanism?
    Mr. Keys. Mr. Chairman, we do use performance-based 
contracts. We use another process even before we even get to 
the contract, and it's called a value engineering process where 
we take the cost estimate and the final design, and with a peer 
group from outside, look at it and see if there's a better way 
to do it. That has helped some. We're looking at a number of 
things that we do contract out. There was a requirement by this 
committee in fiscal year 2003 that we use private contractors 
for 10 percent of our engineering service, and 2004, 20 
percent, 2005, 30 percent, and in 2006, 40 percent, and we are 
honoring that requirement that was put by this committee.

                           PERMITTING PROCESS

    Senator Allard. Thank you, just one more question and I'll 
let you go. In the permitting process, there was one reservoir 
project that took 18 years to get going on the project; what 
recommendations does Reclamation have to streamline the 
permitting process so that water projects don't dry up on the 
vine, before they go through the entire process of permitting?
    Mr. Keys. Mr. Chairman, I'm not familiar with the permit 
you're talking about, because Reclamation doesn't give permits 
to build reservoirs. We work with a project sponsor to see what 
they want in a project. Then that project sponsor comes to the 
Congress and gets it authorized, and then we build it. So I 
don't know about the permitting process other than we have to 
do permits with the Fish and Wildlife Service, with NOAA 
Fisheries, with--for all of the endangered species, and so 
forth.
    Senator Allard. My understanding is the 18 years started 
after initial authorization by the Congress. I mean it ran from 
the point of authorization by Congress, until we finally got 
the permitting.
    Mr. Keys. Mr. Chairman, if you'll give me the name of that 
one, I would certainly get the details for you, I will tell you 
over the past few years that we have taken a number of steps to 
try and streamline this process. We've reorganized several 
times, and I would say that these days, that 18 years would be 
out of the norm.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Allard. Okay. We will get that specific project to 
you, and we will have some discussion between my staff and your 
staff, and see what's there. Okay. Thank you very much. I want 
to thank you for your testimony. And do we leave the record 
open for comment for a period of time? Okay. The subcommittee 
will leave the record open for a week, for additional comments 
and questions and if you get any comments or questions from the 
Missouri Committee I would ask that you respond expeditiously 
if you would please.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

            Questions Submitted by Senator Pete V. Domenici

                           MIDDLE RIO GRANDE

    Question. The Reasonable and Prudent Alternatives specified in the 
2003 Fish and Wildlife Service's Biological Opinion on the Rio Grande 
Silvery Minnow required the construction of two minnow refugia. In 
order to comply with this mandate, I have been working with the BOR 
Albuquerque Area Office to construct a minnow sanctuary. While the BOR 
has undertaken some pre-construction activities, there has been some 
question if the BOR had adequate authority to undertake construction of 
the sanctuary. I am pursuing legislation in Congress that would provide 
the authority necessary to construct the project. What is the status of 
the pre-construction activities underway?
    Mr. Keys. Reclamation is closely cooperating with the U.S. Fish and 
Wildlife Service and the Middle Rio Grande Conservancy District on the 
sanctuary project. Reclamation issued a contract order on March 7 for 
assistance in development of the appraisal level sanctuary conceptual 
design and preliminary environmental compliance requirements. With the 
passage of Public Law 109-13 on May 11, Reclamation now has authority 
to begin actual design work and environmental compliance, now scheduled 
to be completed by September 2005, with construction to begin as soon 
as possible thereafter.
    Question. Assuming authorizing legislation is passed by Congress, 
how long following passage will it take to begin construction and 
ultimately complete the project?
    Mr. Keys. Planning activities are scheduled to be completed so that 
construction of the project could begin as early as October 2005 if 
appropriate authority and funding are in place. Construction of the 
project is expected to take 6 to 9 months.
    Question. What do you anticipate will be the total cost for 
construction and operations of this facility?
    Mr. Keys. Preliminary cost estimates range from $2 million to $10 
million for planning, design, and construction of the pilot phase of 
the sanctuary. Rights-of-way, land and water acquisition, and operation 
and maintenance expenses were not included in these estimates. Refined 
cost estimates will become available over the next few months as the 
design details of the sanctuary are solidified.
    Question. Despite encouraging run-off forecasts, there remains a 
paucity of water in storage in the Rio Grande Basin. The BOR is tasked 
with meeting compact deliveries and complying with the Fish and 
Wildlife Service 2003 Biological Opinion. Meeting the Biological 
Opinion requires providing water to meet minimum flow requirements.
    Over the past 4 years, Congress has provided funding to assure that 
BOR can meet these obligations. It concerns me that the President's 
budget proposes an $8 million cut in funding for Middle Rio Grande 
projects.
    Question. How will the BOR meet its statutory and court-ordered 
obligations with such a greatly decreased budget?
    Mr. Keys. Our challenge is integrating requirements associated with 
the March 17, 2003, Biological Opinion, the Collaborative Program, and 
the Recovery Plan currently being developed in the Fish and Wildlife 
Service. We believe the fiscal year 2006 budget request, which is $1 
million more than the fiscal year 2005 request, is sufficient to meet 
the requirements of the Biological Opinion for fiscal 2006.
    Question. Where does the BOR anticipate it will get water from this 
year in order to meet the regulatory requirements?
    Mr. Keys. Reclamation currently has in storage about 30,000 acre 
feet of water to meet the minimum water flows required by the 2003 
Biological Opinion for the endangered Rio Grande silvery minnow and 
Southwestern willow flycatcher. With the above-average precipitation in 
the Rio Grande Basin, the water in storage should be enough to meet 
these requirements during 2005. In addition Reclamation will pursue 
leasing additional water from San Juan-Chama contractors.
    Question. Pursuant to the 1982 agreement between the MRGCD and the 
six Middle Rio Grande Pueblos, the BOR is responsible for delivering 
water to meet the Pueblos ``prior and paramount'' rights. The BIA was 
also given authority to ensure that these obligations were met. The 
signatory Pueblos rely upon the BOR to deliver the water that they hold 
rights to in order to irrigate over 8,000 acres of land. The Pueblos 
question if the BOR is delivering water consistent with the 1982 
agreement and has questioned if the BIA is fulfilling its trust 
responsibility. Furthermore, the Pueblos rely on the BOR for irrigation 
infrastructure which has fallen into a state of disrepair and needs to 
be upgraded. How does your department plan to resolve the conflict that 
has arisen between the BIA, BOR, and Pueblos?
    Mr. Weimer. The Department of the Interior established a technical 
team consisting of representatives from Reclamation, the U.S. 
Geological Survey, and the Bureau of Indian Affairs to evaluate 
potential differences regarding the interpretation of the 1981 
Agreements in ``prior and paramount'' storage calculation procedures 
and to provide recommendations. This review, as well as further 
discussions with the Pueblos and others should help resolve any 
remaining issues regarding ``prior and paramount'' storage.
    Question. Does the department have any plans to quantify Indian 
rights?
    Mr. Weimer. No adjudication of water rights, including Pueblo water 
rights, has been instituted on the Middle Rio Grande.
    Question. How does the BOR plan to upgrade and maintain the Pueblo 
water delivery infrastructure?
    Mr. Keys. Portions of the six Middle Rio Grande Pueblos irrigation 
infrastructure fall within the boundaries of the Middle Rio Grande 
Project and can be served by Reclamation. There are two types of 
facilities that deliver water to Pueblo lands: Middle Rio Grande 
Project facilities that deliver water to a Pueblo as a whole and 
facilities which are tribal-owned that deliver water to individual 
farms. Reclamation works with the Middle Rio Grande Conservancy 
District to ensure that Middle Rio Grande Project facilities are 
maintained, including those which deliver water to the Pueblos. 
Reclamation has no legal authority to rehabilitate Pueblo on-farm 
ditches. Rather, the Bureau of Indian Affairs has responsibility and 
authority to work on non-Reclamation Project systems on Pueblo lands.
    Question. Is funding available for these purposes through Water 
2025 or other grants?
    Mr. Weimer. Congress has specified that the Middle Rio Grande 
Conservancy District receive about $3 million under Water 2025 for 
water conservation and infrastructure improvements. A Water 2025 
contract has been awarded to the District for specific work activities 
on four of the six Pueblo facilities within the Middle Rio Grande 
Project. The completed work will benefit all six Pueblos with improved 
water delivery, management, and efficiency.
    In addition, Reclamation has authority to expend general planning 
and technical assistance funds, as well as funding from its Native 
American Affairs Program to assist tribal governments with plans to 
protect, manage, and develop water and related resources.
    Question. How do you plan to meet these trust responsibilities?
    Mr. Keys. The Bureau of Reclamation has taken and will continue to 
take actions authorized under Reclamation law which benefit Indian 
tribes. To the extent that Reclamation can act pursuant to law to 
protect trust assets of Indian tribes and provide them water resource 
assistance, Reclamation will do so.

                            ANIMAS-LA PLATA

    Question. Despite past claims of mismanagement and poor planning 
and oversight, the A-LP project is now proceeding at an acceptable 
rate. The President's budget calls for $52 million for the project in 
fiscal year 2006. However, some of the project beneficiaries claim that 
the project requires $75 million in fiscal year 2006 to keep it on 
schedule. This project is of great importance to the communities of 
northern New Mexico and southern Colorado. Do you believe that the $52 
million requested by the administration is adequate to keep the project 
on schedule?
    Mr. Keys. The amount requested by the administration is adequate to 
maintain the current schedule.
    Question. What precautions are being taken to ensure that there are 
not further cost overruns with the project?
    Mr. Keys. We have made several significant changes in one approach 
to management of Animas-La Plata construction and coordination with 
sponsors. We have made changes to streamline reporting on 
accountability within Reclamation for the ALP. The ALP Construction 
Office is responsible for all matters pertaining to the construction of 
the project. This office is managed by a Project Construction Engineer 
who reports directly to the Regional Director of the Upper Colorado 
Region in Salt Lake City, Utah. The construction office continually 
evaluates ways to save costs and still maintain the project features. 
Additional cost tracking procedures implemented in 2004 now relate all 
project costs to the cost estimate (indexed for inflation) for early 
detection of problems. This cost information is shared with the Project 
Sponsors on a monthly basis.
    Question. How is the BOR addressing recent environmental 
challenges?
    Mr. Keys. Funding for the completion of the cultural and 
environmental mitigation features of the project has been given a high 
priority within the ALP project budget. Although construction of 
project facilities has been faced with many environmental challenges, 
ranging from controlling extreme flood events to protection of nesting 
golden eagles, these challenges have been resolved in a timely fashion. 
All environmental compliance and mitigation obligations are currently 
either being met or are on schedule to be completed concurrent with 
project facility construction.

                          WATER TECHNOLOGY R&D

    Question. Recent drought and population growth in the western 
United States requires that we make more efficient use of water and 
develop technologies to make use of previously impaired or unusable 
water. During the 1960's, the Federal Government funded extensive 
research in water technology which resulted in reverse osmosis--the 
desalination technique most widely used today.
    I believe that the Federal Government should renew its investment 
in water treatment technology. Toward this end, I have funded 
construction of a Tularosa Basin Desalination Research and Development 
center in New Mexico. Also, I plan to introduce legislation this year 
that would create a program to develop the next generation of water 
treatment technologies. What do you believe is the Federal Government's 
role in water technology research?
    Mr. Weimer. The administration is currently evaluating Federal 
research and development efforts in desalination, to clearly establish 
long-term goals and ensure that our efforts are carried out in 
accordance with the administration's Research and Development 
Investment Criteria, and that these efforts represent the best 
investment of Federal resources.
    Question. As you are aware, the authority for the BOR's Water 
Desalination Research and Development Act of 1996 expires this year. Do 
you believe that this program should be reauthorized and with what 
changes?
    Mr. Weimer. Yes. Public Law 104-298, the Water Desalination 
Research and Development Act of 1996 (the Act), authorizes the award of 
desalination research grants and contracts. Extended authority would 
enable Presidential requests and Congressional appropriations for these 
purposes to continue under this Public Law. We do not recommend changes 
to the program at this time.

                        RURAL WATER LEGISLATION

    Question. As you are aware, my staff has been working with the BOR 
and the minority staff to develop legislation to aid small and rural 
communities to meet their often extensive water needs. Many western 
communities rely on aquifers for water that will be depleted within the 
next decade. This fact makes the situation especially desperate.
    There are also rural water programs within several other agencies. 
However, they are not as broad is scope and not of the scale that would 
allow many communities to make use of them.
    Furthermore, it is my belief that the BOR has the technical 
expertise to undertake such a project. Is a rural water program a new 
authority that you feel would be appropriate for the BOR to undertake?
    Mr. Keys. Yes, we believe that legislation to establish a rural 
water program would enable the Secretary, through the Bureau of 
Reclamation, to set priorities and establish clear criteria and 
guidelines for the rural water supply projects authorized by Congress 
for Reclamation's involvement. Although the administration supports 
establishing a formal rural water program within the Bureau of 
Reclamation, the President's fiscal year 2006 Budget states that a 
recommendation regarding potential consolidation and re-alignment of 
the Federal rural water programs will be forwarded to a proposed 
``Results Commission.'' The administration will purse both options 
simultaneously.
    Since the early 1980's, Congress has directed Reclamation to 
develop 13 independently authorized, single-purpose municipal and 
industrial water supply projects for rural communities throughout the 
West. In the course of developing the 2004 budget, Reclamation 
participated in two performance assessments--the Program Assessment 
Rating Tool (PART) and a review to develop a set of common performance 
measures for all Federal agencies that play a role in delivering water 
to rural areas. Both assessments found shortcomings in Reclamation's 
involvement in rural water projects, mainly due to the lack of a formal 
rural water program. Consistent with the assessments' recommendations, 
legislation was introduced in the 108th Congress that would allow the 
Department of the Interior to set priorities and establish a 
Reclamation rural water program with adequate controls and clear 
guidelines for project development. We are continuing to work with the 
Committee staff on this effort in the 109th Congress.
    Question. What form do you see this program taking?
    Mr. Keys. During the 108th Congress, the administration submitted 
legislation (S. 2218), to establish a rural water program within the 
Bureau of Reclamation. While there was a hearing before the Senate 
Committee on Energy and Natural Resources in March, 2004, no further 
action was taken on this bill, or on the two other proposals (S. 1732 
and S. 1085) that were introduced by Chairman Domenici and Senator 
Bingaman respectively before the 108th Congress adjourned. Since the 
beginning of the 109th Congress, we have been working very closely with 
the Senate Energy Committee staff from both the majority and minority 
sides to brainstorm solutions to address the complicated issues we are 
facing and we believe that we have narrowed issues that require more 
work. As you may be aware, Chairman Domenici and Ranking Member 
Bingaman, along with several other committee members have introduced S. 
895 to establish a rural water program within the Bureau of 
Reclamation. It has been a pleasure to be a part of this bi-partisan 
process which we hope very much will culminate in enactment of a rural 
water program that meets the fair expectations of rural communities and 
U.S. taxpayers. The fact that there is but a single rural water bill 
before the committee in this Congress reflects the positive spirit of 
consultation and collaboration among this committee's bi-partisan 
leadership and the Department. We look forward to continuing the effort 
to work through the remaining issues and move ahead with this proposal 
on a bi-partisan basis.
    Question. Do you feel that a loan guarantee program is a viable 
mechanism to aid rural communities?
    Mr. Keys. A loan guarantee program could offer many mechanisms for 
providing assistance to communities to develop rural water projects. 
One concern is the capability of rural communities to pay off these 
interest-bearing loans when they would also be paying 100 percent of 
the annual operation, maintenance and replacement costs for these water 
facilities. We are currently evaluating budgetary, programmatic, and 
staffing implications for the Bureau.

                               WATER 2025

    Question. The Bureau of Reclamation has advocated for the new Water 
2025 program for 2 years and the administration has now proposed $30 
million for fiscal year 2006 to carry on these activities. The 
administration has been articulate about the tools used to implement 
this program to include cooperation, new water treatment technology and 
so forth, but the actual goals of the program are not clear. Can you 
re-articulate the concrete goals of the Water 2025 program and provide 
us with an assessment of how these goals are being met with the first 2 
years of investment?
    Mr. Keys. The overarching goal of Water 2025 is to help prevent 
crises and conflict over water in the West. Water 2025 can reach this 
goal by using the most effective low-cost options for increasing water 
supplies that are available, including: (1) Conservation, Efficiency, 
and Markets, (2) Collaboration, (3) Improved Technology, and (4) Remove 
Institutional Barriers and Increase Interagency Cooperation. In an 
effort to strengthen and further focus Water 2025, the program is 
currently developing measurable program goals and performance measures 
to track progress toward those goals.
    In the 2 short years since Water 2025 was initiated, the program is 
already making progress towards preventing crisis and conflict over 
water in the West. We are very pleased with the enthusiastic response 
to the fiscal year 2005 Challenge Grant Request for Proposals, having 
again received over 100 proposals for Challenge Grant funding for the 
second year in a row.
    The fiscal year 2004 Challenge Grant Program demonstrated how 
leveraging the Federal investment can provide tremendous benefits. For 
the $4 million available for the fiscal year 2004 Challenge Grant 
Program, 19 projects were selected in 10 different States. These 
projects represent a total of almost $40 million in on-the-ground water 
delivery system improvements, including Reclamation's contribution of 
$4 million and a non-Federal contribution of approximately $36 million. 
This represents a 10 percent investment from the Federal side. These 
projects broke ground in 2004 and will be completed by the fall of 
2006.
    While not all of the 19 projects have been completed, significant 
progress is being made. For example, the Mancos Water Conservancy 
District in Colorado has already installed five different types of 
canal lining materials along five sections of their inlet canal which 
are now being tested to determine which technique is most effective. 
Durability, application methods, and repair methods will be documented 
during the test, and the District will use the results to determine the 
best way to line the entire canal. The San Juan Dineh Water Users 
Association (Association), which serves water users in the Navajo 
Nation near Shiprock, New Mexico, is using its Challenge Grant to 
replace three unlined canal laterals with underground pipelines, 
potentially saving 5,500 acre feet per year for the Association's water 
users. The Association has nearly completed work on one of the laterals 
and will begin construction on the other two this fall. This project 
will decrease demand on the San Juan River, which will benefit 
endangered fish, and will ensure equitable distribution of water among 
the Association's water users, helping to preserve Native American 
farming methods.
    The deadline for submittals to the fiscal year 2005 Challenge Grant 
Program was January 21, 2005. For the $10 million available in fiscal 
year 2005, we received 117 proposals requesting $35.5 million in 
Federal assistance $10 million more than was requested in fiscal year 
2004. The 117 proposals represent $115 million in water delivery system 
improvements across the West, with $79.5 million proposed to come from 
non-Federal matching funds. Reclamation just announced the 43 projects 
in 13 States selected for funding. The $9.9 million in Federal grants 
awarded equates to more than $27 million in improvements.
    In fiscal year 2004, Reclamation also entered into a cooperative 
agreement with the Middle Rio Grande Conservancy District (District) 
through the Water 2025 Program for water conveyance system 
improvements. This project will improve and modernize irrigation water 
conveyance facilities to increase efficiency, reduce system losses due 
to seepage and evaporation, and improve water management in the Middle 
Rio Grande Valley. System improvements include replacement of turnouts 
and old gates, concrete lining of canals, telemetry and measuring 
devices, automation and a computer system able to manage hundreds of 
gates with information published on the internet for improved 
management of the flows of the Rio Grande River. These improvements are 
intended to reduce diversions by the District, so that it can retain 
more water in upstream storage to meet future demands. Work on these 
improvements is currently underway and is anticipated to be completed 
by December 2007.

                  TULAROSA BASIN DESALINATION FACILITY

    Question. The Bureau of Reclamation has led the development of the 
Tularosa Desalination Demonstration test facility in New Mexico for 3 
years. I enjoyed my recent visit to the site accompanied by 
Representative Pearce of New Mexico. The demonstration of the Office of 
Naval Research's expeditionary unit was well done. The partnership 
between the BOR, the Office of Naval Research and the Department of 
Energy represented by Sandia National Laboratories is a priority for me 
and I am anxious to have the facility completed and serving its 
intended purpose. Is the BOR committed to complete this project and use 
it to its fullest extent possible?
    Mr. Keys. Yes, Reclamation is committed to getting the facility up 
and running as soon as possible. Reclamation, its contractor, and the 
designer are working closely to reduce overall costs and ensure that 
the construction schedule can rapidly execute completion of the 
facility as construction funding is made available.
    Although the building is not yet completed, our strategic approach 
to construction allowed demonstration testing of the Navy's 
expeditionary unit to get underway at the end of April 2005. Under 
current funding and scheduling scenarios, the earliest the building 
will be available and able to offer the full scope of capabilities is 
2006.
    The facility is designed to attract researchers from the private 
sector, universities, cities, States, other Federal agencies, and 
interested international entities. Testing on improvements and cost 
reductions for inland brackish desalination processes will be carried 
out through research studies, pilot plant testing, and small 
demonstration testing. Currently, it is envisioned that the research 
areas will focus on the unique attributes of the facility to support 
studies on improved brackish desalination technologies, concentrate 
disposal, renewable energy driven processes, new innovative processes 
for brackish desalination, and small rural systems.
    Many companies, universities, and government partners have 
expressed interest in the availability of the facility. Every effort 
will be made to involve these potential partners in the research work 
at the facility.
    Question. What is the BOR doing to plan for this future and what 
are those plans?
    Mr. Keys. A business plan is being developed. A draft will be 
available at the end of fiscal year 2005. The business plan will 
identify the organizational structure, a more refined estimate of 
operation and maintenance costs, potential revenue sources, and an 
identification of research opportunities based on their alignment with 
the Administration's Research and Development Investment Criteria.
    Research will be carried out through several different vehicles, 
(e.g. intramural, cooperative agreements, Cooperative Research and 
Development Agreements (CRADAs), and interagency partnerships with the 
Navy, Army, EPA, Sandia, and others). The business plan will identify 
future opportunities for external input by interested parties.
    Question. What has the BOR done to strengthen and expand the 
interagency relationships so critical to the success of our national 
efforts?
    Mr. Keys. Efforts to strengthen and expand interagency 
relationships have been undertaken by Reclamation. In 1992, the 
Interagency Consortium for Desalination and Membrane Separations 
Research was created to leverage Federal Government resources. The 
consortium has been a grassroots organization which has been able to 
share expertise across government agencies such as the Army, Navy, EPA, 
Reclamation, National Institute for Standards and Technology and 
others. The best known outcome from this relationship has been the 
partnering among the Navy, Reclamation, and the Army on the 
Expeditionary Unit for Water Purification currently under testing at 
the Tularosa Facility. In an effort to expand the consortium's reach, 
the national laboratories were invited to the fiscal year 2004 annual 
consortium meeting to make presentations on their missions and 
programs.
    Reclamation has also engaged in a successful collaboration with 
Sandia National Laboratories in the development of both the Tularosa 
facility and the desalination research roadmap. The roadmapping process 
currently involves other agencies in an effort to coordinate mission 
specific needs and to address national priorities in a timely and 
systematic manner.

               NEW MEXICO PROJECT OPERATIONS IMPROVEMENTS

    Question. Both the contractors for the San Juan Project and the 
contractors for the San Juan Chama Projects in New Mexico have 
contacted the BOR about their desire to discuss optimization of the 
operations of the facilities in those projects. They feel that the 
Bureau has been slow to respond to their requests for consultation. 
Will the BOR commit to consultations with these contractors to evaluate 
proposals for modification to the operations of these projects seeking 
to improve the yield of the projects?
    Mr. Keys. We believe this question refers to Santa Fe's request for 
carryover storage in Heron Reservoir. Reclamation has discussed this 
request with the contractor and will continue to do so. At this time, 
Reclamation believes it has no authority for carryover storage. 
However, Reclamation is involved in the Upper Rio Grande Water 
Operations EIS, which is attempting to optimize water operations under 
existing authorities.
    Question. Will you include our office in the discussions?
    Mr. Keys. Yes, your office will be included in the discussions.

              MIDDLE RIO GRANDE ESA COLLABORATIVE PROGRAM

    Question. The Middle Rio Grande area in central New Mexico has been 
in turmoil over addressing requirements of the Endangered Species Act 
for the Rio Grande Silvery Minnow and the Southwest Willow Flycatcher. 
Since 2001 the Middle Rio Grande Collaborative Program has attempted to 
use collaborative efforts to address these issues and avoid 
unproductive litigation. The program has made great progress in 
development of a long-term plan and to implement projects consistent 
with the 2003 Biological Opinion's Reasonable and Prudent Alternatives. 
However, the decision and administrative structure of this program has 
yet to function efficiently. It is my goal to finalize the organization 
of this program and to introduce authorizing legislation to fully 
implement it. Will your two agencies (Army Corps of Engineers and 
Reclamation) commit to working with my staff in developing a final 
organization and moving this program forward in a positive manner?
    Mr. Keys. Yes. We are committed to working with your staff and the 
Corps in developing the final organizational structure and moving the 
program forward.
    The Collaborative Program is currently developing a governance 
structure with anticipated completion within the next few weeks. 
Reclamation is providing input into this process. Reclamation's 
Albuquerque Area Manager met with members of your staff on April 12, 
2005, to discuss Reclamation's organizational proposal for the 
Collaborative Program.
    Question. Will the BOR commit to streamlining and providing the 
full administrative and contracting resources needed to implement this 
program and thus overcome current and historical problems?
    Mr. Keys. Yes. Reclamation will support the administrative and 
contracting needs of the Program while seeking opportunities to 
streamline processes.
    Question. Will BOR commit to increasing the engagement of the 
Executive Committee?
    Mr. Keys. Yes. Reclamation will work with the Program's signatories 
towards increasing the engagement of the Executive Committee.

                             TRINITY RIVER

    Question. As you know, the Federal Court of Appeals recently upheld 
the Trinity Record of Decision. As a result, Trinity River flows will 
now vary between 369,000 and 815,000 acre-feet per year (excluding 
safety of dam releases). This represents an average flow increase of 
approximately 260,000 acre-feet per year.
    Water diverted from the Trinity River to the Sacramento River flows 
through three different power plants, generating 1,100 kWh for every 
acre foot of water. With this water no longer being diverted to the 
Sacramento River, the output of the Central Valley Project power system 
will be reduced by almost 10 percent.
    According to the public power customers in Northern California, 
they will incur $15 million to $22 million in costs per year to replace 
that power. Does the Department agree with that assessment?
    Mr. Keys. The Department's power value estimate was based on a 
consultant's forecast of energy prices and these are comparably lower 
than that claimed by some Northern California power customers. The 
Environmental Impact Statement/Report and the Supplemental 
Environmental Impact Statement provided detailed analysis of the 
potential impacts associated with increased flows in the Trinity River 
and resulting associated decrease in Central Valley Project generation. 
The amount of foregone generation (kilowatt-hours) is generally agreed 
upon but the value of that generation is where differences often occur. 
For instance, based on the Record of Decision flows, the value of 
foregone CVP generation forecast by the Department's consultants is 
$7.2 million to $21.2 million depending on the water year type. It is 
also noted that the CVP is operated as an integrated project 
incorporating several major rivers. Focusing on perceived Trinity River 
flow changes alone does not represent an entirely accurate assessment 
of CVP-wide impacts. As an illustration, reducing Trinity River 
diversions to the Sacramento River will likely require additional 
releases from Shasta Dam in order to meet those same Sacramento River 
flows previously augmented by the Trinity diversions. This means higher 
Shasta generation would then be produced and such generation will, in 
effect, offset some of the lower Trinity generation.
    Question. Since the allocation of costs is supposed to track the 
distribution of benefits, does the Bureau intend to reallocate costs 
associated with the Trinity Project to reflect this operational change?
    Mr. Keys. The Region currently is developing a formal response to a 
request that has been received from CVP water and power customers. A 
forecast schedule for performing the cost-allocation process as well as 
a budget estimate of its cost is being prepared and will be reviewed 
with these customers within the next few weeks. Any such cost-
allocation process would include operating conditions in place and 
expected to be in place in the foreseeable future. As the CVP is 
operated as in an integrated project, the cost allocation would be CVP-
wide and not just focus on the Trinity Project.
    Question. If so, when do you expect to have this change in place?
    Mr. Keys. The CVP is an expansive, multi-purpose project with a 
capital cost allocation base of $3,359 million as of September 30, 
2004. The method that has been used to allocate the capital costs of 
the CVP in the past and the one that would be used to allocate the 
capital costs of the CVP is known as separable costs-remaining 
benefits. This method requires estimating not only project benefits but 
also the costs of ``single-purpose alternatives'' that would generate 
the same level of benefits and the costs of project facilities with 
each project purpose removed.
    The two most time consuming and costly tasks in a new allocation 
would be water and power operation studies and facilities design and 
cost estimates. Water and power operation studies would need to be 
performed in order to estimate the power and water supply benefits of 
the project. This would involve developing basic assumptions, 
validating them, developing a matrix for computer model runs, 
performing the runs, and presenting the results. It has been estimated 
that this process would require at least 4 years to complete and cost 
at least $4 million.
    Appraisal-level cost estimates for at least 50 facilities with 
multiple operational scenarios and multiple features for each facility 
would have to be made. This process itself would cost more than $3 
million and require 3 years to complete.
    Necessary changes to the Trinity River flows have been implemented 
and will continue to be implemented as required.

                         O&M COSTS FOR SECURITY

    Question. The administration has requested $50 million for site 
security efforts, an increase of $6.8 million from fiscal year 2005 
levels. The budget further proposes that the O&M related security costs 
will be reimbursable from project beneficiaries. Can the Department 
make such a change administratively or does legislation need to be 
enacted?
    Mr. Keys. The proposal is consistent with existing law. Reclamation 
has the administrative discretion to determine the circumstances in 
which additional security measures are reimbursable, and proposes that 
annual costs associated with activities for guarding our facilities be 
treated as project O&M costs subject to reimburseability based upon 
project cost allocations. Funding for capital improvements, including 
physical security upgrades, will remain non-reimbursable.
    Question. The Reclamation Project Act of 1939 (53 Stat. 1187) which 
authorizes Reclamation to enter into contracts to furnish water from 
its projects provides at Section 9(e): ``Each such contract shall be . 
. . at such rates as in the Secretary's judgment will produce revenues 
at least sufficient to cover an appropriate share of the annual O&M 
cost and an appropriate share of such fixed charges as the Secretary 
deems proper.'' How does the Department plan to deal with any O&M costs 
that are related to meeting its Trust responsibilities for Indian 
Tribes?
    Mr. Keys. Reclamation will allocate O&M costs based on project cost 
allocations pursuant to individual project authorizations. Where those 
allocations are reimbursable, the costs will be reimbursed from other 
sources, including Indian Tribes. Where those allocations are non 
reimbursable, the cost will not be reimbursed from other sources.
    Question. The proposal notes that the ``project beneficiaries'' 
will be responsible for these O&M related security costs. Does this 
include M&I users or will the Department only target power customers?
    Mr. Keys. Reclamation will allocate costs to all authorized project 
functions which could include in any one project the following types of 
functions: irrigation, M&I, power, recreation, flood control, fish and 
wildlife. Although cost will be allocated to all authorized project 
functions, costs will not be recovered from those functions that are 
non-reimbursable, i.e. recreation, flood control, and fish and 
wildlife.
    Question. Will the Department consider only the primary purposes of 
the project or will it consider secondary purposes as well?
    Mr. Weimer. Unauthorized secondary functions have no allocations 
and therefore, costs will not be reimbursable to those functions.

                                DROUGHT

    Question. The Southwestern United States has been experiencing 
drought conditions since 2000. The Pacific Northwest is also 
experiencing water supply shortages and the current snow pack is almost 
50 percent below average.
    It is my understanding that in your role as Water Master for the 
Colorado River, you are working with the basin States to develop a 
voluntary protocol to deal with water shortages. What is the status of 
the protocol?
    Mr. Weimer. Interior asked the Basin States in the spring of 2004 
to provide consensus-based recommendations concerning mitigating the 
effects of the drought in the Colorado River Basin, for both the short-
term, 1 to 2 years, and long-term, more than 2 years. Because of the 
need to improve coordinated management of the Colorado River reservoirs 
due to the current and future droughts, Interior held a Work Group 
meeting on May 26, 2005, in Henderson, Nevada.
    Based on input received from the Work Group, the Bureau of 
Reclamation published ``Notice to Solicit Comments and Hold Public 
Meetings on the Development of Management Strategies for Lake Powell 
and Mead, Including Lower Basin Shortage Guidelines, Under Low 
Reservoir Conditions'' in the Federal Register on June 15, 2005. To 
date, the States have submitted one recommendation, asking that the 
Department of the Interior begin a process with the State Department to 
engage the Republic of Mexico in shortage discussions.
    Question. When will it be completed?
    Mr. Weimer. The public process to adopt shortage guidelines for the 
Lower Basin would not be completed for at least 2 years. At a minimum, 
Interior expects to complete the consultation process by December 2007.
    Question. Are the States willingly engaged in this effort?
    Mr. Weimer. Yes. In May 2004, Interior asked Reclamation to provide 
technical assistance to the States with regard to studies that might 
help them recommend consensus-based measures. The Basin States formed a 
technical ``work group'', and have enlisted Reclamation's assistance in 
studying the effects of various measures, primarily potential water 
conservation and shortage strategies for the Lower Basin. Reclamation 
also provides ``outreach'' to other stakeholders to keep them informed 
of the issues being considered.
    Several workshops and meetings have been held by the technical work 
group, as well as by the principal decision-makers representing each 
State.
    Question. How are the Department, and the administration as a 
whole, dealing with the drought situation?
    Mr. Keys. The Reclamation States Emergency Drought Relief Act of 
1991 (Public Law 102-250) as amended (Drought Act) authorizes the 
Bureau of Reclamation to undertake drought relief measures through 
emergency assistance (Title I) and planning activities (Title II).
    Title I provides authority for construction, management, and 
conservation measures to alleviate the adverse impacts of drought. Only 
temporary construction activities are authorized, except for the 
construction of permanent wells. Title I also authorizes temporary 
contracts to make available project and nonproject water and to allow 
for the use of Reclamation facilities for water storage and conveyance. 
The 17 Reclamation States and Hawaii, as well as tribes within those 
States, are eligible for this assistance. In fiscal year 2006, the 
request for drought assistance is $500,000.
    Over the years, much of the funding appropriated under the Drought 
Act has been used to reduce effects from drought in several river 
basins, including the Rio Grande and Pecos River. Also, significant 
funding has been used to construct wells on tribal lands and for 
smaller towns and counties. Reclamation has constructed many wells for 
drinking water for smaller financially-strapped entities (towns, 
counties, tribes) that do not have the financial capability to deal 
with the impacts of drought.
    In addition to utilizing the Drought Act authority, the Department 
of the Interior developed Water 2025 to focus Reclamation's financial 
and technical resources on areas in the West where conflict over water 
either currently exists or is likely to occur in the next 25 years, 
even in non-drought conditions. The Water 2025 program identified Hot 
Spots, geographic problem areas where there are competing demands for 
water, which are exacerbated by drought. The program proactively seeks 
to stretch water supplies through conservation, efficiency, and 
markets, particularly in the Hot Spots. Water 2025 provides additional 
tools that help minimize drought impacts.
    Reclamation's Water Conservation Field Services Program also 
addresses drought conditions on a proactive basis, providing technical 
advice and cost-share financing for water management and conservation 
improvements before a drought hits. Finally, Reclamation Project 
reservoirs continue to protect against water shortages due to drought 
conditions. These reservoirs are doing what they were designed to do, 
and Reclamation programs such as Safety of Dams Program and the O&M 
Program maintain these facilities to meet the challenges of drought in 
the West.
    Question. If there are multi-agencies engaged in this effort, how 
are you coordinating them?
    Mr. Weimer. The activities funded by Reclamation through the 
provisions of the Drought Act are unique to that Act and do not require 
partnership arrangements. However, through its Water 2025 program, the 
Department of the Interior is working with local entities and States to 
improve water management through conservation, efficiency, and markets, 
and to improve advanced water purification technologies.
    Reclamation is also working closely with other Federal agencies, 
associations and water users both at the Reclamation project level and 
at the agency level to improve the management, efficiency and 
conservation of water in the West. These efforts help to stretch 
otherwise limited water supplies and protect water users in the event 
of drought. Through the Water 2025 tool of improving interagency 
cooperation, Reclamation has established MOU's with the Army Corps of 
Engineers, the ``Bridging the Headgates'' partners, and is working with 
the Department of Agriculture to establish an MOU that would initiate 
cooperation on water management programs and activities of mutual 
benefit. Reclamation is also working with the USDA to deploy drought 
action teams in drought stricken areas of the West to coordinate the 
communication and delivery of drought-relief resources to affected 
users.
    In operating our facilities, we work closely with other agencies 
(Corps of Engineers, NOAA, State and local governments, irrigation 
districts, etc.) to monitor and share data that pertain to water 
conditions. We coordinate water management activities (releases and 
timing) with those entities to help minimize effects of the drought on 
communities and citizens of the West. Water rights have previously been 
adjudicated in the upper Sprague River Valley, west side of the Wood 
River valley, and the Lost River basin; additionally there are abundant 
post-1909 certificated water rights upstream of Upper Klamath Lake. If 
funded, interest from willing sellers would be solicited and offers 
evaluated in terms of price, transferability, and yield. It is also 
expected that substantial information would be gained in exercising the 
Oregon State water-right transfer mechanisms since they have not 
previously been used in this basin. Such information would also be of 
interest to Klamath Project Irrigators who may want to acquire senior 
upstream water rights. Appropriations language was included with the 
administration's budget request for this pilot program to assure that 
if lands or other interests in lands were acquired along with the water 
rights that they would have to be sold back into the private market.

                          KLAMATH RIVER BASIN

    Question. In a time when many programs are experiencing significant 
cuts, the administration's fiscal year 2006 Budget requests $62.9 
million for the Klamath River Basin. This represents an 8.4 percent 
increase from the fiscal year 2005 funding levels. Why did the 
administration prioritize funding for the Klamath River basin?
    Mr. Weimer. The administration chose to prioritize the funding for 
the Klamath River Basin due to the problems encountered from several 
consecutive years of drought, and the high level of controversies in 
the basin over Interior's responsibilities. The fish species are tribal 
trust resources, as well as being listed under the Endangered Species 
Act. Efforts to provide increased lake levels and river flows for the 
fish have also had a large and lasting effect on the agricultural 
economy of the Klamath Basin and commercial and sports fishing 
downstream. Efforts to restore habitat, improve water management, 
investigate the development of potential new storage options and 
sources of water will contribute to stabilizing the cultural and 
economic well being of the basin. The Department is developing and 
implementing long-term solutions to the water problems in the Klamath 
Basin.
    Question. The Budget notes that Interior is in the process of 
putting together a water bank of approximately 100,000 acre-feet to 
help meet the water needs for coho salmon. Please explain this effort.
    Mr. Keys. In 2001, Reclamation conducted a 1-year pilot demand 
reduction program which provided a payment to irrigators in lieu of 
applying surface water to land previously irrigated. In 2002, 2003, and 
2004, a pilot water bank program was implemented to assist in meeting 
National Oceanic and Atmospheric Administration Fisheries (NOAA) 
Biological Opinion (BO) requirements for threatened salmon in the 
Klamath River. The pilot water bank consists of compensating 
agricultural water users to either forebear use of water, substitute 
groundwater for surface water, or pump ground water to increase the 
supply. The results of the pilot water bank program for the various 
years have been or are being reviewed by Cal Poly-San Luis Obispo and 
the U.S. Geological Survey. Reclamation refines the water bank program 
each year, changing its selection process, contracting process, and 
program rules based on what was learned in previous years to meet its 
increasing obligations. For example, in 2002 Reclamation paid a flat 
fee per acre foot of water. Since then they have instituted a new 
process where landowners offer to enroll their lands in the water bank 
by bid. The least expensive, highest yield lands receive priority.
    Question. Is this supported by the Klamath River stakeholders, 
including the environmentalists?
    Mr. Keys. The stakeholders support the Water Bank generally as a 
short-term solution, but not for the long-term. The water bank has been 
successful in that large numbers of irrigators have voluntarily signed 
up for it, and it has allowed Reclamation to meet the requirements in 
the NOAA Fisheries and Fish and Wildlife Service biological opinions 
and provide sufficient water to meet the need of contracts for 
irrigation. The high annual cost of the water bank is problematic, and 
the water bank is viewed as a temporary solution while long-term 
solutions are developed. Water users are seeking assurance of a water 
supply which the water bank does not provide, and are concerned that 
idling land will negatively affect agribusiness in the basin. The 
environmental community and the tribes support the concept of a water 
bank; however, they believe 100,000 acre feet annually is insufficient 
and that lands should be permanently retired.
    Question. I would also like to know more about the $500,000 
requested for a Fish and Wildlife Service prototype program to acquire 
and transfer water rights to the wetlands in the Klamath Basin refuges. 
Will the Department buy or lease these water rights?
    Mr. Keys. The intent is to buy the water rights.
    Question. Have you identified people who would be willing to let 
the Department acquire their water rights?
    Mr. Weimer. The administration's request to fund the FWS water 
rights acquisition pilot program is designed to test the market for 
water right acquisitions and the Oregon water right transfer procedures 
for transferring water rights to the FWS refuges. Currently, Lower 
Klamath Lake and Tule Lake refuges are mostly dependent on tailwater 
from irrigated lands for their water supply, and the refuges are 
disproportionally hard hit during dry years. A substantial amount of 
water-righted land is always on the market in the basin, but no 
specific water rights for the program have been pre-identified. Water 
rights have previously been adjudicated in the upper Sprague River 
Valley, west side of the Wood River valley, and the Lost River basin; 
additionally there are abundant post-1909 certificated water rights 
upstream of Upper Klamath Lake. If funded, interest from willing 
sellers would be solicited and offers evaluated in terms of price, 
transferability, and yield. It is also expected that substantial 
information would be gained in exercising the Oregon State water-right 
transfer mechanisms since they have not previously been used in this 
basin. Such information would also be of interest to Klamath Project 
Irrigators who may want to acquire senior upstream water rights. 
Appropriations language was included with the administration's budget 
request for this pilot program to assure that if lands or other 
interests in lands were acquired along with the water rights that they 
would have to be sold back into the private market.

                         O&M COSTS FOR SECURITY

    Question. With regard to the treatment of security costs for 
Reclamation facilities following the events of 9/11/01, what 
consideration have you given to a ``risk of loss'' assessment in 
developing an equitable allocation of costs to all of the multiple 
purposes and beneficiaries of the facilities?
    Mr. Keys. Reclamation has conducted comprehensive security risk 
assessments at all critical facilities, evaluating vulnerabilities, 
threats and consequences (including loss of mission, loss of life, and 
public safety). Based on these assessments, Reclamation has developed 
risk management strategies to protect the public, its employees, and 
the facilities and their mission. Reclamation does not allocate project 
costs based on ``risk of loss'' but allocates costs based on the 
project benefits portion of operations and maintenance costs in 
accordance with established Reclamation law and policies.
    Question. What steps has Reclamation taken to mitigate the level of 
security costs for guards and surveillance?
    Mr. Keys. Reclamation has taken several steps to mitigate the level 
of security costs for guards and surveillance. In July 2004, 
Reclamation revised its Threat Condition Protective Measures to 
eliminate the across-the-board requirement for random patrols at yellow 
and orange National threat levels for specific classes of facilities. 
The need for increased patrols and surveillance due to changes in 
threat condition is now determined based on local conditions, such as 
local or regional threats, existing electronic surveillance systems, 
and the presence of on-site operations and maintenance staff.
    Reclamation also eliminated across-the-board patrol requirements 
for dams when the water surface elevation is reasonably low, for 
example during drought conditions. Reclamation has also reviewed the 
need for guards and surveillance at several facilities and has examined 
alternatives such as modifying contracts from routine daily patrols to 
``as needed'' contracts that are only exercised under certain 
conditions.
    Question. Has Reclamation considered a user fee program, which 
could significantly defray the costs of guards?
    Mr. Keys. Reclamation has not investigated user fee programs.
    Question. Has Reclamation requested co-funding from the National 
Park Service for jointly used facilities?
    Mr. Keys. Reclamation has not requested co-funding from the 
National Park Service. Reclamation and National Park Service work 
together to find the most efficient and effective ways to protect 
facilities.
    Question. Commissioner Keys, how much has the Bureau requested and 
received for increased security costs at its multi-purpose dams in the 
wake of the attacks of September 11, 2001?
    Mr. Keys. Between September 11, 2001 and September 30, 2005, 
Reclamation will spend $169 million in non-reimbursable anti-terrorism 
dollars, which include guard and surveillance activities.
    Question. Please break those numbers down by fiscal year.
    Mr. Keys.

                        [In millions of dollars]
------------------------------------------------------------------------
                                                              Amount
------------------------------------------------------------------------
Fiscal Year 2002 Actual.................................            35.6
Fiscal Year 2003 Actual.................................            53.2
Fiscal Year 2004 Actual.................................            36.9
Fiscal Year 2005 Enacted................................            43.2
Fiscal Year 2006 Request................................            50.0
------------------------------------------------------------------------

    Question. Who has paid for that increased security?
    Mr. Keys. Reclamation has paid for 100 percent of increased 
security costs since 9/11/01.
    Question. How much does the Bureau anticipate it will request from 
increased security measures in fiscal years 2007 through 2012?
    Mr. Keys. Reclamation will continue budgeting for guard and 
surveillance needs as appropriate and anticipates outyear budget 
requests will be maintained at a level similar to recent budget 
requests. The annual number will vary based on programmatic priorities 
and long-term goals for meeting security needs.
    Question. Who will pay the anticipated costs?
    Mr. Keys. Annual costs associated with facility guard and patrol 
activities will be treated as project O&M costs subject to 
reimbursability based upon project cost allocations. Reclamation will 
continue to fund the costs of facility hardening and program management 
on a non-reimbursable basis.
    Question. How does the Bureau determine which part of the costs of 
increased security should be reimbursable and which part should be non-
reimbursable?
    Mr. Keys. Reclamation considers the ongoing costs of guards and 
patrol to clearly fall within the definition of project operation and 
maintenance (O&M) costs. Therefore, those costs are subject to 
reimbursement based on project cost allocations. Like equipment 
maintenance, routine facility security activities such as guards and 
patrol are critical in ensuring the uninterrupted supply of Reclamation 
water and power. The determination to treat guard and patrol costs as 
reimbursable project O&M is within Reclamation's authority under 
Federal reclamation law, in particular the Reclamation Project Act of 
1939, and is consistent with longstanding policy and practice.
    Following the terrorist attacks of September 11, 2001, expenditures 
for security enhancements on Bureau of Reclamation facilities increased 
rapidly and dramatically through emergency supplemental appropriations. 
Although Reclamation's practice at that time provided for the ongoing 
costs of security-related activities (including guards and patrol) on 
Reclamation facilities to be a project cost subject to reimbursement by 
project beneficiaries, it was decided that initially, the post-9/11 
facility security-related cost increases should be borne by the United 
States.
    The rationale for making guard and patrol cost increases 
temporarily nonreimbursable was that it would have been a significant 
hardship for the project beneficiaries to bear the entire burden of the 
urgent, dramatic, and unplanned cost escalation.
    Question. Once the Bureau determines which costs should be 
reimbursed by project beneficiaries, how does it allocate those costs 
among beneficiaries?
    Mr. Keys. The capital costs of a Reclamation project are allocated 
to all authorized project functions by percentage of the total 
construction costs attributable to each function. The beneficiaries of 
the functions of irrigation, power, and municipal and industrial water 
supply reimburse the Federal Government for the percentage of project 
capital costs allocated to their particular function. Functions such as 
flood control, fish and wildlife, recreation, water conservation, and 
land resource management are considered to benefit the general public 
and thus are nonreimbursable. Annual operation and maintenance (O&M) 
costs for a project are reimbursed in accordance with the same 
allocated percentages as the capital costs. Reimbursable O&M costs are 
billed to and recovered from the project beneficiaries in the year in 
which they are incurred.
    Question. Are all classes of project beneficiaries allocated a 
portion of the costs the Bureau determines should be reimbursed?
    Mr. Keys. Irrigation, M&I water supply, and hydroelectric power 
generation are categorized as reimbursable; O&M costs allocated to the 
functions of flood control, fish and wildlife, water control/
conservation, recreation, and land resource management, all of which 
are considered beneficial to the general public, are nonreimbursable. 
Reimbursable costs are billed to and recovered from the beneficiaries; 
nonreimbursable costs are not and are instead borne by the Federal 
Government.
    Question. What kind of benchmarking does the Bureau use to 
determine which proposed security enhancements are appropriate?
    Mr. Keys. Upon the completion of vulnerability risk assessments, 
many of which were conducted through contracts with security experts, 
Reclamation employs a Security Advisory Team review process and a 
decision making process to critically evaluate all recommendations made 
in the risk assessment report. Reclamation includes outside experts in 
this process.
    Reclamation also is an active member of the Interagency Forum on 
Infrastructure Protection (IFIP), which meets regularly to discuss 
issues, methodologies, and best practices. IFIP members include 
Reclamation, the Army Corps of Engineers, Tennessee Valley Authority, 
Bonneville Power Administration, Western Area Power Administration, 
Federal Emergency Management Agency, Federal Energy Regulatory 
Commission, Sandia National Laboratory, the Association of State Dam 
Safety Officials, and others.
    Question. Does the Bureau use any kind of risk analysis when 
proposing increased security measures?
    Mr. Keys. Yes. Reclamation uses a comprehensive security risk 
assessment process to determine the risk at each critical 
infrastructure facility. The assessment methodology examines the 
threats, vulnerabilities, consequences, and existing security measures 
at each facility. The risk analysis process includes a review of 
proposed risk reductions by peer reviewers and external security 
experts to validate each recommendation in relation to risk reduction 
strategy.
    Question. Does the Bureau use any cost-effectiveness analysis when 
proposing increased security measures?
    Mr. Keys. Yes. Reclamation conducts cost-effectiveness analysis in 
the areas of the cost of a proposed recommendation relative to the 
projected reduction in risk that the recommendation provides. 
Reclamation also performs front-end cost effectiveness analysis of 
security guard functions at its National Critical Infrastructure 
facilities.

                         UPPER COLORADO REGION

    Question. In the event that minimum power generation level is 
reached in the Colorado River Storage Project (CRSP) as a result of 
drought conditions, what precautions is the Bureau taking to avoid 
laying the burden of financing non-power program--such as the Glen 
Canyon Adaptive Management Program, the Salinity Control Program, and 
the Endangered Fish Recovery Program--on CRSP power customers?
    Mr. Keys. Funding from power revenues for the non-power programs, 
such as the Glen Canyon Adaptive Management Program, the Salinity 
Control Program, and the Endangered Fish Recovery Program, is provided 
by Federal legislation. Reclamation is meeting with both the Western 
Area Power Administration and the Colorado River Energy Distributors 
Association to discuss issues related to the CRSP and the drought. 
Discussions have dealt with how these programs can continue to be 
funded if Lake Powell approaches the minimum power generation level.
    The Legislation for the Endangered Fish Recovery Program addresses 
funding through the Basin Fund with provision for appropriations. That 
is, if ``. . . the Western Area Power Administration and the Bureau of 
Reclamation determine that the funds in the Colorado River Basin Fund 
will not be sufficient to meet the obligations of section 5(c)(1) of 
the Colorado River Storage Project Act for a 3-year period, the Western 
and Reclamation shall request appropriations to meet base funding 
obligations.''
    Question. Is the Bureau considering an appropriations request to 
Congress in order to cover such an eventuality?
    Mr. Keys. Based on the legislation, we must determine that funding 
will not be available for a 3-year period. That determination has not 
been made at this point in time.
    The legislation for the Adaptive Management Program and the 
Salinity Control Program does not address funding through 
appropriations. The current process for funding operation and 
maintenance activities and non-power programs is to look at all program 
items and request funding for work based on the priority of each item. 
Such programs as these would be considered in this process.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye

                         HAWAII WATER RESOURCES

    Question. In fiscal year 2004, funds were provided to the Bureau of 
Reclamation to initiate activities on water recycling opportunities. 
Such activities are critical to Hawaii since water use rates in Hawaii 
are increasing and groundwater recharge rates are declining. What is 
the current status of the Bureau's work on this issue?
    Mr. Keys. Last June, Reclamation retained a contractor to complete 
an appraisal study of potential opportunities for storm-water 
collection, treatment, and reuse. In cooperation with State and local 
agencies, the contractor has identified such opportunities and is 
currently completing their analysis. A final report is due by the end 
of June 2005.
    Question. What recommendations does the Bureau have for future 
actions in Hawaii pertaining to water recycling, in general, and storm-
water capture and reuse, in particular?
    Mr. Keys. The potential for storm-water collection and reuse will 
not be known until the on-going study is complete, but early 
indications are that small, local projects may present opportunities to 
increase water supply as well as provide other benefits. Hawaii 
recognizes the value of water reclamation and reuse as part of a broad 
strategy for developing new water sources to serve increasing needs. 
This is particularly relevant on the islands of Oahu and Maui because 
reuse opportunities are being identified and evaluated. Given 
Reclamation's limited resources and current needs for existing 
Reclamation Projects, a future role for Reclamation is difficult to 
envision for Hawaiian recycling projects.

                          SUBCOMMITTEE RECESS

    Senator Allard. Having said that, we'll go ahead and recess 
the subcommittee meeting.
    [Whereupon, at 3:40 p.m., Thursday, April 7, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


 ENERGY AND WATER, AND RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 
                                  2006

                              ----------                              


                        THURSDAY, APRIL 14, 2005

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:07 p.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Pete V. Domenici (chairman) 
presiding.
    Present: Senators Domenici, Allard, and Feinstein.

                          DEPARTMENT OF ENERGY

                National Nuclear Security Administration

STATEMENT OF AMBASSADOR LINTON F. BROOKS, UNDER 
            SECRETARY AND ADMINISTRATOR, NUCLEAR 
            SECURITY
ACCOMPANIED BY:
        ADMIRAL KIRKLAND DONALD, DEPUTY ADMINISTRATOR, NAVAL REACTORS
        DR. EVERET BECKNER, DEPUTY ADMINISTRATOR, DEFENSE PROGRAMS
        KENNETH BAKER, PRINCIPAL DEPUTY ADMINISTRATOR, DEFENSE NUCLEAR 
            NONPROLIFERATION

             OPENING STATEMENT OF SENATOR PETE V. DOMENICI

    Senator Domenici. The hearing will please come to order. 
The subcommittee is going to take testimony on the fiscal year 
2006 budget request from the National Nuclear Security 
Administration. I changed the process from the previous hearing 
so we'll be able to have more opportunity to ask questions.
    For this hearing, we'll take testimony from the 
Administrator, Ambassador Linton Brooks. Ambassador Brooks is 
joined by his deputies, who can respond to questions, and they 
are Deputy Administrator for Naval Reactors, Admiral Kirkland 
Donald--thank you very much----
    Admiral Donald. Yes, sir.
    Senator Domenici [continuing]. Deputy Administrator for 
Defense Programs, Dr. Everet Beckner; and Ken Baker--good to 
see you here--Principal Deputy Administrator for Defense 
Nuclear Nonproliferation. Thank you very much.
    Admiral Donald, this is your first visit to the 
subcommittee. I want you to know that we appreciate your 
willingness to participate, and it's always a pleasure to have 
you here.
    Dr. Beckner, I understand that you have announced your 
retirement, effective at the end of the month. Obviously, that 
day had to come, but, for everybody that knows what you've 
done, it's a good day for you and your wife, but not a good day 
for us. Between 1962 and 1990, you served in a variety of 
senior leadership positions at Sandia Laboratories; and, since 
leaving the lab, you've worked at Lockheed Martin, served at 
two positions in the Department of Energy; and, between 1991 
and 1995, you served as Principal Deputy Assistant Secretary 
for Defense Programs. And since 2002 you've served as Deputy 
Administrator for Defense Programs at NNSA. So, I understand 
that it's time for you to leave, and certainly I understand 
that, if I have it right, that you probably are going to return 
to New Mexico for your retirement.
    Dr. Beckner. That's correct.
    Senator Domenici. And then I would think it's fair to say 
that, at that point, I will be representing you.
    Dr. Beckner. That's correct.
    Senator Domenici. I don't know, maybe you voted, absentee 
before.
    In any event, you may be having a chance to vote for me in 
person. Who knows? But I want to thank you for that 40 years of 
service, which I think has been exemplary.

                    FISCAL YEAR 2006 BUDGET REQUEST

    Now, the fiscal year 2006 budget, the President has 
requested $9.4 billion, for an increase of 2.5 percent from the 
current-year funding level of $9.1 billion. So, while that's 
not a lot as a percentage, this is a considerable increase 
above the 2 percent cut in discretionary funding for the 
Department of Energy, as a whole.
    The President's budget reflects an increase of 15 percent, 
or $215 million, for the Office of Nuclear Nonproliferation, 
which offsets a slight decrease, Admiral, in the Naval Reactor 
Program----
    Admiral Donald. Yes, sir.
    Senator Domenici [continuing]. Of 1.9 percent, as I 
understand it.
    Admiral Donald. Yes, sir.
    Senator Domenici. And the Office of the Administrator, 3.7 
percent, negative--no, that's the Administrator's weapons--your 
weapons activity. And, let's see, the weapons activity has 
received a 0.7 percent increase, I'm sorry; and the Office of 
the Administrator is -3.7.
    The administration has made a number of policy decisions in 
this bill that I would like to address, just quickly, but 
individually. I have spoken to you, Mr. Ambassador, about some 
of them.

                     FUTURE OF THE WEAPONS PROGRAM

    First, this budget proposes a significant cut to NNSA over 
the next 5 years, as compared with the 2005 request. The 
majority of the cuts seem to come from the weapons program--
they're mostly in the out years, so I say ``seem to''; they're 
not binding at this point--which is a $3 billion reduction. 
This is the third annual Defense program budget, and the budget 
also cuts facilities, the recapitalization, for $750 million. I 
should have said the $3 billion reduction is a third of the 
annual Defense budget. The $3 billion reduction in the NNSA 
program is unsustainable, in my opinion, with the current NNSA 
complex. Now, that doesn't mean that my assumption is a 
necessity, but it's unclear as to where the cuts will be 
applied, and I am deeply concerned that scientific capability 
of the laboratories, which is sometimes overlooked, will be 
significantly affected, on the negative side.
    Ambassador Brooks, I read a number of press articles about 
your testimony before the Armed Services Committee regarding 
your vision of the weapons program out into the future. I think 
your comments before the committee are more informative about 
NNSA's budget priorities than the testimony that you've 
submitted here today, but I would be glad for you to explain 
that, later on. I would ask that your statement of April 4 be 
made a part of the record, so everybody will have it.
    This vision that you've laid out is going to require a 
substantial investment in NNSA's capability and infrastructure. 
Simply put, your vision is not supported by the future budgets. 
Seems like they run into each other, and one goes up and the 
other comes down.
    The long-term impacts of the proposed budget will leave 
your complex with a very shallow scientific capability, housed 
in old facilities, which we've just gone to some great lengths 
to try to make current. And you've been part of helping with 
that. I would agree they haven't been done in a overall plan, 
but clearly the most uninhabitable buildings have been 
replaced, and that's because we insisted, up here, and you all 
were willing to do that.
    So, I don't see how we can maintain the existing capability 
and reinvent the weapons program to design, build, and deploy 
weapons in--by 2012 and 2015--that are described in your 
testimony, that you can elaborate upon here today.

                     RELIABLE REPLACEMENT WARHEADS

    The testimony you gave before the Committee of Armed 
Services laid out a plan. In my opinion, it exceeds the 
political support here on Capitol Hill, unless the reports of 
what you said are not what you mean. Your comments that I've 
identified indicate that DOD has identified, and I quote, ``no 
requirements for such weapons.'' Your testimony made broad 
assumptions about the Reliable Replacement Warheads. That's 
called RRW. That initiative is--at least there's an indication 
that it is there to develop new weapons. And I hope you will 
dispel that today. And I see your testimony does that; I just 
want to go over that more than one time.
    The RRW--and I say to my friend, the new member from 
Colorado, this Reliable Replacement Warhead actually came from 
this committee. It was not a request from the administration. 
We were asked by those who were involved in science-based 
stockpile stewardship, as it pertains to ingredients that make 
up the nuclear weapons--they asked us to put in something that 
would give them authority to do research on replacement parts, 
and--in many respects; so they might be lighter, so they'd be 
safer, so they'd be more durable. So we--that was put in here 
to achieve stockpile transformation. Strike that. It wasn't for 
transformation; it was for stewardship maintenance. So, we need 
to make sure that that's clearly understood and that there's no 
misunderstanding on the part of Senators as to what it meant 
and what you intend to use it for.
    Incidentally, it's not a whole bunch of money, so it surely 
is not to build a--it's $9 million, so, as you know, Mr. 
Ambassador, that's got to be a very small amount if we're 
talking about a very significant change.

                    ROBUST NUCLEAR EARTH PENETRATOR

    Now, the weapon research, the policy decisions that is 
likely to attract attention will be the Department's commitment 
to a study of so-called Robust Nuclear Earth Penetrators. The 
budget provides for $4 million in 2006, and $14 million in 
2007. This is, from what I can tell, not part of a planned 
funding, beyond the completion of the study. So when we get 
approached on this, we're going to have to have your assurance 
that you aren't doing this with the idea that a plan to use it 
for building a new weapon is part of this. That's a separate 
issue for the Department and the Congress, later on.

                       NATIONAL IGNITION FACILITY

    Now, there's one monster program, in terms of dollars, that 
we might as well talk about, and that's NIF, the National 
Ignition Facility, that you operate out in California at the 
nuclear laboratory there. I notice that you have refocused 
efforts on NIF, with the goal of achieving final results by 
2010. Is that correct?
    Dr. Beckner. Yes, sir.
    Senator Domenici. This budget cuts a lot of relevant 
stewardship research, while NASA wages what I consider almost a 
crusade to move on with NIF. Now, we've eliminated, entirely, 
the funding for inertial fusion technology; that's $33 million. 
That supports the development of lasers and Z pinches that 
could be used in stewardship programs that I have great 
confidence in, and I think many other scientists do. It just 
happened to come a year or 2 too late, and we had already 
committed to the plan for NIF. I was shocked to learn that the 
budget doesn't even support a full single shift at the Z 
machine. And if I don't get a chance to ask you about it, I 
hope you will answer that.
    [The information follows:]

                       National Ignition Facility

    Senator Domenici, I appreciate the opportunity to respond to your 
remarks. You have raised a number of issues that I will address in 
turn.
    First, we have maintained a focus on the goal of ignition at NIF 
despite reductions to the Inertial Confinement Fusion Ignition and High 
Yield Campaign. The budget submission supports the execution of the 
first ignition experiments at NIF in fiscal year 2010. This is an 
important goal for the stewardship program and the Nation. Ignition is 
a unique capability that will allow the stewardship program to address 
weapon performance issues related to thermonuclear burn. You and your 
committee have supported that important goal, and we appreciate your 
support.
    As you may recall, the fiscal year 2005 appropriation reduced the 
funding for the NIF Demonstration Program, an essential piece of the 
NIF Project. In response to the fiscal year 2005 appropriation and the 
modified NNSA 5-year budget, a new plan to complete the NIF Project has 
been developed. This plan supports the Ignition 2010 goal. We have 
recently concluded a major external review of this new NIF Project plan 
that found the Project was proceeding well and performing in accordance 
with its baseline prior to the fiscal year 2005 reduction. The review 
team also found that the proposed plan for completing the Project is 
executable and recommended NNSA accept a change proposal reflecting 
this plan. However, they caution that the NIF Project is tightly 
constrained with respect to budget and should be protected against 
further reductions. NNSA will submit revised plans for the NIF Project 
and the ignition program to the Congress by June 30, 2005. The 
achievement of the ignition goal will require continued strong 
commitment from both the Congress and the NNSA.
    Second, you raised a concern regarding the funding for inertial 
fusion technology. (By ``inertial fusion technology,'' we mean 
development of high repetition rate laser and pulsed-power drivers and 
other activities primarily directed at the development of inertial 
fusion as an electrical power source; this is distinct from stockpile 
stewardship activities conducted at NNSA inertial fusion facilities.) 
The Congress has funded this via ``add-ons'' in the past, and it is 
true that such activities are not funded in the current budget. As you 
point out, this work is of high quality, but the energy-related 
inertial fusion technology activities have never appeared in the NNSA 
submission, as they are lower priority than other stewardship needs and 
largely motivated by the inertial fusion energy mission, which does not 
reside in NNSA. I would also point out that NNSA does support a number 
of important technology development activities relevant to weapons 
applications of inertial fusion, including high-energy petawatt lasers 
and advanced ignition concepts. As a final point, from both the defense 
and energy perspectives, the demonstration of ignition is the highest 
priority inertial fusion activity NNSA and the Nation can undertake.
    Third, you raised a concern regarding funding for the Z machine. 
The Z machine has returned outstanding results and continues to be an 
important resource for NNSA. In fact, in the face of a difficult budget 
we have maintained a reasonable program at Z in fiscal year 2006, 
including full funding for the Z-refurbishment project. Because of 
constrained budgets, we are planning to operate the Z Facility at 90 
percent of the full single shift rate through April 2006. At the end of 
April 2006, the Z-facility will be shut down for refurbishment and 
installation of hardware, per the Z-refurbishment project plan. Thus, 
overall we will reduce the number of shots on Z by a modest amount 
while keeping the Z-refurbishment project on schedule.
    NIF is important to the NNSA, stockpile stewardship, and the 
Nation. It will provide critical information for the stewardship 
program and open major new scientific frontiers. The demonstration of 
ignition will be a major scientific achievement for stockpile 
stewardship; in particular, it is critical to the validation of the 
advanced simulation codes produced by the Advanced Simulation and 
Computing Program. NIF is now 80 percent complete, and we believe the 
most effective path financially and technically is to complete the NIF 
Project and commence ignition experiments as expeditiously as possible.
    Thank you again for your interest and the opportunity to respond.

    Senator Domenici. Another policy change contained in this 
budget is a provision to shift the cleanup responsibilities 
from the Office of Environmental Management to the NNSA. I 
understand that the Department would like the NNSA to take 
ownership of its waste streams and include cleanup cost in the 
lifecycle of future projects.
    In theory, I agree with this concept. However, applying 
environmental cleanup responsibilities to the weapons 
stewardship program might be a greater challenge than the 
administration expects. I hope to learn more about this 
proposal from your testimony, especially the legal basis for 
such actions.

                        NUCLEAR NONPROLIFERATION

    We all know that a better job is being done on--overall, on 
cleanup than ever before. Some will disagree. I compliment you 
on it.
    On nonproliferation, huge issue, we appreciate the 
President's mentioning it in his State of the Union, and then 
for you to follow through with a significant increase of 15 
percent on nonproliferation.
    I failed to mention, when we talked about cleanup, with the 
presence of the Senator from Colorado, that one of the real 
examples of achievement, setting timetables and getting them 
done, is in your State. Rocky Flats. We've had other ones say 
we can't have a timetable, we never can get finished. Here you 
came up with one that was terrifically difficult, in terms of 
pollution, and you got it done.
    Nonproliferation research is up. That's good. You include 
funding for the MOX program. Very exciting. Terrific idea.
    The MPCA with Russia has an increase. Eliminating the 
Russian plutonium production has an increase. That one's all in 
jeopardy if we don't get the agreement with the Russians, which 
doesn't have much longer time, because that's got a lot of 
money tied up in the appropriations that the House may decide 
to spend if we don't get that agreement. And I'm working very 
hard with the State Department and your Secretary to see if 
they can't expedite that.

                             NAVAL REACTORS

    Naval reactors, we don't have to say much. They always 
excel. We use you as an example, and especially with all your 
boats at sea----
    Admiral Donald. Yes, sir.
    Senator Domenici [continuing]. With reactors floating 
around with spent fuel rods onboard----
    Admiral Donald. Yes, sir.
    Senator Domenici [continuing]. As examples of why we 
shouldn't be so frightened about nuclear power and nuclear 
waste.
    Admiral Donald. Thank you, sir.
    Senator Domenici. So, in conclusion, there is no doubt 
about it, the budget will require some tough choices to balance 
the needs of the Department, but what we must do this year 
pales in comparison to the challenge we will face if we're 
expected to cut $3 billion over the next 5 years from the 
weapons program. I don't think anyone's given much thought--
maybe they have, but they certainly hasn't come up with any 
conclusions that we've accepted in Congress as to how we will 
achieve those.
    So, Mr. Ambassador, sorry for going through all of this, 
but I think it's important that you know that we know what's 
going on and that we are very interested in what you have to 
say.
    The Senator from Colorado.

                   STATEMENT OF SENATOR WAYNE ALLARD

    Senator Allard. Mr. Chairman, I have a full statement I'd 
like to put in the record.
    Just briefly, this is a new experience for me.
    Senator Domenici. Yes.
    Senator Allard. I was on the authorizing side, as Chairman 
of the Strategic Subcommittee, and viewed many of these issues 
from the authorizers' point of view, which I don't think is 
that different from where you come from, Mr. Chairman. I plan 
on being very supportive of your efforts here on this 
subcommittee.
    You know, I've had an opportunity to work with Ambassador 
Brooks and Dr. Beckner, both, and I think they do a great job, 
and I think we will miss them. And, in fact, I took a personal 
tour with both of them, visited Lawrence Livermore Lab, Los 
Alamos Lab, Sandia Lab, as well as went over to the Pantex 
facility there in Texas, and have had an opportunity, also, 
Admiral, from being--looking at a nuclear reactor on a ship. 
So, I do feel that we're doing a good job in many of these 
areas, and I'm a little bit taken aback by the size of 
reduction in funding that the administration has suggested on 
this.
    And, Mr. Chairman, you've always taken a special interest 
in all these programs, in the health and well-being of these 
laboratories, and I've appreciated that effort. And when I 
visited those labs, the employees in those labs--and the 
administration, frankly, looked up to your leadership, and you 
were spoken of favorably in many instances.
    You know, I've been supportive of the study on RNEP, and 
it's always taken me aback why the other House couldn't at 
least settle on just studying it, look what our options are and 
what--the programs happening out there. And I hope that we can 
continue to push that on this side. And it's somewhat of a 
problem, I think, in conference committee, and hopefully we can 
be more successful this year than we have in the past.
    And so, I look forward to your testimony, Mr. Brooks. And, 
Mr. Chairman, I look forward to working with you on many of 
these very important issues. And thank you for mentioning Rocky 
Flats, Mr. Chairman. We're 1 year ahead of schedule, and we're 
under budget. And so, I'm proud of that. And, again, thank you 
for giving me an opportunity to say a few words.
    [The statement follows:]

               Prepared Statement of Senator Wayne Allard

    Thank you Mr. Chairman for the opportunity to attend this hearing 
today. It is a little unusual to be approaching this issue from the 
appropriations side of the house. As you know, Mr. Chairman, last year 
I chaired the Senate Armed Services Strategic Forces Subcommittee, 
which was responsible for authorizing funding and overseeing the 
Department of Energy National Nuclear Security Agency.
    Ambassador Brooks, it is a pleasure to see you again. Your 
leadership at the National Nuclear Security Agency has been critical 
over these last couple of years. I want you to know that I support you 
and that I look forward to working with you this year.
    Mr. Chairman, I have been concerned for many years that the United 
States was not doing enough to ensure the effectiveness and reliability 
of our nuclear weapons deterrent. Two years ago, I visited all three 
nuclear weapons labs: Livermore National Laboratory, Sandia National 
Laboratory, and Los Alamos. I also visited the refurbishment facility 
at Pantex, Texas.
    Mr. Chairman, I know you take a special interest in the health and 
well-being of these laboratories. Your support for their work has 
helped diversify and invigorate the activities of the labs. Most if not 
all of the workers, technicians, and researchers at the labs look up to 
you and deeply appreciate everything you have done for them.
    Given your interest, I believe it is important for you to know that 
during my visit, I sensed an unusual degree of hesitancy. It seemed to 
me that though the scientists at the labs were proud of their work, 
many were apprehensive about discussing it. As I probed, I became aware 
of the detrimental impact decisions made here in Washington were having 
on our scientists and researchers. We have put so many laws on the 
books and have had so many public, highly controversial debates that 
those at the labs are often left wondering if whether the work that 
they are doing for our Nation was appropriate, or worse, even legal.
    This apprehension introduces an element of uncertainty. As I'm sure 
you know, uncertainty can be very destabilizing for a scientist and can 
hinder the scientist's ability to focus on the question at hand. It 
introduces limiting factors that cloud the scientific process and make 
it very difficult to approach a problem in a logical, straightforward 
manner.
    Mr. Chairman, I believe the Congress has been sending mixed 
messages. One moment, the Congress repeals the prohibition on the low 
yield nuclear weapons. Then, Congress turns around and cuts the funding 
for the study of the feasibility of a robust nuclear earth penetrator.
    The Congress tells our scientists to be responsive to the 
requirements of the military commanders and begin to think about how 
nuclear weapons fit within the Nuclear Posture Review's new triad. Then 
Congress changes its mind and cuts funding for advanced concepts 
initiatives, which would have tried to match our military's 
requirements with potential nuclear capabilities.
    Mr. Chairman, I recognize that the problem is not in the Senate. 
Under your leadership, we have successfully defeated several floor 
amendments to cut nuclear weapons funding or limit our weapons 
activities. I know that some in the House have been willing to make 
significant sacrifices in order to prohibit funding for certain nuclear 
weapons activities. I want you to know that I will strongly support you 
both on the floor and in conference on these issues. In my mind, few 
programs are as important to our country's national security as our 
nuclear weapons programs.
    Thank you Mr. Chairman for the opportunity to speak today. I look 
forward to the Ambassador Brooke's testimony.

    Senator Domenici. You're welcome. We welcome you on the 
committee. You're going to be a terrific asset.
    The round will proceed. Mr. Ambassador, your full remarks 
will be made a part of the record.
    Oh, I didn't see you, Senator Feinstein. You walked in--I 
shouldn't say ``snuck in''--you just walked in, and I wasn't 
looking. So, would you like to have some opening remarks? If 
you do, please proceed.

                 STATEMENT OF SENATOR DIANNE FEINSTEIN

    Senator Feinstein. Well, I'd be happy to make a couple of 
opening remarks.
    As you know, I have great respect for you and great respect 
for Ambassador Brooks. I am very opposed to reopening the 
nuclear door and developing a new generation of nuclear 
weapons. And this budget contains money to do just that.
    Specifically, $4 million in the Energy budget, and $4.5 
million for the Department of Defense for the study of the 
Robust Earth Nuclear Penetrator, $25 million to increase the 
Nevada Test Site's time to test readiness from the current 24 
to 36 months, to 18 months; and $7.7 million for a modern pit 
facility. And that's a facility then to build 450 new pits, 
which are the nuclear triggers for nuclear weapons; 450 per 
year, some of which could be designed for new weapons. You 
don't really need that much production--we went into this 
before--unless you're intent on reopening the nuclear door.
    I'm pleased that this budget contains no funding for the 
advanced weapons concept and the development of low-yield 
tactical nuclear weapons under 5 kilotons, but it does contain 
$9 million for the Reliable Replacement Warhead program. And I 
would like to, at the appropriate time, question Ambassador 
Brooks about his testimony before the Senate--the House Armed 
Services Committee, because there is concern that this program 
may be used as another way to develop new nuclear weapons.
    I think we made a strong statement last year. I know, Mr. 
Chairman, respectfully, you don't share my belief here. But the 
House and some of us on this committee were able to get this 
money in last year's budget struck entirely for this program. 
And, as you know, the proposal is for--and also not in this 
program is the 5-year budget; there's no 5-year budget in this 
budget. I think it was $486 million in the last budget we 
looked at. So, I have a number of questions on this subject.
    Thank you very much.
    Senator Domenici. Thank you, Senator. And I am aware of all 
those issues; and, from just guessing, I think we might agree 
on one.
    Senator Feinstein. Good. Which one?
    Senator Domenici. That one will--one of those will be easy 
to pass--I mean easy to get concurrence on.
    Senator Feinstein. Good.
    Senator Domenici. Mr. Ambassador.
    That was what the intent of the RRW program--we can agree 
on that.
    Mr. Ambassador.

                STATEMENT OF AMBASSADOR LINTON F. BROOKS

    Ambassador Brooks. Thank you very much, Mr. Chairman.
    Because I have submitted a detailed statement for the 
record, what I'd like to do is not try to summarize that, but 
simply address a series of very specific issues that the 
opening statements have made fairly clear are of interest to 
the committee.
    Let me start with nonproliferation. The President, in the 
State of the Union, made the point about the need to restrain 
spending. And you see that reflected both in this year's budget 
and in our projection over 5 years. Therefore, the 
nonproliferation increase of 15 percent, which also tracks out 
through the 5-year plan, is an indication of the 
administration's priorities and, even more so, the fact that it 
is targeted for those things that are directly relevant to the 
defense of the homeland: improving the detection of nuclear 
technologies to deter nuclear proliferation, security upgrades 
in the MegaPorts program, shutting down the production of 
plutonium in the former Soviet Union. And all of these things, 
we believe, are important and we urge the committee to support.
    I want to talk, a couple of minutes, about the MOX program. 
Most of our nonproliferation programs are very similar to last 
year, and I appreciate the historic support this committee has 
given. I'd like to update you on our efforts to dispose of 
surplus weapons-grade plutonium.
    We have had, for 2 years now, an ongoing disagreement with 
Russia regarding liability protection that has delayed the 
beginning of construction in both the United States and the 
Russian Federation. I am hopeful that we are about to resolve 
this. It has the personal attention of the Secretary of State. 
It has the personal attention of the Secretary of Energy. We 
have made some new proposals. And I am hoping that within a few 
weeks we will be able to finally tell you that this is behind 
us.
    I want to be very careful, because we aren't the only ones 
who have to act; the Russian Federation has to act, and it's 
sometimes difficult to predict the Russian Federation. Because 
of the ongoing delay, and because of the funding constraints I 
referred to in the President's projection, we can no longer 
complete construction of our facility on the schedule we had 
earlier provided Congress, which was to be in production by 
January 1, 2009. We notified the Congress of that formally in 
February, and we will, as required by law, have an alternate 
plan by August.
    But I do want to make a point right now. It is easy to 
assume that because of these delays the money in this budget is 
not necessary. That is incorrect. This money is necessary. 
We're going to solve liability, and we need to get on with 
construction.
    Let me turn to the areas on which there's likely to be some 
greater controversy in the weapons programs, and let me start 
with the Robust Nuclear Earth Penetrator.
    As was noted, overall our weapons program is actually a 
decrease of about 3.5 percent if you take into account a 
transfer of money from Defense in last year's budget. The 
Nuclear Earth Penetrator study, we project $4 million in this 
year, $14 million in 2007, slightly smaller amounts in the 
Department of Defense, and nothing else.
    After last year's action by the Congress, we asked the 
Department of Defense to review the continuing need. The 
Secretary of Defense personally reviewed that, and, at his 
direct personal request, we have included the money in the 
budget for this year. He did this, not because he's 
particularly interested in developing a new weapon, but because 
there are adversaries who are building deeply-buried 
facilities, and it is unwise for there to be anything that's 
beyond the reach of U.S. power. And until we know that we can 
deal with those conventionally, we need to at least find out 
what we can do in the nuclear area.
    The press reports on this have not always been completely 
accurate. Nobody believes that you can drive a weapon thousands 
of feet into the ground and contain the fallout. Nobody 
believes that you can make a weapon that wouldn't have 
substantial devastation if it was used. If I may be inelegant, 
in testimony before another committee I said, ``Anybody who 
thinks you can use a nuclear weapon and not notice is just 
nuts.'' But----
    Senator Feinstein. Could you----
    Senator Domenici [continuing]. Mr. Ambassador, I'm very 
sorry. I was interrupted. Could you go back, just, like, turn 
the clock back?
    Ambassador Brooks. Yes, sir.
    Senator Feinstein. Well, I want him to hear that part, 
about the fallout.
    Ambassador Brooks. Yes, ma'am.
    There have been press reports which have suggested that we 
believe that the Nuclear Earth Penetrator can bury itself into 
the ground to the point where the fallout would all be 
contained. That, I believe, is almost certainly impossible, and 
it is, in any event, not what we are thinking of doing. We're 
thinking of putting something that will survive a few meters in 
the ground, so that the energy will penetrate deeply into the 
ground in order to destroy, collapse hardened facilities.
    Now, I want to make a couple of points, and they go to 
Senator Feinstein's point. Last year's budget allowed the quite 
fair, but erroneous, belief that the administration had decided 
to go ahead and build this thing. And that was because, in the 
belief that we should show what the implications would be, we 
had put an out-year wedge for what it would cost to field it. 
The administration has not made any such decision. It can't 
make such a decision without at least two other congressional 
votes. And so, to ensure that you knew that we understood that, 
we show nothing beyond the 2007 money. I have no idea, until we 
complete the study, whether this will prove interesting, 
whether this will be something we will want to do further 
research on.
    But I do want to stress two points: that we've made no 
decision to proceed beyond the current phase, there's no 
funding programmed, except for the current phase, and we've 
tried to, by focusing only on one of the two candidates we were 
originally looking at, make the study as limited as possible.
    The other area which I'd like to spend a little time on in 
the weapons program is the Reliable Replacement Warhead. And I 
want to start out by making two statements, in just the 
strongest possible terms. The first is, stockpile stewardship 
is working. The only reason that we are able to consider this 
kind of research is because stockpile stewardship is working. 
And, secondly, the implication that this is some backdoor way 
to build new weapons is wrong. That's not what we intend. I 
believe the Secretary has sent a letter to that effect to some 
of the members of this committee.
    Now, if we're not going to do new weapons, what are we 
going to do? In the cold war, we had very tight design to 
minimize the weight and space of warheads so we could put the 
maximum number on a missile. We don't do that anymore, because 
we're reducing. So the question is, if we relax those, could we 
upgrade and modify our existing warheads by, for example, using 
components that are less difficult to handle, so that when we 
take these apart for periodic surveillance, we have fewer 
problems? Could we modify these by, for example, changing some 
of the explosive components so that they are insensitive high 
explosives, so that as we do our surveillance, we reduce both 
the risk, but also the difficulty? Could we modify these by 
changing components in a way that we would be less sensitive to 
aging, and, thus, never need to get to the point where we might 
think about nuclear testing? And so, the RRW approach will 
allow us to investigate what the options are.
    In the testimony I provided to the Armed Services 
Committee, I suggested some things that the country might want 
to do if this approach proves to be as beneficial as we hope. 
The country might want to say, because these warheads are so 
reliable, we don't need to keep as many spares as the 
President's plan now has, and we can further reduce the total 
stockpile. The country would certainly be able to say it's far 
less likely that we will be faced with the question of whether 
or not a nuclear test is needed for a problem if we strengthen 
and ruggedize these warheads in a way that we're less sensitive 
to aging. Which of those options will prove to be workable, we 
don't know, but the idea is to develop new components, which 
will go in existing warheads that are delivered by existing 
missiles and aimed at existing targets. There's no new weapons, 
new targets, new military capabilities being sought here.
    Two other areas I want to talk about in the weapons area. 
One is the National Ignition Facility. And actually, Mr. 
Chairman, your opening statement pretty much parallels my 
opening statement. We have, in fact, refocused this program to 
focus on achieving ignition in 2010. That's not the only 
important use of this. There are important stockpile 
stewardship uses for NIF. In order to do this with the 
budgetary pressures I referred to, we have reduced inertial 
confinement for fusion work at other facilities; at Omega 
Laser, for example. We will be sending a report to the 
appropriate committees by June 30 on our revised NIF activation 
plan as we work out the detailed implications. And Dr. Beckner 
can address this a little more in the questioning, if you want.
    Finally, I do want to make a comment about the modern pit 
facility. We are required by law to hold open all the options 
that are analyzed in the environmental impact statement, but I 
think that the odds of us concluding we need 450 pits a year 
are very small. The farther I can drive down the overall 
stockpile, the smaller the modern pit facility has to be made. 
But sooner or later, unless everything we know about the aging 
of plutonium is wrong, we are going to need to melt down and 
rework the existing pits for the existing warheads, and we need 
to build a facility to do that. The Congress, the law, 
currently prohibits us from selecting a site for that facility, 
and I urge the committee to lift that prohibition in the coming 
year so that we can continue an orderly progress.
    You mentioned, and I would just note, that Naval Reactors 
Program supports the 103 operating reactors, 40 percent of the 
Navy's combat ships. This has been a legend in both technical 
and managerial excellence for pretty much all of my 
professional lifetime, and I have no reason to doubt that it'll 
continue to be.
    The final area I want to talk about is safeguards and 
security. The reason I said that our weapons program had gone 
down by 8 percent--I mean, by 3.5 percent--and you, Mr. 
Chairman, mentioned a slight increase--is that we lumped 
together, in the budget submission, safeguards and security and 
actual weapons work. What's going up is safeguards and 
security. We asked for $708 million in this fiscal year, and 
the projections for the future show growth. And I actually am 
worried about that. Nonetheless, the situation is that we now 
know there are people who are willing to die in order to 
inflict massive damage on the United States, that we have 
looked carefully at a very elaborate design-basis threat, and 
that right now while we hope that technology will let us guard 
against this threat in a less expensive fashion, protecting and 
preserving the security of nuclear materials is just one of our 
highest priorities.
    I think that we will have a great deal of difficulty in--
this time next year, in continuing this progress. I think that 
we clearly are going to need more money in future years. The 
budget we've presented to you this year is accurate.

                          PREPARED STATEMENTS

    But no matter how low the probability of an attack, I think 
that you have to deter our enemies, and that means you have to 
be visibly able to repel attacks. So I urge the committee to 
continue its historic strong support for physical security.
    Mr. Chairman, that concludes my summary statement, and my 
colleagues and I are ready for your questions.
    [The statements follow:]

           Prepared Statement of Ambassador Linton F. Brooks

    Thank you for the opportunity to discuss the fiscal year 2006 
Budget Request for the National Nuclear Security Administration (NNSA). 
This is my third appearance before this Committee as the Under 
Secretary for Nuclear Security, and I want to thank all of the Members 
for their strong support for our important national security 
responsibilities.

                                OVERVIEW

    In the fifth year of this administration, with the strong support 
of Congress, NNSA has achieved a level of stability that is required 
for accomplishing our long-term missions. Our fundamental 
responsibilities for U.S. national security include:
  --Stewardship of the Nation's nuclear weapons stockpile;
  --Reducing the threat posed by the proliferation of weapons of mass 
        destruction;
  --Providing reliable and safe propulsion for the U.S. Navy; and,
  --Managing the national nuclear security complex, which includes both 
        security for our facilities and materials to protect our 
        employees and our neighbors, and sustaining the weapons complex 
        infrastructure.
    This budget request supports the NNSA's mission.
    In his State of the Union Address in February, the President 
underscored the need to restrain spending in order to sustain our 
economic prosperity. As part of this restraint, it is important that 
total discretionary and non-security spending be held to levels 
proposed in the fiscal year 2006 budget. The budget savings and reforms 
in the budget are important components of achieving the President's 
goal of cutting the budget deficit in half by 2009 and we urge the 
Congress to support these reforms. To support the President's goal, 
most programs in NNSA's budget of $9.4 billion are funded at levels 
less than we projected last year.
    The major exceptions are those nonproliferation programs that 
directly affect homeland security. Consistent with the President's 
priorities, we have increased funding for activities associated with 
nonproliferation by 15 percent on top of the already significant 
budgets of last year, for a total request of $1.6 billion. That 
increase has been targeted for research on proliferation detection 
technologies, for programs to improve the security of weapons material 
outside the United States, and to detect such material in transit.
    The international community faces a variety of new and emerging 
threats. As the events of September 11, 2001 made clear, new sub-
national threats are emerging that involve hostile groups willing to 
use or support the use of low-tech weapons of great destructive 
capability. If these groups come to possess nuclear weapons or other 
weapons of mass destruction (WMD), they would pose an even greater 
threat to the United States. Thus, diplomatic, political, and other 
efforts to prevent the acquisition of nuclear weapons, weapons-usable 
materials, or chemical or biological weapons, in conjunction with a 
robust counter-terrorism effort and defenses, are the best means 
available to address this threat.
    The fiscal year 2006 request in our Stockpile Stewardship Program 
also makes adjustments to ensure that we continue to meet our 
commitments to the Department of Defense (DOD). In the post-Cold War 
world, nuclear weapons play a critical but reduced role in the Nation's 
overall security posture. Nuclear forces--linked with an advanced 
conventional strike capability and integrated with a responsive 
infrastructure--continue to be an essential element of national 
security by strengthening our overall ability to reassure allies of 
U.S. commitments, dissuade arms competition from potential adversaries, 
and deter threats to the United States, its overseas forces, allies, 
and friends.
    Key elements of our nuclear posture involve strategies that enable 
the United States to quickly adapt and respond to unanticipated changes 
in the international security environment or to unexpected problems or 
``surprises'' in the status of our nuclear forces. As our Nation's 
nuclear stockpile draws down to levels established in the Treaty of 
Moscow--between 1,700-2,200 operationally deployed strategic nuclear 
warheads--the United States will also reduce dramatically the total 
number of warheads in the stockpile. The June 2004 Report to Congress, 
``A Revised Nuclear Weapons Stockpile Plan for 2012'', lays out our 
plans to meet this goal by 2012.
    A critical strategy to support these reductions is to establish a 
flexible and responsive nuclear weapons infrastructure to support 
future defense requirements. A responsive NNSA infrastructure--people 
and facilities--includes innovative science and technology research and 
development at the National laboratories and agile production 
facilities that are able to meet identified needs and are capable of 
responding to unanticipated problems in the stockpile.
    The initiative for NNSA to develop a more responsive infrastructure 
was first developed in the Nuclear Posture Review submitted to Congress 
in January 2002. That Review couples the plan for stockpile reductions, 
agreed to in the Treaty of Moscow, with the ability to respond quickly 
to any surprise events in the future, such as an unexpected degradation 
in certified performance of a U.S. stockpile weapon or, on the world 
scene, an unanticipated military threat. On that basis, NNSA is now 
developing its capabilities to employ its weapons infrastructure in the 
required ``responsive'' way. This plan is now under development and 
will begin to be evident when we provide the fiscal year 2007 budget to 
the Congress, since it is tied directly to the 2012 commitment for 
1,700-2,200 operationally deployed strategic warheads.
    The NNSA is also evaluating what the weapons complex should look 
like in the future. A Nuclear Weapons Complex Infrastructure Study, 
directed by the House Report accompanying the fiscal year 2005 Energy 
and Water Development Appropriations Act, is underway and is scheduled 
to be complete by the end of April 2005. The Study is being run as a 
task force under the Secretary of Energy's Advisory Board.
    NNSA's principal mission is to assure that the Nation's nuclear 
stockpile remains safe, secure, and reliable. A rigorous program 
enables the Secretaries of Energy and Defense to report each year to 
the President on the safety, security, and reliability of our nuclear 
weapons stockpile. Stockpile Stewardship activities are carried out 
without the use of underground nuclear testing, continuing the U.S. 
moratorium on testing initiated in the early 1990's. This is made 
possible by using science-based judgments informed by cutting edge 
scientific and engineering tools as well as extensive laboratory and 
flight tests. We are gaining a more complete understanding of the 
stockpile each year. Computer codes and platforms developed by our 
Advanced Simulation and Computing (ASC) campaign are now used to 
address three-dimensional issues in weapons performance.
    NNSA also is working, through weapon refurbishment, to ensure that 
an aging stockpile is ready to meet Department of Defense requirements. 
The W87 Life Extension Program was completed in September 2004 and the 
remaining Life Extension Programs are progressing well. A significantly 
lower number of refurbishments are expected as a result of a reduced 
stockpile, with savings being realized in the next decade. We are also 
producing new tritium for the first time since 1988 and the new Tritium 
Extraction Facility at Savannah River is ahead of schedule and under 
budget. Los Alamos National Laboratory remains on track to certify a 
war reserve W88 pit by 2007. As articulated in our January 2005 Report 
to Congress, we are refining plans for a Modern Pit Facility.
    The Nation continues to benefit from advances in science, 
technology and engineering fostered by the national security program 
activities, including cutting edge research and development carried out 
in partnership with many of the Nation's colleges, universities, small 
businesses and minority educational institutions. The NNSA programs, 
including three national laboratories, the Nevada Test Site, and the 
production facilities across the United States employ nearly 2,300 
Federal employees and approximately 35,000 contractor employees to 
carry out this work.
    We are also continuing to advance our nonproliferation objectives 
worldwide. In June 2002, the United States championed a new, 
comprehensive nonproliferation effort known as the Global Partnership. 
World leaders committed to provide up to $20 billion over 10 years to 
fund nonproliferation programs in the former Soviet Union. The NNSA 
contributes directly to this effort by carrying out programs with the 
international community to reduce and prevent the proliferation of 
nuclear weapons, materials and expertise. The security of our Nation 
and the world are enhanced by NNSA's ongoing work to provide security 
upgrades for military and civilian nuclear sites and enhanced border 
security in Russia and the Former Soviet Union. In the past year, we 
have completed comprehensive materials protection control and 
accountability upgrades at six Russian Navy and Strategic Rocket Forces 
nuclear weapon facilities, and we are now beginning efforts to install 
security upgrades at vulnerable Russian 12th Main Directorate sites.
    We are planning a significant increase to the Megaports initiative, 
an effort to install radiation detection equipment at the world's 
largest seaports to screen large volumes of container traffic headed 
for the United States well before it gets to our shores. This is a 
relatively new program and we already have agreements in place with 
several countries and are looking for more. With the support of the 
Congress, we hope to complete installation of detection equipment at 24 
ports by 2010. We are reducing the world's stocks of dangerous 
materials such as plutonium through NNSA-sponsored Fissile Materials 
Disposition programs in the United States and Russia as well as through 
elimination of Russian plutonium production. We have also initiated the 
Global Threat Reduction Initiative (GTRI) to identify, secure, remove, 
and/or facilitate the disposition of high-risk vulnerable nuclear and 
radiological materials and equipment around the world that pose a 
threat to the United States and to the international community.
    The Nation benefits from NNSA's work in partnership with the 
Department of Homeland Security to develop and demonstrate new 
detection technologies to improve security of our cities and ports. 
Perhaps the most tangible benefits to the Nation following the 9/11 
terrorist attacks are the ``first responder teams'' of highly 
specialized scientists and technical personnel from the NNSA sites who 
are deployed across the Nation to address threats of weapons of mass 
destruction. These teams work under the direction of the NNSA Office of 
Emergency Operations, Department of Homeland Security and the Federal 
Bureau of Investigation to respond to nuclear emergencies in the United 
States and around the world. In the past year, these teams have 
provided support to such diverse groups and locations as . . . The 
teams adapt to changing technologies and evolving challenges associated 
with combating terrorism and accident/incident scenarios in today's 
world. Outstanding performance in training, exercises, and real world 
events continues to justify NNSA's reputation for having one of the 
world's premier nuclear and radiological technical emergency response 
capabilities.
    The NNSA also works in partnership with the DOD to meet their needs 
for reliable and militarily effective nuclear propulsion for the U.S. 
Navy. In the past year, the Naval Reactors Program has completed the 
reactor plant design for the VIRGINIA-class submarine, and supported 
``safe steaming'' of another 2 million miles by our nuclear-powered 
ships. They have continued their unsurpassed record of ``clean up as 
you go'', including remediating to ``green grass'' the former S1C 
prototype Site at Windsor, Connecticut, and completing a successful 
demonstration of the interim naval spent fuel dry storage capability in 
Idaho.

                    FISCAL YEAR 2006 BUDGET REQUEST

    The fiscal year 2006 budget request totals $9.4 billion, an 
increase of $233.3 million or 2.5 percent. We are managing our program 
activities within a disciplined 5-year budget and planning envelope. We 
are doing it successfully enough to be able to address emerging new 
priorities and provide for needed funding increases in some of our 
programs--notably in Defense Nuclear Nonproliferation--within an 
overall modest growth rate by reallocating from other activities and 
projects that are concluded or being rescoped.

                                               NNSA BUDGET SUMMARY
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                            Fiscal Year    Fiscal Year                 Fiscal Year
                                                2004      2005 Original  Fiscal Year       2005      Fiscal Year
                                             Comparable                      2005       Comparable       2006
                                           Appropriation  Appropriation  Adjustments  Appropriation    Request
----------------------------------------------------------------------------------------------------------------
Office of the Administrator..............           353            356            +1           357           344
Weapons Activities.......................         6,447          6,226          +357         6,583         6,630
Defense Nuclear Nonproliferation.........         1,368          1,420            +2         1,422         1,637
Naval Reactors...........................           762            808            -6           801           786
                                          ----------------------------------------------------------------------
      Total, NNSA........................         8,930          8,811          +353         9,164         9,397
----------------------------------------------------------------------------------------------------------------

    The NNSA budget justification contains outyear budget and 
performance information as part of a fully integrated budget submission 
as required by Sec. 3253 of the NNSA Act, as amended (Public Law 106-
65). This section, entitled Future-Years Nuclear Security Program, 
requires NNSA to provide to Congress with each budget request the 
estimated expenditures necessary to support the programs, projects and 
activities of the NNSA for a 5-fiscal-year period.

                                  FUTURE YEARS NUCLEAR SECURITY PROGRAM (FYNSP)
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                  Fiscal     Fiscal     Fiscal     Fiscal     Fiscal
                                                Year 2006  Year 2007  Year 2008  Year 2009  Year 2010    Total
----------------------------------------------------------------------------------------------------------------
Office of the Administrator...................        344        358        372        387        402      1,863
Weapons Activities............................      6,630      6,780      6,921      7,077      7,262     34,671
Defense Nuclear Nonproliferation..............      1,637      1,674      1,711      1,748      1,787      8,556
Naval Reactors................................        786        803        821        839        857      4,106
                                               -----------------------------------------------------------------
      Total, NNSA.............................      9,397      9,615      9,825     10,051     10,308     49,196
----------------------------------------------------------------------------------------------------------------

    This year's 5-year projections show a decrease of $496 million over 
the FYNSP approved for the fiscal year 2005 President's Request. Within 
this total, there is an increase associated with the transfer of the 
Environmental Management scope for projects at NNSA sites ($696 
million). This increase is offset within the Department's overall 
budget by a corresponding reduction in the budget of the Environmental 
Management program. We have also programmed enhanced efforts in several 
NNSA programs during the 5-year period: Defense Nuclear 
Nonproliferation increases $1.4 billion; Safeguards and Security 
increases $979 million; Emergency Response activities increase $154 
million; and Office of Administration increases $98 million. These 
increases are partially offset by reductions in Defense Programs (-$3.0 
billion), the Facilities Recapitalization efforts (-$752 million), and 
Naval Reactors (-$64 million). NNSA plans to rebalance outyear funding 
during the fiscal year 2007-2011 PPBE process.

                    DEFENSE NUCLEAR NONPROLIFERATION

    The Defense Nuclear Nonproliferation program is one area of the 
NNSA budget where mission priorities require us to request significant 
increases in funding for fiscal year 2006. The convergence of 
heightened terrorist activities and the associated revelations 
regarding the ease of moving materials, technology and information 
across borders has made the potential of terrorism involving weapons of 
mass destruction (WMD) the most serious threat facing the Nation. 
Preventing WMD from falling into the hands of terrorists is the top 
national security priority of this administration. The fiscal year 2006 
budget request of $1.64 billion for Defense Nuclear Nonproliferation 
represents an unprecedented effort to protect the homeland and U.S. 
allies from this threat.
    The Defense Nuclear Nonproliferation program goal is to detect, 
prevent, and reverse the proliferation of Weapons of Mass Destruction 
(WMD) while mitigating nuclear risk worldwide. Our programs address the 
danger that hostile nations or terrorist groups may acquire weapons of 
mass destruction or weapons-usable material, dual-use production or 
technology, or WMD capabilities, by securing or eliminating vulnerable 
stockpiles of weapon-usable materials, technology, and expertise in 
Russia and other countries of concern.
    Over the last 4 years the United States, in collaboration with the 
international community through joint nonproliferation programs, has 
had much success in preventing the spread of weapons of mass 
destruction. Some of these successes supported by NNSA's Nuclear 
Nonproliferation Program include: a 2-year acceleration in securing 600 
metric tons of weapons-usable material at 51 sites in Russia and the 
Newly Independent States; upgrading 13 nuclear facilities in the Newly 
Independent States in the Baltic region to meet international physical 
protection guidelines; and establishing the Megaports Initiative that I 
mentioned earlier.
    The administration is requesting $1.64 billion to support 
activities to reduce the global weapons of mass destruction 
proliferation threat, about $214 million or a 15 percent increase over 
comparable fiscal year 2005 activities. The administration has targeted 
both the demand and supply side of the nuclear terrorism challenge with 
aggressive nonproliferation programs that have achieved a number of 
major successes in recent years. Through the Global Partnership with 
the G-8 nations, the United States is dedicating the necessary 
resources to combat this complex threat, committing to provide half of 
the $20 billion for this effort, including $1 billion in fiscal year 
2006 in programs through NNSA, DOD and the Department of State.
    For fiscal year 2006, $343.4 million is included to support the 
International Nuclear Materials Protection and Cooperation program to 
secure nuclear materials in the Former Soviet Union, a 16.6 percent 
increase over the fiscal year 2005 enacted appropriation. For over a 
decade, the United States has been working cooperatively with the 
Russian Federation to enhance the security of facilities containing 
fissile material and nuclear weapons. The scope of these efforts has 
been expanded to protect weapons-usable material in countries outside 
the Former Soviet Union as well. These programs fund critical 
activities such as installation of intrusion detection and alarm 
systems, and construction of fences around nuclear sites. Efforts to 
complete this work and to secure facilities against the possibility of 
theft or diversion have been accelerated.
    A number of major milestones for this cooperative program are on 
the near horizon and the fiscal year 2006 budget ensures that 
sufficient funding will be available to meet these milestones. Security 
upgrades will be completed for Russian Navy nuclear fuel and weapons 
storage by the end of fiscal year 2006 and for Rosatom facilities by 
the end of fiscal year 2008--both 2 years ahead of the original 
schedule. Russian Strategic Rocket Forces sites will be completed in 
2007, 1 year ahead of schedule. Additionally, cooperation will begin 
with the nuclear warhead storage sites of the Russian Ministry of 
Defense's 12th Main Directorate. By the end of 2006, NNSA will have 
supported completion of security upgrades at nearly 80 percent of the 
sites covered by the current bilateral agreement to secure nuclear 
materials and nuclear warheads in Russia and the Newly Independent 
States.
    Fiscal year 2006 funding for the Megaports initiative, another part 
of the International Nuclear Materials Protection and Cooperation 
program, is requested at $74 million, a $59 million increase, to 
continue to deploy radiation detection equipment at key overseas ports 
to pre-screen U.S. bound cargo containers for nuclear or radioactive 
materials. These materials could be concealed in any of the millions of 
cargo containers in various stages of transit throughout the world's 
shipping network.
    However, the busiest seaports also provide an opportunity for law 
enforcement officials to pre-screen the bulk of the cargo in the world 
trade system. Under the Megaports Initiative, DOE cooperates with 
international partners to deploy and equip key ports with the technical 
means to detect and deter illicit trafficking in nuclear and other 
radioactive materials. This effort supports the U.S. Department of 
Homeland Security's Container Security Initiative. The fiscal year 2006 
budget supports the completion of five ports, which will increase to 10 
the number of ports equipped through the Megaports Initiative.
    Increased resources are being requested for the Nonproliferation 
and Verification Research and Development program in fiscal year 2006. 
The budget of $272.2 million supports proliferation detection and 
nuclear explosion monitoring efforts. The additional $48.3 million 
above the enacted fiscal year 2005 appropriations will be used to 
leverage the technical expertise and experience of the National 
Laboratories and universities to provide a crucial boost to our basic 
and applied radiation detection and radiochemistry science efforts. 
This research will develop improved basic radiation detector materials 
and radiochemistry analytical capabilities, as well as the applied 
technologies that will enable fielding our advanced technology in 
support of global nonproliferation missions. We need detectors and 
capabilities that are more sensitive, smaller, durable, and 
economical--the increase in basic and applied research will help us to 
achieve that goal.
    Funding for the Elimination of Weapons Grade Plutonium Production 
(EWGPP) in Russia is requested at $132 million in fiscal year 2006. 
This program will result in the permanent shutdown of three Russian 
nuclear reactors, which currently produce weapons-grade plutonium. 
These reactors, which are the last three reactors in Russia that 
produce plutonium for military purposes, also provide necessary heat 
and electricity to two Russian ``closed cities'' in the Russian nuclear 
weapons complex. This budget provides the funding needed to shutdown 
the three reactors through (1) refurbishment of an existing fossil fuel 
(coal) power plant in Seversk by 2008; and (2) construction of a new 
fossil-fuel plant at Zheleznogorsk by 2011. This will eliminate the 
production of 1.2 metric tons annually of weapons-grade plutonium. The 
program is of critical importance because plutonium that is never 
created does not have to be accounted for, does not need to be secured, 
and will not be available to be targeted by terrorists. The EWGPP 
program has been working with the Army Corps of Engineers (COE) to 
perform an independent cost review of both projects. The Seversk review 
has been completed and the COE found the project cost to be valid and 
reasonable. The Zheleznogorsk study will be completed later in fiscal 
year 2005.
    At $98 million, the Global Threat Reduction Initiative (GTRI) 
program, a newly created initiative announced in 2004, brings together 
key activities that support the goal to identify, secure, remove and 
facilitate the disposition of high-risk, vulnerable nuclear and 
radiological materials and equipment around the world. Our Nation has 
begun to reap the benefits of this initiative with the successful 
completion of two shipments of Russian-origin fresh high-enriched 
uranium nuclear fuel to Russia from foreign research reactors. These 
shipments fall under one of several programs geared toward implementing 
the U.S. highly enriched uranium minimization policy.
    The NNSA is requesting $653 million in fiscal year 2006 to continue 
to support the Fissile Materials Disposition program to dispose of 
surplus weapons-grade fissile materials under an agreement between the 
United States and Russia. Both countries have agreed to dispose of 34 
metric tons of plutonium by converting it to a mixed oxide fuel and 
burning it in electricity-generating nuclear reactors.
    We are working to design and build facilities to dispose of these 
inventories in the United States and are supporting concurrent efforts 
in Russia to obtain reciprocal disposition of similar materials. One of 
the key obstacles is an ongoing disagreement with Russia regarding 
liability protection for plutonium disposition work performed in that 
country.
    This has resulted in a significant delay in the planned start of 
construction of the MOX Fuel Fabrication facilities and the Pit 
Disassembly and Conversion Facility. I am cautiously optimistic that we 
are over the hurdle on this issue but details still need to be 
negotiated and finalized. Please be assured that we remain committed to 
building these facilities and to the long-term objectives of the 
program. We will keep you posted as progress is made. The fiscal year 
2006 net increase is primarily for the Off-specification HEU Blend-Down 
Project with TVA and increased oversight to support major construction 
of the MOX Fuel Fabrication facility in fiscal year 2006.

                           WEAPONS ACTIVITIES

    The fiscal year 2006 budget request for the programs funded within 
the Weapons Activities appropriation is $6.63 billion, less than a 1 
percent increase over fiscal year 2005. This request emphasizes 
programs supported by the Nuclear Posture Review, which directed that 
NNSA maintain a research, development, and manufacturing base that 
ensures the long-term effectiveness of the Nation's stockpile. This 
request also supports the facilities and infrastructure that must be 
responsive to new or emerging threats.
    Directed Stockpile Work (DSW) is one of our areas of special 
emphasis this year with a fiscal year 2006 request of $1.4 billion, an 
11 percent increase over fiscal year 2005. The increase is needed to 
ensure that we continue to meet DOD requirements. Without question, our 
focus remains on the stockpile, but we are looking ahead. The United 
States is continuing work to refurbish and extend the life of the 
warheads in the stockpile though the life extension program. Work on 
the life extensions are progressing well, with the W87 LEP being 
completed in September 2004. First Production Units are scheduled for 
three other systems, the B61, W76 and W80, in the fiscal year 2006-2009 
timeframe.
    In fiscal year 2006, DSW funding will support resumption of the 
Robust Nuclear Earth Penetrator (RNEP) feasibility and cost study with 
$4.0 million requested. Resumption of the RNEP study was requested by 
the Secretary of Defense after his personal review. I would like to 
point out that we are only asking for funds to complete a truncated 
study that began May 1, 2003--one system only, not two as originally 
proposed, so the costs will be lower. I would also like to emphasize 
that absolutely no decisions have been reached, there is no engineering 
development work planned which would require Congressional approval and 
there is no funding being requested past fiscal year 2007. We have also 
eliminated the contingency funding for follow-on work shown in last 
year's FYNSP. I believe the administration and the Congress need to 
have an important discussion about the need for this capability but it 
would be best to complete the feasibility and cost study so we can all 
make an informed decision.
    Congress appropriated $9.0 million in fiscal year 2005 for the 
Reliable Replacement Warhead. We think this is an excellent way to 
reduce costs and maintain the stockpile and we have requested $9.4 
million in fiscal year 2006, about a 4.7 percent increase, to continue 
this initiative.
    Progress in other parts of the Stockpile Stewardship Program 
continues. The fiscal year 2006 request for Campaigns is $2.1 billion. 
This request funds a variety of Campaigns, experimental facilities and 
activities that continue to enhance NNSA's confidence in ``science-
based'' judgments for stockpile stewardship, and provide cutting edge 
technologies for stockpile certification and maintenance. Without 
question, our Campaigns are providing immediate and tangible benefits 
to the stockpile.
    While there is no reason to doubt the ability of the Stockpile 
Stewardship Program to continue to ensure the safety, security, and 
reliability of the nuclear deterrent, the Nation must maintain the 
ability to carry out an underground nuclear weapons test in the event 
of some currently unforeseen problems that cannot be resolved by other 
means. Consistent with the law, we are improving our readiness posture 
from the current ability to test within 24 to 36 months to an ability 
to test within 18 months. The fiscal year 2006 budget request of $25.0 
million supports achieving an 18-month readiness posture by September 
2006. We will achieve a 24-month readiness posture in fiscal year 2005. 
But let me be clear, there are no plans to test.
    The National Ignition Facility (NIF) at Lawrence Livermore National 
Laboratory (LLNL) continues to be an essential component of the 
Stockpile Stewardship Program. Consistent with the strong views of the 
Congress, we are continuing towards full commissioning of all 192 beams 
and focus on the 2010 ignition goal. To do this, however, we have had 
to accept additional risks and reduce some other inertial confinement 
fusion work at other sites. The fiscal year 2006 request of $460.4 
million for the Inertial Confinement Fusion and High Yield Campaign, a 
14 percent reduction from fiscal year 2005, reflects those reductions. 
Inertial fusion ignition is the greatest technical challenge ever 
pursued by the Department. Ignition has never been achieved in the 
laboratory and this scientific advance will benefit several national 
endeavors.
    The Dual-Axis Radiographic Hydrodynamic Test Facility (DARHT) at 
Los Alamos National Laboratory (LANL) is already producing the highest 
quality images of simulated primary implosions ever obtained. As you 
can imagine, this was an area of very high interest during the LANL 
suspension. The first hydro test in many months is expected in March 
2005 to support the W76 LEP. The fiscal year 2006 request of $27.0 
million will support repair and commissioning of the second axis to 
provide time sequence information required for future weapon primary 
certification.
    The Advanced Simulation and Computing (ASC) request for fiscal year 
2006 is $660.8 million, a decrease of 4.7 percent from fiscal year 
2005. This will fund the current and planned operating platforms and 
the codes employed by designers and scientists in Stockpile Stewardship 
Program. In fiscal year 2006, the ASC program will improve physics and 
materials models to more accurately represent the complex physical 
phenomena in our weapons systems. For example, incremental improvements 
in Plutonium Equation of State and materials models will be 
incorporated into our modern codes. Efforts in Verification and 
Validation of the simulation tools will lead to improved confidence in 
simulation as a key component of stockpile assessment. Fiscal year 2006 
formal code releases will be provided to the design community for the 
W76-1 LEP.
    The NPR recognized a long-term need for a Modern Pit Facility (MPF) 
to support the pit manufacturing requirements of the entire stockpile. 
NNSA's fiscal year 2006 request for MPF is $7.7 million, which is 
included in the $248.8 million request for the Pit Manufacturing and 
Certification Campaign. As articulated in our January 2005 Report to 
Congress, we are refining plans for a Modern Pit Facility. LANL remains 
on track to certify a war reserve W88 pit by 2007 and we are 
reestablishing the technology base to manufacture all pit types in the 
stockpile.
    The Readiness Campaign request is $218.8 million in fiscal year 
2006, a decrease of about 16 percent. The decrease is attributable 
mainly to the postponement of lower priority activities such as risk 
mitigation projects for the Life Extension Programs that are the least 
likely to impact life extension needs and also major items of 
equipment.
    NNSA's Readiness in Technical Base and Facilities activities 
operate and maintain current facilities and ensure the long-term 
vitality of the NNSA complex through a multi-year program of 
infrastructure construction. About $1.6 billion is requested for these 
efforts, a decrease of 8.7 percent from fiscal year 2005. Funding for 
three new construction starts is requested and five candidate projects 
are in engineering design.
    In fiscal year 2006, the budget request is $212.1 million for 
Secure Transportation Asset, a 6.2 percent increase over fiscal year 
2005 levels, for meeting the Department's transportation requirements 
for nuclear weapons, components, and special nuclear materials 
shipments. Hiring of additional Federal agents and production of 
additional SafeGuards Transporters to meet the increased workload and 
new Design Basis Threat security requirements accounts for the 
increase.
    The remainder of the Weapons Activities appropriation funding is 
for Nuclear Weapons Incident Response, Facilities and Infrastructure 
Recapitalization, and Safeguards and Security.

             FACILITIES AND INFRASTRUCTURE RECAPITALIZATION

    The Facilities and Infrastructure Recapitalization Program (FIRP) 
is essential to NNSA's ability to continue revitalization of the 
complex consistent with the Nuclear Posture Review. The program is 
delivering on its mission to reduce deferred maintenance and restore 
the condition of facilities and infrastructure across the complex. I 
consider FIRP to be a true NNSA ``success story'', and am pleased to 
note that the National Research Council has commended NNSA's progress 
and execution of real property asset management as the most advanced 
within DOE. The fiscal year 2006 FIRP request of $283.5 million is a 
decrease of 9.6 percent over fiscal year 2005. For the outyears, we 
intend to rebalance the FIRP budget profile presented in this 
President's Budget, within the overall NNSA budget allocation, to 
ensure the program's ability to accomplish its mission and fulfill its 
commitment to Congress.

                        ENVIRONMENTAL MANAGEMENT

    Environmental compliance is the focus of another management 
challenge to us. Let me begin by saying that the NNSA of the Future 
accepts responsibility for our environmental work at NNSA sites. The 
fiscal year 2006 budget reflects the functional transfer of scope, 
funding and the associated Federal staff from the Office of 
Environmental Management (EM) to the NNSA. These functional transfers 
align responsibility with accountability, ensure clear accounting of 
the total cost of ownership, and improve overall effectiveness and 
efficiency. The transfers resolve existing inefficiencies caused by the 
duplicate EM/NNSA chain of command that has existed since the inception 
of the NNSA Act. The NNSA Act precludes EM from providing direction to 
NNSA employees or contractors--yet EM has direct control of budgeting 
and funding authority, and is accountable for environmental activities 
at NNSA sites. The current EM/NNSA management structure results in 
confused lines of authority that impede cost-effective and timely 
implementation of the cleanup program at NNSA sites. I would like to 
highlight that this is a zero sum budget transfer, which results in no 
increases to the Department's overall funding or staffing. I believe 
the transfer is essential to the effective and efficient operations of 
environmental activities at NNSA sites and the only viable alternative 
for the NNSA.
    The transferred mission from EM is included in NNSA's fiscal year 
2006 Request of $174.4 million in Environmental Projects and 
Operations. The environmental transfer activities include environmental 
restoration, legacy waste management and disposition, and 
decontamination and decommissioning at sites where NNSA has continuing 
missions. Specifically, the transfers include: Kansas City Plant; 
Lawrence Livermore National Laboratory (Main Site and Site 300); Nevada 
Test Site (including the waste disposal facilities); Pantex Plant; 
Sandia National Laboratories; and the Separations Process Research 
Unit. Environmental activities at the Los Alamos National Laboratory 
and Y-12 National Security Complex are expected to transfer in fiscal 
year 2007. Additionally, the request in the Readiness in Technical Base 
and Facilities under operations of facilities includes a total of $47.0 
million for newly generated waste at the Lawrence Livermore National 
Laboratory and the Y-12 National Security Complex (responsibility for 
newly generated waste at other NNSA sites was previously transferred by 
prior agreements).
    We will manage all environmental activities that transfer within 
the newly established Environmental Projects and Operations Program, 
with the exception of newly generated waste, which will be managed by 
Defense Programs. We plan to use NNSA's successful Facilities and 
Infrastructure Recapitalization Program (FIRP) as the business model 
for managing our new environmental responsibilities. This includes 
strong central management and accountability for results; best-in-class 
business practices; and transparency in budget and program performance.
    During this year of transition, NNSA, both in tandem with EM staff 
and ``on our own'', have been meeting with various outside 
organizations to not only discuss the proposed transfer, but also to 
gain insight into the ongoing issues and be able to represent NNSA's 
perspectives as well. We have routinely scheduled meetings with EPA 
Headquarters and Regions to discuss emerging regulatory issues, 
proposed rulemaking, and region-specific issues. NNSA staff, with EM, 
has engaged with regulators, Tribal entities, Citizen's Advisory Boards 
on cleanup end state definition and other topics pertinent to clean up 
and environmental compliance at all of the NNSA sites that will be 
transferring. NNSA staff has met with Tribal entities to entertain 
dialog on Tribal issues regarding this transfer. I personally addressed 
the combined intergovernmental meeting in December of the National 
Governor's Association, Energy Communities Alliance, National 
Governor's Association, National Association of Attorneys General, and 
State and Tribal Government Working Group.

                   NUCLEAR WEAPONS INCIDENT RESPONSE

    The Nuclear Weapons Incident Response request of $118.8 million is 
9.6 percent above the fiscal year 2005 level. This represents a 7.6 
percent program growth to bring first responder capability more into 
line with their increased responsibilities and operations tempo. It 
replaces outdated and inoperable equipment, provides qualification 
training, and develops and fields a communications kit that resolves 
incompatibility issues. It further provides for development and 
implementation of a first responder outreach program and provides a 
modest increase to the Technology Integration program, thus making the 
equipment purchase program more effective.

                        SAFEGUARDS AND SECURITY

    Protecting the Nation's assets is one of our highest priorities. 
The growth of our requests for the Safeguards and Security budget over 
the last 5 years clearly reflects our commitment to security. In fiscal 
year 2001, our request for safeguards and security was $406.4 million. 
In fiscal year 2003, the request grew to $510.0 million--the first 
fiscal reflection of the more dangerous security environment recognized 
after 9/11. That funding and the increased amounts received in 
successive years has been used to further enhance our already strong 
security posture.
    The fiscal year 2006 request for Safeguards and Security is $740.5 
million. NNSA sites are on track to implement the requirements 
contained in the May 2003 Design Basis Threat Policy by the end of 
fiscal year 2006. Assessment and planning to meet the higher threat 
delineated in the October 2004 revision to the Design Basis Threat 
Policy will be completed in the third quarter of this year. The budget 
request adequately funds our efforts to meet this refinement in fiscal 
year 2006, but we are facing some shortfalls in subsequent years that 
we are going to have to deal with.
    We have made significant improvements in the readiness of our 
protective forces and the physical plants they defend at the Los Alamos 
and Lawrence Livermore National Laboratories, the Y-12 National 
Security Complex, the Pantex Plant and the Nevada Test Site. Where we 
have found weaknesses based upon our own reviews or reviews conducted 
by others, these weaknesses have been fixed. We are moving ahead 
smartly to ensure the special nuclear materials entrusted to the NNSA 
are stored in modern secure facilities. To this end, we have begun 
moving material from the TA-18 site at Los Alamos to the Device 
Assembly Facility on the Nevada Test Site--one of our most modern 
facilities designed specifically for security. We have also accelerated 
the construction of the Highly Enriched Uranium Materials Facility at 
Y-12 for storage of materials currently located in some of our oldest 
facilities. We have worked through our difficulties with the security 
of classified removable electronic media at Los Alamos and have 
implemented strict policies and procedures to control such data and 
ensure accountability in the future.

                             NAVAL REACTORS

    The Naval Reactors fiscal year 2006 budget request of $786 million 
is a decrease of $15.4 million from fiscal year 2005. The majority of 
funding supports sustaining the Navy's 103 operational nuclear 
reactors. This work involves continual testing, analysis, and 
monitoring of plant and core performance which becomes more critical as 
the reactor plants age. The nature of this business demands a careful, 
measured approach to developing and verifying nuclear technology; 
designing needed components, systems, and processes; and implementing 
them in existing and future plant designs. Most of this work is 
accomplished at Naval Reactors' DOE laboratories. These laboratories 
have made significant advancements in extending core lifetime, 
developing robust materials and components, and creating an array of 
predictive capabilities.
    Naval Reactors' operations and maintenance budget request is 
categorized into four areas of technology: Reactor Technology and 
Analysis; Plant Technology; Materials Development and Verification; and 
Evaluation and Servicing.
    The $213.9 million requested for Reactor Technology and Analysis 
will support continued work on the design for the new reactor plant for 
the next generation of aircraft carriers, CVN-21. These efforts also 
support the design of the Transformational Technology Core (TTC), a new 
high-energy core that is a direct outgrowth of the Program's advanced 
reactor technology and materials development and verification work.
    Reactor Technology and Analysis also develops and improves the 
analysis tools which can be used to safely extend service life beyond 
our previous experience base. The increasing average age of our Navy's 
existing reactor plants, along with future extended service lives, a 
higher pace of operation and reduced maintenance periods, place a 
greater emphasis on our work in thermal-hydraulics, structural 
mechanics, fluid mechanics, and vibration analysis. These factors, 
along with longer-life cores, mean that for years to come, these 
reactors will be operating beyond our previously proven experience 
base.
    The $143.8 million requested for Plant Technology provides funding 
to develop, test, and analyze components and systems that transfer, 
convert, control, and measure reactor power in a ship's power plant. 
Reactor plant performance, reliability, and safety are maintained 
through a full understanding of component performance and system 
condition over the life of each ship. Naval Reactors is developing 
components to address known limitations and to improve reliability of 
instrumentation and power distribution equipment to replace aging, 
technologically obsolete equipment. Additional technology development 
in the areas of chemistry, energy conversion, instrumentation and 
control, plant arrangement, and component design will continue to 
support the Navy's operational requirements.
    The $145.1 million requested for Materials Development and 
Verification funds material analyses and testing to provide the high-
performance materials necessary to ensure that naval nuclear propulsion 
plants meet Navy goals for extended warship operation and greater power 
capability. More explicitly, materials in the reactor core and reactor 
plant must perform safely and reliably for the extended life of the 
ship. Funds in this category also support Naval Reactors' share of work 
at the Advanced Test Reactor (ATR), a specialized reactor plant 
materials testing facility operated by the DOE Office of Nuclear 
Energy, Science, and Technology.
    The $183.4 million requested for Evaluation and Servicing sustains 
the operation, maintenance, and servicing of Naval Reactors' operating 
prototype reactor plants and the remaining share of Naval Reactors' ATR 
operations. Reactor core and reactor plant materials, components, and 
systems in these plants provide important research and development data 
and experience under actual operating conditions. These data aid in 
predicting and subsequently preventing problems that could develop in 
Fleet reactors. With proper maintenance, upgrades, and servicing, the 
two prototype plants and the ATR will continue to meet testing needs 
for at least the next decade.
    Evaluation and Servicing funds also support the implementation of a 
dry spent fuel storage production line that will put naval spent fuel 
currently stored in water pits at the Idaho Nuclear Technology and 
Engineering Center and at the Expended Core Facility (ECF) on the Naval 
Reactors facility in Idaho into dry storage. Additionally, these funds 
support ongoing decontamination and decommissioning of inactive nuclear 
facilities at all Naval Reactors sites to address their ``cradle to 
grave'' stewardship responsibility for these legacies, and minimize the 
potential for any environmental releases.
    In addition to the budget request for the important technical work 
discussed above, program direction and facilities funding is required 
for continued support of the Program's operations and infrastructure. 
The $52.6 million requested for facilities operations will maintain and 
modernize the Program's facilities, including the Bettis and Knolls 
laboratories as well as ECF and Kesselring Site Operations (KSO), 
through capital equipment purchases and general plant projects. The 
$16.9 million requested for construction funds will be used to build a 
materials development facility and a new office building. This will 
allow consolidation of work now occurring in several locations across 
the laboratories. Finally, the $30.3 million requested for program 
direction will support Naval Reactors' DOE personnel at Headquarters 
and the Program's field offices, including salaries, benefits, travel, 
and other expenses.

                      OFFICE OF THE ADMINISTRATOR

    The fiscal year 2006 budget request of $343.9 million is about 3.7 
percent below the fiscal year 2005 appropriation. The request reflects 
the completion the NNSA re-engineering initiative that streamlined 
support for corporate management and oversight of the nuclear weapons 
and nonproliferation programs.
    Re-engineering resulted in an annual cost avoidance of over $40 
million realized by the reduction of NNSA Federal staffing levels. In 
addition, the funding request is sufficient to support the new program 
for Historically Black Colleges and Universities, initiated by Congress 
in fiscal year 2005, through fiscal year 2006.

                           MANAGEMENT ISSUES

    I would like to conclude by discussing some of NNSA's management 
challenges and successes. This committee is well aware of the problems 
that beset the Los Alamos National Laboratory during the past year. In 
July 2004 the Laboratory Director imposed a stand down on essentially 
all activities at the laboratory because of a series of security and 
safety problems, especially an inability to locate two classified 
computer disks. While a thorough investigation revealed that the 
``missing'' disks never existed, it also revealed that there were 
serious problems with the management of safety and security at Los 
Alamos. Operations have now resumed and the laboratory is in the 
process of putting into place long-term corrective actions. I have 
provided the committee with a copy of the report prepared jointly by 
the former Deputy Secretary of Energy and myself that outlines the 
problems in detail. As a result of this action, I imposed a significant 
reduction in the management fee awarded to the University of California 
for the operation of Los Alamos.
    Of particular concern to me was that the Federal oversight system 
had recognized the safety-related problems at Los Alamos in advance, 
but not the security problems. The committee has received an 
independent assessment of this weakness in oversight. I believe it was 
caused by leadership failures, inadequate numbers of trained Federal 
security experts, a local oversight approach that did not provide 
enough hands-on involvement, and a failure to provide sufficient 
headquarters supervision of the local Site Office. We are in the 
process of implementing corrective action in each area. I will keep the 
committee informed of our progress.
    On the ``success'' side, the NNSA has fully embraced the 
President's Management Agenda through the completion of the NNSA re-
engineering initiative by creating a more robust and effective NNSA 
organization. Additionally, NNSA's success has been recognized with 
consistently ``Green'' ratings, including Budget and Performance 
Integration. NNSA integrates financial data with its budget and 
performance information through implementation of its Planning, 
Programming, Budgeting and Evaluation (PPBE) process that was 
implemented simultaneously with the standup of the new NNSA 
organization established by the NNSA Act.
    The PPBE process is in its third year of implementation, and seeks 
to provide a fully integrated cascade of program and resource 
information throughout the management processes, consistent with 
expectations in the NNSA Act. The cascade and linkages within NNSA 
mirror the Headquarters and field organization structures, and are 
supported by management processes, contracting, funds control and 
accounting documentation. The cascade and linkages are quite evident in 
our updated NNSA Strategic Plan, issued last November.
    We at NNSA take very seriously the responsibility to manage the 
resources of the American people effectively and I am glad that our 
management efforts are achieving such results.
    Finally, to provide more effective supervision of high-hazard 
nuclear operations, I have established a Chief, Defense Nuclear Safety 
and appointed an experienced safety professional to the position. I 
believe this will help us balance the need for consistent standards 
with my stress on the authority and responsibility of the local Site 
Managers.

                               CONCLUSION

    In conclusion, I am confident that we are headed in the right 
direction. Our budget request will support continuing our progress in 
protecting and certifying our nuclear deterrent, reducing the global 
danger from proliferation and weapons of mass destruction, and 
enhancing the force projection capabilities of the U.S. nuclear Navy. 
It will enable us to continue to maintain the safety and security of 
our people, information, materials, and infrastructure. Above all, it 
will meet the national security needs of the United States of the 21st 
century.
    Mr. Chairman, this concludes my statement. A statistical appendix 
follows that contains the budget figures supporting our request. My 
colleagues and I would be pleased to answer any questions on the 
justification for the requested budget.

                   NATIONAL NUCLEAR SECURITY ADMINISTRATION APPROPRIATION AND PROGRAM SUMMARY
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                            Fiscal Year    Fiscal Year                 Fiscal Year
                                                2004      2005 Original  Fiscal Year       2005      Fiscal Year
                                             Comparable                      2005       Comparable       2006
                                           Appropriation  Appropriation  Adjustments  Appropriation    Request
----------------------------------------------------------------------------------------------------------------
Office of the Administrator..............           353            356            +1           357           344
Weapons Activities.......................         6,447          6,226          +357         6,583         6,630
Defense Nuclear Nonproliferation.........         1,368          1,420            +2         1,422         1,637
Naval Reactors...........................           762            808            -6           801           786
                                          ----------------------------------------------------------------------
      Total, NNSA........................         8,930          8,811          +353         9,164         9,397
----------------------------------------------------------------------------------------------------------------


                                  FUTURE YEARS NUCLEAR SECURITY PROGRAM (FYNSP)
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                  Fiscal     Fiscal     Fiscal     Fiscal     Fiscal
                                                Year 2006  Year 2007  Year 2008  Year 2009  Year 2010    Total
----------------------------------------------------------------------------------------------------------------
Office of the Administrator...................        344        358        372        387        402      1,863
Weapons Activities............................      6,630      6,780      6,921      7,077      7,262     34,671
Defense Nuclear Nonproliferation..............      1,637      1,674      1,711      1,748      1,787      8,556
Naval Reactors................................        786        803        821        839        857      4,106
                                               -----------------------------------------------------------------
      Total, NNSA.............................      9,397      9,615      9,825     10,051     10,308     49,196
----------------------------------------------------------------------------------------------------------------


                                        WEAPONS ACTIVITIES APPROPRIATION
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                       Fiscal Year                     Fiscal Year
                                    Fiscal Year 2004  2005 Original    Fiscal Year         2005      Fiscal Year
                                       Comparable                          2005         Comparable       2006
                                   Appropriation \1\  Appropriation  Adjustments \2\  Appropriation    Request
----------------------------------------------------------------------------------------------------------------
Weapons Activities:
    Directed Stockpile Work......       1,290,525        1,316,936         -39,782       1,277,154     1,421,031
    Science Campaign.............         258,856          279,462          -3,469         275,993       261,925
    Engineering Campaign.........         265,206          260,830             555         261,385       229,756
    Inertial Confinement Fusion           511,767          541,034          -5,130         535,904       460,418
     and High Yield Campaign.....
    Advanced Simulation and               715,315          703,760          -7,013         696,747       660,830
     Computing Campaign..........
    Pit Manufacturing and                 262,544          265,671          -2,651         263,020       248,760
     Certification Campaign......
    Readiness Campaign...........         294,490          272,627         -11,181         261,446       218,755
    Readiness in Technical Base         1,649,959        1,670,420         116,033       1,786,453     1,631,386
     and Facilities..............
    Secure Transportation Asset..         186,452          201,300          -1,591         199,709       212,100
    Nuclear Weapons Incident               96,197           99,209           9,167         108,376       118,796
     Response....................
    Facilities and Infrastructure         238,755          273,544          40,178         313,722       283,509
     Recapitalization Program....
    Environmental Projects and            181,652     .............        192,200         192,200       174,389
     Operations..................
    Safeguards and Security......         628,861          757,678          -5,749         751,929       740,478
                                  ------------------------------------------------------------------------------
      Subtotal, Weapons                 6,580,579        6,642,471         281,567       6,924,038     6,662,133
       Activities................
    Use of Prior Year Balances...        -104,435          -86,000          72,912         -13,088   ...........
    Security Charge for                   -28,985          -30,000   ...............       -30,000       -32,000
     Reimbursable Work...........
    Transfer from DOD              .................      -300,000   ...............      -300,000   ...........
     Approprations...............
    Undistributed Adjustment.....  .................  .............          2,400           2,400   ...........
                                  ------------------------------------------------------------------------------
      Total, Weapons Activities..       6,447,159        6,226,471         356,879       6,583,350     6,630,133
----------------------------------------------------------------------------------------------------------------
\1\ Fiscal year 2004 reflects distribution of the rescission of $37,007,815 from the Energy and Water
  Development Appropriations Act for fiscal year 2004, approved reprogrammings, and comparability adjustments.
  Reference the ``Fiscal Year 2004 Execution'' table for additional details on these adjustments.
\2\ The fiscal year 2005 adjustments column reflects distribution of the rescission of $49,811,768 from the
  Consolidated Appropriations Act, 2005 (Public Law 108-447), transfer of funds pursuant to a letter dated
  December 9, 2004, from the Chairmen of the Senate and House Appropriation Committees to the Secretary of
  Energy, and comparability adjustments. Reference the ``Fiscal Year 2005 Execution'' table for additional
  details on these adjustments.


                                 DEFENSE NUCLEAR NONPROLIFERATION APPROPRIATION
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                        Fiscal Year
                                 Fiscal Year 2004   Fiscal Year 2005    Fiscal Year         2005        Fiscal
                                    Comparable          Original            2005         Comparable    Year 2006
                                Appropriation \1\  Appropriation \2\  Adjustments \2\  Appropriation    Request
----------------------------------------------------------------------------------------------------------------
Defense Nuclear
 Nonproliferation:
    Nonproliferation and               228,197            225,750            -1,787         223,963      272,218
     Verification Research and
     Development..............
    Nonproliferation and                86,219            154,000           -62,682          91,318       80,173
     International  Security..
    International Nuclear              228,734            322,000           -27,349         294,651      343,435
     Materials Protection and
     Cooperation..............
    Global Initiatives for              39,764             41,000              -325          40,675       37,890
     Proliferation Preven-
     tion.....................
    HEU Transparency                    17,894             20,950              -166          20,784       20,483
     Implementation...........
    International Nuclear               19,850     .................  ...............  .............  ..........
     Safety and Coopera- tion.
    Elimination of Weapons-             81,835             40,097             3,872          43,969      132,000
     Grade Plutonium
     Production...............
    Fissile Materials                  644,693            624,000           -10,940         613,060      653,065
     Disposition..............
    Offsite Source Recovery     .................           7,600            -7,600    .............  ..........
     Project..................
    Global Threat Reduction             69,464     .................         93,803          93,803       97,975
     Initiative...............
                               ---------------------------------------------------------------------------------
      Subtotal, Defense              1,416,650          1,435,397           -13,174       1,422,223    1,637,239
       Nuclear Nonprolifera-
       tion...................
    Use of Prior Year Balances         -48,941            -15,000            14,880            -120   ..........
                               ---------------------------------------------------------------------------------
      Total, Defense Nuclear         1,367,709          1,420,397             1,706       1,422,103    1,637,239
       Nonprolifera- tion.....
----------------------------------------------------------------------------------------------------------------
\1\ Fiscal year 2004 reflects distribution of the rescission of $7,832,911 from the Energy and Water Development
  Appropriations Act for fiscal year 2004, approved reprogrammings, and comparability adjustments. Reference the
  ``fiscal year 2004 Execution'' table for additional details on these adjustments.
\2\ The fiscal year 2005 adjustments column reflects distribution of the rescission of $11,363,176 from the
  Consolidated Appropriations Act, 2005 (Public Law 108-447), transfer of funds pursuant to a letter dated
  December 9, 2004, from the Chairmen of the Senate and House Appropriation Committees to the Secretary of
  Energy, and comparability adjustments. Reference the ``fiscal year 2005 Execution'' table for additional
  details on these adjustments.


                                          NAVAL REACTORS APPROPRIATION
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                             Fiscal Year    Fiscal Year                 Fiscal Year
                                                 2004           2005      Fiscal Year       2005        Fiscal
                                              Comparable      Original        2005       Comparable    Year 2006
                                            Appropriation  Appropriation  Adjustments  Appropriation    Request
----------------------------------------------------------------------------------------------------------------
Naval Reactors Development (NRD):
    Operations and Maintenance............       718,836        771,211        -6,170       765,041      738,800
    Program Direction.....................        26,552         29,500          -236        29,264       30,300
    Construction..........................        18,490          7,189           -57         7,132       16,900
                                           ---------------------------------------------------------------------
      Subtotal, Naval Reactors Development       763,878        807,900        -6,463       801,437      786,000
    Less Use of prior year balances.......        -2,006   .............  ...........  .............  ..........
    Subtotal Adjustments..................  .............  .............  ...........  .............  ..........
                                           ---------------------------------------------------------------------
      Total, Naval Reactors...............       761,872        807,900        -6,463       801,437      786,000
----------------------------------------------------------------------------------------------------------------
Public Law Authorization: Public Law 83-703, ``Atomic Energy Act of 1954''; ``Executive Order 12344 (42 U.S.C.
  7158), ``Naval Nuclear Propulsion Program''; Public Law 107-107, ``National Defense Authorization Act of
  2002'', Title 32, ``National Nuclear Security Administration''; Public Law 108-375, National Defense
  Authorization Act, fiscal year 2005; Public Law 108-447, The Consolidated Appropriations Act, 2005.


                                    OFFICE OF THE ADMINISTRATOR APPROPRIATION
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                            Fiscal Year    Fiscal Year                 Fiscal Year
                                                2004      2005 Original  Fiscal Year       2005      Fiscal Year
                                             Comparable                      2005       Comparable       2006
                                           Appropriation  Appropriation  Adjustments  Appropriation    Request
----------------------------------------------------------------------------------------------------------------
Office of the Administrator Program             352,949        356,200           851       357,051       343,869
 Direction...............................
----------------------------------------------------------------------------------------------------------------


                                                                 FUNDING BY GENERAL GOAL
                                                                  [Dollars in millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Fiscal     Fiscal     Fiscal     Dollar    Percent     Fiscal     Fiscal     Fiscal     Fiscal
                                                       Year 2004  Year 2005  Year 2006    Change     Change   Year 2007  Year 2008  Year 2009  Year 2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
General Goal 1, Nuclear Weapons Stewardship:
    Directed Stockpile Work..........................     $1,291     $1,277     $1,421      +$144      +11.3     $1,459     $1,487     $1,516     $1,545
    Science Campaign.................................        259        276        262        -14       -5.1        264        264        264        264
    Engineering Campaign.............................        265        261        230        -31      -11.9        172        182        165        165
    ICF and High Yield Campaign......................        512        536        460        -76      -14.2        462        462        462        462
    Advanced Simulation and Computing Campaign.......        715        697        661        -36       -5.2        666        666        666        666
    Pit Manufacturing and Certification Campaign.....        263        263        249        -14       -5.3        251        251        251        251
    Readiness Campaign...............................        294        261        219        -42      -16.1        220        220        220        220
    Readiness in Technical Base and Facilities.......      1,650      1,786      1,631       -155       -8.7      1,746      1,817      1,916      2,000
    Nuclear Weapons Incident Response................         96        108        119        +11       10.2        125        131        138        144
    Secure Transportation Asset......................        186        200        212        +12        6.0        223        234        246        258
    Facilities and Infrastructure Recapitalization           239        314        284        -30       -9.6        289        296        302        308
     Program.........................................
    Safeguards and Security..........................        629        752        740        -12       -1.6        777        815        855        897
    Program Direction................................        297        302        284        -18       -6.0        296        307        320        332
    Offset/PY Balance................................       -133       -341        -32       +309      -90.6        -33        -34        -35        -36
                                                      --------------------------------------------------------------------------------------------------
      Total Goal 1, Nuclear Weapons Stewardship......      6,563      6,693      6,740        +48        0.7      6,916      7,097      7,285      7,477
                                                      ==================================================================================================
General Goal 2, Control of Weapons of Mass
 Destruction:
    Nonproliferation and Verification Research &             228        224        272        +48       21.4        279        288        301        312
     Development.....................................
    Nonproliferation and International Security......         86         91         80        -11      -12.1         82         83         85         87
    International Nuclear Material Protection and            229        295        343        +48       16.3        351        358        366        373
     Cooperation.....................................
    Global Initiatives for Proliferation Prevention..         40         41         38         -3       -7.3         39         39         40         41
    HEU Transparency Implementation..................         18         21         20         -1       -4.8         21         21         22         22
    International Nuclear Safeguard and Cooperation..         20  .........  .........  .........  .........  .........  .........  .........  .........
    Elimination of Weapons-Grade Plutonium Production         82         44        132        +88        200        138        137        140        143
    Fissile Materials Disposition....................        645        613        653        +40        6.5        667        680        693        708
    Global Threat Reduction Initiative...............         69         94         98         +4        4.3         98        102        101        101
    Program Direction................................         56         55         60         +5        9.0         62         65         67         70
    Offset/PY Balances...............................        -49       -120  .........        120       -100  .........  .........  .........  .........
                                                      --------------------------------------------------------------------------------------------------
      Total Goal 2, Control of Weapons of Mass             1,424      1,477      1,697       +220       14.9      1,735      1,775      1,815      1,857
       Destruction...................................
                                                      ==================================================================================================
General Goal 3, Defense Nuclear Power (Naval                 764        801        786        -15       -1.9        803        821        839        857
 Reactors)...........................................
    Use of PY Balances...............................         -2  .........  .........  .........  .........  .........  .........  .........  .........
                                                      --------------------------------------------------------------------------------------------------
      Total Goal 3, Defense Nuclear Power (Naval             762        801        786        -15       -1.9        803        821        839        857
       Reactors).....................................
                                                      ==================================================================================================
General Goal 6, Environmental Management:                    182        192        174        -18       -9.4        160        132        113        117
 Environmental Projects and Operations...............
                                                      --------------------------------------------------------------------------------------------------
      Total Goal 6, Environmental Management.........        182        192        174        -18       -9.4        160        132        113        117
                                                      ==================================================================================================
      Total, NNSA....................................      8,929      9,164      9,397       +233        2.5      9,615      9,825     10,051     10,308
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note.--NNSA Program Direction expenditures funded in the Office of the Administrator appropriation have been allocated in support of Goals 1 and 2. Goal
  1 allocation includes Federal support for programs funded by the Weapons Activities appropriation, as well as NNSA corporate support, including
  Federal staffing at the site offices. Goal 2 allocation includes Federal support for all Nuclear Nonproliferation programs. Program Direction
  expenditures for Naval Reactors, supporting Goal 3, are funded within the Naval Reactors appropriation.


                                                                 FUNDING SUMMARY BY SITE
                                                                [In millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         Fiscal Year               Fiscal Year
                                                               Fiscal Year  Fiscal Year  2006 Office  Fiscal Year      2006     Fiscal Year     Total
                                                                   2004         2005        of the    2006 Weapon    Nuclear     2006 Naval  Fiscal Year
                                                                                            Admin      Activities   Nonprolif      React         2006
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chicago Operations Office:
    Ames Laboratory..........................................          0.3          0.3  ...........  ...........          0.3  ...........          0.3
    Argonne National Laboratory..............................         22.1         28.7  ...........          3.2         33.0  ...........         36.2
    Brookhaven National Laboratory...........................         34.1         61.1  ...........          2.2         58.0  ...........         60.2
    Chicago Operations Office................................        488.4        439.8          1.7         33.7        391.0  ...........        426.4
    New Brunswick Laboratory.................................          1.1          1.1  ...........  ...........          1.1  ...........          1.1
    Lawrence Berkeley National Laboratory....................          3.8          3.0  ...........  ...........          2.7  ...........          2.7
Idaho Operations Office:
    Idaho National Engineering and Environmental Laboratory..         65.8         70.5  ...........          2.3          2.8         56.4         61.5
    Idaho Operations Office..................................          1.7          1.6  ...........          1.9          0.7  ...........          2.6
Kansas City Site Office:
    Kansas City Plant........................................        428.7        363.5  ...........        355.6          1.4  ...........        357.0
    Kansas City Site Office..................................          6.0          6.0          6.3  ...........  ...........  ...........          6.3
Livermore Site Office:
    Lawrence Livermore National Laboratory...................      1,208.2      1,170.6  ...........        997.5         70.2  ...........      1,067.7
    Livermore Site Office....................................         17.9         18.4         16.4          2.7  ...........  ...........         19.1
Los Alamos Site Office:
    Los Alamos National Laboratory...........................      1,487.7      1,555.4  ...........      1,351.8        219.2  ...........      1,571.0
    Los Alamos Site Office...................................         15.6         15.5         15.5          0.9  ...........  ...........         16.4
NNSA Service Center:
    Atomic Energy of Canada, Ltd.............................          0.5  ...........  ...........  ...........  ...........  ...........  ...........
    General Atomics..........................................         14.4         13.2  ...........         14.5  ...........  ...........         14.5
    National Renewable Energy Laboratory.....................          1.8          1.8  ...........  ...........          1.8  ...........          1.8
    Naval Research Laboratory................................         25.3         35.6  ...........  ...........  ...........  ...........  ...........
    University of Rochester/LLE..............................         62.4         72.6  ...........         45.6  ...........  ...........         45.6
    NNSA Service Center (all other sites)....................        502.7        442.3         91.1        264.7        201.8  ...........        557.6
Nevada Site Office:
    Nevada Site Office.......................................        114.9         83.5         18.0         56.4          0.8  ...........         75.2
    Nevada Test Site.........................................        369.3        335.5  ...........        376.0          1.3  ...........        377.3
Oak Ridge Operations Office:
    Oak Ridge Institute for Science and Engineering..........          8.4          7.8  ...........          7.9  ...........  ...........          7.9
    Oak Ridge National Laboratory............................        118.1        171.2  ...........          8.2        173.7  ...........        181.9
    Office of Science and Technical Information..............          0.1          0.1  ...........          0.1  ...........  ...........          0.1
    Y-12 Site Office.........................................         11.7         12.4         13.1  ...........  ...........  ...........         13.1
    Y-12 National Security Complex...........................        761.3        906.0  ...........        741.9         43.7  ...........        785.6
    Pacific Northwest National Laboratory....................        119.0        107.5  ...........          4.0        119.1  ...........        123.1
    Oak Ridge Operations Office..............................         23.7         27.5  ...........          5.9         36.3  ...........         42.2
Pantex Site Office:
    Pantex Plant.............................................        450.7        514.9  ...........        441.8          5.7  ...........        447.5
    Pantex Site Office.......................................         11.5         12.0         12.3          0.1  ...........  ...........         12.4
Pittsburgh Naval Reactors Office:
    Bettis Atomic Power Laboratory...........................        375.5        391.9  ...........  ...........  ...........        388.2        388.2
    Pittsburgh Naval Reactors Office.........................          8.6          9.1  ...........  ...........  ...........          9.4          9.4
Richland Operations Office: Richland Operations Office.......          0.8          1.3  ...........          2.2  ...........  ...........          2.2
Sandia Site Office:
    Sandia National Laboratories.............................      1,462.5      1,360.2  ...........      1,119.5        137.9  ...........      1,257.4
    Sandia Site Office.......................................         14.9         12.9         13.1          0.3  ...........  ...........         13.4
Savannah River Operations Office:
    Savannah River Operations Office.........................         15.2         11.3  ...........  ...........         13.0  ...........         13.0
    Savannah River Site Office...............................          3.0          3.1          3.3  ...........  ...........  ...........          3.3
    Savannah River Site......................................        296.2        305.1  ...........        212.7         69.5  ...........        282.2
Schenectady Naval Reactors Office:
    Knolls Atomic Power Laboratory...........................        301.8        316.8  ...........          6.5  ...........        308.0        314.5
    Schenectady Naval Reactors Office........................          6.7          6.8  ...........  ...........  ...........          7.0          7.0
Washington DC Headquarters...................................        247.7        602.7        159.8        601.8         52.5         13.9        828.0
Other........................................................          3.9          3.1          0.2  ...........  ...........          3.1          3.3
                                                              ------------------------------------------------------------------------------------------
      Subtotal, NNSA.........................................      9,114.0      9,503.7        350.8      6,661.9      1,637.5        786.0      9,436.2
Adjustments..................................................       -184.4       -340.8         -6.9        -32.0  ...........  ...........        -38.9
                                                              ------------------------------------------------------------------------------------------
      Total, NNSA............................................      8,929.7      9,163.9        343.9      6,630.1      1,637.2        786.0      9,397.2
--------------------------------------------------------------------------------------------------------------------------------------------------------

                              Attachment 1
  Statement of Ambassador Linton F. Brooks Before the Subcommittee on 
           Strategic Forces, Senate Armed Services Committee

                              INTRODUCTION

    Mr. Chairman, thank you for the opportunity to appear before you 
today to discuss nuclear weapons programs and policies. I look forward 
to working with you in this new area of responsibility. I also want to 
thank all of the members for their strong support for critical national 
security activities. Before I begin my remarks, I want to say how 
pleased I am to be on this panel today with my colleague, Gen. James E. 
Cartwright, Commander of United States Strategic Command, who will 
present the military perspective on these issues.
    Today, I will discuss with you the administration's emerging vision 
for the nuclear weapons enterprise of the future, and the initial steps 
we will be taking, with your support, to realize that vision. This 
vision derives from the work of the Nuclear Posture Review (NPR), the 
August 2003 Conference at Strategic Command, the follow-on NPR 
Strategic Capabilities Assessment and related work on a responsive 
nuclear infrastructure--key elements of which are addressed in Acting 
Assistant Secretary of Defense Mira Ricardel's written statement 
submitted for the record. The Nuclear Weapons Complex Infrastructure 
study, currently underway and scheduled to be completed this summer, 
will further refine this vision. I should add that Gen. Cartwright and 
the Directors at our three National Laboratories have provided both 
leadership and creative impetus to this entire effort.
    The NPR has resulted in a number of conceptual breakthroughs in our 
thinking about nuclear forces--breakthroughs that have enabled concrete 
first steps in the transformation of our nuclear forces and 
capabilities. The recognition of a more dynamic and uncertain 
geopolitical threat environment but one in which Russia does not pose 
an immediate threat, the broad reassessment of the defense goals that 
we want nuclear forces to serve, and the evolution from a threat-based 
to a capabilities-based nuclear force have enabled substantial 
reductions in operationally-deployed strategic warheads through 2012 as 
reflected in the Moscow Treaty. This has also led to the deep 
reduction, directed by the President last May, in the total nuclear 
weapons stockpile required to support operationally-deployed forces. By 
2012 the stockpile will be reduced by nearly one-half from the level it 
was at the time this administration took office resulting in the 
smallest nuclear stockpile in decades. This represents a factor of 4 
reduction in the stockpile since the end of the Cold War.
    Very importantly, the NPR articulated the critical role of the 
defense R&D and manufacturing base, of which a responsive nuclear 
weapons infrastructure is a key element, in the New Triad of strategic 
capabilities. We have worked closely with the Department of Defense to 
identify initial steps on the path to a responsive nuclear 
infrastructure and are beginning to implement them.
    Building on this progress, I want to address the current state of 
our thinking about the characteristics of the future nuclear weapons 
stockpile and supporting nuclear infrastructure. Specifically, I will 
address three key questions:
  --What are the limitations of today's stockpile and nuclear 
        infrastructure?
  --Where do we want the stockpile and infrastructure to be in 2030?
  --What's the path to get there?
    In laying out these ideas, the administration hopes to foster a 
more comprehensive dialog with Congress on the future nuclear posture. 
I must first emphasize, however, that today stockpile stewardship is 
working, we are confident that the stockpile is safe and reliable, and 
there is no requirement at this time for nuclear tests. Indeed, just 
last month, the Secretary of Energy and Secretary of Defense reaffirmed 
this judgment in reporting to the President their ninth annual 
assessment of the safety and reliability of the U.S. nuclear weapons 
stockpile. Like the eight certifications that preceded it, this year's 
assessment is based on a collective judgment of the Directors of our 
National Laboratories and of the Commander, U.S. Strategic Command, the 
principal steward of our nuclear forces. Our assessment derives from 10 
years of experience with science-based stockpile stewardship, from 
extensive surveillance, from the use of both experiments and 
computation, and from professional judgment.

       WHAT ARE THE LIMITATIONS OF TODAY'S STOCKPILE AND NUCLEAR 
                            INFRASTRUCTURE?

    Although nuclear weapons issues are usually contentious, I believe 
that most would agree that if we were starting to build the stockpile 
from scratch today we would take a much different approach than we took 
during the Cold War. Indeed, today's Cold War legacy stockpile is the 
wrong stockpile from a number of perspectives. Let me explain.
    First, today's stockpile is the wrong stockpile technically. Most 
current warheads were designed to maximize explosive yield with minimum 
size and weight so that many warheads could be carried on a single 
delivery vehicle. During the Cold War, this resulted in the most cost 
effective approach to meet then existing military requirements. As a 
result, our weapons designers, in managing risk during a period when we 
used nuclear tests as part of the tool kit to maintain confidence, 
designed closer to the so-called ``cliffs'' in performance. If we were 
designing the stockpile today under a test moratorium and to support an 
operationally-deployed force in which most delivery systems will carry 
many fewer warheads than the maximum capacity, we would manage 
technical risk differently, for example, by ``trading'' size and weight 
for increased performance margins, system longevity, and ease of 
manufacture.
    Second, the legacy stockpile was not designed for longevity. During 
the Cold War we introduced new weapons into the stockpile routinely and 
``turned over'' most of the stockpile every 15-20 years exploiting an 
enormous production capacity. Today, our weapons are aging and now are 
being rebuilt in life extension programs that are both difficult and 
costly. Rebuilding nuclear weapons will never be cheap, but decisions 
taken during the Cold War forced the use of certain hazardous materials 
that, in today's health and safety culture, cause warheads to be much 
more costly to remanufacture. Maintaining the capability to produce 
these materials causes the supporting infrastructure to be larger and 
more costly than it might otherwise be.
    More broadly, our nuclear warheads were not designed with priority 
to minimize overall demands on the nuclear weapons enterprise; that is, 
to minimize DOE and DOD costs over the entire life cycle of the warhead 
which includes design, development, production, certification, 
surveillance, deployment, life extension, retirement, and 
dismantlement.
    As a result of these collective decisions, it is becoming more 
difficult and costly to certify warhead remanufacture. The evolution 
away from tested designs resulting from the inevitable accumulations of 
small changes over the extended lifetimes of these systems means that 
we can count on increasing uncertainty in the long-term certification 
of warheads in the stockpile. To address this problem, we must evolve 
our strategy from today's ``certify what we build'' to tomorrow's 
``build what we can certify.''
    The Cold War legacy stockpile may also be the wrong stockpile from 
a military perspective. The Nuclear Posture Review identified a number 
of capabilities shortfalls in the existing arsenal that could undermine 
deterrence in the future. Specifically, the NPR suggested that current 
explosive yields are too high, that our systems are not capable against 
hard and deeply buried targets, that they do not lend themselves to 
reduced collateral damage and that they are unsuited for defeat of 
biological and chemical munitions. The designs of the past do not make 
full use of new precision guidance technologies from which our 
conventional systems have fully benefited, nor are they geared for 
small-scale strikes or flexibility in command, control and delivery. We 
do not know when, if ever, we will need to field new capabilities to 
deal with these shortfalls. Nonetheless, it is vital that we maintain 
the capability to respond to potential future requirements.
    The stockpile we plan for in 2012 is the wrong stockpile 
politically because it is probably still too large. The President's 
decision last May to reduce the stockpile significantly was taken in 
the context of continued progress in creating a responsive nuclear 
weapons infrastructure as part of the New Triad of strategic 
capabilities called for in the NPR. But we have a ways to go to get 
there. Until we achieve this responsive infrastructure, we will need to 
retain a substantial number of non-deployed warheads to hedge against a 
technical failure of a critical warhead or delivery system, or against 
unforeseen geopolitical changes. Because operationally-deployed forces 
are dominated by two weapons types--the W76 SLBM warhead and the W80 
cruise missile warhead--we are particularly sensitive to technical 
problems involving these systems. We retain ``hedge'' warheads in large 
part due to the inability of either today's nuclear infrastructure, or 
the infrastructure we expect to have when the stockpile reductions are 
fully implemented in 2012, to manufacture, in a timely way, warheads 
for replacement or for force augmentation, or to act to correct 
unexpected technical problems. Establishing a responsive nuclear 
infrastructure will provide opportunities for additional stockpile 
reductions because we can rely less on the stockpile and more on 
infrastructure (i.e., ability to produce or repair warheads in 
sufficient quantity in a timely way) in responding to technical 
failures or new or emerging threats.
    Finally, today's stockpile is the wrong stockpile from a physical 
security standpoint. During the Cold War the main security threat to 
our nuclear forces was from spies trying to steal our secrets. Today, 
the threat to classified material remains, but to it has been added a 
post-9/11 terrorist threat that is difficult and costly to counter. We 
now must consider the distinct possibility of well-armed and competent 
terrorist suicide teams seeking to gain access to a warhead in order to 
detonate it in place. This has driven our site security posture from 
one of ``containment and recovery'' of stolen warheads to one of 
``denial of any access'' to warheads. This change has dramatically 
increased security costs for ``gates, guns, guards'' at our nuclear 
weapons sites. If we were designing the stockpile today, we would apply 
new technologies and approaches to warhead-level use control as a means 
to reduce physical security costs.
    Let me turn to issues of the nuclear weapons infrastructure. By 
``responsive'' nuclear infrastructure we refer to the resilience of the 
nuclear enterprise to unanticipated events or emerging threats, and the 
ability to anticipate innovations by an adversary and to counter them 
before our deterrent is degraded. The elements of a responsive 
infrastructure include the people, the science and technology base, and 
the facilities and equipment needed to support a right-sized nuclear 
weapons enterprise. But more than that, a responsive infrastructure 
involves practical and streamlined business practices that will enable 
us to respond rapidly and flexibly to emerging Department of Defense 
needs.
    Our current infrastructure is by no means responsive. A nearly 
complete halt in nuclear weapons modernization over the past decade, 
coupled with past under funding of key elements of our manufacturing 
complex has taken a toll on our ability to be responsive. For example, 
we have been unable to produce certain critical parts for nuclear 
weapons (e.g., plutonium parts) for many years. And today's business 
practices--for example, the paperwork and procedures by which we 
authorize potentially hazardous activities at our labs and plants--are 
unwieldy. But progress is being made. We restored tritium production in 
Fall 2003 with the irradiation of special fuel rods in a TVA reactor, 
and anticipate that we will have a tritium extraction facility on-line 
in time to meet the tritium needs of a reduced stockpile. We are 
restoring some lost production capabilities, and modernizing others, so 
that later this decade we can meet the scheduled startups of 
refurbishment programs to extend the life of three warheads in the 
legacy stockpile. We are devoting substantial resources to restoring 
facilities that had suffered from years of deferred maintenance. 
Finally, we have identified quantitative metrics for 
``responsiveness,'' that is, timelines to address stockpile problems or 
deal with new or emerging threats. These will help guide our program by 
turning the concept of responsiveness into a measurable reality.
    That said, much remains to be done. Among other things, we must 
achieve the scientific goals of stockpile stewardship, continue 
facilities and infrastructure recapitalization at NNSA's labs and 
plants, construct a Modern Pit Facility to restore plutonium pit 
production, strengthen test readiness, streamline business practices, 
and transfer knowledge to the next generation of weapons scientists and 
engineers who will populate this responsive infrastructure. Our 
challenge is to find ways to carry this out that reduce duplication of 
effort, support consolidation of facilities and promote more efficient 
operations complex-wide. I want to stress the importance of a Modern 
Pit Facility even if the stockpile continues to shrink--sooner or later 
the effects of plutonium aging will require all our current pits to be 
remanufactured.

    WHERE DO WE WANT THE STOCKPILE AND INFRASTRUCTURE TO BE IN 2030?

    Although the legacy stockpile has served us well, it was designed 
to meet the requirements of the Cold War era, many of which are 
irrelevant or inadequate today. We need to begin now to transform to 
the nuclear weapons enterprise of the future--this means transformation 
to a smaller, less costly, more easily secured, safe and reliable 
stockpile as well as transformation of the supporting nuclear 
infrastructure. The two are, of course, intertwined--we see stockpile 
transformation as ``enabling'' transformation to a responsive nuclear 
infrastructure, and a responsive infrastructure as essential to 
reducing total stockpile numbers and associated costs.
    Part of transformation will be to retain the ability to provide new 
or different military capabilities in response to DOD's emerging needs. 
Gen. Cartwright will discuss this aspect of transformation in more 
detail in his testimony.
    But transformation involves more than retaining the capability to 
respond to new military requirements. My main responsibility is to 
assure the continued safety, security and reliability of the nuclear 
weapons stockpile. In this regard, even if we never received another 
DOD requirement for a new military capability for the nuclear 
stockpile, the concerns raised about our ability to assure the safety, 
security and reliability of the legacy stockpile over the very long 
term would still drive the need to transform the stockpile. And the 
concerns about responsiveness to technical problems or geopolitical 
change would still mandate transformation of the weapons complex.
    More broadly, we must explore whether there is a better way to 
sustain existing military capabilities in our stockpile absent nuclear 
testing. With the support of Congress, we are beginning a program--the 
Reliable Replacement Warhead (RRW) program--to understand whether, if 
we relaxed warhead design constraints imposed on Cold War systems (that 
have typically driven ``tight'' performance margins in nuclear design) 
we could provide replacements for existing stockpile weapons that could 
be more easily manufactured with more readily available and more 
environmentally benign materials, and whose safety and reliability 
could be assured with highest confidence, without nuclear testing, for 
as long as the United States requires nuclear forces. Such warheads 
would be designed specifically to facilitate less costly remanufacture 
and ease of certification of safety and reliability, and thus would 
reduce infrastructure costs needed to support that component of the 
stockpile. Because they would be designed to be less sensitive to 
incremental aging effects, they would dramatically reduce the 
possibility that the United States would ever be faced with a need to 
conduct a nuclear test in order to diagnose or remedy a reliability 
problem.
    There is another reason why it is critical that we begin now to 
transform the stockpile. We have not developed and fielded a new 
warhead in 20 years, nor have we modified a warhead in nearly 10 years. 
We are losing expertise. We must train the next generation of nuclear 
weapons designers and engineers before the last generation, who honed 
its skills on nuclear testing, retires. If such training--and I cannot 
emphasize this strongly enough--is disconnected from real design work 
that leads to engineered systems, we will, as one laboratory director 
put it, ``create not a new generation of weapons designers and 
engineers but a generation of analysts'' who may understand the theory, 
but not the practice, of warhead development. If that happens, it would 
place at risk our capabilities for stockpile stewardship in the future.
    Along these lines, as part of the transformation of the stockpile, 
we must preserve the ability to produce weapons with new or modified 
military capabilities if this is required in the future. Currently the 
DOD has identified no requirements for such weapons, but our experience 
suggests that we are not always able to predict our future 
requirements. The chief implication is that we must maintain design 
capability for efforts like those being carried out in the RRW program 
but also as a hedge against possible future requirements for new 
capabilities.

                     WHAT'S THE PATH TO GET THERE?

    Let me briefly describe the broad conceptual approach for stockpile 
and infrastructure transformation. The ``enabler'' for such 
transformation, we believe, is the RRW program. To establish the 
feasibility of the RRW concept, we will use the funds provided by 
Congress last year and those requested this year to begin concept and 
feasibility studies on replacement warheads or warhead components that 
provide the same or comparable military capabilities as existing 
warheads in the stockpile. If those studies suggest the RRW concept is 
technically feasible, and if, as I expect, the Department of Defense 
establishes a requirement, we should be able to develop and produce by 
the 2012-2015 timeframe a small build of warheads in order to 
demonstrate that an RRW system can be manufactured and certified 
without nuclear testing.
    Once that capability is demonstrated, the United States will have 
the option to:
  --truncate or cease some ongoing life extension programs for the 
        legacy stockpile;
  --apply the savings from the reduced life extension workload to begin 
        to transform to a stockpile with a substantial RRW component 
        that is both easier and less costly to manufacture and certify; 
        and,
  --use stockpile transformation to enable and drive consolidation to a 
        more responsive infrastructure.
    We should not underestimate the very complex challenge of 
transforming the enterprise while it is operating at close to full 
capacity with on-going warhead life extension programs and potential 
evolving requirements. As a result, as we proceed down this path, we 
will look for opportunities to restructure key life extension programs 
to provide more ``head room'' for transformation. This could also 
provide, in the nearer term, opportunities to ensure appropriate 
diversity in the stockpile, making our nuclear deterrent less sensitive 
to single-point failure of a particular warhead or delivery system.
    Once we establish a responsive infrastructure, and demonstrate that 
we can produce new (or replacement) warheads on a timescale in which 
geopolitical threats could emerge, and can respond in a timely way to 
technical problems in the stockpile, then we can go much further in 
reducing non-deployed warheads and meet the President's vision of the 
smallest stockpile consistent with our Nation's security.
    Success in realizing our vision for transformation will enable us 
to achieve over the long term a smaller stockpile, one that is safer 
and more secure, one that offers a reduced likelihood that we will ever 
need to test again, one that reduces NNSA and DOD ownership costs for 
nuclear forces, and one that enables a much more responsive nuclear 
infrastructure. Most importantly, this effort can go far to ensure a 
credible deterrent for the 21st century that will reduce the likelihood 
we will ever have to employ our nuclear capabilities in defense of the 
Nation.

                               CONCLUSION

    The administration is eager to work with the Congress to forge a 
broad consensus on an approach to stockpile and infrastructure 
transformation. The vision of our future nuclear weapons posture I have 
set forth today is based on the collective judgment of the Directors of 
our National Laboratories and of the Commander, U.S. Strategic Command. 
It derives from lessons learned from 10 years of experience with 
science-based stockpile stewardship, from many years of effort in 
planning for and carrying out the life extension programs for our 
legacy stockpile, and from coming to grips with national security needs 
of the 21st century as laid out in the NPR.
    I hope that the committee finds our vision both coherent and 
compelling. But I must emphasize that it is simply that, a long-term 
vision, nothing more and nothing less. Much of it has not yet begun to 
be implemented in program planning, or is at the very early stages of 
development. But we believe it is the right vision to guide our near 
term planning and to ensure the Nation's long-term security. I ask for 
the committee's support and leadership as we embark on the path of 
transformation.
    Thank you Mr. Chairman. I will be pleased to answer any questions.

                     RELIABLE REPLACEMENT WARHEADS

    Senator Domenici. Very good. I thank you. And I think, 
based on what we have said, though Senator Feinstein clearly 
will want to proceed with some further specifics about her 
points of interest, you've covered most things fairly well.
    I want to clarify, once again, so we'll be sure--Senator 
Feinstein alluded to testimony given by you heretofore before 
Armed Services Committee. I don't know if it's a House or the 
Senate----
    Senator Feinstein. It was the House.
    Ambassador Brooks. Senate, sir.
    Senator Feinstein. Was it----
    Senator Domenici. House?
    Ambassador Brooks. The Senate. I believe the testimony----
    Senator Feinstein. I was----
    Ambassador Brooks [continuing]. You've got the Strategic 
Forces Subcommittee.
    Senator Domenici. Okay.
    Senator Feinstein [continuing]. Referring to the House.
    Senator Domenici. You were referring to the House. I'll 
refer to the Senate.
    On, ``What's the path to get there?'', you commented, near 
the end of that paragraph, that if those studies suggest that 
the RRW concept, which we've just explained awhile ago, is 
technically feasible, and if, as I expect, the Department of 
Defense establishes a requirement, we should be able to develop 
and produce, by 2012-2015 time frame, a small build of warheads 
in order to demonstrate that the RRW system can be manufactured 
and certified without nuclear testing.
    Now, I think that whatever the Senator from California is 
going to ask you about the House testimony, that we're probably 
talking about a similar concern, in terms of what is meant. So 
would you please elaborate? This language, ``produce by, date, 
time frame, a small build of warheads,'' we're not talking 
about building a new----
    Ambassador Brooks. No, sir, we are not.
    Senator Domenici [continuing]. Nuclear weapon.
    Ambassador Brooks. Here's what will happen if there were no 
RRW program. We will take the warheads for the W76, the most 
numerous warhead in the stockpile, and we will put it through a 
Life Extension Program.
    Senator Domenici. Right.
    Ambassador Brooks. And, at the end of that Life Extension 
Program, we will have a large number of warheads, which are 
identical--and so, subject to common-point failure; if 
something's wrong, it affects lots of warheads--and are built 
with all the Cold War constraints that I talked about.
    So, what I am suggesting in that testimony is, if the 
research that we propose to conduct under the RRW program 
suggests that we can replace components in that warhead in a 
way that makes it safer to conduct surveillance, that reduces 
the amount of difficult materials in there, then the Department 
of Defense could formally say, ``That's a good idea.'' And so, 
instead of taking the whole W76 force and rebuilding it, as 
built, we would rebuild some of them using these new concepts. 
What we would then have is a fraction of our warheads that were 
less subject to the problems that you inherently get because of 
the way we designed warheads when the single-most important 
thing was to put the maximum yield into the smallest weight. 
And I'm suggesting it might be possible to do that by 2012 or 
2015. That's not a decision we've made; we don't know enough to 
make the decision. We know----
    Senator Domenici. In any event, when the decision is to be 
made, the word--the words ``a small build'' does not mean a 
small build of new warheads.
    Ambassador Brooks. No, it means----
    Senator Domenici. In any----
    Ambassador Brooks [continuing]. It means a small number of 
modified or remanufactured warheads----
    Senator Domenici. Parts.
    Ambassador Brooks [continuing]. Incorporating----
    Senator Domenici. Different parts.
    Ambassador Brooks [continuing]. These concepts, yes, sir.
    Senator Domenici. Because that's being done pursuant to 
language--it's called ``reliable replacement''----
    Ambassador Brooks. Yes, sir.
    Senator Domenici [continuing]. ``Program''----
    Ambassador Brooks. Yes, sir.
    Senator Domenici [continuing]. Not of the missile, but 
Reliable Replacement Warhead program.
    Ambassador Brooks. Yes, sir, that's correct.
    Senator Domenici. And nobody's suggested that we are not 
supposed to do that, because, as a matter of fact, that's what 
the whole effort that science-based stockpile stewardship is 
directed at.
    Ambassador Brooks. Yes, sir.
    Senator Domenici. To find out whether they still have 
durability, whether they're still safe, whether they're still 
reliable. And if they're found not to be, we're not supposed to 
decide, ``That's the end of it, we shut 'em all down''; we're 
supposed to know about that, and something's supposed to 
happen.
    Ambassador Brooks. That's correct, sir.

                          TEST-SITE READINESS

    Senator Domenici. Which comes to the next question. We have 
never said, to my knowledge, that we are going to close down 
the Nevada test range. As a matter of fact, even when we 
decided on the moratorium, my recollection is, we said it will 
have to constantly be maintained so that it will be ready if we 
need it. Is that correct? In, maybe, different words, but----
    Ambassador Brooks. That is correct. And the issue--and I do 
want to make a slight modification to one of those things made 
in the opening statement--the $25 million that is in this 
budget for test-site readiness, much of that is required as 
long as you're going to keep the test site ready at all. That's 
a relatively small fraction--and I'd have to give you the exact 
number for the record that is devoted to shortening that 
readiness. But we----
    Senator Domenici. Well, Mr. Ambassador, we can argue that 
out up here, in due course, but, you know, some of us have 
thought, from--for a long time, 4 or 5 years, that the question 
is--should come up, and the Department would be put in a bad 
position when it was raised, that if we ever needed the range, 
it wasn't ready.
    Ambassador Brooks. Yes, sir, I agree with that.
    [The information follows:]

                   Underground Nuclear Test Readiness

    The fiscal year 2006 President's budget request includes $25 
million to maintain test readiness timelines that are consistent with 
administration policy. The test readiness budget is thus less than 8 
percent of the total funding to Nevada that directly or indirectly 
supports a viable test site. The test readiness budget pays for items 
not exercised by the experiment and infrastructure funds as detailed 
below. Test readiness examples are authorization basis documents and 
safety analyses for underground nuclear tests, updating of test 
procedures and agreements with local governmental authorities, the 
design and manufacture of Field Test Neutron Generators, new 
diagnostics, a study of seismic effects on the Las Vegas valley and 
maintenance of specialized equipment.
    The test readiness budget is actually a small portion of the 
funding required to maintain the Nevada Test Site in a condition that 
would allow the NNSA to conduct an underground nuclear test. The bulk 
of the funding that maintains the Nevada Test Site comes from the 
amounts provided by the NNSA to Bechtel Nevada for maintenance of 
infrastructure and for the conduct of experiments in support of the 
stockpile stewardship program; for example the underground subcritical 
experiments. These funds total approximately $300 million.

    Senator Domenici. And it might take a long, long time to 
get it ready. So what's the use of saying you ought to maintain 
it, if it takes 5, 6 years to get it ready? And you're saying 
it just happens that, at this point in history, we're saying 
it's time to do some improvements; and we conclude, therefore, 
we must be getting ready to test new weapons, which is not the 
case. Is----
    Ambassador Brooks. That is not----
    Senator Domenici [continuing]. That correct?
    Ambassador Brooks [continuing]. The case.
    Senator Domenici. All right. Now, that's not going to be 
believed by everybody, you understand. Some people are going 
to----
    Ambassador Brooks. True, nonetheless, sir.
    Senator Domenici [continuing]. Some are going to say that 
isn't true. Maybe the lady on my right will say that isn't 
true. But I don't know who else to ask. I don't know who--we 
could put you all under oath, maybe we can ask that every 
person that has anything to do with it all swear that it isn't, 
but I'm--you know, I happen to believe that we need to improve 
the range. It's a great asset. And I hope we never use it. But 
I am one that does not believe it is absolutely certain that we 
will never have to use it. I'm not one of those, and I would 
never vote, and would probably do the best I could to see that 
that didn't happen.

              NUCLEAR WEAPONS COMPLEX INFRASTRUCTURE STUDY

    Now, having said that, there's three or four more, and I 
may submit them, but let me talk a little bit with you about 
the--whatever is going on in terms of a nuclear weapons complex 
infrastructure study.
    Ambassador Brooks. Yes, sir.
    Senator Domenici. Now, I understand that there is such a 
study. I understand that it might have been time for such a 
study. And I have no argument with who's on it or that they 
have been--whether or not they've been busy trying to study and 
inventory. I understand they have. What I don't--what I'm very 
worried about--you see, I've been here long enough to know 
about a lot of studies, and there's lots of them been done that 
nothing happened. And I'm not so sure that's all good or bad. 
As far as us having done so many on security, I think that's 
very bad. We had at least five on what's wrong with security, 
and we never did anything. But we've had a lot of them, 
including one by the distinguished son of the founder of 
Motorola, a great doctor, who's now very old. But, anyway, he 
did a study, that carries his name, on how we should do this, 
how we should consolidate them. You might remember the----
    Ambassador Brooks. Yes, sir. The Galvin report, sir.
    Senator Domenici. What's the name of the man?
    Ambassador Brooks. I think it's the Galvin report.
    Senator Domenici. Yeah, Galvin. You know, he was looking 
about privatization and streamlining. Everybody looked at that 
and threw it away, too.
    So, all I'm worried about is, whatever this study is, am I 
correct that, No. 1, it's not done--not finished?
    Ambassador Brooks. It's not done.
    Senator Domenici. No. 2, nobody's signed onto it yet, is 
that right?
    Ambassador Brooks. That's correct.
    Senator Domenici. The Secretary hasn't committed to any 
parts of it. Is----
    Ambassador Brooks. That's correct.
    Senator Domenici [continuing]. That right?
    Ambassador Brooks. Yes, sir, that's correct.
    Senator Domenici. You don't even know whether it's going to 
be the kind of thing that, in toto, you will support. Is that 
right?
    Ambassador Brooks. That's correct.
    Senator Domenici. And there are people passing around ideas 
about what might be in it. You don't vouch for those, even if 
they come from your Department, right?
    Ambassador Brooks. That's correct.
    Senator Domenici. There are some talking about which lab's 
going to grow, which lab's going to lose, which lab's going to 
have what. You have made no such decisions----
    Ambassador Brooks. We have made no such decisions, and it 
would be premature to do so. We've asked for a broad-based, 
open-ended, think-out-of-the-box study. And when we get it, 
we'll look at it, figure out what----
    Senator Domenici. Right.
    Ambassador Brooks [continuing]. Makes sense and what 
doesn't.

               SECURITY AT LOS ALAMOS NATIONAL LABORATORY

    Senator Domenici. Now, I have just one last thing that 
really worries me. You know, it has--for a long time, Los 
Alamos National Laboratory has been synonymous with excellence. 
We all know that there's competition. Sandia is not 
competition, because they're different. Lawrence Livermore was 
built to be competitive. But it's only recently that, in the 
area of design and building and verifying the adequacy of our 
nuclear weapons, that--it's only recently that Lawrence 
Livermore has reached the heights that it has, vis-a-vis Los 
Alamos. Is that not correct? In the last 10 or 15 years. Los 
Alamos was premier, and building more and designing more----
    Ambassador Brooks. That's certainly true.
    Senator Domenici. Right.
    Now, what worries me, Mr. Secretary, is that they've had 
some problems on security, they've had some problems on 
management, but is it fair to say that none of that has 
impeached their competence and distinction as a great 
laboratory that has significant use and need to the defense of 
our country and to nuclear weaponry?
    Ambassador Brooks. Absolutely. The science at Los Alamos, 
as at other labs, is absolutely superb. Our concern with the 
safety and the security and management problems is because 
you've got to get them fixed so they can get back to doing what 
they do well, in science. I think we're making progress. The 
jury's still out on whether we're all the way there in fixing 
those problems.
    Senator Domenici. Thank you very much.
    Now, we'll go--Senator, you were here first, Senator 
Allard, so we're going to go to you, and then Senator 
Feinstein.

                       NUCLEAR WEAPONS STOCKPILE

    Senator Allard. Mr. Ambassador, one of the things that 
seems to be happening, and I want you to verify this, is, 
throughout the world we continue to have countries that seem to 
be making nuclear weapons--Pakistan; India, I think, is of 
note; North Korea is--appears to be going that direction, they 
claim they are; and Iran, big question mark. I haven't heard 
Russia say anything about the fact that they've taken away 
their ability to produce more nuclear weapons, like we have 
done. And a number of other countries, some of them in the 
European community, seem to maintain that capability, and yet 
we no longer are producing nuclear weapons. In fact, this 
President has called for a reduction in the nuclear warheads, 
through the stockpile. We've done more than that; we've even--
actually pulled down some of our readiness, as far as nuclear 
warheads, with the Peacekeeper.
    Ambassador Brooks. Yes, sir.
    Senator Allard. And a question that comes to mind--in 
comparison to what's happening with other countries, have--and 
maybe just from our own historical point of view, we have--I 
think we've had nuclear weapons stockpile down to the lowest 
level it's ever been for some time. Can you give me some idea 
of how we are, comparatively, historically, in the United 
States?
    Ambassador Brooks. When----
    Senator Allard. I suspect we're down to historical levels.
    Ambassador Brooks. When the reductions the President 
approved last May are implemented in 2012, the stockpile will 
be lower than it has been in my professional lifetime. And I've 
been around for quite awhile.
    I can't be more precise than that, because----
    Senator Allard. It's a sensitive----
    Ambassador Brooks [continuing]. By long practice, the exact 
stockpile numbers, we do not discuss publicly, although I'll be 
more than happy to be very specific. And there's a report----
    Senator Allard. In a----
    Ambassador Brooks [continuing]. For the Congress on this.
    Senator Allard [continuing]. Different situation. I 
understand that. But, you know, I think we've made substantial 
gains in that, and I kind of--my view is that we can even do a 
better job if we have an opportunity to study what's happening 
in the stockpile. If we had a better understanding of what 
happens with aging----
    Ambassador Brooks. Right.
    Senator Allard [continuing]. The various elements in the 
triggers, and had a better idea of what, you know, future risks 
might be. And it seems to me that with these studies, we could 
begin to resolve some of these questions, and maybe even have 
an opportunity to reduce that nuclear stockpile even more; 
particularly in the fact that our ability to target precisely 
is out there. And so, I'd like to hear you respond to that.
    Ambassador Brooks. Yes, sir. I believe, right now, that 
there are--first of all, the President has made it very clear, 
throughout his term in office, and even before, that he seeks 
the lowest nuclear weapons stockpile that's consistent with our 
national security. And he's demonstrated that through the 
actions that he took last year.
    I believe that a more responsive infrastructure and a 
series of weapons that are easier to maintain will allow us to 
reduce further the number of spares that we keep; and, thus, 
continue to lead the world in showing nuclear restraint.

                           ADVANCED CONCEPTS

    Senator Allard. And I think it's something that we can be 
proud of, but I also think that somehow or the other we have to 
be sure that we're able to maintain some sort of defensive 
structure, some deterrence that goes with that, where----
    Ambassador Brooks. Yes, sir.
    Senator Allard [continuing]. Where we don't--we don't have 
our missile defense system in a posture yet where it's 
reliable. And so, we still have to rely, to a certain degree, 
on mutual-assured-destruction approach in order to prevent some 
of our adversaries from overstepping, I think, in many cases.
    And is it fair to say that all you want to do at this point 
is to study concepts on what is actually feasible?
    Ambassador Brooks. Yes, sir.
    Senator Allard. And nothing more?
    Ambassador Brooks. That's correct.
    Senator Allard. And it's pretty clear, as I think we've 
mentioned time and time again, that our legislation there is 
set, we don't provide dollars for anything more than just a 
study.
    Ambassador Brooks. Yes, sir, that's absolutely correct.
    Senator Allard. And so, I think it's pretty clear.
    How much money is in your 5-year plan for this study?
    Ambassador Brooks. For the Robust Nuclear Earth Penetrator, 
$4 million in the budget that's before Congress, $14 million in 
what we project for 2007, and that's all.
    Senator Allard. Is that enough money to complete the study?
    Ambassador Brooks. It's enough money to complete the study.
    Senator Allard. So, not only do we not have any money in 
there for any production at all, we just don't have----
    Ambassador Brooks. We don't have any money for engineering 
development, either.
    Senator Allard. We don't have enough money to complete the 
study.
    Ambassador Brooks. We'd have to come back to you twice more 
before you could get----
    Senator Allard. Before you could have development.
    Ambassador Brooks [continuing]. To have the debate on 
production.
    Senator Allard. Very, very good point.
    Senator Domenici. Senator, would you yield on that?
    Senator Allard. Yes, I'll be glad to yield.

                      RELIABLE REPLACEMENT WARHEAD

    Senator Domenici. Senator, while you're on that question, 
we should follow up with a Reliable Replacement Warhead, which 
is right on line with what you're talking about, which is not 
the big penetrator.
    Ambassador Brooks. That's correct.
    Senator Allard. That's correct. That's correct.
    Senator Domenici. And that's a small amount of money, too.
    Senator Allard. That's correct.
    Senator Domenici. But it's also evaluating--and could you 
tell us how much money is in that?
    Ambassador Brooks. $9.4 million.
    Senator Domenici. So anybody who thinks that's building 
warheads--I mean, you know, you can't even get the team hired 
if you're talking about that.
    Senator Allard. I agree with you, Mr. Chairman.
    And I'd like to address this--you know, we do have support 
from the Pentagon, and we've had--earlier this year, General 
Cartwright, Commander of U.S. Strategic Command, testified 
before the Senate Armed Services Committee that he strongly 
supports a study of the capabilities of a Robust Nuclear Earth 
Penetrator for the purpose of determining whether it can hold 
certain high value and deeply buried targets at risk. And, as I 
understand what his comments were, it's not--the result would 
not be a new nuclear weapon.
    Ambassador Brooks. That's correct.
    Senator Allard [continuing]. And----
    Ambassador Brooks. But----
    Senator Allard [continuing]. And you can----
    Ambassador Brooks. The result of this will just be a study.
    Senator Allard. Yes. That is very important. And if the 
military needs to better understand the capabilities of any of 
these new technologies, it seems to me that you've got to do 
some studying. To do anything else seems to me totally 
irresponsible if you're concerned about the defense of this 
country.
    Once the study is complete, and if the military asks you to 
further investigate, will you come back to the Congress for 
permission?
    Ambassador Brooks. Yes, sir. Not only because that's 
sensible, but because I'm not allowed to do anything else. I 
can't go beyond the study stage without a separate act of 
Congress, and if I go into engineering development, then I 
can't go to production without a third act of Congress, and 
each of those has to be preceded by a decision by the 
President. So, we are a long way from actually having a debate 
over fielding anything, if we ever get there. And I don't have 
any idea what will happen after the results of the study. It 
will depend, in part, I suspect, on our progress at holding 
these targets at risk conventionally, which is everybody's 
preferred method.

            POTENTIAL ADVERSARIES NUCLEAR WEAPONS ACTIVITIES

    Senator Allard. And, to kind of wrap up behind my starting 
comments, have you seen any evidence that would suggest that 
our potential adversaries have ceased their nuclear weapons 
activities in the last 20 years? Of course, Libya--I think 
maybe that would be the only example, but, other than for 
that----
    Ambassador Brooks. Well, yes----
    Senator Allard [continuing]. Have you seen any evidence?
    Ambassador Brooks [continuing]. Of potential adversaries, 
Libya's probably the only example. South Africa is the other 
example of a country that clearly went the nuclear route, and 
then appears to have walked back from it.
    There is certainly evidence that the Russian Federation is 
reducing their overall deployed levels, but they continue to 
produce nuclear weapons. And I believe that to be true of all 
of the nuclear powers, both the recognized ones--with the 
caveat that our knowledge of what's actually happening in North 
Korea is not as detailed, your comment is correct, they have 
stated they have nuclear weapons, they have shown things to 
visitors, which the visitors say looked like nuclear weapons, 
but it's not hard to make something that looks like nuclear 
weapons. I don't know if they have nuclear weapons. The general 
assessment of almost everybody is, they do; but numbers are----
    Senator Allard. Hard to come by.
    Ambassador Brooks [continuing]. Very difficult to----
    Senator Allard. Yeah.
    Ambassador Brooks [continuing]. To ascertain.

                     WEAPONS LABORATORIES STAFFING

    Senator Allard. And, you know, from a manpower standpoint 
in our laboratories, would you comment on the manpower 
shortage--I'd call a critical manpower shortage--on the know-
how of how to manage these weapons with our physicists and 
scientists?
    Ambassador Brooks. I want to distinguish two things. 
Particularly in the aftermath of 9/11, the combination--what 
always attracts people to the weapons laboratories is a 
combination of very great science and the opportunity to serve 
the country, from a security standpoint. I think there are many 
more young scientists now for whom national security is a 
motivator in the aftermath of 9/11. And so, I think, in terms 
of the new Ph.D. at the beginning of his or her career, we're 
not doing too badly.
    The area where we're very worried is the people who have 
had the experience of facing tough design challenges. And those 
people are disproportionately, almost exclusively, in their 
late 50's and older, and they will be retiring. One of the 
things that we will get from the RRW program, which requires 
the same kind of intellectual skill of understanding in these 
very complex entities--if you change this, if you take out this 
material that you put in, after all, for a reason, if you 
replace this with a simpler component, what happens? And 
exercising those skills by the older generation will provide a 
way to mentor the younger generation and to kind of pass on 
some of that hard-won knowledge. It's also true that, because 
of the success of science-based stockpile stewardship, we are 
gaining greater technical and conceptual understanding. And so, 
the new generation will be able to learn, by looking at 
analysis, things that the older generation had to learn by 
going out and doing underground testing.
    So, I think it's important to worry. I am not panicked 
about this. I mean, you know, some of these people, they're 
national treasures, and when they leave it's going to be very 
tough to replace them. I refer to my colleague on my left.

                    SECURITY AT WEAPONS LABORATORIES

    Senator Allard. Mr. Chairman, one final point. You have 
referred, in your comments, about the security at the 
laboratories. The Ambassador's referred to the security of the 
laboratories. And I remember a comment by Senator Simpson one 
time, who says, ``How soon they forget.'' And it seems to me we 
have forgotten about some of our security issues at our labs 
and some of the problems we've had in the past, and how we're 
trying to correct those. And when we have the reductions in 
spending, one of the first things that come to my mind, how are 
we going to maintain the proper security environment that we 
need around those labs?
    And I'll conclude with that. Thank you.
    Ambassador Brooks. Yes, sir.
    Senator Domenici. Senator Feinstein.
    Senator Feinstein. Thank you very much----
    Senator Domenici. Thank you very much, Mr. Ambassador.

                     RELIABLE REPLACEMENT WARHEADS

    Senator Feinstein [continuing]. Thank you very much, Mr. 
Chairman.
    I would like, if I might, if you would approve, place in 
the record some letters on the RRW, my letter of February 9 to 
Secretary Bodman, his response of March 4, and my subsequent 
letter of April 12.
    Senator Domenici. They're part of the record, if that's 
what you desire.
    Senator Feinstein. Thank you very much.
    [The information follows:]

    
    
   
    Senator Feinstein. In the Secretary's March 4 response to 
me, to the question, ``Could this program lead to the 
introduction of new nuclear weapons?'', here is his response, 
``The focus of the RRW program is to extend the life of those 
military capabilities provided by existing warheads, not 
develop warheads for new or different military missions. 
``If''--there's always an ``if'' or a ``but''--``If, in the 
future, the DOD identifies requirements for new or different 
military capabilities, it is conceivable that certain of the 
concepts identified in the RRW program could be applied in the 
development of warheads to meet those new requirements.''
    Now, how does that not open the door to new nuclear 
weapons?
    Ambassador Brooks. Let me try, Senator. And let me--and I--
we have a problem. I mean, we, on my end of the street. And our 
problem is, we want to be as complete and accurate as possible 
so we can't be accused of misleading the Congress. Knowledge is 
fungible. Everything I learn doing anything associated with a 
nuclear weapon potentially will help me if the Department of 
Defense ever decides they want something fundamentally new. We 
just gave an example. We're going to get people who are going 
to learn to think a little bit about, ``What does it mean you 
do this or that to change component of a weapon?'' And so, what 
the Secretary meant when he wrote that was to simply make it 
clear that we acknowledge the inevitable, inescapable fact that 
if you learn more things you can use that knowledge in a 
variety of ways. We wanted to recognize that fact, then make it 
clear that's not why we're doing this program. We don't 
envision this program as leading to new weapons.
    I think, as the Secretary's letter says, it's not the 
purpose of the RRW program, and I think he also, if I remember 
his letter correctly, acknowledged--I mean, he'd have to remind 
you; you know, but he wanted to make sure you knew that he 
knows that we couldn't go forward on anything without the 
Congress.
    Senator Feinstein. Oh, I understand that. And you--I saw 
the twinkle in your eye, because you know that we fenced the 
program. I think it's at 6.3. And----
    Ambassador Brooks. Yes, ma'am.
    Senator Feinstein [continuing]. So, my next question was 
going to be--I would assume, then, that 2007 takes you up to 
6.3.
    Ambassador Brooks. Are we talking about the----
    Senator Feinstein. We're talking about the bunker buster.
    Ambassador Brooks [continuing]. Going beyond 2007 would 
take you--2007 is 6.2----
    Senator Feinstein. 2007 is----
    Ambassador Brooks [continuing]. 6.2.
    Senator Feinstein [continuing]. 6.2?
    Ambassador Brooks. Yes, the same as 2005. 2006-2007 are the 
same thing, in terms of that classic definition of the steps 
you go. To go beyond would require, (a) money we haven't 
programmed, and, (b) approval you haven't given.
    Senator Feinstein. Right. And that's when--to go into 6.3--
--
    Ambassador Brooks. Yes, ma'am.
    Senator Feinstein [continuing]. Which is the more active 
engineering----
    Ambassador Brooks. Engineering development.
    Senator Feinstein [continuing]. You would have to come back 
to us for----
    Ambassador Brooks. Yes, ma'am.

                     RELIABLE REPLACEMENT WARHEADS

    Senator Feinstein [continuing]. Permission. Yes, I think 
that's good.
    Now, back to the RRW. You don't plan on testing these new 
warheads?
    Ambassador Brooks. No. No. In fact, as we go to the 
laboratories and ask them to start thinking about what approach 
they might use, technically, to this component replacement, one 
of the constraints we're going to put is, they have to be able 
to say they believe that they'll be able to certify--that is, 
if they--whatever we choose to replace, whether it's the 
explosive or remove certain materials, we're actually going to 
be able to certify that without nuclear testing. There's 
absolutely no intent that this program be----
    Senator Feinstein. See, that's another thing. I find it 
hard to believe that you would actually develop a new warhead 
as a replacement that would go into a military situation 
without actually testing it before. I find it difficult to 
believe that a President wouldn't want it tested.
    Ambassador Brooks. Well--and I would have found it 
difficult to believe 15 years ago. That's why we've come to you 
for the last decade to get all this money for science-based 
stockpile stewardship, because what we will do is constrain the 
changes that we make to those that we don't need to use 
underground testing. And because we have a better 
understanding, both of subcritical experiments, things that 
aren't nuclear testing, as you're using the term, because we 
have better computation, that'll still let us do modification. 
I mean, that's not new. When we do the life-extension programs, 
I say we rebuild them just the way they were built, and that's 
not actually----

                             TEST READINESS

    Senator Feinstein. And then why move up time-to-test to 18 
months? Why is that----
    Ambassador Brooks. A completely different reason, unrelated 
to RRW. The--and here's how we got to 18 months. We believe 
that there is no need to test now. We don't foresee any need to 
test. But if our surveillance program reveals a serious problem 
with a warhead that is crucial to the stockpile, I certainly, 
and I expect the professional military, would go to the 
President and say, ``We may need to test, either to confirm the 
problem or to make sure of the fix.'' Now, if you look back in 
history when we were testing, and when we did see problems, and 
you say, ``About how long did it take us from the 
identification of the problem to when we were ready to do an 
experiment and design it?''--and a lot of this stuff you can't 
do in advance, because you don't know what the problem is--18 
months seemed to be a roughly appropriate number. Shorter than 
that, and you were paying money for readiness you couldn't use, 
because the experiment wouldn't be ready. Longer than that, and 
you were running the risk of being ready to test to find out 
whether you had corrected an important problem, but the test 
site wasn't ready. That's 18 months.
    Is 18 the right number? Well, 17 or 20. I mean, nobody can 
tell you that. That's--18 is certainly better than 3 years. Is 
it a big deal between the 24 months and--I don't--that's how we 
got to 18, and there's not a whole lot more science to it than 
that.
    Senator Domenici. You can go ahead, sir.

                     RELIABLE REPLACEMENT WARHEADS

    Dr. Beckner. Yes, could I? Let me return to the question of 
RRW and whether that inevitably might lead you to the need to 
test. The fact is that the designs that will be worked on 
within that concept will go back in time to earlier designs, 
which were heavier, in some cases larger, but for which we do 
have a database. It's fairly old, but, as you know, weapons 
have been tested now for many, many years, over 1,000 of them. 
So, the intent is, when they work on these ideas, is to utilize 
data that does tie back to----
    Senator Feinstein. The test.
    Dr. Beckner [continuing]. Former tests. So, we're not going 
to go out into completely new territory with any of these 
ideas.

                                  PITS

    Senator Feinstein. Okay. Now, two I-can't-understand-for-
the-life-of-me questions. The first I-can't-understand-for-the-
life-of-me question is why you need 450 pits, why you've been 
so persistent on 450 pits, when everything I read says you 
don't need 450 pits to modernize your present fleet. And the 
report on the----
    Ambassador Brooks. Says we don't need it.
    Senator Feinstein [continuing]. Quality isn't due until 
2006. So why are you moving so aggressively, and have been for 
the last couple of sessions, toward 450 pits?
    Ambassador Brooks. Senator, with the greatest respect, 
nobody who works for me, or nobody for whom I have worked for, 
has ever said 450. What we did was, when we did the 
environmental impact statement for NEPA, we took the broadest 
possible range. I've forgotten how they got the upper limit, 
but they said we had to analyze within the broadest possible 
range. I have said before, and I will say now, I think it is 
very difficult to imagine anything like 450. I believe the 
report we submitted to Congress said that we thought it would 
probably be in the range of 150.
    Let me explain to you what--the reason for the fuzziness. 
Let's say that the Congress lifts the restriction, I get the 
site, and we build this thing, and it starts producing pits 
around 2020. At that point, the newest pit in the stockpile 
will be 30 years old, because we stopped making them. We don't 
talk about specific numbers of the stockpile, but let's just 
say that you had 3,000 weapons deployed, spare, pits that 
aren't in there. Let's just say you had 3,000. I made the 
number up. All right? If, in fact, it turns out that the 
lifetime of plutonium is 45 years, then we have 25 years left 
on that lifetime to get through all 3,000 of those. So, you 
say, okay, and you do a simple division, and you get about 150.
    If, on the other hand, you delay the modern pit facility 
and nothing else changes, but you delay it 5 years, now all of 
a sudden you've got a shorter time to get through that same 
number of pits. And so, the number you have to put through each 
year goes up. If the number is greater than 3,000, then, 
obviously, you have more.
    So we've got a number of variables we don't know. The way 
you make--so the way you hedge against that is, you say, well, 
with most plausible stockpiles, you can convince yourself 
you're going to need about 150, and then you have the 
capability sometime in the next decade, if that turns out to 
the wrong number, because, in fact, plutonium lifetime is much 
shorter than we now expect, then you expand it.
    The reason you don't want to wait and say, ``Well, let's do 
all of the analysis that will let us narrow down the lifetime 
of plutonium'': two reasons. First, the way science really 
works is, we won't have a clear answer that everybody will 
agree on; we'll just have a technical scientific disagreement 
with more data. I mean, I predict that's what will happen. But, 
secondly, suppose we do have a consensus and it turns out that 
we're really near the short end of the thing. Then, in order to 
get through turning over the stockpile, I have to build this 
bigger than I need. If it turns out that we erred and that the 
lifetime of pits is much longer than we expected, then sometime 
in the next decade this committee or its successor will be able 
to crank back on some ongoing funding. The first one could put 
the program at risk; the second one does not.
    So, it is my view that the right thing to do is to go 
forward with the design, keeping as many options as possible 
open, but the reason you can't understand why we'd want 450 
pits a year is, there is no reason we want 450 pits a year. I 
think that's just way too high, unless we hold off this thing 
so long that you've got to turn the whole stockpile over in a 
very short time.
    Senator Feinstein. I thank you. Now I have to go home and 
do my homework on the actual fleet, and do those numbers----
    Ambassador Brooks. Yes, ma'am.
    Senator Feinstein [continuing]. And on the expected 
lifetime----
    Ambassador Brooks. Yes, ma'am.
    Senator Feinstein [continuing]. And do those numbers----
    Ambassador Brooks. And I----
    Senator Feinstein [continuing]. Which we will do.
    Ambassador Brooks. At least to save you the math, I commend 
you the report on pit lifetime, which I will make sure your 
staff has a copy, which looks at this parametrically. It looks 
at all the conceivable lifetimes, and it will--you know, you 
pick what you believe is likely to be true, and then it'll give 
you the answer. It's--

                    ROBUST NUCLEAR EARTH PENETRATOR

    Senator Feinstein. Thank you.
    Now, the second I-can't-believe-for-the-life-of-me 
question. And this is----
    Senator Domenici. Is it ``believe it or not?''
    Senator Feinstein [continuing]. This is the big one. This 
is one that confounds me, because the Ambassador has been very 
up-front. And I had the quote from the March 2 House Armed 
Services Strategic Forces Subcommittee when you answered a 
question that Congresswoman Tauscher asked you about the bunker 
buster, and she asked, ``I just want to know if there's any way 
a bunker buster of any size that we would drop will not produce 
a huge amount of radioactive debris.'' And you said, as you 
said here today, ``No, there is not.'' And then the question 
was, ``How deep could it go?'' And the same thing, you said, 
``A couple of tens of meters, maybe--I mean, certainly. I 
really must apologize for my lack of precision if we, in the 
administration, have suggested that it was possible to have a 
bomb that penetrated far enough to trap all fallout. I don't 
believe that. I don't believe the laws of physics will ever let 
that be true.''
    And I believe that's a really correct statement, because 
I've talked to a number of nuclear physicists. They say the 
same thing. So my question is, why are we doing this? We won't 
spew radiation, in terms of millions of cubic feet. I hope to 
God we won't. So why are we doing this?
    Ambassador Brooks. For the same reason, Senator, that we're 
doing any of the nuclear weapons programs. We face a very 
serious philosophical, moral, technical issue with nuclear 
weapons. And that is, for deterrents to work, we have to 
threaten to destroy something that is valuable to an adversary; 
notwithstanding the fact that the act of destroying that would 
be, in many ways, an unimaginable act. You and I have spent our 
whole life, and for much of that life, we've faced off against 
the Soviet Union at a time when at least I thought we might 
really go to war with those guys, and we deterred an attack on 
the United States by the notion of doing something back that 
would cause huge devastation.
    May I, ma'am? Because I'm actually going somewhere; it just 
doesn't look that way.
    Senator Feinstein. Okay. I want to do this.
    Ambassador Brooks. The concern that we have now is that the 
kind of what I call ``generic dictator,'' because I don't want 
to get arguing about any specific country, but if you look at 
generic dictators that we have dealt with recently, you will 
find they don't care about their people. They care about their 
power, and they care about their weapons, and they tend to put 
those things in places they don't think we can get to. And I 
don't believe that it is in our interest for a dictator to 
believe that there's nothing we could do. What we would do, who 
knows? That's the argument that says one might want a future 
President to have the option of such a weapon. All we're trying 
to do now is decide whether he can have it if he wants it, by 
figuring out if it's technically feasible.
    Senator Feinstein. I appreciate that. And I appreciate your 
directness. I really do.
    Where I have a hard time with this answer is reading the 
Nuclear Posture Review and seeing the position that's taken in 
that review. Whereas, we all know we've never had a no-first-
use policy, this review says that there are certain instances 
and certain countries against we would countenance a first use 
of nuclear weapons. All of those countries, the seven that are 
mentioned, know that. So, what are they going to do, sit back 
while we develop this, or are they going to go out and develop 
something even more, or at least as much? And this is where, 
when we have adequate conventional weapons, highly 
sophisticated conventional weapons, and, where combined with 
intelligence on air holes and exits and entries and those kinds 
of things, can be just as effective, I don't know why we want 
to risk the escalation, which, to me, seems to overwhelm the 
argument of deterrence.

                    ROBUST NUCLEAR EARTH PENETRATOR

    Ambassador Brooks. Yes, ma'am. And the answer is, in my 
view, in the premise you make. You make the premise that we can 
adequately hold these targets at risk through conventional 
means, that we have the conventional capability and the 
precision intelligence. And if that were true, I don't know why 
anybody would want to develop a nuclear capability, either. The 
point is that I think the actual ability to do this 
conventionally is not quite as good--and I'm getting in areas 
that, (a) are not my formal responsibility, and, (b) shouldn't 
be discussed in an open hearing. But let me just say, for the 
sake of argument, if you believed that we might not have that 
capability, then you might want to at least think about, well, 
if the choice is nothing or a threat--or threatening an 
individual with nuclear weapons, which enhances deterrence? You 
correctly point out that countries are aware of what we might 
do. As long as we can't do things, then they don't have to 
worry about what a future President would do.
    I believe, and there is a formal requirement from the 
Department of Defense, that we need to be able to threaten, 
militarily, hardened and deeply buried targets. Everybody that 
I know would much rather do that conventionally. And if your 
analysis that our intelligence and our conventional 
capabilities are right, then, (a) it doesn't matter whether you 
fund the study or not, because we'll certainly never go on with 
it, because it would make no sense. All I'm asking you to think 
through is, if it turns out that you're wrong, which is better, 
to accept the risks that you correctly describe by having a 
capability, or to accept the risks that I've described of 
having something that's a sanctuary beyond the reach of U.S. 
power?
    I think that's a hard decision. I think we ought to have 
that discussion in the knowledge of whether we could do it with 
nuclear weapons if we wanted to. And that's why the 
administration proposes to spend some money to find out.
    Senator Feinstein. Yeah, and I appreciate your 
forbearance--yeah, I know, wrap it up--but one last thing and 
I'm done. We have an intellectual, an antiseptic discussion. 
And I go back, and I pull out my pictures of Nagasaki and 
Hiroshima. And I looked at what 15 kilotons can do. And I look 
at the wind patterns in various places, and I see what a 100-
kiloton bunker buster will do. I mean, we would have to be mad 
to ever use it. And it--so, for me, if you leave this 
antiseptic world of going back and forth over a table, and you 
look at the real world of potential use, it's entirely 
different.
    Ambassador Brooks. It's very hard to see any time when any 
nuclear weapon you would want to use. It's, nonetheless, been, 
for all my lifetime, the view that the capability is an 
effective deterrent. And we've always faced that. The dichotomy 
you point out about this huge devastation, if we ever use them, 
compared to the deterrent benefit, that's true whether they can 
penetrate a few meters into the ground or not. And I think 
that's a hard question.
    The only thing I would ask you to believe is, there's 
nobody on my end of the street who is unaware that nuclear use 
is, you know, quite literally, the most difficult and awesome 
decision a President would ever have to make. I don't think 
that we are going forward in an antiseptic way. We certainly 
don't intend to be, and I certainly don't think of it that way.
    Senator Feinstein. Thank you very much. Thank you, I 
appreciate your forbearance.
    Thank you very much.

                    RETIREMENT OF DR. EVERET BECKNER

    Senator Domenici. Thank you.
    Now, let me ask--Dr. Beckner, this is your last day, and, 
you know, we would have, perhaps, asked you questions, but we 
chose to do it another way. You still had something good to 
contribute. Do you want to say anything here, on your last day, 
about what's gone on or anything you'd like to?
    Dr. Beckner. Well, since you've given me the opportunity, I 
certainly wouldn't turn it down.
    This has been a marvelous experience for me. It comes 
toward the end of my career, which extended back to 25-plus 
years at Sandia and then finally culminating in this position. 
It's the finest job I've had, mainly because of the importance 
to the country. It's not one that I was eager to leave, but it 
seemed to be time. And so, I now look forward to the 
retirement. But I'll think about it a lot in the future. So, I 
appreciate the opportunity I've had, and I want to be sure I'm 
on the record for that.
    Senator Domenici. Well, you stay--you keep your suitcase 
packed, because there's probably a lot of things we're going to 
ask you to do that won't infringe upon the notion that you're 
in retirement.
    Dr. Beckner. Yeah, I'd be pleased to do that.

                       NUCLEAR WEAPONS RELEVANCE

    Senator Domenici. We'll permit you to be constructive.
    Senator, while you're still here, let me first say to you 
that I clearly understand the concern that you've expressed on 
all the issues. And I wish that we never had a nuclear weapon 
around, which I sense you do, also. And I even hear people, 
believe it or not, in commissions and council at the local 
levels, passing resolutions that we should get rid of our 
nuclear weapons. I hope, at least, when they say that, they 
mean ``our,'' not just ours, but----
    Senator Feinstein. Everyone's.
    Senator Domenici [continuing]. Everyone's. But I think 
they're--some of them aren't even saying that, just that they 
don't want them around America. But, you know, they were put 
upon us by ourselves, in a sense, and then we got in this mess 
that we had them and somebody else had them.
    It is interesting that these devastating, terribly damaging 
weapons that nobody would fathom using kept peace for a long 
time. I mean, actually, I've seen some studies that there are 
probably less people killed in wars, during the 50 years that 
we were at bay, than any comparable 50 years in modern times. 
Interesting. Maybe it's not true, but I hear it's true.
    Now it's getting worse; not because of that group of 
weapons laid over against ours, but because others have found 
it, right? Now it's--but, you know, I tend to operate off the 
premise, which apparently some people, even that built our 
bombs, didn't agree upon, because some of them wanted to share 
the fact that we had weapons, because they weren't quite sure 
we would be right all the time. You know that. Some of them 
excused--have written later and excused themselves from perhaps 
leaking secrets, that they weren't too sure we ought to have a 
monopoly. But let me say, I tend to believe our people, in 
government, when they tell us what they're going to do and what 
they're not going to do. And I don't have any such confidence 
that others are--even if they're our friends in the world--are 
going to tell us that about nuclear weapons and activities that 
they're undertaking. We could have a nice debate about that, 
but that's my feeling.
    I also don't think that American people have to believe 
that. They, consequently think--they always tell me that I am 
absolutely wrong, we are building new weapons, and they know we 
are, ``Every day, you're building a new bomb.'' I tell them, 
``I don't know where you get it. I only can believe what I've 
heard.'' But they believe it.
    The truth of the matter is that I believe that none of 
these things that they're asking us to do in this field are 
done with the idea of enhancing or encouraging, in any way, our 
unilateral use of nuclear weapons, in any way, against another 
country, enemy or would-be enemy. I think they're all being 
developed because there is an apparent need so long as the 
world is what I've just described. And if it isn't that way, 
then we ought to--you know.

                                  PITS

    And I want to talk about pits for a minute, then I'll 
close. It is not correct to say that, ``Here we are, rushing 
ahead to build pits.'' I mean, I have, for 10 years, been 
pressured by the Defense people that we're making fools of 
ourselves by not having any pit substitutes for our nuclear 
weapons; to the point where I was able to say, for 5 
consecutive years, we're the only nuclear power that has no 
inventory of pits around. And we're trying to do it, right? And 
we finally ended up building them at Los Alamos, which is not 
supposed to be the place. You know, they're up there doing it. 
I've looked at it. And it sure as hell doesn't look like a 
manufacturing plant to me. And I know, Doctor, you've seen it. 
You've seen it, Mr. Ambassador. I mean, it's a pretty shaky 
looking place to be manufacturing pits. Safe, I acknowledge. 
And nobody's scared, so they must be safe. But--I'm not sure--
but, sooner or later, we have to either decide that we are or 
we aren't. And sometime we've got to build a place.
    And just think of this. Here's an administration, this one 
or the next one, that has to decide on a location and a 
building. I don't think you're saying they don't have to, ever. 
You're just questioning whether they're exaggerating, whether--
but it's a terrific undertaking to site a building and decide 
upon it with the anti--and the way people can insist you jump 
through hoops before you do it, if you ever do it. And so, I 
don't think it's--I think the explanation that, while you're 
going through the impact evaluation, which takes forever and--
go ahead and put in a number that makes sure that when Congress 
gets around to approving it, we're not going to have to do 
anything over again. Now, it may be too high, and it may be 
that before you go on even considering her concern and what 
I've said and you've said, you might want to cut it in half. 
You might want to go down to 150 or something, because, you 
know, I say, thank God if we ever got there, in terms of 
getting it done--I don't mean building them, but at least we'd 
be rid of the problem that we can't make a decision.

                            NUCLEAR WEAPONS

    So that's how I see it. And I never want you to think that 
because I'm not going to agree with you on some of these 
things--I do respect, greatly, you; but, not only that, you've 
worked hard on these issues. I just hope you know that what to 
you are believe-it-or-nots, to some of us are believable. And 
that's where we are on about five or six issues, and we'll 
debate them out thoroughly. And I think the committee--
subcommittee will have a good time this year.
    Senator Feinstein. I think so, too.
    Senator Domenici. We won't take so long to debate them. You 
can do that on the floor, but we'll get something done.
    Senator Feinstein. Thank you.

                             NAVAL REACTORS

    Senator Domenici. Any of you--Admiral, do you have anything 
to say?
    Admiral Donald. No, sir. It's a pleasure to be here.
    Senator Domenici. Are your boats at sea still safe?
    Admiral Donald. Yes, sir, absolutely.
    Senator Domenici. Are they still landing in ports 
everywhere?
    Admiral Donald. Yes, sir. Yes, sir. We're welcome in any 
ports.
    Senator Domenici. Except Australia.
    Admiral Donald. New Zealand.
    Senator Domenici. New Zealand. That's an old-time 
arrangement, right?
    Admiral Donald. Yes, sir, it is.
    Senator Domenici. Yeah. And when you go into ports in 
Europe, they don't move all their boats out of there----
    Admiral Donald. Absolutely not.
    Senator Domenici [continuing]. Because they're scared of 
you, do they?
    Admiral Donald. No, sir, they do not.
    Senator Domenici. That's amazing. You do that, but, over 
here, if we try to move a spent fuel rod, they want to clear 
out the countryside, right? And you've gone over there in 
water, where, if it leaked there, it would go everywhere. 
Anyway.
    And, Mr. Baker, how about you. Do you have anything to 
comment?

                     ADDITIONAL COMMITTEE QUESTIONS

    Mr. Baker. No, I just want to thank you, Senator Domenici, 
over the years, for supporting our program. The threat has been 
reduced. It's getting tougher and tougher working with Russia, 
but, through your support, we have succeeded, and I want to 
thank you for it.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
            Questions Submitted by Senator Pete V. Domenici
                         plutonium disposition
    Question. It appears that the liability proposal for plutonium 
disposition program continues to make slow progress. I was disappointed 
with the failure of the parties to reach an agreement before the 
Bratislava Summit between President Bush and President Putin.
    As I noted in my statement, I fear opponents will seize on the 
opportunity to cut the budget request of $336 million and the $300 
million in unobligated funds. I suspect our G-8 partners, who have 
committed $800 million toward this project, are also watching U.S. 
progress very carefully.
    Why are we alone among the major participants in the Global 
Partnership not to be able to reach a liability agreement with Russia? 
Can you assure the committee that the administration is committed to 
pushing this agreement through in the near future?
    Answer. The United States has many agreements with the Russian 
Federation for which it is essential to have appropriate liability 
protection for the United States, its personnel, its contractors and 
their personnel. The effects on these agreements need to be taken into 
account as we proceed with resolving liability issues in the context of 
the plutonium disposition program. The administration remains strongly 
committed to achieving a satisfactory resolution of the liability 
issues in the near future, which will enable the United States and 
Russia to proceed with plans to dispose of surplus weapon-grade 
plutonium.
  u.s./russian working group on nuclear security--bratislava statement
    Question. It seems to me that the only way we can succeed in 
completing the security upgrades in Russia in 2008, in building an 
effective security culture there, and in getting the Russians to 
sustain high security with their own resources after our help phases 
out, is to convince the Russians that this is an urgent threat to their 
own security. The same goes for similar work with other countries. What 
more can we do to build understanding of the urgency of the treat--in 
Russia, and in countries around the world? President Bush and President 
Putin announced a commitment to increase efforts on ``Loose Nukes'' 
during the President's recent visit to Europe. What is the dimension of 
the new announcement, in terms of acceleration, reordering priorities?
    Answer. At their meeting in Bratislava, President Bush and 
President Putin agreed to enhance cooperation between our two countries 
to better counter nuclear terrorism. Stressing that ``while the 
security of nuclear facilities in the United States and Russia meet 
current requirements, these requirements must be constantly enhanced to 
counter the evolving terrorist threats.'' As such, the President's 
announced an expansion of cooperation on nuclear security and 
identified five areas for further cooperation: (1) Emergency Response; 
(2) Best Practices for security at nuclear facilities; (3) Security 
Culture; (4) Research Reactors; and (5) Nuclear Security.
    The Bratislava statements have energized an evolving partnership in 
U.S.-Russia relations focused on the prevention of nuclear terrorism. 
While progress was being made in many of these areas prior to 
Bratislava, the process launched at Bratislava has focused increased 
attention on a number of critical U.S. nuclear security goals. 
Specifically as a result of Bratislava, we have expanded dialogue into 
new potential areas of cooperation: emergency response, best practices, 
and security culture, and have established concrete milestones for 
targeted areas of ongoing cooperation: including the conversion of 
research reactors to low enriched uranium fuel, the repatriation of 
both spent and fresh high enriched uranium fuel back to Russia and the 
United States, and completing joint action plans for nuclear site 
security upgrades at Rosatom and Ministry of Defense facilities.
    Question. What are the key things we need to do to follow up on the 
Bratislava summit?
    Answer. To continue the momentum achieved by Bratislava, the United 
States and Russia will need to follow through on continued 
implementation and established milestones for repatriation of fresh and 
spent highly-enriched uranium (HEU) fuel, site security upgrades at 
Russian nuclear facilities, and conversion of Russian and U.S.-supplied 
research reactors in third countries currently using HEU fuel. The 
United States and Russia have also agreed to a number of joint 
workshops and exercises planned for Fall 2005, in best practices, 
security culture, and emergency management. As emergency response 
cooperation expands from traditional consequence management cooperation 
to prevention of nuclear terrorism, the United States and Russia will 
need to consider a new intergovernmental agreement on Emergency 
Response.

                    RUSSIAN SECURITY SUSTAINABILITY

    Question. As you complete upgrades at more and more sites, the 
sustainability work becomes ever more important, and presumably will 
become an increasing share of the effort. Why does the budget request 
reduce funds to support sustainability by $11 million?
    Answer. Sustainability will indeed increasingly consume a larger 
portion of the budget for each of our nuclear security programs. The 
budget request reduction was a result of the National Infrastructure 
and Sustainability program's accelerated procurement of 10 new railcars 
for the Rosatom Weapons Complex in fiscal year 2005. The railcars will 
enable Rosatom to securely move nuclear material between sites. 
However, the budget request for the sustainability portion of all other 
nuclear security activities was not reduced.
    Question. The Russians have done very little to reduce the number 
of sites with nuclear weapons and materials. It seems to me if [we] 
want high security there at an affordable price, in a way they can 
sustain, we have to be guarding a smaller number of places. What can we 
do to convince them to consolidate?
    Answer. DOE/NNSA has engaged Rosatom officials on the importance of 
consolidation on numerous occasions and the Material Consolidation and 
Conversion Project is a vehicle whereby DOE/NNSA can support the 
consolidation of HEU to fewer sites. The joint DOE-Rosatom MCC Working 
Group provides a forum for continuing this engagement. It is necessary 
to consider financial incentives and other assistance for Rosatom and 
the nuclear sites that offset the impact of removing material from 
operational sites.

                          U.N. RESOLUTION 1540

    Question. I was very pleased by the administration's success in 
pushing through U.N. Security Council Resolution 1540, which legally 
obligates every U.N. member country to put in place criminal laws 
banning any WMD activities with terrorists, effective export controls 
and border controls, and effective security and accounting for WMD 
stockpiles, including nuclear materials. I think this is a key tool to 
prevent future A.Q. Khan networks, and to keep nuclear bomb materials 
out of terrorist hands. But I've seen surprisingly little follow-
through on implementing this resolution so far. Our export control 
support programs, for example, were working with 30-40 targeted 
countries before the resolution and they're still working with 30-40 
targeted countries now--but under the resolution there are 191 
countries that have a legal requirement to put good export controls in 
place, and probably well over 100 of them that are going to need help 
to do so. What role does the Department of Energy play in supporting 
the enforcement of these controls and in monitoring compliance?
    Answer. Alongside the Department of State's Export Control and 
Related Border Security (EXBS) Program, DOE's International 
Nonproliferation Export Control Program (INECP) supports export control 
assistance overseas. Through this program, INECP serves to meet 
pressing export control system improvement requirements as outlined in 
U.N. Security Council Resolution 1540 and the President's 
nonproliferation policy in the 30-40 countries it currently engages. 
INECP uses national laboratory specialists to train foreign technical 
counterparts in the methods required to ``staff'' their own national 
export control systems, and thus supports elements necessary for 
effective national export control systems.
    Specifically, INECP's training enables foreign technical 
specialists to:
  --Conduct analyses of items proposed for export to prevent the 
        diversion of WMD-related commodities to State proliferators or 
        terrorist organizations;
  --Provide training in high risk property management and internal 
        compliance to their nuclear and dual-use industries that help 
        industry officials understand the proliferation threat posed by 
        legitimate technologies; and,
  --Adapt INECP-modeled curricula to national customs training academy 
        needs. This ``Commodity Identification Training'' is designed 
        to familiarize frontline customs officers with the visually 
        distinctive aspects of dual-use commodities needed to 
        manufacture WMD, so that they can seek additional advice when 
        necessary from their own national technical experts.
    Question. What more should be done to prevent the proliferation of 
nuclear material, scientific expertise and equipment?
    Answer. DOE's nonproliferation programs focus on these core aspects 
of the proliferation threat. Our programs cover a wide range of efforts 
from securing nuclear material at the source, to increasing overseas 
border security, to implementing and monitoring export controls, to 
disposing of fissile material and to scientific engagement of former 
weapons scientists. The administration continues to make these programs 
a top priority and the continued support of Congress for our 
multifaceted efforts would be greatly appreciated as we work as quickly 
as possible to reduce the threat posed by nuclear proliferation.

                DOE RELATIONSHIP WITH HOMELAND SECURITY

    Question. The Department is providing valuable technological 
expertise in its laboratories to the missions of Homeland Security. Can 
you provide for the committee the contributions that have been made 
thus far by the laboratories to the Department of Homeland Security, by 
each laboratory or other entity?
    Answer. Over the past 2\1/2\ years, the National Nuclear Security 
Administration (NNSA) and the other elements of the Department have 
worked with the Department of Homeland Security (DHS) to identify and 
provide critically needed technology, equipment, and expertise. We have 
been engaged in more than 233 programs and projects across the complex 
that were supported by more than $582.9 million from DHS since its 
inception.
    NNSA and its Laboratories have made significant contributions to 
the Department of Homeland Security (DHS). For instance, the core DHS 
Science and Technology (S&T) program, including the biological research 
program, started as a transfer of programs, funds and personnel from 
the NNSA Office of Nonproliferation Research and Engineering. Further, 
DHS and DOE have actively used a Calendar Year 2003 Memorandum of 
Agreement (MOA) to provide DHS direct access to the DOE and NNSA 
laboratories. This interaction has included providing expert technical 
staff from the national laboratories to staff key positions within the 
DHS S&T Undersecretariate, to a large number of DHS-funded technology 
programs and projects at the national laboratories, to an active 
programmatic engagement between offices in NNSA and DHS.
    I am enclosing for the record, a summary of the number of projects, 
and associated costs, for the efforts at NNSA sites. While most of 
these efforts are on-going, the summary also lists some of the 
significant NNSA accomplishments and deliverables that have contributed 
to meeting the DHS mission.
Attachment.--DOE Relationship with Homeland Security
            Sandia National Laboratories (SNL)
    Programs/Projects.--74.
    Funding.--$104.9 million.
    Contributions: Radiological and Nuclear Countermeasures.--Sensor 
for Measurement and Analysis of Radiation Transients (SMART) technology 
uses sodium iodide detectors and Sandia developed software to 
distinguish between various naturally occurring isotopes and special 
nuclear material.
    Sandia National Laboratories was responsible for the maritime venue 
at the RNC surge deployment of the DHS CounterMeasures Test Beds as 
well as providing staff and redeploying equipment to other venues such 
as bridges, tunnels and commuter rail.
    The Sandia analysis team has responded to rapid turnaround requests 
during national Orange Alerts and provided specific information to 
local, State, and Federal law enforcement on the deployment and use of 
radiation detectors.
    Infrastructure Protection Program.--Sandia's National 
Infrastructure Simulation & Analysis Center (NISAC) and Critical 
Infrastructure Protection/Decision Support System (CIP/DSS) Program 
have developed specific skill sets and capabilities requested by DHS to 
support infrastructure protection requirements issued by the DHS 
directorates.
    Chem/Bio Countermeasures Program.--SNL is developing fully self-
contained, portable, hand-held chemical analysis systems incorporating 
``lab on a chip'' technologies. The micro-ChemLab systems utilize micro 
fabricated substrates to provide sensitive devices with fast response 
times in a low power, compact package.
    A BioBriefcase project is being undertaken as a joint collaboration 
between Sandia and Lawrence Livermore National Laboratories for the 
DHS. This project calls for a broad-spectrum bioagent detector that is 
briefcase-sized and features dramatically reduced reagent consumption, 
improved sensitivity and rapid response time.
    Under the Transit Facility Protection effort, a chemical sensor 
test bed and emergency response plan developed by Sandia and Argonne 
National Laboratory in 1997 to demonstrate an early warning system at 
the Washington, DC Metro recently went online as part of the subway's 
ongoing emergency preparedness operations.
    Chemical detectors and prototype biological detectors have been 
fielded at a major U.S. airport as components of a future integrated 
monitoring system.
    Decontamination and Restoration.--A Domestic Demonstration and 
Application Program (DDAP) begun in 2003, in collaboration with 
Lawrence Livermore National Laboratory, is intended to create an 
optimal model for restoring a vulnerable facility, such as an airport, 
after a biological agent attack. The envisioned model is known as BROOM 
for Building Restoration Operations Optimization Model. The researchers 
are partnering in this effort with San Francisco Bay Area airports.
    They developed a single decontamination foam that has rendered all 
typical chemical and biological agents harmless. It was used to help 
eliminate anthrax in the Hart, Dirksen, and Ford buildings on Capitol 
Hill, and at contaminated sites in New York and in the Postal Service.
    Explosives Detection Technology.--Sandia has developed a 
preconcentrator for explosives detectors that is 1,000 times more 
sensitive, 200 times smaller, 13 times less costly, and 4 times faster 
than previous technologies.
    Operation Safe Commerce.--They support the Ports of Los Angeles and 
Long Beach as part of the DHS Operation Safe Commerce Program.
            Los Alamos National Laboratory (LANL)
    Programs/Projects.--85.
    Funding.--$109.3 million.
    Contributions: Nuclear and Radiological Threat Reduction.--Los 
Alamos has played a key role in testing radiation detection portal 
monitors, installing radiation detection equipment in the NYC test 
beds, in testing and improving equipment used to identify the radiation 
source material, and advancing our capabilities to actively interrogate 
containers that might contain threat materials or devices.
    Los Alamos also plays a key role in designing systems of radiation 
detectors and in assessing the performance of such systems.
    DHS funds preparations for responding to terrorist attacks, 
including a forensics and attribution program and an effort focused on 
providing first responders with a ``playbook'' detailing the 
appropriate scientifically correct response to a dirty bomb attack, and 
LANL plays a major role in both areas.
    Chemical and Biological Threat Reduction.--The established projects 
from DOE's Chemical and Biological National Security Program (CBNP-NP-
20) provided DHS's early successes in applied research and operational 
systems. Foremost among these was the project that became the BioWatch 
system that is now a 24/7 operational environmental surveillance system 
for biothreats in tens of cities.
    Under DHS, LANL in partnership with EPA and CDC, quickly prototyped 
and implemented a national surveillance system by maturing the previous 
BASIS system. Los Alamos provided the system analysis of optimization, 
the sample management system, and tools to support local and Federal 
agencies in relocating and optimizing sensor placement.
    For bioforensics efforts they provided unique analysis of biothreat 
agents from national and international incidences.
    LANL performed genomic sequencing of pathogens that supported the 
development of new detection systems and bioforensics and established 
environmental microbial backgrounds that increase reliability of 
environmental surveillance systems.
    They developed and demonstrated a bio-risk assessment methodology 
to guide the Nation's investment in biothreat reduction, both for 
intentional and naturally occurring threat agents.
    Infrastructure, Threat and Risk Analysis.--LANL integrates programs 
in threat analysis, vulnerability assessments, and consequence analysis 
to provide a risk-informed decision making capability to senior level 
officials in the DHS, as well as other U.S. government officials. The 
Critical Infrastructure Decision Support System has been used to model 
all 17 infrastructures/key assets and their critical interdependencies 
for the first time.
    The National Infrastructure Simulation and Analysis Center (NISAC) 
has performed critical infrastructure asset identification and ranking 
for major metropolitan areas of Portland, Houston, Chicago and Los 
Angeles.
    The All-WMD Terrorist Threat Capability Assessment project has 
produced assessments of Tier 0 and 1 groups for the Intelligence 
Community including the interests and capabilities of these groups for 
attacking infrastructures using WMD.
            Lawrence Livermore National Laboratory (LLNL)
    Programs/Projects.--50.
    Funding.--$264 million.
    Contributions: Assessments and System Integration.--LLNL worked 
with the DHS since its inception to develop cutting-edge technologies 
in order to make America safer. LLNL's greatest contribution to this 
effort has been its ability to integrate threat-informed risk 
assessments into systems definition which identifies where research and 
development can most effectively improve operational capabilities and 
deploy them.
    Biodefense.--They developed new assays for improved bioagent 
detection, the creation of improved biodetection techniques and the 
deployment of these techniques into operational capabilities (BioWatch) 
and created the Biodefense Knowledge Center (BKC).
    Radiation Detection.--LLNL is also developing new detection 
technologies and supporting the creation of national standards on these 
(and existing) technologies, while working with operational entities 
(Port Authority of New York and New Jersey) on the integration of 
technology into mission critical activities.
    Forensics.--LLNL has always provided its singular expertise 
regarding nuclear incidents and is continuing to work with the domestic 
and international community (in coordination with other Federal 
agencies, including DHS) to improve the methods and protocols of 
nuclear forensics and attribution.
    Their Forensic Science Center has been assisting the law 
enforcement community in analyzing forensic samples of interest. DHS, 
in coordination with the FBI, is leveraging this capability by 
establishing nationally available contaminated evidence receival 
facilities at NNSA sites (including LLNL) because of the Laboratory's 
special expertise with WMD materials, international accreditation and 
long standing relationship with the law enforcement community.
    Intelligence Support.--LLNL provided scientific and technical 
expertise for the analysis of all source intelligence information, 
primarily regarding the foreign nuclear threat. They have expanded 
their analytic capabilities to all threats and are a key part of DHS's 
intelligence team. Part of this expansion has been the development of 
advanced knowledge management tools, which have been further leveraged 
by DHS into the ADVISE architecture.
            Nevada Test Site (NTS)
    Programs/Projects.--11.
    Funding.--$98.5 million.
    Contributions: WMD Training.--Over 24 thousand students have been 
trained to date. Training is being provided at the Nevada Test Site and 
across the United States and territories in Weapons of Mass Destruction 
radiological/nuclear response. Training covers the spectrum from the 
All-Hazards Awareness level up through scenario-based, hot-zone, hands-
on Hazardous Material Technician level.
    Radiological/Nuclear Test and Evaluation Complex.--This facility is 
currently under construction and scheduled to be operational in the 
fall of 2006. DHS has identified a critical need to develop a facility 
to test and evaluate sensors and detection systems for the detection of 
the clandestine movement of radiological materials across our Nation's 
borders. When complete, this DHS-funded Nuclear Hazard Category 2 
facility will have the capability to test prototype detectors in 
simulated real-world conditions with a variety of radionuclides 
including Special Nuclear Materials.
            Savannah River National Laboratory (SRNL)
    Programs/Projects.--13.
    Funding.--$6.2 million.
    Contributions: Forensics and Attribution.--SRNL developed 
analytical capabilities to more quickly and accurately determine the 
source of origin for captured nuclear materials. New equipment and 
techniques are being developed along with cataloging existing source 
data.
    They are modifying existing facilities to expand our capabilities 
for handling and analyzing forensic evidence contaminated with nuclear 
materials.
    Training.--Training for U.S. Coast Guard personnel on radiation 
detection general search techniques that includes training in the 
general orientation and USCG rad detection equipment operations is 
being provided.
    SRNL is also providing training for Customs and Border Patrol 
personnel on radiation detection general search techniques in support 
of counter-smuggling efforts.
    Test and Evaluation.--They have conducted testing and evaluation of 
Commercial Off-The-Shelf (COTS) radiation detection equipment in a 
maritime environment for the U.S. Coast Guard to support their 
selection process for purchasing.
    The laboratory tested and evaluated radiation detection hardware in 
conjunction with Sandia National Lab at the DHS Test Bed at the Port of 
New York/New Jersey. COTS portal monitors were installed and tested in 
a marine port environment.
    All of the laboratories have provided specialized expertise in 
various technologies as needed by the Department of Homeland Security. 
This level of support has been made available since the inception of 
the DHS.

    Besides the National Nuclear Security Administration (NNSA), other 
offices in the Department of Energy (DOE) work closely with the 
Department of Homeland Security (DHS) to ensure DHS can use the special 
capabilities and expertise of the DOE laboratories to support DHS 
mission activities. DOE and DHS have signed a Memorandum of Agreement 
for this purpose and DOE has developed a streamlined reimbursable 
process for allowing DHS access to the DOE laboratories. DOE also 
provides an annual report to Congress on the homeland security related 
activities conducted by the DOE laboratories and facilities which 
includes DHS funded work.
    I understand the Office of Science (SC) laboratories continue to 
conduct research and development activities that have the potential to 
provide new technologies for homeland security applications, as well as 
broaden the science base in areas of interest to DHS. These activities 
are primarily funded by DHS, but can also be supported by other 
sponsors of the laboratories. In fiscal year 2005, the SC laboratories 
are expected to receive approximately $230 million directly from DHS 
for a wide variety of research and development efforts. Below are a few 
specific examples of the contributions made thus far to DHS by the SC 
laboratories.
    Argonne National Laboratory, working with several other DOE 
laboratories, has developed the PROTECT program which provides an early 
warning crisis management system aimed at mitigating the impacts of 
chemical attacks on critical infrastructure such as high-threat subway 
systems, intermodal transportation facilities, large buildings, and 
airports. The system employs chemical detectors supported with video 
verification of patron distress to identify actual attacks from 
detector false alarms. The system also includes an advanced command and 
control system that combines detector, video, train, and facility 
ventilation data, and produces output for situation awareness for 
facility managers and responders. The PROTECT system is now being used 
in Washington, DC; New York, NY; and Boston, MA. In each case, the 
system is run by facility managers, and maintenance costs are paid for 
by the facilities themselves. The system is expected to be deployed in 
other major cities across the country.
    Brookhaven National Laboratory has developed and constructed a 
``test-bed'' facility, called the Radiation Detector Testing and 
Evaluation Facility (RADTEC), for assembling, operating, and testing 
commercial and government ``off-the-shelf'' technologies targeted for 
various homeland security applications, providing unbiased baseline 
data for comparison purposes. RADTEC includes a secure indoor facility, 
allowing equipment to be assembled and tested in a protected 
environment before being placed in a nearby outdoor test environment. 
The outdoor facility consists of an isolated stretch of road, allowing 
the appropriate security and health and safety protocols needed for 
testing with radioactive sources of national security concern. The 
facility is expected to become an important resource for local, county, 
State, and Federal officials, allowing researchers to define the 
strengths and limitations of various detectors, providing a 
quantitative and qualitative method for comparison. This comparison is 
necessary to provide the most comprehensive security screening 
deployment for the busy ports and access points in the New York 
metropolitan area.
    Oak Ridge National Laboratory (ORNL) and Pacific Northwest National 
Laboratory (PNNL) have been chosen to help facilitate the transition of 
innovative technologies and organizational concepts to regional, State, 
and local jurisdictions under the Regional Technology Integration 
initiative. The initiative will serve as the principal mechanism for 
aligning science and technology assessments and expertise with the real 
needs of first responders. The program recognizes the real and 
important variables of the environment of individual communities, 
including population, leadership structure, geography and physical 
layout, level of threat, and available resources. It is expected to be 
a building block on which cities can improve emergency response efforts 
by taking advantage of what the Nation has to offer in terms of 
scientific and technological advances and learning from others' 
experiences.
    Oak Ridge National Laboratory has also developed a transportable 
radiation portal monitoring system (TRMS). The system consists of a 
two-detector, commercially available vehicle monitor that detects gamma 
and neutron radiation. Each detector is mounted on a custom designed, 
commercially manufactured trailer that can operate as a single unit or 
a dual-sided unit. The system was developed as a result of the 
implementation of a gamma-only system designed and built for use at 
ORNL. This initial system was designed to detect increases in measured 
gamma radiation levels as vehicles containing scrap and waste passed 
through the detection area. The advantages of a radiation detection 
system that is easy to setup, operate, then breakdown indicated that 
this technique may be valuable for homeland security applications. The 
TRMS was provided to the Port Authority of New York/New Jersey test bed 
where it was deployed for use. Field observations were made which 
resulted in an action plan to revise the design making the unit more 
roadworthy. During the deployment, the radiological performance was 
excellent and the ability to setup the system quickly was seen as a 
great advantage and to be very desirable by the user community.
    Pacific Northwest National Laboratory is improving the 
understanding of how contaminants disperse in an urban environment in 
the event of a terrorist attack. PNNL and other partners are releasing 
a safe inert tracer gas into downtown Manhattan and then measuring wind 
patterns using portable wind-sampling instruments placed around the 
area. Data collected from the study will help improve computer model 
simulations of the transport and deposition of urban atmospheric 
contaminants. It also will be shared with the surrounding emergency 
response community to enable officials to factor the results into 
response techniques. The data collected during the New York campaign 
will improve the reliability of computer models. The models are 
important for local and Federal officials to train and prepare in the 
event of an airborne disaster. The ability to track dispersal of 
contaminants through the air in the metropolitan New York area is a top 
priority for local and national emergency management officials.
    Additionally the Idaho National Laboratory (INL), managed by the 
DOE Office of Nuclear Energy, Science and Technology (NE), performs 
work for the Department of Homeland Security (DHS) in several areas 
including improving cyber security technologies for Supervisory Control 
and Data Acquisition (SCADA) and Process Control Systems, trace 
explosives detection and testing, nuclear materials detection, and 
biological countermeasures.
    The INL's Control Systems Security Center is a multi-year program 
to perform risk and vulnerability assessments, and develop tools and 
solutions against known cyber vulnerabilities, as well as increasing 
industry's awareness of cyber security for control systems. The program 
works cooperatively with the Department's National SCADA Test Bed 
allowing industry and vendors to place their equipment in a specialized 
facility where it is analyzed by cyber and control systems researchers. 
INL's independent infrastructure systems allows SCADA and control 
systems testing to be performed in a more realistic environment than 
computer simulation. INL also performs SCADA and communications 
modeling work for the National Communications System, assists utilities 
by conducting site assist visits, and provides support to the U.S. 
Computer Emergency Readiness Team.
    INL has also developed an active interrogation system for the 
detection of shielded nuclear materials smuggled in large commercial 
cargo containers, teaming with a commercial company to adapt this 
system for deployment at the Nation's ports of entry. The system can 
detect the presence of weapons grade nuclear material and can 
differentiate between highly enriched uranium, depleted uranium, or 
thorium.
    Laboratory scientists are conducting research and performing 
testing on trace explosives detection systems for DHS and other Federal 
agencies. They perform explosive forensic analysis, design improved 
sensors, and develop detection testing protocols and standards.
    Finally, INL performs work in chemical and biological 
countermeasures by developing and validating a suite of DNA signatures 
for rapid detection of certain biological agents and have developed a 
quick, safe, accurate method to detect this agent in the field.
    Question. It is my understanding that DHS will establish a Domestic 
Nuclear Detection Office (DNDO) with primary responsibilities to 
improve the deployment of nuclear detectors here in the United States. 
DHS claims they will work to coordinate Federal efforts in this area 
and the development of new detection technology. It is my understanding 
that the Department has agreed to provide staffing for this Office. 
What role will DOE play in this partnership and which agency will pay 
the staffing costs for the DOE employees? NNSA's role and strategic 
objectives relative to nuclear proliferation are well understood, but 
what do you see as NNSA's role relative to the proliferation of other 
Weapons of Mass Destruction, particularly biological weapons?
    Answer. The Domestic Nuclear Detection Office (DNDO) was 
established to bolster the ability to detect and interdict illicit 
nuclear and radiological materials that threaten the homeland. As the 
Nation's technical resource for nuclear and radiological matters, DOE 
is committed to working collaboratively with the DNDO in the use and 
development of technologies and resources. At the same time, DOE 
retains the responsibility for managing those programs that support DOE 
missions.
    With the establishment of the DNDO, DOE has agreed to provide 
staffing in key areas on a rotational basis to ensure there is 
continuity and connectivity between the Departments for this key 
Presidential Initiative. For fiscal year 2006, NNSA will provide up to 
11 staff members to provide connectivity across research and 
development, operational and procurement related interactions of the 
Departments. DHS has stated their intention to request fiscal year 2007 
funding to reimburse interagency rotational assignments to DNDO.
    In terms of the NNSA role relative to the proliferation of other 
Weapons of Mass Destruction (WMD), particularly biological weapons, 
NNSA's mission statement includes all WMD as global areas of emphasis. 
While, noting that NNSA's primary focus is on the nuclear aspect of 
WMD, there is considerable talent and research that has been, and can 
be, brought to bear on biological weapons R&D, especially in a 
nonproliferation context. The NNSA Laboratories are well situated to 
provide leading edge R&D to further the capability for the Nation to 
detect, characterize and locate biological threats to the Nation. This 
capability is, and should be, integrated with other ongoing biological 
detection R&D work in DHS, the Defense Department and other Federal 
agencies.

                                 TA-18

    Question. Ambassador Brooks, Secretary Abraham made a decision to 
begin moving the Category 1 Special Nuclear Material out of TA-18 at 
Los Alamos to the Nevada Test Site for security purposes. Unfortunately 
the NNSA never budgeted for this activity in fiscal year 2005, nor was 
it requested in the Emergency Supplemental Appropriations bill. Instead 
you have decided to ``tax'' specific RTBF projects to pay of this 
activity. New Mexico projects would lose $10 million as a result. 
Congress did not prioritize funding for these RTBF projects so you 
could pay for your unbudgeted priorities. Senator Reid and I have 
included a provision within the Senate Supplemental that will provide 
$26 million for the TA-18 move. Are there any other emergency items of 
which you are aware but that have not been requested--such as $30 
million needed for security upgrades in Nevada? If so what are they?
    Answer. There are no other emergency items, but we are in the 
process of submitting a reprogramming of $17.4 million for Safeguards 
and Security to support emergent requirements associated with the 
implementation of the May 2003 Design Basis Threat.
    Question. Why did you decide to cut Congressional priorities to 
fund the TA-18 project instead of requesting funding as part of the 
Emergency Supplemental?
    Answer. The decision to begin moving the Category I Special Nuclear 
Material out of TA-18 at Los Alamos National Laboratory to the Nevada 
Test Site for security purposes (National Nuclear Security 
Administration (NNSA) Press Release NA-04-10, dated March 31, 2004) 
occurred after formulation of the fiscal year 2005 Budget and therefore 
was not included. Nevertheless, as our understanding of the security 
risk evolved, so did NNSA's sense of urgency to move these materials as 
soon as possible. Funding the early move of materials fits within the 
definition of the Readiness in Technical Base and Facilities account 
and was viewed as the most expeditious means to address this security 
concern.

              NUCLEAR WEAPONS COMPLEX INFRASTRUCTURE STUDY

    Question. Ambassador Brooks, I understand that the Department has 
convened a team under the Secretary of Energy Advisory Board to visit 
each of the NNSA facilities, meet with lab personnel and Department of 
Defense officials. This group is expected to make a proposal in May 
regarding the future size and scope of the NNSA weapons complex.
    I have been informed by constituents who spoke with Ed Wilmot, the 
DoE site manager at Los Alamos, who was quoted as saying that Los 
Alamos will lose 25 percent of their capability as result of this 
proposal. That is a frightening thought, and I would appreciate it if 
you could set the record straight since you have been briefed on this 
study. Do you support a 25 percent reduction of capability at Los 
Alamos?
    Answer. I do not foresee any circumstances that would lead to a 25 
percent reduction of capability at Los Alamos.
    Question. Was the statement made by Ed Wilmot accurate, and will 
this study propose such a drastic reduction in capability at Los 
Alamos?
    Answer. Unfortunately, the information you received regarding Ed 
Wilmot's comments at a session of the Los Alamos Medical Center Board 
of Director's meeting were taken out of context by someone who was not 
present at the meeting. The fact is Mr. Wilmot used a 25 percent 
reduction as an arbitrary number during a strategy planning session of 
the Board that was unrelated to the ongoing Complex Study required by 
Congress. I should note that during this planning session a wide 
spectrum of other scenarios were discussed including significant growth 
at Los Alamos.
    The Nuclear Weapons Complex Infrastructure Study task force is an 
independent study on behalf of the Secretary of Energy's Advisory 
Board. The study is advisory only and is now underway. The board has 
not published its recommendations and neither the Secretary of Energy 
nor I have made any decisions about the study.

                        FIVE-YEAR BUDGET OUTLOOK

    Question. Ambassador Brooks, the fiscal year 2006 budget proposes a 
net reduction to the NNSA budget by $500 million over the next 5 years 
as compared to fiscal year 2005. The budget proposes reducing Defense 
Programs by $3 billion and the FIRP program is to be cut by $750 
million. I don't believe that you will be able to support the vision 
you have laid out in your testimony before the Senate Armed Services 
Committee to maintain the existing stockpile while you restore the 
design and production capability for a new weapon by 2015. Can you 
please explain where you intend to cut the $3 billion and how you 
intend to support this new capability?
    Answer. The reductions in the nuclear weapon stockpile from the 
Treaty of Moscow, and a changed approach to Stockpile Stewardship will 
enable NNSA to make a funding reduction of this magnitude and still 
support this mission. During the next 5 to 10 years, we gain the 
efficiencies of investments made in advanced computing and simulation. 
The large capital expenditures in the past 5 years associated with 
supercomputing, the National Ignition Facility, and restoring tritium 
production capability are already winding down. The recent steep growth 
in funding for Safeguards and Security will taper off as infrastructure 
and technology improvements are implemented.
    The key planning parameters for our future new capabilities are 
embodied in the ``responsive infrastructure'' and ``reliable 
replacement warhead'' concepts. Both of these are designed to support 
the continuing stewardship of the Nation's nuclear deterrent more 
efficiently and effectively, in terms of both products and facilities. 
Program implementation for these approaches is just beginning. The 
Nuclear Weapons Complex Infrastructure Study requested by the Congress 
is expected to support and expand upon this new approach.
    Question. How will you ensure that we meet our stockpile 
stewardship obligations if you continue to make deep cuts to the 
Science Campaign (-5 percent) the Engineering Campaign (-12 percent), 
Readiness (-16 percent) over the next several years?
    Answer. A reduction in funding for a campaign does not necessarily 
indicate a lack of support or retreat from program obligations. Funding 
for these campaigns, and all NNSA programs, is a function of multi year 
planning to meet stockpile stewardship obligations and long term goals, 
not a ``level of effort''. In the case of these and all campaigns, 
achievement of research objectives, completion of major construction 
projects, and future objectives all factor in to determine NNSA's 
overall priorities and funding levels.
    Question. In your testimony before the Senate Armed Services 
Committee you referred to a major change in the fiscal year 2007 
budget. Can you please elaborate on that proposal?
    Answer. We knew when we submitted the fiscal year 2006-2010 
President's Budget that we would likely rebalance the outyears for a 
number of our programs during our fiscal year 2007 PPBE process. That 
will take place this spring and summer in light of some ``fact of 
life'' changes for a few major programs, and in view of congressional 
direction we receive with the fiscal year 2006 actions.
    The Nuclear Weapons Complex Infrastructure Study requested by the 
Congress is also expected later this spring. Although we do not expect 
that the study recommendations will have a major impact on the fiscal 
year 2007-2011 budget proposal, the fiscal year 2007 budget process 
will provide a forum for dialogue between the administration and the 
Congress that will set the path to a different, more efficient and less 
expensive approach to the nuclear weapons complex in the future.

                    NATIONAL IGNITION FACILITY (NIF)

    Question. It appears that with constraints imposed by NIF 
construction, the budget for High Energy Density Physics research at 
Los Alamos and Livermore has been dropped to zero in fiscal year 2006 
and fiscal year 2007 and Sandia's budget for the operation of the ``Z'' 
machine has been drastically cut. How does this large cut in this 
science activity affect the viability of the NIF ignition plan and the 
long term health of this critical aspect of stockpile stewardship?
    Answer. Over the next 5 to 10 years NNSA will need to make the 
nuclear weapon complex more agile and responsive and will have to 
respond to a number of weapon design challenges. To effectively support 
the stockpile, previously planned major advanced scientific 
capabilities, such as validated simulation tools, radiography, and NIF 
ignition experiments, must be put in place as soon as feasible. For 
this reason, the fiscal year 2006 submission reoriented the Inertial 
Confinement Fusion and High Yield Campaign towards the completion of 
NIF. Execution of the first ignition experiment in fiscal year 2010 
appears credible, despite the reductions to the high energy density 
physics program. Near term experiments in support of the ignition 
campaign will be executed at OMEGA and Z. Clearly adjustments are being 
made and we are accepting greater, though manageable, programmatic 
risk.
    OMEGA and Z are essential for near term work in high-energy-density 
weapon physics and the ignition campaign, and these facilities will be 
adequately supported in fiscal year 2006. With respect to Z, we have 
maintained a reasonable program at Z, including full funding for the Z-
refurbishment project. Because of constrained budgets, we are planning 
to operate the Z Facility at 90 percent of the full single shift rate 
through April 2006. At that time, the Z-Facility will be shut down for 
refurbishment. Overall, we will reduce the number of shots on Z by a 
modest amount while still keeping the Z-refurbishment project on 
schedule. The amount of experiments supported at OMEGA in fiscal year 
2006 will also be slightly less than fiscal year 2005. In short, the 
NIF ignition plan, and this aspect of stockpile stewardship remains 
viable.
    Question. The ICF budget for fiscal years 2006, 2007 and 2008 
appears marginal, at best, to meet needs of the expected ignition 
campaign on NIF in 2010. No shots at all are expected on NIF in the 
years leading up to this campaign. With such total concentration on NIF 
construction, the research needed to build up to a credible program for 
utilization of the NIF to support the Stockpile cannot be done. On what 
basis does NNSA believe that they can maintain a robust stockpile 
stewardship effort in High Energy Density Physics prior to crucial 
experiments on NIF in light of this prioritization?
    Answer. As discussed in the question above, experimental programs 
are being maintained at Z and OMEGA, in addition to supporting NIF 
construction. Funds and plans are in place for a high energy density 
physics program that is required to support current stockpile 
applications. Some of this support is captured in other campaigns and 
directed stockpile work. Full details will be made available as part of 
the fiscal year 2007 request.
    Question. With reduction of science budgets at the NNSA labs, there 
is clear risk of atrophy of science expertise in high energy density 
physics. What steps is NNSA taking, and what additional steps should be 
taken, to develop science programs that can aid in the development of 
High Energy Density Physics experiments on the NIF and other NNSA 
facilities (such as the Omega laser and ZR at Sandia)?
    Answer. The NNSA has aggressively rebalanced the High Energy 
Density Physics (HEDP) program and is accepting greater programmatic 
risk in response to budgetary pressures. Nevertheless, we have a viable 
program that maintains a sufficient level of scientific expertise in 
HEDP, and will obtain relevant data from HEDP facilities to support 
near-term stockpile stewardship deliverables.

                       SMALL BUSINESS CONTRACTING

    Question. I understand that DOE is last among Federal agencies in 
terms of compliance with the small business contracting goals set by 
the administration. I also recognize this is a result of policy that 
prohibits the Department from counting small business sub contracts let 
by the M&O contractors.
    Both Sandia and Los Alamos place at least 45 percent of their 
subcontracts with small business--well over the SBA required level of 
23 percent. DOE wide, small business procurements make up 52 percent of 
all M&O subcontracts. Despite this strong track record, DOE is only 
scored for prime contracts (only 4 percent of primes go to small 
business).
    To address this shortfall NNSA has initiated two efforts to improve 
its small business score. The first has been to sign contracts with 
Alaska Native Corporations. Since October 2004, the NNSA has signed 
$500 million in contracts with ANCs.
    The second initiative, known as the Tri-lab Initiative, would take 
$100 million in procurements from each of the three NNSA labs and 
bundle them to be offered by either the Albuquerque Service Center or 
Headquarters. NNSA's decision to pull these contracts back to 
Headquarters is also likely to impact the labs through a reduction in 
LDRD funding and will reduce NNSA's mandated small business goals 
negotiated by each lab.
    This program is ill conceived and poorly executed as the 
procurement targets have varied widely as have the goals and terms 
proposed by NNSA. Can you please explain why you have insisted that the 
NNSA proceed with this proposal despite strong objection by the labs 
and small businesses?
    Answer. As a result of the Emergency Supplemental Appropriations 
Act for Defense, the Global War on Terror, and Tsunami Relief, 2005, 
section 6022, NNSA has tabled the Tri-lab Initiative indefinitely 
pending the outcome of the joint study directed by the legislation. The 
expectation that NNSA can award 23 percent of the NNSA budget to small 
businesses when more than 80 percent of the departmental budget is 
obligated to Management and Operating contracts presents a real 
challenge. Nevertheless NNSA continues to strive for increases in the 
amount of prime contracting dollars awarded to the Small Business 
community, as we work to support Federal-wide goals.
    Question. The GAO is currently reviewing DOE subcontracting rules 
for a report later this year, and I have proposed language to fix this 
matter. Would you agree to put off execution of the tri-lab bundling 
proposal until the GAO completes their work and submits its 
recommendations?
    Answer. The GAO has completed its work on DOE oversight of small 
business subcontracting and the Department has begun the process of 
implementing these recommendations through the issuance of several 
documents and directives.
    Additionally, as a result of the Emergency Supplemental 
Appropriations Act for Defense, the Global War on Terror, and Tsunami 
Relief, 2005, section 6022, NNSA has tabled the Tri-lab Initiative 
indefinitely pending the outcome of the joint study directed by the 
legislation.
    Question. The GAO is currently reviewing DOE subcontracting rules 
for a report later this year, and I have proposed language to fix this 
matter. Can you please guarantee that this proposal will not impact 
current small business contracts in New Mexico and not negatively 
impact the LDRD program at each of the labs this year and the following 
years?
    Answer. Pending the findings from the joint study directed by the 
Emergency Supplemental Appropriations Act for Defense, the Global War 
on Terror, and Tsunami Relief, 2005, section 6022, NNSA has halted 
action on the Tri-lab proposal. NNSA looks forward to working with the 
Small Business Administration in developing an appropriate methodology 
for measuring the achievement of the Department of Energy with respect 
to awarding contracts to small businesses.

                     ADVANCED SIMULATION COMPUTING

    Question. Ambassador Brooks, NNSA is holding a significant funding 
reserve at Headquarters for the Advanced Simulation and Computing 
program and it is unclear how the money will be spent. I believe that 
we need to get this funding into the field. I also recognize that 
within the NNSA there is a debate regarding whether you should build 
computing capacity by purchasing existing technology to increase 
capacity quickly and cheaply or continue the current practice of buying 
expensive leadership-class machines. Do you have concerns that our 
weapons design computing needs are outstripping their access to 
computing capacity?
    Answer. The funds identified in the fiscal year 2006 National 
Nuclear Security Administration (NNSA) budget request under 
Headquarters includes hardware and contract dollars that will be 
distributed to the laboratories at the beginning of the fiscal year. In 
the future, most of these funds will be distributed prior to the budget 
request submission and therefore the Headquarters numbers in future 
submissions should be significantly lower than the current one.
    Currently, our computing needs do exceed our access to computing 
capacity. Sustained support for computing is essential to support 
national security. At NNSA and at the weapons Laboratories, we know 
that to address both current stockpile issues and emerging needs, 
computer systems that stretch the capabilities of the technology are 
required. Our current systems are oversubscribed, both in terms of 
capacity (high-volume, smaller-size) and capability (low-volume, 
largest-size). With the current generation of leadership-class 
machines, simulating the behavior of a system in the current stockpile 
with a full three-dimensional calculation is taking a year or more to 
complete--whereas a timely analysis should take less than a month. 
Further, the developing weapons' certification methodology, which 
includes compute-intensive sensitivity analysis, is driving a growing 
demand for capacity systems. Our current shortfall in computing is 
exacerbated by urgent situations that arise in the stockpile that 
displace other time-critical work. A case in point is a current 
Significant Finding Investigation that required us to supplant 
important work on the W76 Life Extension Program so that critical 
computations could be completed. Our continuing challenge is to reduce 
the time-to-solution of these problems while acquiring the most cost-
effective systems that make it possible for weapons scientists and 
engineers to keep pace with the demands of the stockpile stewardship 
program.
    Question. Is it possible to address capacity needs at a lower cost 
through multiple systems than buying a single cutting-edge machine?
    Answer. We are addressing the capacity computing needs of the 
program by acquiring computer systems that are based on available, 
commodity products (such as processors, memories, and interconnection 
networks, and the Linux operating system). These systems can be 
acquired and deployed very rapidly to address a significant subset, but 
not all, of our problems. The Advanced Simulation and Computing program 
procured some early Linux-based systems in 2002 and found them to be 
effective for a significant fraction of our weapons simulations. We 
recognize that the weapons program can't make use of capability (now 
referred to as leadership-class) computers until it provides sufficient 
capacity systems to alleviate its oversubscription problems. However, 
Linux clusters cannot fulfill our most demanding capability needs, so 
the program will continue to rely on a balance of commodity clusters 
and cutting-edge machines for those applications that require them.

                             CYBER SECURITY

    Question. The Integrated Cyber Security Initiative work to 
provision and secure NNSA systems has been moving along successfully 
with installations at several DOE Labs (most notably Sandia). Based 
upon this experience, should this infrastructure be promoted as ``the'' 
enterprise approach to secure and provision and authenticate all of DOE 
users? If so, why?
    Answer. The Integrated Cyber Security Initiative is implementing an 
enterprise secure network for all sites in NNSA. The DOE Diskless 
Workstation Tiger team has recommended that the NNSA enterprise secure 
network be extended to include all DOE sites processing classified 
data. Because much of the work performed by the non-NNSA laboratories 
in DOE is unclassified it would inappropriate to connect these 
laboratories to the NNSA enterprise secure network. NNSA laboratories 
and production facilities are evaluating the NSNA enterprise secure 
network architecture for possible deployment in their sensitive and 
unclassified computing environments.
    Question. Right now DOE labs seem to operate with a multitude of 
approaches to secure messaging and have developed a standardized manner 
in which to ensure that important communications are provided with the 
necessary level of security. Although there is a Federal Bridge 
Certificate Authority (FBCA) PKI infrastructure that is being used by 
many across DOE to send secure messages, there are many instances where 
individuals send information (apparently using their own discretion) 
without using this infrastructure, clearly not in compliance with DOE 
policy. What efforts are being made to standardize DOE with a common 
secure messaging solution by offering PKI credentials to all DOE 
employees and contractors and ensure that solution is being utilized at 
all appropriate times?
    Answer. The DOE and NNSA are currently working to develop the plans 
for implementing the Homeland Security Presidential Directive-12. This 
directive requires that all Federal employees and Federal contractors 
use a common, standard credential to access all government and 
government contractor information systems. A key element in the 
implementation of this directive is a Department-wide PKI 
infrastructure. Completion of the implementation of the directive, now 
mandated by the Office of Management and Budget for September 2006, 
will provide a common PKI infrastructure across all DOE and NNSA sites 
and enable the use of a common secure messaging solution.
    Question. Sensitive data may reside within a database, on a 
computer or laptop, within an email or other communication, among other 
places. What procedures and system does the Department use to ensure 
that: (1) individuals accessing internal information are who they claim 
to be; (2) the system allows individuals to only view the material they 
are authorized to view and no more; and (3) ensures that ``authorized'' 
users are not deliberately or inadvertently able to share this 
information with unauthorized users? If no such program is in place, 
why is there not a program in place to ensure such safeguards in the 
storage, use, and communication of such data exists for the entire 
Department? Would such a program have prevented some, any, or all of 
the security lapses that we have seen in within the Department?
    Answer. The Integrated Cyber Security Initiative is implementing 
hardware, software, and procedures that will ensure that only 
authorized users may access and share data with other authorized users. 
Authorization will be strictly based on management approval of the 
``need-to-know.'' Deployment of this architecture into the NNSA 
unclassified and sensitive computing environments, coupled with the DOE 
implementation of HSPD-12 and FIPS 201, will extend these controls to 
cover all NNSA data. These controls will reduce the number of incidents 
involving inadvertent disclosure of information through inappropriate 
email and file transfers. However, these controls cannot address the 
incidents where users mis-handle data outside the computing 
environment, such as misplacing classified removable electronic media 
(CREM).

    Senator Domenici. I do want to close by saying, Senator, 
that--Feinstein--there is another thing about ournuclear 
weapons, versus Russia, which I think we are being very honest 
about. And they're not being dishonest. I mean, they may be, 
but I don't know about it. But they have different nuclear 
weapons.
    Senator Feinstein. Yes, I know.

                         CONCLUSION OF HEARINGS

    Senator Domenici. You know that. And they replace them 
regularly, and that's not considered new ones. They build them 
all the time, because they never built them to last very long. 
So, here we are, every time we move a--we wiggle a little 
pinky, somebody's running around saying--not you--but that 
we're building a new weapon, when there is a constant new set 
of weapons that you big scientists know they're going to have 
that work right. They don't have the same situation we do. They 
may have some other problems--manpower, all the rest of it.
    With that, we're in recess.
    [Whereupon, at 3:40 p.m., Thursday, April 14, the hearings 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]


    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2006

                              ----------                              

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

                       NONDEPARTMENTAL WITNESSES

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

                      DEPARTMENT OF DEFENSE--CIVIL

                         Department of the Army

                       Corps of Engineers--Civil

  Prepared Statement of the Arkansas River Basin Interstate Committee
    Mr. Chairman and members of this distinguished committee, my name 
is Lew Meibergen. I am Chairman of the Board of Johnston Enterprises 
headquartered in Enid, Oklahoma. It is my honor to serve as Chairman of 
the Arkansas River Basin Interstate Committee, members of which are 
appointed by the governors of the great States of Arkansas, Colorado, 
Kansas, Missouri, and Oklahoma.
    In these times of war on terrorism, homeland defense and needed 
economic recovery, our thanks go to each of you, your staff members and 
the Congress. Your efforts to protect our Nation's infrastructure and 
stimulate economic growth in a time of budget constraints are both 
needed and appreciated.
    Our Nation's growing dependence on others for energy, and the need 
to protect and improve our environment, make your efforts especially 
important. Greater use and development of one of our Nation's most 
important transportation modes--our navigable inland waterways--will 
help remedy these problems. At the same time, these fuel-efficient and 
cost-effective waterways keep us competitive in international markets. 
In this regard, we must maintain our inland waterway transportation 
system. We ask that the Congress restore adequate funding to the Corps 
of Engineers budget--$6.6 billion in fiscal year 2006--to keep the 
Nation's navigation system from further deterioration. If this 
catastrophic problem is not addressed immediately, we are in real 
danger of losing the use of this most important transportation mode.
    As Chairman of the Interstate Committee, I present this summary 
testimony as a compilation of the most important projects from each of 
the member States. Each of the States unanimously supports these 
projects without reservation. I request that the copies of each State's 
individual statement be made a part of the record, along with this 
testimony.
Equus Beds Aquifer--Kansas
    Equus Beds Aquifer Storage and Recovery Project.--Continuation of a 
City of Wichita Groundwater Management District No. 2 and State of 
Kansas project to construct storage and recovery facilities for a major 
groundwater resource supplying water to more than 20 percent of Kansas 
municipal, industrial and irrigation users. The project will capture 
and recharge in excess of 100 million gallons per day and will also 
reduce on-going degradation of the existing groundwater by minimizing 
migration of saline water. Federal authorization of the project HR 4650 
introduced last year or through similar legislation this year and 
continued Federal funding is requested in the minimum amount of $1.5 
million for fiscal year 2006.
Arkansas River Navigation Improvements
    Mr. Chairman, Public Law 108-137 authorized a 12-foot channel on 
the McClellan-Kerr Arkansas River Navigation System. The Corps is now 
obligated to operate and maintain the system as a 12-foot channel. Over 
90 percent of the system currently is adequate for a 12-foot channel. 
Deepening the remainder of the channel to 12 feet will allow carriers 
to place 43 percent more cargo on each barge, which will reduce the 
amount of fuel consumed and emissions released. Other environmental 
benefits include the creation of new aquatic habitat through new dike 
construction and the construction of least tern islands through 
beneficial use of dredged material.
    Therefore, we request $40 million to construct dike structures to 
scour out the channel, and dredge necessary areas for improving the 
depth of the channel. This investment will increase the cost 
competitiveness of this low-cost, environment-friendly transportation 
mode and help us combat the loss of industry and jobs to overseas.
Tow Haulage Equipment--Oklahoma
    We request funding of $3.0 million to initiate the installation of 
tow haulage equipment on the locks located along the Arkansas River 
portion of the McClellan-Kerr Arkansas River Navigation System. Total 
cost for these three locks is $4.7 million. This project will involve 
installation of tow haulage equipment on W.D. Mayo Lock and Dam No. 14, 
Robert S. Kerr Lock and Dam No. 15, and Webbers Falls Lock and Dam No. 
16, on the Oklahoma portion of the waterway. The tow haulage equipment 
is needed to make transportation of barges more efficient and 
economical by allowing less time for tows to pass through the various 
locks.
    The testimony we present reveals our firm belief that our inland 
waterways and the Corps of Engineers' efforts are especially important 
to our Nation in this time of trial. Transportation infrastructure like 
the inland waterways need to be operated and maintained for the benefit 
of the populace. Without adequate annual budgets, this is impossible.
    Mr. Chairman, members of this committee, we respectfully request 
that you and members of your staff review and respond in a positive way 
to the attached individual statements from each of our States which set 
forth specific requests pertaining to those States.
    We sincerely appreciate your consideration and assistance.

                                ARKANSAS

     PREPARED STATEMENT OF PAUL LATTURE, II, CHAIRMAN FOR ARKANSAS

    Mr. Chairman and members of the Committee, thank you for the 
opportunity to present testimony to this most important committee. I 
serve as Executive Director for the Little Rock Port Authority and as 
Arkansas Chairman for the Interstate Committee. Other committee members 
representing Arkansas, in whose behalf this statement is made, are 
Mssrs. Wally Gieringer of Hot Springs Village, retired Executive 
Director of the Pine Bluff-Jefferson County Port Authority; Scott 
McGeorge, President, Pine Bluff Sand and Gravel Company, Pine Bluff; 
Barry McKuin of Morrilton, President of the Conway County Economic 
Development Corporation; and N.M. ``Buck'' Shell, CEO, Five Rivers 
Distribution in Van Buren and Fort Smith, Arkansas.
    We call to your attention four projects on the McClellan-Kerr 
Arkansas River Navigation System (the ``System'') that are especially 
important to navigation and the economy of this multi-State area: 
Arkansas River Navigation Improvements, Port of Little Rock Tow-Haulage 
in Oklahoma.

Arkansas River Navigation Improvements
    Mr. Chairman, Public Law 108-137 authorized a 12-foot channel on 
the McClellan-Kerr Arkansas River Navigation System. The Corps is now 
obligated to operate and maintain the system as a 12-foot channel. Over 
90 percent of the system currently is adequate for a 12-foot channel. 
Deepening the remainder of the channel to 12 feet will allow carriers 
to place 43 percent more cargo on each barge which will reduce the 
amount of fuel consumed and emissions released. Other environmental 
benefits include the creation of new aquatic habitat through new dike 
construction and the construction of least tern islands through 
beneficial use of dredged material.
    Therefore, we request $40 million to construct dike structures to 
scour out the channel, and dredge necessary areas for improving the 
depth of the channel. This investment will increase the cost 
competitiveness of this low-cost environment-friendly transportation 
method and help us combat the loss of industry and jobs to overseas.

Little Rock Port
    We recognize the significant reduction in new work and understand 
the need to combat the Global War on Terrorism. We also recognize the 
need to look for economic advantages where the needs of the government 
cross with the good of public entities to serve both needs. We believe 
a prime example of this effort would be to utilize Section 107 of the 
River and Harbors Act of 1960 (Public Law 86-645) in the Continuing 
Authorities Program which would allow the disposal of dredge disposal 
material to be utilized by the Little Rock Port for beneficial fill 
material.
    Therefore, $7.6 million is requested for this project. This project 
will compliment the goal of Homeland Security by providing a safe, mid-
America environment for shipping while complimenting other Federal 
investments, including the 12-foot channel project by providing 
completion of a major economic development engine.

Tow-haulage in Oklahoma
    In the State of Arkansas, tow-haulage equipment has reduced the 
time required for lockage of a large tow configuration from 4 hours to 
pass a lock to 2 hours per passage. Due to funding constraints, this 
system has not been placed on the locks in Oklahoma.
    We request, for the benefit of the entire system, $4.2 million to 
design and install a tow-haulage system on the first three locks going 
up the System in Oklahoma: Robert S. Kerr, Webbers Falls, and W.D. Mayo 
Locks.

Ark-White Cutoff
    A cutoff is developing between the Arkansas and White Rivers which, 
if not corrected, could have dramatic adverse effects on the navigation 
system as well as significant bottomland hardwoods and pristine 
environment that provides unique wildlife habitat in southeast 
Arkansas.
    Unless corrected, it is inevitable that a major cutoff will occur 
negatively impacting navigation on the river, significantly increasing 
siltation and dredging requirements and, at worst, cutting off the 
lower end of the Navigation System from the Mississippi River.
    We request, for the benefit of the entire system, $7 million to 
protect the Navigation System from incurring significant increases in 
dredging, hazardous navigation conditions, and to preclude a 
devastating loss of habitat in bottom land hardwoods in the Big Island 
region between the Arkansas River, the White River and the Mississippi 
River. This pristine habitat is being threatened from the meandering of 
these rivers while also adversely impacting the Navigation System. The 
funds are greatly needed to preserve Navigation by completing the study 
and initiating construction.
    In addition to these three vital requests, we urge you to continue 
to support funding for the construction, and operation and maintenance 
of the McClellan-Kerr Arkansas River Navigation System which provides 
low-cost and dependable transportation for farm products, construction 
aggregates, raw materials and finished products important to our 
Nation's economic recovery.
    It is also most important that you continue construction authority 
of the McClellan-Kerr Project until remaining channel stabilization 
problems identified by the Little Rock District Corps of Engineers have 
been resolved. The Corps needs to develop a permanent solution to the 
threat of cutoffs developing in the lower reaches of the navigation 
system and to use environmentally sustainable methods under the 
existing construction authority.
    Mr. Chairman, we appreciate the work of this essential committee 
and thank you for your efforts that contribute so much to the social 
and economic well-being of the United States of America.
    We fully endorse the statement presented to you today by the 
Chairman of the Arkansas River Basin Interstate Committee and urge you 
to favorably consider these requests that are so important to the 
economic recovery of our region and Nation.

                                 KANSAS
      PREPARED STATEMENT OF GERALD H. HOLMAN, CHAIRMAN FOR KANSAS

    Mr. Chairman and members of the committee, I am Gerald H. Holman, 
Senior Vice President of the Wichita Area Chamber of Commerce, Wichita, 
Kansas and Chairman of the Kansas Interstate Committee for the Arkansas 
Basin Development Association (ABDA).
    The Kansas ABDA representatives join with our colleagues from the 
other Arkansas River Basin States to form the multi-State Arkansas 
Basin Development Association. We fully endorse the summary statement 
presented to you by the Chairman of the Arkansas River Basin Interstate 
Committee.
    Public Law 108-137 authorized a 12-foot channel on the McClellan-
Kerr Arkansas River Navigation System. The Corps is now obligated to 
operate and maintain the system as a 12-foot channel. Over 90 percent 
of the system currently is adequate for a 12-foot channel. Deepening 
the remainder of the channel to 12 feet will allow carriers to place 43 
percent more cargo on barges which will reduce the amount of fuel 
consumed and emissions released. Other environmental benefits include 
the creation of new aquatic habitat through new dike construction and 
the construction of least tern islands through beneficial use of 
dredged material. Therefore, we request $40 million to maintain the 
authorized depth by constructing dike structures to minimize dredging 
and dredging only necessary areas. This investment will increase the 
cost competitiveness of this low-cost environment-friendly 
transportation method and help us combat the loss of industry and jobs 
to overseas.
    We are encouraged about water resource development opportunities in 
the Arkansas River Basin for not only navigation, but also hydropower, 
flood control, recreation, water supply and environmental stewardship. 
We also support the promotion of economic development around Corps 
reservoirs. While encouraged, we are also concerned that existing and 
proposed funding levels will not support the needs and therefore, we 
support the return of proceeds from hydropower facilities, water 
storage contracts, recreation use, and proceeds from leases and sale of 
Federal lands, to be returned to the respective projects for 
infrastructure maintenance and improvements for the public benefit 
involving those projects.
    The critical water resources projects in the Kansas portion of the 
Arkansas River Basin are identified below. The projects are safety, 
environmental and conservation oriented and all have regional and/or 
multi-State impact. We are grateful for your past commitment to 
critical needs in Kansas.
    We ask for your continued support for this important Bureau of 
Reclamation project on behalf of the Wichita/South Central Kansas area:
    Equus Beds Aquifer Storage and Recovery Project.--This is the 
continuation of a Bureau of Reclamation project jointly endorsed by the 
City of Wichita, Groundwater Management District No. 2 and the State of 
Kansas. This model technology has proven the feasibility of recharging 
a major groundwater aquifer supplying water to nearly 600,000 
irrigation, municipal and industrial users. The demonstration project 
has successfully recharged more than 1 billion gallons of water from 
the Little Arkansas River. The project is essential to help protect the 
aquifer from on-going degradation caused by the migration of saline 
water.
    The demonstration project has confirmed earlier engineering models 
that the full scale aquifer storage and recovery project is feasible 
and capable of meeting the increasing water resource needs of the area 
to the mid-21st century. The Equus Beds are also vital to the 
surrounding agricultural economy. Environmental protection of the 
aquifer, which this strategic project provides, has increasing 
importance to ensure quality water for the future since south central 
Kansas will rely to an even greater extent on the Equus Beds aquifer 
for water resources.
    The south-central Kansas economy including the Wichita MSA 
represents:
  --More than 20 percent of the State's employment.
  --More than 1/3 of the State's manufacturing employment and payroll.
  --At least 20 percent of the State personal income.
    The quality of life and economic future for more than 20 percent of 
the State's population and economy is dependent upon the availability 
of reliable, high quality water resources from the Equus Beds.
    The State of Kansas supports this much-needed project and includes 
it within the Kansas Water Plan. All interested parties fully support 
the project as the needed cornerstone for the area agricultural economy 
and for the economy of the Wichita metropolitan area.
    The aquifer storage and recovery project is a vital component of 
Wichita's comprehensive and integrated water supply strategy. The full 
scale design concept for the aquifer storage and recovery project calls 
for a multi-year construction program. Phase One is estimated to cost 
$17.1 million. The total project involving the capture and recharge of 
more than 100 million gallons of water per day is estimated to cost 
$110 million over 10 years. This is substantially less costly, both 
environmentally and economically, when compared with reservoir 
construction or other alternatives.
    We are grateful for your previous cost share funding during the 
demonstration phase, as a compliment to funds provided by the City of 
Wichita. As we enter the construction phase, we request continued 
Congressional support in two ways:
  --HR 4650 was introduced and passed out of committee last year. That 
        bill, or similar legislation introduced this year, would 
        authorize the project and also provide cost share funding up to 
        25 percent of the project cost. We request your support of HR 
        4650 or similar legislation authorizing the Aquifer Storage and 
        Recovery Project as a Federal project and directing the Bureau 
        of Reclamation to participate in its final design and 
        construction to completion.
  --Through continued cost share funding of the full-scale Aquifer 
        Storage and Recovery Project in the minimum amount of 
        $1,500,000 for fiscal year 2006 within the limits of HR 4650 or 
        similar legislation.
    Many of our agricultural communities have historically experienced 
major flood disasters, some of which have resulted in multi-State 
hardships involving portions of the State of Oklahoma. The flood of 
1998 emphasized again the need to rapidly move needed projects to 
completion. Major losses also took place in the Wichita metropolitan 
area. Projects in addition to local protection are also important. Our 
small communities lack the necessary funds and engineering expertise 
and Federal assistance is needed. This committee has given its previous 
support to Corps of Engineers projects in Kansas and we request your 
continued support for the following:
    Arkansas City, Kansas Flood Protection.--Unfortunately, this 
project was not completed prior to the flood of 1998. The flood 
demonstrated again the critical need to protect the environment, homes 
and businesses from catastrophic damages from either Walnut River or 
Arkansas River flooding. When the project is complete, damage in a 
multi-county area will be eliminated and benefits to the State of 
Oklahoma just a few miles south will also result. The Secretary of the 
Army was authorized to construct the project in fiscal year 1997. The 
project is slated for completion in fiscal year 2005 but the funding is 
not adequate in the President's budget. We request your continued 
support in the amount of $3.619 million, which is $2.619 million above 
the President's budget request so the Corps of Engineers can complete 
this project.
    The Arkansas River Basin is a treasure that must be protected for 
future generations. We are experiencing decline in water quality due to 
sediment and nutrient loading. The quality of the water in the Arkansas 
River and its tributaries, including the numerous reservoirs in the 
system, is a reflection of its watershed and land use practices. It is 
imperative that the subbasins within the system are studied using the 
watershed approach and that protective remedies are identified and 
implemented to reverse the continuing decline in water quality. We 
recommend that the following high priority watershed studies be added 
to the fiscal year 2006 budget:
  --Walnut River (El Dorado Lake) Watershed Feasibility Study.--A 
        reconnaissance study was conducted in July 2000 by the USACE, 
        Tulsa District, which identified ecosystem restoration as a 
        primary concern in the Walnut Basin. The Kansas Water Office 
        entered into an agreement with the USACE to begin a Walnut 
        River Basin Ecosystem Restoration Feasibility Study for the 
        entire basin.
      Following the initial phase of the feasibility study, it was 
        decided that focusing the study to a smaller geographic area 
        would make more efficient use of existing local, State, and 
        Federal resources. The project was re-scoped to focus study 
        efforts on protection and restoration of El Dorado Lake and its 
        contributing watershed.
      Public water supply storage in El Dorado Lake is owned by the 
        City of El Dorado and represents an important future regional 
        water supply source for the Walnut Basin. The reservoir and its 
        watershed have been designated by the Kansas Department of 
        Health and Environment as high priority for Total Maximum Daily 
        Load (TMDL) implementation for eutrophication (nutrients) and 
        siltation. Fecal coliform bacteria is another high priority 
        TMDL pollutant. Because of the importance of protecting both 
        water quality and quantity in El Dorado Lake, and to more 
        effectively target limited resources, KWO has partnered with 
        the City of El Dorado to address long-term protection and 
        restoration needs for the reservoir and its watershed, in 
        cooperation with other local, State and Federal agencies.
      Study efforts include addressing identified opportunities to 
        reduce sedimentation in El Dorado Lake and meet the watershed 
        total daily maximum load (TMDL) issues of sediment and 
        eutrophication for the purpose of preserving existing water 
        supply storage, restoring riparian and aquatic habitat in the 
        lake and watershed.
      We support the President's fiscal year 2006 budget for this 
        project in the amount of $200,000 for completion of the 
        feasibility study. The feasibility study is expected to be 
        completed in September 2006.
  --Grand (Neosho) Basin Reconnaissance Study.--A need exists for a 
        basin-wide water resource planning effort in the Grand-Neosho 
        River basin, apart from the issues associated with Grand Lake, 
        Oklahoma. A Federal interest has been determined from the 
        reconnaissance study as a result from a Congressional add in 
        fiscal year 2003 and another add was appropriated in fiscal 
        year 2004. Additional funds are needed to continue the 
        reconnaissance stage of the project. The study would support 
        management efforts by Kansas and Oklahoma agencies to address 
        watershed and reservoir restoration issues in the Grand Lake 
        Watershed. Local interest may also exist for local ecosystem 
        restoration projects. We request funding in the amount of 
        $300,000 in fiscal year 2006.
    Grand Lake Feasibility Study.--A need exists to complete evaluation 
of water resource problems in the Grand-Neosho River basin in Kansas 
and Oklahoma to evaluate solutions to upstream flooding problems 
associated with the adequacy of existing real estate easements 
necessary for flood control operations of Grand Lake, Oklahoma. A study 
authorized by the Water Resources Development Act of 1996 was completed 
in September of 1998 and determined that if the project were 
constructed based on current criteria, additional easements would be 
required. Section 449 of WRDA 2000 directed the Secretary to evaluate 
backwater effects specifically due to flood control operations on land 
around Grand Lake. That study indicated that Federal actions have been 
a significant cause of the backwater effects and according to WRDA 
2000, the feasibility study should be 100 percent federally funded. A 
Feasibility study is necessary to determine the most cost-effective 
solution to the real estate inadequacies. Changes in the operations of 
the project or other upstream changes could have a significant impact 
on flood control, hydropower, and navigation operations in the Grand 
(Neosho) River system and on the Arkansas River basin system, as well. 
We request funding in the amount of $650,000 in fiscal year 2006 to 
fully fund Feasibility studies evaluating solutions to upstream 
flooding associated with existing easements necessary for flood control 
operations of Grand Lake. Although this has been a Congressional add 
for the past 2 years, no money was made available in the fiscal year 
2005 President's budget request.
    Continuing Authorities Programs.--We support funding of needed 
programs including the Small Flood Control Projects Program (Section 
205 of the 1948 Flood Control Act, as amended), Aquatic Ecosystem 
Restoration (Section 206 of the 1996 Water Resources Development Act, 
as amended), Ecosystem Restoration (Section 1135 of the 1986 Water 
Resources Development Act, as amended) as well as the Emergency 
Streambank Stabilization Program (Section 14 of the 1946 Flood Control 
Act, as amended). Smaller communities in Kansas (Iola, Liberal, 
McPherson, Augusta, Parsons, Altoona, Kinsley, Newton, Arkansas City, 
Coffeyville and Medicine Lodge) have previously requested assistance 
from the Corps of Engineers under the Section 205 and Section 14 
programs. The City of Wichita is also requesting funding through these 
programs to address flooding problems. We urge you to support an 
increase of these programs to a $65 million programmatic limit for the 
Small Flood Control Projects Program, $35 million for Aquatic Ecosystem 
Restoration, $35 million for the Ecosystem Restoration Program and $25 
million for the Emergency Streambank Stabilization Program.
    The Planning Assistance to States Program under section 22 of the 
Water Resources Development Act of 1974, as amended, provides Federal 
funding to assist the States in water resource planning. The State of 
Kansas is grateful for previous funding under this program which has 
assisted small Kansas communities in cost sharing needed resource 
planning as called for and approved in the Kansas State Water Plan. We 
request continued funding of this program at the $10 million 
programmatic limit which will allow the State of Kansas to receive the 
$500,000 limit.
    Finally, we are very grateful that both the Corps of Engineers and 
Bureau of Reclamation have the expertise needed for the development and 
protection of water resources infrastructure. It is essential to have 
the integrity and continuity these agencies provide on major public 
projects. Your continued support of these vital agencies, including 
funding, will be appreciated. Our infrastructure must be maintained and 
where needed, enhanced for the future.
    Mr. Chairman and members of these committees, thank you very much 
for the dedicated manner in which you have dealt with the Water 
Resources Programs and for allowing us to present our funding requests.

                                OKLAHOMA
   PREPARED STATEMENT OF JAMES M. HEWGLEY, JR., CHAIRMAN FOR OKLAHOMA

    Mr. Chairman and members of the committee, I am James M. Hewgley, 
Jr., Oklahoma Chairman of the Arkansas River Basin Interstate 
Committee, from Tulsa, Oklahoma.
    It is my privilege to present this statement on behalf of the 
Oklahoma Members of our committee in support of adequate funding for 
water resource development projects in our area of the Arkansas River 
Basin. Other members of the committee are Mssrs. Ted Coombes, Tulsa; A. 
Earnest Gilder, Muskogee; Terry McDonald, Tulsa; and Lew Meibergen, 
Enid, who also serves as Chairman of the combined Arkansas River Basin 
Interstate Committee.
    Together with representatives of the other Arkansas River Basin 
States, we fully endorse the statement presented to you by the Chairman 
of the Arkansas River Basin Interstate Committee. We appreciate the 
opportunity to present our views of the special needs of our States 
concerning several studies and projects.
    The committee is encouraged about water resource developmental 
opportunities in the Arkansas River Basin for not only navigation, but 
also hydropower, flood control, recreation, water supply, and 
environmental stewardship. However, we are concerned that existing and 
proposed funding levels will not support the needs.
    Tow Haulage Equipment--Oklahoma.--We request funding of $3.0 
million to initiate the installation of tow haulage equipment on the 
locks located along the Arkansas River portion of the McClellan-Kerr 
Arkansas River Navigation System. Total cost for these three locks is 
$4.7 million. This project will involve installation of tow haulage 
equipment on W.D. Mayo Lock and Dam No. 14, Robert S. Kerr Lock and Dam 
No. 15, and Webbers Falls Lock and Dam No. 16, on the Oklahoma portion 
of the waterway. The tow haulage equipment is needed to make 
transportation of barges more efficient and economical by allowing less 
time for tows to pass through the various locks.
    Mr. Chairman, Public Law 108-137 authorized a 12-foot channel on 
the McClellan-Kerr Arkansas River Navigation System. The Corps is now 
obligated to operate and maintain the system as a 12-foot channel. Over 
90 percent of the system currently is adequate for a 12-foot channel. 
Deepening the remainder of the channel to 12 feet will allow carriers 
to place 43 percent more cargo on barges, which will reduce the amount 
of fuel consumed and emissions released. Other environmental benefits 
include the creation of new aquatic habitat through new dike 
construction and the construction of least tern islands through 
beneficial use of dredged material.
    Therefore, we request $40 million to maintain the authorized depth 
by constructing dike structures to minimize dredging and dredging only 
necessary areas. This investment will increase the cost competitiveness 
of this low-cost, environment-friendly transportation method and help 
us combat the loss of industry and jobs to overseas.
    The committee supports direct funding for hydropower and is 
convinced that this is a great public/private partnership that will 
make aging hydropower facilities more reliable and will utilize 
hydropower revenue to protect the Federal investment. Similarly, the 
committee supports initiatives to apply proceeds collected from Corps 
hydropower facilities, water storage contracts, and from recreation use 
fees to be returned to the projects where the revenue was generated in 
order to properly maintain the infrastructure and provide quality 
services. Finally, the committee promotes economic development around 
Corps reservoirs, and endorses the return of proceeds from leases and 
sale of Federal lands to be returned to the respective projects for 
infrastructure maintenance and improvements for the recreating public.
    The Power Plant at Webbers Falls Lock and Dam on the Arkansas River 
has suffered from greatly reduced reliability due to turbine design 
problems. Because this is a run-of-the-river facility with no storage, 
energy spilled due to off-line units is energy that is lost forever. A 
feasibility study recommending major rehabilitation of this unit has 
been approved by the office of the Chief of Engineers.
    Similar problems have been experienced at Ozark-Jeta Taylor Lock 
and Dam on the Arkansas River in Arkansas. Congress approved a new 
start and funding to begin the major rehabilitation of the Ozark 
powerhouse in fiscal year 2003. Congress approved the administration's 
fiscal year 2005 budget request of $5 million in Construction General 
funding to continue this major rehabilitation. The Little Rock District 
has solicited bids to replace the turbines with a more reliable design, 
and was scheduled to sign the contract in April 2005. This contract 
would have included an option to provide the newly designed turbines 
for the Webbers Falls project as well if additional funding were 
forthcoming. By combining the turbine replacements into a single 
contract, as recommended by Corps' Hydropower Design Center, $5 million 
could be saved. Anticipating the award of this contract, the consumer-
owned electric utilities that purchase the hydropower generated at 
these projects committed in January 2005 to provide up to $38 million 
to complete the Webbers Falls rehab if traditional appropriations were 
unavailable for this project.
    Unfortunately, the administration's fiscal year 2006 budget request 
does not include the necessary follow-on funding to continue the Ozark 
major rehab. On this basis Corps Headquarters has recommended that the 
Little Rock District not issue the contract and that the remaining $3 
million in fiscal year 2005 funding be reprogrammed to other projects. 
If this recommendation is carried out, the major rehab of both Ozark 
and Webbers Falls power plants would be terminated.
    The committee recommends that Congress appropriate $9.5 million to 
start the Webbers Falls major rehab in fiscal year 2006. If traditional 
appropriation funding is unavailable for these projects, we recommend 
that the committee fund these projects from the receipts provided by 
the sale of Federal hydropower--a process which is recommended in the 
administration's budget request.
    Mr. Chairman, it is my pleasure to point out to this distinguished 
committee that this navigation system has brought low cost water 
transportation to Oklahoma, Arkansas and the surrounding States. There 
has been over $5.5 billion invested in the construction and development 
of the McClellan-Kerr Arkansas River Navigation system by the Federal 
Government ($1.3 billion) and the public and private sector ($4.2 
billion+), resulting in the creation of over 50,000 jobs in this 
partnered project.
    Maintenance of the Navigation System.--In preparation for the 
deepening of the navigation system from 9 to 12 feet, there is a 
backlog of maintenance items that has been deferred due to insufficient 
budgets to allow proper maintenance. These maintenance items are 
required even to support navigation at the 9-foot depth in order to not 
jeopardize the reliability of the system. Therefore, we request 
additional funding in the amount of $1,549,000--plus the amount from 
Little Rock, over and above normal funding, for deferred channel 
maintenance. These funds would be used for such things as repair of 
bank stabilization work, needed advance maintenance dredging, and other 
repairs needed on the system's components that have deteriorated over 
the past three decades.
    In addition to the system-wide needed maintenance items mentioned 
above, the budget for the Corps of Engineers for the past several years 
has been insufficient to allow proper maintenance of the McClellan-Kerr 
Arkansas River Navigation System--Oklahoma portion. As a result, the 
backlog of maintenance items has continued to increase. If these 
important maintenance issues are not addressed soon, the reliability of 
the system will be jeopardized. The portion of the system in Oklahoma 
alone is responsible for returning $2.6 billion in annual benefits to 
the regional economy. The fiscal year 2006 O&M President's budget for 
Tulsa District is $9.4 million less (over 12 percent) than the fiscal 
year 2005 appropriation, which will result in no funding being 
available for critical infrastructure maintenance in fiscal year 2006. 
We therefore request that $2.33 million be added to the budget to 
accomplish critical infrastructure maintenance items on the Oklahoma 
portion of the system as follows:
  --Robert S. Kerr.--$1,334,000 to repair erosion and construct 
        emergency mooring wood dolphins.
  --Webbers Falls.--$498,000 for emergency dredging and to install a 
        debris boom.
    Additional O&M funds are also requested for other high priority, 
non-navigation, water resource needs including $543,000 for tainter 
gate repair at Kaw; $1,200,000 for floating bulkhead mooring facility 
repair at Keystone; $1,303,000 for tainter gate repair at Fort Gibson; 
and $250,000 for tainter gate hoist equipment replacement at Tenkiller.
    The Arkansas River Basin is a treasure that must be protected for 
future generations. We are already experiencing a decline in water 
quality due to sediment and nutrient loading. The quality of the water 
in the Arkansas River and its tributaries, including the numerous 
reservoirs in the system, is a reflection of its watershed and land use 
practices. It is imperative that the sub-basins within the system are 
studied using the watershed approach, similar to that currently being 
performed in the Oologah feasibility studies, and that protective 
remedies are identified and implemented to reverse the continuing 
decline in water quality. We recommend that the following high priority 
watershed studies be added to the fiscal year 2006 budgets:
    Miami, Oklahoma and Vicinity Feasibility Study.--We request funding 
of $350,000 to move into the feasibility stage for the vicinity in 
Ottawa County including and surrounding Miami, Oklahoma in the Grand 
(Neosho) Basin. Water resource planning-related concerns include 
chronic flooding, ecosystem impairment, poor water quality, subsidence, 
chat piles, mine shafts, health effects, and Native American issues. 
The State of Oklahoma's desire is to address the watershed issues in a 
holistic fashion and restore the watershed to acceptable levels. Study 
alternatives could include structural and non-structural flood damage 
measures, creation of riverine corridors for habitat and flood storage, 
development of wetlands to improve aquatic habitat and other measures 
to enhance the quality and availability of habitat and reduce flood 
damages.
    Oologah Lake Watershed Feasibility Study.--We request funding of 
$370,000, which is $42,000 more than the President's budget request, 
for ongoing feasibility studies at Oologah Lake and in the upstream 
watershed. The lake is an important water supply source for the city of 
Tulsa and protection of the lake and maintaining and enhancing the 
quality of the water is important for the economic development of the 
city. Recent concerns have been expressed by the City of Tulsa and 
others regarding potential water quality issues that impact water 
users, as well as important aquatic and terrestrial habitat. Concerns 
are related to sediment loading and turbidity, oilfield-related 
contaminants and nutrient loading.
    Grand (Neosho) Basin Reconnaissance Study.--We request funding in 
the amount of $300,000 to conduct a feasibility study of the water 
resource problems in the Grand (Neosho) Basin in Oklahoma and Kansas. 
There is a need for a basin-wide water resource planning effort in the 
Grand-Neosho River basin, apart from the issues associated with Grand 
Lake, Oklahoma. The reconnaissance study indicated that there is a 
Federal interest in this project and the feasibility will focus on the 
evaluation of institutional measures which could assist communities, 
landowners, and other interests in northeastern Oklahoma and 
southeastern Kansas in the development of non-structural measures to 
reduce flood damages in the basin. The reconnaissance study was a 
Congressional add new start, but no funding was put into the fiscal 
year 2006 President's budget request to continue into the feasibility 
stage.
    Wister Lake Watershed Ecosystem Restoration Study.--This ecosystem 
restoration study will evaluate alternatives for in-lake solutions on 
Wister Lake. Excessive sedimentation and turbidity, nutrient loading 
and excessive algae growth, taste and odor; and excessive iron and 
manganese are problems at Wister Lake. Wind and wave action, combined 
with shoreline erosion and nutrient inputs, contribute to habitat loss 
and degradation of the lake. We request funds in the amount of $140,000 
to continue this study.
    Spavinaw Creek Watershed Study.--Spavinaw Creek and its downstream 
impoundments Eucha and Spavinaw Lakes are severely impacted by nutrient 
loading and excessive algae growth as a result of agricultural 
practices located in Arkansas and Oklahoma. Degradation of water 
quality has led to taste and odor problems, increased treatment costs, 
and a decreased recreational and aesthetic value of the lakes. 
Together, Spavinaw and Eucha Lakes provide 47 percent of the water 
supply for the Tulsa metropolitan area. The Metropolitan Utility 
Authority entered into the feasibility cost-share agreement in June 
2004. We request funds in the amount of $266,000 to continue this 
study.
    Grand Lake Feasibility Study.--A need exists to evaluate water 
resource problems in the Grand-Neosho River basin in Kansas and 
Oklahoma to evaluate solutions to upstream flooding problems associated 
with the adequacy of existing real estate easements necessary for flood 
control operations of Grand Lake, Oklahoma. A study authorized by the 
Water Resources Development Act of 1996 was completed in September of 
1998 and determined that if the project were constructed based on 
current criteria, additional easements would be required. Section 449 
of WRDA 2000 directed the Secretary to evaluate backwater effects 
specifically due to flood control operations on land around Grand Lake. 
That study indicated that Federal actions have been a significant cause 
of the backwater effects and, according to WRDA 2000, the feasibility 
study should be 100 percent federally funded. A feasibility study is 
necessary to determine the most cost-effective solution to the real 
estate inadequacies. Changes in the operations of the project or other 
upstream changes could have a significant impact on flood control, 
hydropower and navigation operations in the Grand (Neosho) River system 
and on the Arkansas River Basin system, as well. We urge you to provide 
$650,000 to fund feasibility studies for this important project in 
fiscal year 2006 and to direct the Corps of Engineers to execute the 
study at full Federal expense. This project has been a Congressional 
add for the past 2 years, but there are no funds in the fiscal year 
2006 President's budget request to continue this project.
    Tenkiller Dam Safety Project.--We are pleased that the President's 
budget includes funds to advance work for flood control and other water 
resource needs in Oklahoma. Of special interest to our committee is 
funding for the Tenkiller Ferry Lakes Dam Safety Assurance Project in 
Oklahoma. This project is slated to be complete in fiscal year 2006 and 
continued funding is necessary for safety purposes and economic 
efficiencies. We would like to see Tenkiller funded at the $5.2 million 
level, which is the Corps' capability for fiscal year 2006.
    Canton Dam Safety.--We request that funding in the amount of $6.0 
million be provided to continue the Canton Lake Dam Safety Project. The 
stability of the existing spillway requires restrictions on the flood 
control pool. The flood pool can only be held to a 17-year flood event. 
Installation of steel anchors is required to stabilize the existing 
spillway so that the project can be operated as originally designed. 
Funds were provided by Congress in the fiscal year 2005 Appropriations 
bill to work on this important project.
    Section 205.--Although the Small Flood Control Projects Program 
addresses flood problems which generally impact smaller communities and 
rural areas and would appear to benefit only those communities, the 
impact of those projects on economic development crosses county, 
regional and sometimes State boundaries. The communities served by the 
program frequently do not have the funds or engineering expertise 
necessary to provide adequate flood damage reduction measures for their 
citizens. Continued flooding can have a devastating impact on community 
development and regional economic stability. The program is extremely 
beneficial and has been recognized nationwide as a vital part of 
community development, so much so in fact that there is currently a 
backlog of requests from communities who have requested assistance 
under this program. There is limited funding available for these 
projects and we urge this program be increased to an annual limit of 
$65 million.
    We also request your continued support of the Flood Plain 
Management Services Program (Section 206 of the 1960 Flood Control 
Act), which authorizes the Corps of Engineers to use its technical 
expertise to provide guidance in flood plain management matters to all 
private, local, State and Federal entities. The objective of the 
program is to support comprehensive flood plain management planning. 
The program is one of the most beneficial programs available for 
reducing flood losses and provides assistance to officials from cities, 
counties, States and Indian Tribes to ensure that new facilities are 
not built in areas prone to floods. Assistance includes flood warning, 
flood proofing, and other flood damage reduction measures, and critical 
flood plain information is provided on a cost-reimbursable basis to 
home owners, mortgage companies, realtors and others for use in flood 
plain awareness and flood insurance requirements.
    We also request your support of the Planning Assistance to States 
Program (Section 22 of the 1974 Water Resources Development Act) which 
authorizes the Corps of Engineers to use its technical expertise in 
water and related land resource management to help States and Indian 
tribes solve their water resource problems. The program is used by many 
States to support their State water plans. As natural resources 
diminish, the need to manage those resources becomes more urgent. We 
urge your continued support of this program as it supports States and 
Native American tribes in developing resource management plans which 
will benefit citizens for years to come. The program is very valuable 
and effective, matching Federal and non-Federal funds to provide cost-
effective engineering expertise and support to assist communities, 
States and tribes in the development of plans for the management, 
optimization and preservation of basin, watershed and ecosystem 
resources. The Water Resources Development Act of 1996 increased the 
annual program limit from $6 million to $10 million and we urge this 
program be fully funded to the programmatic limit of $10 million.
    We strongly urge the Appropriations Committee to raise the Corps of 
Engineers' budget to $6.6 billion to help get delayed construction 
projects back on schedule and to reduce the deferred maintenance 
backlog which is out of control. This will help the Corps of Engineers 
meet the obligations of the Federal Government to people of this great 
country.
    Concerning another related matter, we have deep concerns about the 
attempt to re-authorize the Endangered Species Act without significant 
beneficial reforms. If a bill is passed through without reforms, it 
will be devastating to industry and the country as a whole. We strongly 
urge you to take a hard look at any bill concerning this re-
authorization and insure that it contains reasonable and meaningful 
reforms. We urge the re-authorization of the act with reforms at the 
earliest possible time.
    Mr. Chairman, we appreciate this opportunity to present our view on 
these subject.
                                 ______
                                 
  Prepared Statement of the Tennessee-Tombigbee Waterway Development 
                               Authority

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

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

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

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

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

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

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

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

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

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

    The Upper Mississippi River Basin Association (UMRBA) is the 
organization created in 1981 by the Governors of Illinois, Iowa, 
Minnesota, Missouri, and Wisconsin to serve as a forum for coordinating 
river-related State programs and policies and for collaborating with 
Federal agencies on regional issues. As such, the UMRBA works closely 
with the Corps of Engineers on a variety of programs. Of particular 
interest to the basin States are the following:
         upper mississippi and illinois rivers navigation study
    The Corps of Engineers recently completed its 14-year Upper 
Mississippi and Illinois Rivers Navigation Study, issuing the final 
feasibility report in September 2004 and the Chief's Report in December 
2004. However, Congress has not yet authorized the recommended 
integrated plan for navigation improvements and ecosystem restoration. 
To insure that the necessary planning and design work can proceed, in 
anticipation of construction authorization, Congress appropriated $13.5 
million for Preconstruction Engineering and Design (PED) in fiscal year 
2005. A similar bridging strategy will be necessary in fiscal year 2006 
if authorization is still pending.
    PED.--The UMRBA supports $24 million for PED in fiscal year 2006. 
Many of the large scale projects, such as new locks or fish passage at 
dams, require 3 years or more of PED before they can move to 
construction. It is thus critical that PED work proceed immediately and 
be sustained over time. In fiscal year 2005, PED funding is being 
directed to both navigation improvements and ecosystem restoration 
projects. To continue this balanced approach, the Corps proposes 
directing $13 million to navigation measures (mooring facilities, 
switchboats, and lock design), $9 million to 30 ecosystem restoration 
projects, and $2 million for program management in fiscal year 2006.
    Construction.--If the integrated navigation and ecosystem 
restoration program is authorized for construction this year, 
construction could be initiated on some projects as early as fiscal 
year 2006. In that event, UMRBA would support construction funding of 
$16.2 million, which is the Corps of Engineers' maximum expressed 
capability. This funding would support mooring facilities at 7 sites, 
switchboats at 2 sites, and 10 ecosystem restoration projects.

                    ENVIRONMENTAL MANAGEMENT PROGRAM

    For the past 18 years, the Upper Mississippi River System 
Environmental Management Program (EMP) has been the premier program for 
restoring the river's habitat and monitoring the river's ecological 
health. As such, the EMP is key to achieving Congress' vision of the 
Upper Mississippi as a ``nationally significant ecosystem and a 
nationally significant commercial navigation system.'' Congress 
reaffirmed its support for this program in the 1999 Water Resources 
Development Act by reauthorizing the EMP as a continuing authority and 
increasing the annual authorized appropriation to $33.5 million. The 
UMRBA is pleased that the administration has requested full funding of 
$33.5 million for the EMP in fiscal year 2006. The fact that the 
administration has identified the EMP as one of nine projects ``that 
are the highest priorities in the Nation,'' is tribute to the EMP's 
success. Yet annual appropriations for the EMP have fallen short of the 
authorized funding levels for the past 8 years and the program is still 
suffering from the dramatic 40 percent cut it experienced in fiscal 
year 2003. Thus, the UMRBA strongly urges Congress to appropriate full 
funding of $33.5 million for the EMP in fiscal year 2006.
    The administration's proposed funding level of $33.5 million will 
support planning and design of 21 habitat restoration projects and 
construction of 11 projects. Once completed, these 11 projects will 
benefit over 32,000 acres of aquatic and floodplain habitat. In 
addition, fiscal year 2006 funds will support expanded efforts of the 
Long Term Resource Monitoring program (LTRMP), which has suffered 
substantially from the funding shortfalls in recent years. This year, 
the LTRMP was restructured to enhance its ability to meet increasing 
demands for information with decreasing resources. But it is essential 
that funding be increased in fiscal year 2006 to revive many of the 
critical functions that have been eliminated, deferred, or reduced.
    UMRBA is particularly concerned about an apparent directive from 
OMB that $3 million of fiscal year 2006 EMP funding be devoted to 
development of a ``10-year aquatic ecosystem restoration plan.'' Such a 
plan is unnecessary and would be duplicative of plans that the Corps of 
Engineers just completed as part of the Upper Mississippi and Illinois 
Rivers Navigation Study. Given the backlog of EMP habitat restoration 
projects awaiting construction, and the vast number of unmet needs 
under the Long Term Resource Monitoring Program, it would be misguided 
to divert construction funds from this important work to develop a plan 
that is largely duplicative. Congress should direct the Corps of 
Engineers to use EMP funds exclusively for construction of habitat 
restoration projects and long term monitoring, as authorized in the 
1999 Water Resources Development Act.
    UMRBA recognizes that one of the biggest challenges facing future 
restoration efforts on the Upper Mississippi River (UMR) will be 
integrating the work that is currently done under EMP with the new 
ecosystem/navigation authority being proposed. Congress is currently 
considering authorization of a new dual-purpose authority for the Corps 
of Engineers, as recommended in the recently completed navigation 
feasibility study. For now, however, the EMP remains the single most 
effective and long-standing UMR ecosystem restoration program. 
Moreover, the EMP's monitoring element is entirely unique and would not 
be replicated in the proposed new authority. Therefore, fully funding 
the EMP is as important today as it has ever been. The EMP must not 
languish as questions related to future program streamlining and 
coordination are being addressed.

              MAJOR REHABILITATION OF LOCKS AND DAMS (L&D)

    Most of the locks and dams on the Upper Mississippi River System 
are over 60 years old and many are in serious need of repair and 
rehabilitation. For the past 19 years, the Corps has been undertaking 
major rehabilitation of individual facilities throughout the navigation 
system in an effort to extend their useful life. This work is critical 
to ensuring navigation reliability and safety.
    The UMRBA supports the Corps' fiscal year 2006 budget request for 
major rehabilitation work at L&D 11 ($7.58 million), L&D 19 ($17.5 
million), and L&D 24 ($4.3 million). L&D 11, located near Dubuque, 
Iowa, is nearly 70 years old and experiencing frequent breakdowns of 
mechanical and electrical equipment. The major rehabilitation project 
currently underway includes new bulkheads, lock chamber and guidewall 
repairs, and electrical system upgrades. Rehabilitation needs are 
especially urgent at L&D 19, where temporary use of the only available 
spare lock gates risks closure of the river north of Keokuk, Iowa, if 
those gates fail. L&D 24, located near Clarksville, Missouri, is 
nearing completion of the first phase of its $87 million 
rehabilitation. Fiscal year 2006 funding will support completion of the 
dam tainter gate rehabilitation and lock wall concrete repairs.
    The UMRBA also supports funding for two major rehabilitation 
projects that are not included in the President's request: L&D 3 ($5.3 
million) and Locks 27 ($2 million). Navigation safety and embankment 
failure have been a concern for over 20 years at L&D 3. Downbound 
commercial tows have difficulty negotiating the lock chamber and in 
some cases have actually been sucked into the gated portion of the dam. 
Releasing these barges from the dam involves manipulating the gates and 
water levels in a way that puts increased pressure on the adjacent 
embankments, which have been severely weakened by age and past 
accidents. Should these structures be breached, commercial navigation 
would be curtailed and two large power plants would be forced to shut 
down. Lock 27 is located at a critical juncture on the inland waterway 
system, downstream of the Mississippi, Illinois, and Missouri Rivers. 
Because no funding has yet been provided to initiate rehabilitation as 
a construction ``new start,'' emergency repairs continue using O&M 
funds.

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

    The Corps of Engineers is responsible for operating and maintaining 
the Upper Mississippi River System for navigation. This includes 
channel maintenance dredging, placement and repair of channel training 
structures, water level regulation, and routine care and operation of 
29 locks and dams on the Mississippi River and 7 locks and dams on the 
Illinois River. The fiscal year 2006 budget request totals 
approximately $180 million for O&M of this river system. These funds 
are critical to the Corps' ability to maintain a safe and reliable 
commercial navigation system, while protecting and enhancing the 
river's environmental values.

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

    The President's fiscal year 2006 funding request for O&M of most 
Upper Mississippi River reaches is above fiscal year 2005 allocations, 
with the exception of the pooled portion of the St. Louis District. 
Unfortunately, all these funding levels are well below what is needed. 
In particular, there is a growing backlog of maintenance needs as a 
result of historically flat line budgets. In the case of the Illinois 
Waterway, the President's fiscal year 2006 request, which is 20 percent 
below the fiscal year 2005 allocation, is even more problematic. 
Funding on the Illinois Waterway was increased substantially in fiscal 
year 2005 to address a significant maintenance backlog. Under the 
fiscal year 2006 request, all work on the backlog would stop and basic 
service levels would be reduced.
    The UMRBA supports increased funding for O&M of the Upper 
Mississippi and Illinois River System to meet routine ongoing operation 
and maintenance needs, and to address the growing unfunded maintenance 
backlog. Full capability funding in fiscal year 2006 for all three 
Upper Mississippi and Illinois River districts totals $232.57 million.

  UPPER MISSISSIPPI RIVER COMPREHENSIVE PLAN (FLOOD DAMAGE REDUCTION)

    Section 459 of the Water Resources Development Act of 1999 
authorized the Corps to develop what is called the ``Upper Mississippi 
River Comprehensive Plan,'' the primary focus of which is systemic 
flood damage reduction and flood protection. Since planning began in 
December 2001, funding shortfalls have been significant and the study 
has been suspended several times. It will thus be impossible to 
complete the study within the 3-year time frame Congress established in 
WRDA 1999, and later reaffirmed in WRDA 2000.
    The fiscal year 2006 budget includes no funding for the 
Comprehensive Plan, despite the fact that the study is nearly complete. 
The analysis to date suggests that systemwide levee increases have 
benefit-to-cost ratios less than one. However, this is the Corps' first 
use of flow frequency data to analyze flood damage reduction options on 
a systemwide basis. It is providing important insights into how local 
changes to the flood protection system may impact flood levels 
throughout the system. The Corps has also evaluated a series of 
Emergency Action Scenarios that state floodplain managers can utilize 
when making flood-fighting decisions. It is thus important that this 
study be brought to a timely conclusion, including preparation of the 
final report. Toward that end, UMRBA supports $1.1 million for 
completion of the study in fiscal year 2006.
                                 ______
                                 
 Prepared Statement of the Fort Peck Assiniboine and Sioux Tribes and 
                     Dry Prairie Rural Water System

                    FISCAL YEAR 2006 BUDGET REQUEST

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

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

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

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

    Note that cost indexing from last year due to inflation increased 
the cost of the project from $207 million to $235 million, an increase 
of $28 million. This is more than the amount requested for fiscal year 
2006. Increases in the level of appropriations are needed to outpace 
inflation.

                          PROPOSED ACTIVITIES

    Public Law 106-382 (October 27, 2000) authorized this project, 
which includes all of the Fort Peck Indian Reservation in Montana and 
the Dry Prairie portion of the project outside the Reservation.
Fort Peck Indian Reservation
    On the Fort Peck Indian Reservation the Tribes have used 
appropriations from previous years to construct the Missouri River raw 
water intake, a critical feature of the regional water project. The raw 
water pump station has also been constructed, and the raw water 
pipeline between the Missouri River and the water treatment plant has 
been constructed to within 2 miles of the water treatment plant. The 
sludge lagoons at the water treatment plant are currently under 
construction. All projects have a head under the engineers estimate.
    A contract for the construction of the Missouri River water 
treatment plant will be initiated in fiscal year 2005. Completion of 
construction of the water treatment plant is contemplated in fiscal 
year 2007.
    The request for fiscal year 2006 will continue the construction of 
the Missouri River water treatment plant with the use of the 
$13,251,000. Fiscal year 2007 funds in the amount of $10.2 million will 
be required for completion of the water treatment plant. The request 
for fiscal year 2006 also provides for construction of finished core 
water pipelines from the water treatment plant toward the communities 
of Poplar (Poplar to Big Muddy) and Wolf Point (Poplar to Wolf Point). 
These are the principal core pipelines that extend east and west of the 
water treatment plant to serve the Fort Peck Indian Reservation and to 
connect to Dry Prairie facilities on the east and west boundaries of 
the Reservation. The funds for the pipeline projects are equally 
divided at $1,956,000 for each project. The Tribes will also use 
$856,000 for operation and maintenance buildings. The Bureau of 
Reclamation can confirm that the use of funds proposed for fiscal year 
2006 is well within the project's capability based on current status of 
plans and specifications.
    The pipeline project from the water treatment plant to Poplar will 
provide a source of water for a section of the Fort Peck Indian 
Reservation contaminated by oil drilling operations and the subject of 
EPA orders to the responsible oil company. The oil company will provide 
the distribution system necessary to mitigate the problems and the 
Assiniboine and Sioux Rural Water System will provide the 
interconnecting pipeline without duplicating any facilities identified 
in the Final Engineering Report.
Dry Prairie
    Dry Prairie has used previous appropriations to construct core 
pipelines and a booster pump station from the community of Culbertson 
to serve the communities of Froid and Medicine Lake. This project 
represents a significant portion of the main core pipeline for the 
eastern half of the Dry Prairie Project. Pipelines were sized to serve 
the area north of the Missouri River, south of the Canadian border and 
between the Fort Peck Indian Reservation and the North Dakota border 
(see general location map attached).
    The project relies on interim water supplies. The regional water 
treatment plant will provide finished water when pipelines are 
constructed to the interconnection point for Dry Prairie at the Big 
Muddy River. The project between Culbertson, Froid and Medicine Lake is 
in full operation and serves the last two mentioned communities and a 
small number of rural users.
    The completed system provides Dry Prairie with capability to build 
branch pipelines and connect rural areas in the south half of the east 
half of the Dry Prairie Project. Bainville, Dane Valley and East 
Medicine Lake area residents can be served with the existing system 
capacity that is now constructed and in operation. The request for 
fiscal year 2006 funds of $7,438,000 will be combined with a non-
Federal cost share of $2,349,000 to build nearly $10 million of branch 
pipelines connecting with the Culbertson-Froid-Medicine Lake core 
pipeline. Bidding of the project can be undertaken in by third-quarter 
fiscal year 2005. The Bureau of Reclamation can confirm the capability 
to construct these pipelines based on the current status of design.
Master Plan
    The project master plan is provided for review on the following 
page. The request for fiscal year 2006 is shown in relation to the 
project components that remain to be completed by 2012.

                         LOCAL PROJECT SUPPORT

    The Fort Peck Tribes have supported the project since 1992 when 
they conceived it and sought means of improving the quality of life in 
the region. The planning was a logical step after successful completion 
of an historic water rights compact with the State of Montana. This 
compact was the national ``ice breaker'' that increased the level of 
confidence by other Tribes in Indian water right settlement 
initiatives. The Tribes did not seek financial compensation for the 
settlement of their water rights but expected development of meaningful 
water projects as now authorized.
    The 1999 Montana Legislature approved a funding mechanism from its 
Treasure State Endowment Program to finance the non-Federal share of 
project planning and construction. Demonstrating support of Montana for 
the project, there were only three votes against the statutory funding 
mechanism in both the full House and Senate. The 2001 through 2005 
Montana Legislatures have provided all authorizations and 
appropriations necessary for the non-Federal cost share.
    Dry Prairie support is demonstrated by a financial commitment of 
all 14 communities within the service area to participate in the 
project. Rural support is strong, with about 70 percent of area farms 
and ranches intending to participate as evidenced by their intent fees 
of $100 per household.

                   NEED FOR WATER QUALITY IMPROVEMENT

    The Fort Peck Indian Reservation was previously designated as an 
``Enterprise Community'', underscoring the level of poverty and need 
for economic development in the region. The success of economic 
development within the Reservation will be significantly enhanced by 
the availability of higher quality, safe and more ample municipal, 
rural and industrial water supplies that this regional project will 
bring to the Reservation, made more necessary by an extended drought in 
the region. Outside the Fort Peck Indian Reservation, the Dry Prairie 
area has income levels that are higher than within the Reservation but 
lower than the State average.
    The feature of this project that makes it more cost effective than 
similar projects is its proximity to the Missouri River. The southern 
boundary of the Fort Peck Indian Reservation is formed by the Missouri 
River for a distance of more than 60 miles. Many of the towns in this 
regional project are located 2 to 3 miles from the river, including 
Nashua, Frazer, Oswego, Wolf Point, Poplar, Brockton, Culbertson, and 
Bainville. As shown on the enclosed project map, a transmission system 
outside the Fort Peck Indian Reservation will deliver water 30 to 40 
miles north of the Missouri River. Therefore, the distances from the 
Missouri River to all points in the main transmission system are 
shorter than in other projects of this nature in the Northern Great 
Plains.

                        ADMINISTRATION'S SUPPORT

    The Tribes and Dry Prairie worked extremely well and closely with 
the Bureau of Reclamation prior to and following the authorization of 
this project in fiscal year 2000. The Bureau of Reclamation hands 
heavily reviewed and commented on the Final Engineering Report, and all 
comments were incorporated into the report and agreement was reached on 
final presentation. OMB reviewed the Final Engineering Report prior to 
its submission to Congress in the final step of the approval process. 
The Commissioner, Regional and Area Offices of the Bureau of 
Reclamation have been consistently in full agreement with the need, 
scope, total costs, and the ability to pay analysis that supported the 
Federal and non-Federal cost shares. There have been no areas of 
disagreement or controversy in the formulation of the project.
    The Bureau of Reclamation collaborated with the Tribes and Dry 
Prairie to conduct and complete value engineering investigations of the 
Final Engineering Report (planning), the Culbertson to Medicine Lake 
pipeline (design), the Poplar to Big Muddy River pipeline (design), the 
Missouri River intake (design) and on the regional water treatment 
plant (design). Each of these considerable efforts has been directed at 
ways to save construction and future operation, maintenance and 
replacement costs as planning and design proceeded. Agreement with 
Reclamation has been reached in all value engineering sessions on steps 
to take to save Federal and non-Federal costs in the project.
    The Bureau of Reclamation conducted independent review of the final 
plans and specifications for the Missouri River raw water intake, the 
regional water treatment plant and the Culbertson to Medicine Lake 
Project. The Agency participated heavily during the construction phases 
of those projects and concurred in all aspects of construction from 
bidding through the completion of construction. (The regional water 
treatment plant has not yet been constructed).
    Cooperative agreements have been developed and executed from the 
beginning phases to date between the Bureau of Reclamation and the 
Tribes and between Bureau of Reclamation and Dry Prairie. Those 
cooperative agreements carefully set out goals, standards and 
responsibilities of the parties for planning, design and construction. 
All plans and specifications are subject to levels of review by the 
Bureau of Reclamation pursuant to the cooperative agreements. The 
sponsors do not have the power to undertake activities that are not 
subject to oversight and approval by the Bureau of Reclamation. Each 
year the Tribes and Dry Prairie are required by the cooperative 
agreements to develop a work plan setting out the planning, design and 
construction activities and the allocation of funding to be utilized on 
each project feature.
    Clearly, the Fort Peck Reservation Rural Water System is well 
supported by the Bureau of Reclamation. Congress authorized the project 
with a plan formulated in full cooperation and collaboration with the 
Bureau of Reclamation, and major project features are under 
construction with considerable oversight by the Agency.
                                 ______
                                 
  Joint Prepared Statement of the Port Commerce Department, The Port 
 Authority of New York & New Jersey; Division of Intermodal Services, 
    Department of Transportation, State of New Jersey; Empire State 
Development Corporation, State of New York; and New York City Economic 
                        Development Corporation

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

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

                              CONSTRUCTION

    New York and New Jersey Harbor.--This project was authorized by 
Section 101(a)(2) of WRDA 2000 (Public Law 106-541). The NY & NJ Harbor 
Deepening Project will improve transportation efficiency and will 
benefit the markets served by the port as well as the Nation's defense 
capability. All-water services to the East Coast, increasingly embraced 
by major steamship lines, promise growing cargo throughput in the years 
ahead. The Port and private industry have been engaged in a $1.46 
billion redevelopment program that includes waterways, terminal, and 
access improvements to meet this anticipated growth. We urge adoption 
of the $101,000,000 budget request with the understanding that 
restoration of previously reprogrammed funds will be available, if 
needed, to keep the harbor-deepening program on schedule.
    Continuing Authority Program.--We request that $6,875,000 be added 
to the Continuing Authority Program to enable construction of habitat 
restoration at Gerritsen Creek, Lincoln Park and the Jamaica Bay Marsh 
Island sites, and to complete the study phase for the Soundview Park 
restoration site. We also note that the current budget request for 
$15,000,000 is not adequate to support CAP projects ready for 
construction. Funding CAP to the authorized limit of $25,000,000 would 
be more realistic and would signal Congress' commitment to achieving 
effective environmental restoration.

                           SURVEYS (STUDIES)

    Hudson-Raritan Estuary Studies.--These studies were authorized by a 
House Committee Resolution dated April 15, 1999, Docket Number 2596. 
Increases are requested for the studies in order to achieve the 
completion schedules for the New York & New Jersey, Lower Passaic, and 
Gowanus studies.
    New York & New Jersey.--The study purpose is to identify projects 
to restore estuarine, wetland and adjacent upland buffer habitat in the 
region consistent with existing port and regional management plans. A 
Feasibility Cost Sharing Agreement (FCSA) was signed July 12, 2001, and 
study initiated. One fast-tracked project is Liberty State Park. New 
Jersey has all required project funds on hand and ready to provide to 
the Corps for construction. The Corps is unable to proceed with both 
the comprehensive study and the Liberty State Park project without more 
funds. We respectfully request that the budget be augmented by $50,000 
to $850,000 to allow the Corps to proceed.
    Lower Passaic.--Communities throughout the Passaic River Basin 
requested improvements to remediate and restore the river. In June 
2003, the Corps, in partnership with EPA and the NJ Office of Maritime 
Resources (OMR), completed a comprehensive Project Management Plan 
(PMP) that integrates the work of all three agencies into a single 
study. In the same month, the Corps signed a FCSA with OMR and began 
the study. This has been designated as a pilot project under the joint 
Corps-EPA Urban Rivers Restoration Initiative. The non-Federal matching 
funding will be available as the project requires. Lack of Federal 
funding will jeopardize the Corps' ability to participate in the joint 
fieldwork envisioned in the PMP. We request that the budget be 
augmented to $2,300,000.
    Gowanus.--The feasibility study will assess the environmental 
problems and potential solutions in the Gowanus Canal and Bay. 
Restoration measures will assess clean up of off-channel contaminated 
hot spots, contaminant reduction measures, wetland creation, water 
quality improvements, and alteration of hydrology/hydraulics to improve 
water movement and quality. It was designated as a pilot project under 
the joint Corps-EPA Urban Rivers Restoration Initiative. A FCSA was 
executed with the NYC Department of Environmental Protection in March 
2002. The City has committed its full share to the project and awaits 
the Federal match. To continue the restoration study of this highly 
contaminated, urban body of water, we request that the budget be 
augmented to $1,000,000.
    Hackensack Meadowlands.--This study looks at the feasibility of 
restoring wetlands in the project area and assesses toxic waste 
remediation potential. The area's wildlife habitat preserves are 
threatened by dwindling open marshes. In April 2003, the Corps executed 
the FCSA with the local sponsor, the NJ Meadowlands Commission, and 
initiated the feasibility study. We respectfully request that the 
budget be augmented to $900,000 for this study aimed at protecting 
marshes, tidal creeks and open spaces and to $1,000,000 in S234 funds 
to begin projects ready for construction.
    Liberty State Park.--The feasibility study looks to restore a major 
saltwater marsh system and remediate on-site contamination. We request 
$1,000,000 to complete the study and to initiate the Preliminary 
Engineering and Design (PED) phase, contingent upon authorization of 
this significant regional project.
    Jamaica Bay and Flushing Bay.--These important regional projects 
require conditional authorization to begin work on the final designs. 
We request $1,000,000 and $725,000, respectively, for Preliminary 
Engineering & Design, contingent on authorization, for these important 
projects.

                       OPERATION AND MAINTENANCE

    Maintenance projects are critical to the commerce, navigation and 
security of the Port, as well as the Nation's security. If channels are 
not maintained to official depths and as needed by today's commerce, 
the efficiency of the Federal system of channels is lost and the risk 
of groundings increases. Past and current budgets enable only partial 
maintenance of the channels, leaving significant areas at shallow and 
potentially unsafe depths. The Port is one the Nation's busiest 
petroleum ports and the Arthur Kill (under NY & NJ Channels) is 
critical to that trade. Maintenance of the channel is needed to support 
the industry, which serves the greater New York Metropolitan area and 
much of the American Northeast. Maintenance also protects and 
perpetuates the Federal infrastructure investment. We identified 
several critical projects with pressing dredging safety concerns. With 
those concerns in mind, it is important to be on the record in stating 
that this part of the fiscal year 2006 budget is insufficient to meet 
the practical needs of commerce. While the total port maintenance need 
well exceeds the President's O&M budget for the projects identified on 
the above table, we respectfully request the budget be augmented by 
$29,110,000 to $42,925,000.

                               CONCLUSION

    The administration's budget includes language that would restrict 
the use of continuing contracts, which is extremely troubling. On 
reading the budget documents the full intent on this matter is not 
clear but it is evident that Congress is being requested to adopt a 
``1-year contract'' approach that would have very serious impacts on 
the Port's deepening program. There are 17 contracts to be awarded in 
the project with a current estimated date of completion in 2014. As 
best as we can tell, the administration proposal would mean the 
completion of the deepening program 8 years later (in 2022). That would 
increase the overall construction cost significantly, undermine the 
value of our terminal development investments, and possibly even put at 
least one terminal operator out of business. As such we strongly oppose 
the policy change. The Port of New York & New Jersey continues to be a 
major international gateway for the Nation. The civil works program, 
coupled with public and private sector investments, has served well the 
Nation's economic and security interests for the better part of two 
centuries. We are proud of that history and commit to continuing this 
productive partnership with the Federal Government for centuries to 
come.
                                 ______
                                 
   Prepared Statement of the Perkins County Rural Water System, Inc.

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

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

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

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

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

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

                               CONCLUSION

    The Port of New York & New Jersey is an important part of the 
economy of the New York/New Jersey metropolitan area, and with fishing, 
swimming, and boating it is holds great potential as a major 
recreational opportunity and economic engine for the region. Port 
development has also been a major beneficiary of the Estuary's natural 
resources. Several of the facilities have been built on former wetlands 
(in some cases predating Clean Water Act protections of those 
wetlands). Maintenance channel dredging, necessary for port commerce 
also has significant impacts on benthic habitat, mudflats, and 
wetlands. Recognizing this, the Port Authority and Port interests have 
committed to significant improvements in water and air quality, 
priority habitat preservation and restoration, and activities to 
mitigate for environmental impacts from Port operations and expansion.
    We are encouraged by the constructive dialogue between Port 
interests and the environmental conservation community that has 
resulted in this appropriations request. Thank you for the opportunity 
to submit testimony on this important appropriation.
                                 ______
                                 
      Prepared Statement of the Ouachita River Valley Association

        APPROPRIATIONS FOR THE OUACHITA-BLACK NAVIGATION PROJECT

    Mr. Chairman and members of the committee, thank you for the 
opportunity to present testimony to this committee that influences so 
much of the economy of our region through the Ouachita-Black Navigation 
Project. The Project was authorized by the River and Harbor Act of 1950 
as modified by the River and Harbor Act of 1960.
    The Ouachita River Valley Association is a nonprofit organization 
with a 112-year history having as its purpose the ``development of 
projects that have been proven to be economically sound, socially 
justified which enhance the general welfare of the people in the 
Ouachita River basin in Arkansas, Louisiana, and the Nation''. Mr. 
Chairman, sometimes it is prudent and helpful to state the obvious to 
ensure a common understanding of a situation and to enable informed 
evaluation. The following statements lie in this domain. The 337-mile 
Ouachita-Black Navigation System is the only commercially navigable 
waterway serving the eleven Parishes and Counties in northeast 
Louisiana and Southeast Arkansas. All project benefits rely on the four 
small locks and dams that have been in place for up to 30 years. None 
of which have an auxiliary structure nor are there feasible 
alternatives to the many services they provide. With few exceptions, 
the waterway throughout its 30-year history has received funding 
sufficient only for operations with little attention to maintenance. 
Neglect of this waterway following construction is symbolized by the 
absence of navigation charts on a project in operation for 30 years.
    We submit our request in three major categories for your 
consideration. The first and foremost need is that of Operations and 
Maintenance, General (O&M) funding; second is the need for funding for 
stabilization of eroding banks that are endangering existing public and 
private infrastructure; and the third is funding for a study to 
identify and document the contributions of this waterway to the Nation 
and the region it serves in Louisiana and Arkansas.

                   OPERATION AND MAINTENANCE, GENERAL

    Historical funding shortfalls for Operations and Maintenance (O&M) 
are seriously threatening the reliability and dependability of the 
Ouachita-Black Navigation System. The waterway is an important 
industrial/agricultural economic generator, vital transportation 
artery, irreplaceable source for municipal, industrial and agricultural 
water supplies, a vast recreational asset and natural resource 
preservation project serving this region and the Nation. These many 
benefits depend upon safe and reliable operation of four locks and dams 
and periodic channel maintenance work. A $1 investment in preventive 
O&M yields more than $14 in returns to the Nation. Programmed 
maintenance has been demonstrated to be and is intuitively more 
economical than breakdown maintenance. Economic losses from service 
failures brought about by long-term system closures are magnified by 
unscheduled and more costly ``break down'' repairs.
    An ominous concern specific to the Ouachita-Black System is the 
inability to dewater the locks to inspect critical lock components and 
to repair them in a timely manner without long and costly outages. 
Absent the stoplog slots, a failure of the lock miter gates and other 
underwater components as a result of deterioration or a marine accident 
will require months or years to repair as compared to perhaps weeks 
with a working stoplog system. Jonesville Lock was modified with 
stoplog slots in fiscal year 2004 to provide this capability. However, 
funding provided in fiscal year 2005 was insufficient to continue this 
work at the three upstream structures. We strongly urge and recommend 
that the highest priority be given to continuation of the stoplog slot 
installation program followed closely with inspection and repair of the 
critical components that have not been maintained for 30 years.
    Request is made for $12.5 million for routine operations, 
continuation of the stoplog slot modification program, repair critical 
components, initiate preventive maintenance work, and perform channel 
maintenance dredging. This amount is only 58 percent of the more than 
$21 million for work that is identified as needed and within the 
capability of the Corps of Engineers to perform in fiscal year 2006.

                CONSTRUCTION GENERAL, BANK STABILIZATION

    As with any alluvial stream, the Ouachita River tends to meander 
with the annual rise and fall of river flows. The degree of this attack 
has been relatively minor but has now reached the point of endangering 
critical and irreplaceable infrastructure. Protection of federally 
funded infrastructure such as levees, roads and bridges, ports, as well 
as historical sites is best and most economically provided by judicious 
hardening or stabilizing the banks of the river. Prevention of damages 
is more economical that repair and replacement. Levees protecting the 
cities of Columbia and Monroe, Louisiana are threatened by encroaching 
erosion at miles 113, 121, and 169 and an irreplaceable historical site 
is endangered at Camden, Arkansas.
    Request is made for $5.0 million for bank protection at these 
sites. Proposed Bill and Report language are attached.
        general investigations, post-construction benefit study
    It is our strongest contention that expenditure of Federal funds 
should be thoroughly evaluated and justified on the basis of sound 
investments. However, much of the difficulty in providing acceptable 
evidence of waterway benefits is the lack of a comprehensive post-
construction evaluation.
    Benefits for this project have been narrowly defined in the past 
and decisions made from an uninformed perspective without regard to the 
actual contributions of the waterway system to the region and Nation. 
Initial administration budget proposals for fiscal year 2005, that 
would have abandoned the project, produced stakeholder meetings 
throughout the basin. The largest was a hearing held by the Arkansas 
Legislature at Camden, Arkansas with more than 150 people of all 
interests in attendance. The 30 stakeholders testifying before the 
committee brought out the widespread impact of the waterway on the 
people, industries, and environment of the region.
    The effort to abandon significant portions of the national waterway 
infrastructure based solely on arbitrary tons or ton-miles of cargo 
moved is rooted in the concept that tributary streams provide only 
limited transportation benefits. Analysis of Waterborne Commerce 
Statistics Center data by Institute for Water Resources and TVA reveals 
that 68 percent of cargo tonnage and 56 percent of waterway ton-miles 
are generated on tributary streams. The ancillary benefits generated in 
connection with navigation projects are perhaps even greater than 
transportation benefits and should be determined in greater detail 
through basin specific studies.
    Funds in the amount of $250,000 are requested to conduct a post-
construction benefit evaluation of the Ouachita-Black Navigation System 
to provide a basis for future levels of investments.

                               SUMMATION

    Mr. Chairman we appreciate the opportunity to bring these issues to 
the attention of the committee. And, to help ``connect the dots'' for 
prevention of catastrophic failures but most importantly to strengthen 
the Nation through wise investment in our natural resources from which 
springs our wealth. Investments by the Federal Government in the 
Ouachita-Black Navigation System have and are continuing to make a 
significant difference in the lives of the people residing in the 
valley while contributing to the Nation at-large. For this we are 
grateful. We urge the Congress through its power of the budget to 
restore and maintain this important component of the national waterway 
infrastructure through very modest investments. Proposed Bill and 
Report Language are enclosed.

                             BILL LANGUAGE
  OUACHITA AND BLACK RIVERS BANK STABILIZATION, ARKANSAS AND LOUISIANA

    Provided further, that using the funds appropriated herein, the 
Secretary of the Army, acting through the Chief of Engineers, is 
authorized and directed to design and construct bank stabilization 
measures, at Federal expense with local sponsors providing necessary 
lands, easements, and rights of way, along the Ouachita and Black 
Rivers, Arkansas and Louisiana, between mile 0 on the Black River, 
Louisiana, to mile 460 on the Ouachita River, Arkansas at the outlet of 
Remmel Dam, such measures to be constructed as the Secretary determines 
necessary to maintain navigation, for flood damage prevention, for 
control of erosion and for historic preservation.

                            REPORT LANGUAGE
  OUACHITA AND BLACK RIVERS BANK STABILIZATION, ARKANSAS AND LOUISIANA

    The Committee is aware of the severe bank caving and erosion 
occurring along the Ouachita and Black Rivers, Arkansas and Louisiana, 
between mile 0 on the Black River, Louisiana, to mile 460 on the 
Ouachita River, Arkansas at the outlet of Remmel Dam and has included 
bill language directing the Corps of Engineers to use funds provided, 
to design and construct bank stabilization measures, at Federal expense 
with local sponsors providing necessary lands, easements, and rights of 
way, along the Ouachita and Black Rivers, Arkansas and Louisiana, as 
the Secretary determines necessary to maintain navigation, for flood 
damage prevention, for control of erosion, and for historical 
preservation.
                                 ______
                                 
 Prepared Statement of the Clark County Regional Flood Control District

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

                   RIO DE FLAG FLOOD CONTROL PROJECT

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

   MCCOOK & THORNTON RESERVOIRS SUMMARY RECOMMENDATION.--$3,000,000 
                              CONSTRUCTION

    On behalf of the Metropolitan Water Reclamation District of Greater 
Chicago (District), I want to thank the subcommittee for this 
opportunity to present our priorities for fiscal year 2006 and, at the 
same time, express our appreciation for your support of the District's 
projects in the years past. The District is the local sponsor for three 
Corps of Engineers (Corps) priority projects of the Chicagoland 
Underflow Plan: the O'Hare, McCook and Thornton Reservoirs. We are 
requesting the subcommittee's full support for McCook and Thornton 
Reservoirs, as the O'Hare Reservoir has been completed. Specifically, 
we request the subcommittee to include a total of $30,000,000 in 
construction funding for the McCook and Thornton Reservoir projects in 
the bill. The following text outlines these projects and the need for 
the requested funding.

                     THE CHICAGOLAND UNDERFLOW PLAN

    The Chicagoland Underflow Plan (CUP) consists of three reservoirs: 
the O'Hare, McCook and Thornton Reservoirs. These reservoirs are a part 
of the Tunnel and Reservoir Plan (TARP). The O'Hare Reservoir Project 
was fully authorized for construction in the Water Resources 
Development Act of 1986 (Public Law 99-662) and completed by the Corps 
in fiscal year 1999. This reservoir is connected to the existing O'Hare 
segment of the TARP. Adopted in 1972, TARP was the result of a multi-
agency effort, which included officials of the State of Illinois, 
County of Cook, City of Chicago, and the District.
    TARP was designed to address the overwhelming water pollution and 
flooding problems of the Chicagoland combined sewer areas. These 
problems stem from the fact that the capacity of the area's waterways 
has been overburdened over the years and has become woefully inadequate 
in both hydraulic and assimilative capacities. These waterways are no 
longer able to carry away the combined sewer overflow (CSO) discharges 
nor are they able to assimilate the pollution associated with these 
discharges. Severe basement flooding and polluted waterways are the 
inevitable result. More critically, larger storms generate back flows 
to Lake Michigan and pollute water supply for the six-county area. We 
point with pride to the fact that TARP was found to be the most cost-
effective and socially and environmentally acceptable way for reducing 
these flooding and water pollution problems. Experience to date has 
reinforced such findings with respect to economics and efficiency.
    The TARP plan calls for the construction of the new ``underground 
rivers'' beneath the area's waterways. The ``underground rivers'' are 
tunnels up to 35 feet in diameter and 350 feet below the surface. To 
provide an outlet for these tunnels, reservoirs will be constructed at 
the end of the tunnel systems. Approximately 101.5 miles of tunnels, 
constructed at a total cost of $2.2 billion, are operational. The final 
7.9 miles of tunnels, costing $168 million, are under construction. The 
tunnels capture the majority of the pollution load by capturing all of 
the small storms and the first flush of the large storms. The completed 
O'Hare CUP Reservoir provides 350 million gallons of storage. This 
Reservoir has a service area of 11.2 square miles and provides flood 
relief to 21,535 homes in Arlington Heights, Des Plaines and Mount 
Prospect. In its first 7 years of operation, O'Hare CUP Reservoir has 
taken water in 22 storm events, and yielded $70.7 million in flood 
damage reduction benefits, which exceeds its $44.5 million construction 
costs. The Thornton and McCook Reservoirs are currently under 
construction, but until they are completed, significant areas will 
remain unprotected. Without these outlets, the local drainage has 
nowhere to go when large storms hit the area.
    Since its inception, TARP has not only abated flooding and 
pollution in the Chicagoland area, but has helped to preserve the 
integrity of Lake Michigan. In the years prior to TARP, a major storm 
in the area would cause local sewers and interceptors to surcharge, 
resulting in CSO spills into the Chicagoland waterways and, during 
major storms, into Lake Michigan, the source of drinking water for the 
region. Since these waterways have a limited capacity, major storms 
have caused them to reach dangerously high levels resulting in massive 
sewer backups into basements and causing multi-million dollar damage to 
property.
    Since implementation of TARP, 787 billion gallons of CSOs have been 
captured, that otherwise would have reached waterways. Area waterways 
are once again abundant with many species of aquatic life and the 
riverfront has been reclaimed as a natural resource for recreation and 
development. Closure of Lake Michigan beaches due to pollution from 
CSOs has become a rarity. The elimination of CSOs will reduce the 
quantity of discretionary dilution water needed to keep the area 
waterways fresh. This water can be used instead for increasing the 
drinking water allocation for communities in Cook, Lake, Will and 
DuPage counties that are now on a waiting list to receive such water. 
Specifically, since 1977, these counties received an additional 162 
million gallons of Lake Michigan water per day, partially as a result 
of the reduction in the District's discretionary diversion since 1980. 
Additional allotments of Lake Michigan water will be made to these 
communities as more water becomes available from reduced discretionary 
diversion.
    With new allocations of lake water, more than 20 communities that 
previously did not get lake water are in the process of building, or 
have already built, water mains to accommodate their new source of 
drinking water. The new source of drinking water will be a substitute 
for the poorer quality well water previously used by these communities. 
Partly due to TARP, it is estimated that between 1981 and 2020, 283 
million gallons per day of Lake Michigan water would be added to 
domestic consumption. This translates into approximately 2 million 
additional people that would be able to enjoy Lake Michigan water. This 
new source of water supply will not only benefit its immediate 
receivers but will also result in an economic stimulus to the entire 
Chicagoland area by providing a reliable source of good quality water 
supply.

        REMAINING COMPONENTS: THE MCCOOK AND THORNTON RESERVOIRS

    The McCook and Thornton Reservoirs of the Chicagoland Underflow 
Plan (CUP) were fully authorized for construction in the Water 
Resources Development Act of 1988 (Public Law 100-676). These CUP 
reservoirs are an integral part of TARP; the flood protection component 
of this plan that is designed to reduce basement flooding due to 
combined sewer back-ups and inadequate hydraulic capacity of the urban 
waterways.
    These reservoirs will provide a storage capacity of 18 billion 
gallons and will provide annual benefits of $115 million. The total 
estimated annual benefits of these projects are more than twice as much 
as their total annual cost. The District, as the local sponsor, has 
acquired the land necessary for these projects, and will meet its cost 
sharing obligations under Public Law 99-662.
    These projects are a very sound investment with a high rate of 
return. The remaining benefit to cost ratios for these projects, after 
fiscal year 2005, are 3.01 for the McCook Reservoir and 3.17 for the 
Thornton Composite Reservoir. Preliminary design indicates that the 
remaining benefit to cost ratio for the McCook Reservoir is actually 
closer to 3.90, due to capital cost reductions of approximately $100 
million. When completed, the reservoirs will enhance the quality of 
life, safety and the peace of mind of the residents of this region. The 
State of Illinois has endorsed these projects and has urged their 
implementation. In professional circles, these projects are hailed for 
their foresight, innovation, and benefits.
    Based on two successive Presidentially-declared flood disasters in 
our area in 1986 and again in 1987, and dramatic flooding in the last 
several years, we believe the probability of this type of flood 
emergency occurring before implementation of the critical flood 
prevention measure is quite high. As the public agency for the greater 
Chicagoland area responsible for water pollution control and flood 
control projects, we have an obligation to protect the health and 
safety of our citizens. Due to the need to provide continuous flood 
protection to the community, our delegation is working in Congress on 
language for the Water Resources Development Act of 2005 to allow the 
District to advance construction of the Thornton Composite Reservoir 
and be reimbursed for the work under the authority of Section 211 of 
the Water Resources Development of 1996. We are asking your support in 
helping us achieve this necessary and important goal of construction 
completion.
    We appreciate that the subcommittee has included critical levels of 
funds for these important projects. We were delighted to see the 
$29,150,000 in construction and engineering funds included in the 
fiscal year 2005 Energy and Water Development Appropriations Act for 
the McCook and Thornton Reservoirs. However, it is important that we 
receive a total of $30,000,000 in construction funds in fiscal year 
2006 to maintain the schedule of these critical projects. This funding 
would be used to complete the construction of the distribution tunnels, 
to continue work on the groundwater cut-off wall and grout curtain for 
the McCook Reservoir and to continue the design engineering for both 
reservoirs. The community has waited long enough for protection and we 
need these funds now to move the project into construction. We 
respectfully request your consideration of our request.

                                SUMMARY

    Our most significant recent flooding occurred on February 20, 1997, 
when almost 4 inches of rain fell on the greater Chicagoland area. Due 
to the frozen ground, almost all of the rainfall entered our combined 
sewers, causing sewerage back-ups throughout the area. When the 
existing TARP tunnels filled with approximately 1.2 billion gallons of 
sewage and runoff, the only remaining outlets for the sewers were our 
waterways. Between 9 p.m. and 3 a.m., the Chicago and Calumet Rivers 
rose 6 feet. For the first time since 1981 we had to open the locks at 
all three of the waterway control points; these include Wilmette, 
downtown Chicago, and Calumet. Approximately 4.2 billion gallons of 
combined sewage and stormwater had to be released directly into Lake 
Michigan.
    Given our large regional jurisdiction and the severity of flooding 
in our area, the Corps was compelled to develop a plan that would 
complete TARP and be large enough to accommodate the area we serve. 
With a combined sewer area of 375 square miles, consisting of the city 
of Chicago and 51 contiguous suburbs, there are 1,443,000 structures 
within our jurisdiction, that are subject to flooding. The annual 
damages sustained exceed $150 million. If TARP, including the CUP 
Reservoirs, were in place, these damages could be eliminated. We must 
consider the safety and peace of mind of the 2 million people who are 
affected, as well as the disaster relief funds that will be saved when 
these projects are in place. As the public agency in the greater 
Chicagoland area responsible for water pollution control, and as the 
regional sponsor for flood control, we have an obligation to protect 
the health and safety of our citizens. We are asking your support in 
helping us achieve this necessary and important goal. It is absolutely 
critical that the Corps' work, which has been proceeding for a number 
of years, now continues on schedule through construction.
    Therefore, we urgently request that a total of $30,000,000 in 
construction funds be made available in the fiscal year 2006 Energy and 
Water Development Appropriations Act to continue construction of the 
McCook and Thornton Reservoir Projects.
    Again, we thank the subcommittee for its support of this important 
project over the years, and we thank you in advance for your 
consideration of our request this year.
                                 ______
                                 
     Prepared Statement of the Napa County Flood Control and Water 
                         Conservation District
                        summary recommendations

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

                    NAPA RIVER FLOOD CONTROL PROJECT

Background
    The project is located in the city and county of Napa, California. 
Excluding public facilities, the present value of damageable property 
within the project flood plain is well over $500 million. The Napa 
River Basin, comprising 426 square miles, ranging from tidal marshes to 
mountainous terrain, is subject to severe winter storms and frequent 
flooding. In the lower reaches of the river, flood conditions are 
aggravated by high tides and local runoff. Floods in the Napa area have 
occurred in 1955, 1958, 1963, 1965, 1986 (flood of record), 1995, and 
1997. In 1998, the river rose just above flood stage on three 
occasions, but subsided before major property damage occurred. In 
December of 2002, flooding occurred from the Napa Creek at the 
transition to the Napa River, resulting in damage to numerous residents 
and several businesses.
    Since 1962, 27 major floods have struck the Valley region, exacting 
a heavy toll in loss of life and property. The flood on 1986, for 
example, killed three people and caused more than $100 million in 
damage. Damages throughout Napa County totaled about $85 million from 
the January and March 1995 floods. The floods resulted in 27 businesses 
and 843 residences damaged countrywide. Almost all of the damages from 
the 1986, 1995, and 1997 floods were within the project area. Congress 
has authorized a flood control project since 1944, but due to expense, 
lack of public consensus on the design and concern about environment 
impacts, a project had never been realized. In mid-1995, Federal and 
State resource agencies reviewed the plan and gave notice to the Corps 
that this plan had significant regulatory hurdles to face.
Approved Plan--Project Overview
    In an effort to identify a meaningful and successful plan, a new 
approach emerged that looked at flood control from a broader, more 
comprehensive perspective. Citizens for Napa River Flood Management was 
formed, bringing together a diverse group of local engineers, 
architects, aquatic ecologists, business and agricultural leasers, 
environmentalists, government officials, homeowners and renters and 
numerous community organizations.
    Through a series of public meetings and intensive debate over every 
aspect of Napa's flooding problems, the Citizens for Napa River Flood 
Management crafted a flood management plan offering a range of benefits 
for the entire Napa region. The Corps of Engineers served as a partner 
and a resource for the group, helping to evaluate their approach to 
flood management. The final plan produced by the Citizens for Napa 
River Flood Management was successfully evaluated through the research, 
experience and state-of-the-art simulation tools developed by the Corps 
and numerous international experts in the field of hydrology and other 
related disciplines. The success of this collaboration serves as a 
model for the Nation.
    Acknowledging the river's natural state, the project utilizes a set 
of living river strategies that minimize the disruption and alteration 
of the river habitat, and maximizes the opportunities for environmental 
restoration and enhancement throughout the watershed.
    Construction of the project began 4 years ago. The benefits of the 
plan include reducing or elimination of loss of life, property damage, 
cleanup costs, community disruption due to unemployment and lost 
business revenue, and the need for flood insurance. In fact, the 
project has created an economic renaissance in Napa with new 
investment, schools and housing coming into a livable community on a 
living river. As a key feature, the plan will improve water quality, 
create urban wetlands and enhance wildlife habitats.
    The plan will protect over 7,000 people and over 3,000 residential/
commercial units from the 100-year flood event on the Napa River and 
its main tributary, the Napa Creek, and the project has a remaining 
benefit/remaining cost ratio of over 3 to 1 as calculated by the Corps. 
One billion dollars in damages will be saved over the useful life of 
the project. The Napa County Flood Control District is meeting its 
local cost-sharing responsibilities for the project. A countywide sales 
tax, along with a number of other funding options, was approved 5 years 
ago by a two-thirds majority of the county's voters for the local 
share.

Project Synopsis
            Fiscal Year 2005 Funding
    The fiscal year 2005 Energy and Water Development Appropriations 
Act included $16,000,000 to continue construction of the project.
            Necessary Fiscal Year 2006 Funding
    Funding for the Napa River Project during 2006 in the amount of 
$24,000,000 is needed to continue construction of the project and 
maintain the current project schedule.

                    NAPA RIVER MAINTENANCE DREDGING

Background
    The Napa River project is a shallow-draft, mainly light commercial 
and recreational, navigation channel. The operations and maintenance 
schedule provides for a 6-year cycle of maintenance dredging for the 
Napa River Channel to -15 feet Mean Lower Low Water (MLLW) from Mare 
Island Strait Causeway to Asylum Slough (downstream portion); thence 
-10 feet MLLW to head of navigation at the Third Street Bridge in the 
City of Napa (upstream portion). The sponsor (Napa County Flood Control 
and Water Conservation District) is responsible for furnishing a 
suitable upland dredged material disposal site for the project. The 
most recent maintenance dredging for the project was completed in 
fiscal year 1999.

Necessary Fiscal Year 2006 Funding
    Funding in the amount of $2,644,000 for maintenance dredging of the 
Napa River project is required in fiscal year 2006. With maintenance 
normally performed on a 6-year cycle, dredging to restore authorized 
project depths is overdue. Maintenance dredging is required to restore 
depths required for existing traffic and in anticipation of the 
additional boat traffic resulting from the replacement of the Maxwell 
Bridge as part of the Napa River flood control project.

                    NAPA VALLEY WATERSHED MANAGEMENT

Background
    The Napa Valley watershed faces many challenges and stresses to its 
environmental health and flood management abilities. From a healthy 
river point of view, the Napa River has been on a recovery path since 
its low point in the 1960's, when the last of the native salmon were 
taken from the system by severe water pollution and habitat 
destruction. Steelhead trout have survived as a remnant population of 
200 that is presently in need of higher quality and more extensive 
spawning areas for recovery to a significant population.
    In order to address issues such as encroachment of the river and 
loss of wetlands and to develop local tools for improving natural 
resource management, the U.S. Army Corps of Engineers, San Francisco 
District (Corps) and the Napa County Flood Control and Water 
Conservation District (NCFCWCD) is currently developing a Napa Valley 
Watershed Management Plan (WMP) which identifies problems and 
opportunities for implementing environmentally and economically 
beneficial restoration in the Napa Valley watershed providing ecosystem 
benefits, such as flood reduction, erosion control, sedimentation 
management, and pollution abatement. The authority for this study is 
the Northern California Streams Study Authority stemming from the 
Rivers and Harbors Act of 1962, Public Law 87-874. The plan, which the 
District is requesting funds for, would include the identification, 
review, refinement, and prioritization of restoration and flood 
protection opportunities with an emphasis on restoration of the 
watershed's ecosystem (e.g., important plant communities, healthy fish 
and wildlife populations, rare and endangered habitats and species and 
wildlife and riparian habitats).

Project Synopsis

            Fiscal Year 2005 Budget Funding
    The fiscal year 2005 Energy and Water Development Appropriations 
Act included $200,000 to continue the Napa Valley Watershed Management 
Study. Funds are being used for data evaluation and outreach and to 
create a data monitoring framework for the watershed.
            Necessary Fiscal Year 2006 Funding
    Funding for the Napa Valley Watershed Management Study during 
fiscal year 2006 in the amount of $500,000 is needed to continue work 
on the Napa Valley Watershed Resource Analysis & Report. This amount is 
included in the President's Budget Request for the Corps of Engineers. 
The purpose of this work is to provide a foundation assessment for 
resource allocation that improves the habitat and water quality in the 
Napa River watershed.
                                 ______
                                 
 Prepared Statement of the Board of Levee Commissioners for the Yazoo-
                           Mississippi Delta

 U.S. ARMY CORPS OF ENGINEERS MISSISSIPPI RIVER & TRIBUTARIES PROJECT 
                         REQUEST--$450 MILLION

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

                              CIVIL WORKS

    Mr. Chairman and members of the committee, I am Wayne Dowd, and 
pleased to represent the Red River Valley Association as its President. 
Our organization was founded in 1925 with the express purpose of 
uniting the Citizens of Arkansas, Louisiana, Oklahoma and Texas to 
develop the land and water resources of the Red River Basin.
    The Resolutions contained herein were adopted by the Association 
during its 80th Annual Meeting in Bossier City, Louisiana on February 
24, 2005, and represent the combined concerns of the citizens of the 
Red River Basin area as they pertain to the goals of the Association.
    The President's budget included $4.513 billion for the civil works 
programs. Even though the President's budget is only $200 million less 
than what was appropriated in fiscal year 2005, $4.705 billion (4.4 
percent reduction), the problem is how the funds were distributed. A 
few projects received as much as twice as much as was appropriated in 
fiscal year 2005 to the detriment of many projects that received no 
funding. The $4.513 billion level does not come close to the real needs 
of our Nation. A more realistic funding level to meet the requirements 
for continuing the existing needs of the civil works program is $5.5 
billion in fiscal year 2006. The traditional programs, inland waterways 
and flood protection remain at the low, unacceptable level as in past 
years. These projects are the backbone to our Nation's infrastructure 
for waterways, flood control and water supply. We remind you that civil 
works projects are a true ``jobs program'' in that up to 85 percent of 
project funding is contracted to the private sector for construction 
and much of the architect and engineer work. Not only do these funds 
provide jobs, but provide economic development opportunities for our 
communities to grow and prosper, creating jobs.
    In the past we have worked hard to ``add'' funding to the Energy 
and Water Bill for the Water projects. We want to bring to your 
attention that in fiscal year 1998 the Water projects received 
approximately 20 percent of the total bill. Over the next 7 years the 
Water portion steadily decreased to only 16.6 percent of the total bill 
in fiscal year 2005. The Nation's Energy program is very important, but 
we believe the Water program is too. We ask that the Subcommittee on 
Energy and Water and the full Appropriations Committee support bringing 
the Water share of the bill back to the 20 percent it once was.
    The inland waterway tributary rivers continue to face scrutiny on 
what determines a successful waterway. This has an impact on the 
operations and maintenance funding a waterway receives. Using criteria 
that only considers tons, actually moved on the waterway, neglects the 
main benefit that justified the original waterway project, 
transportation cost savings. Currently there is no criteria used to 
consider ``water compelled rates'' (competition with rail). We know 
that there are industries not using our waterway because rail rates 
were reduced, to match the waterborne rates, the same year our waterway 
became operational. If the operation of our waterway was terminated the 
rail rates would increase. Many industries have experienced great 
transportation savings without using the waterway.
    The main problem is that there is no ``post-project'' evaluation 
for navigation projects. We support the development of such an 
evaluation and volunteer the J. Bennett Johnston Waterway and our 
efforts to develop one. Such an evaluation could be made once every 5 
years to insure the waterway continues to meet the determined criteria. 
We also believe any evaluation adopted must have input from and be 
validated by the administration, Congress and industry. Too much money 
has been expended to use an evaluation that is unfair and disregards 
the true benefits realized from these waterway projects.
    We do not support any efforts to increase the benefit-to-cost ratio 
for projects above 1.0 and we do not support increasing the local 
sponsor's cost sharing requirements. This is not ``Corps reform,'' it 
is an initiative to eliminate the civil works program. We do support 
true reform that would make civil works projects less expensive and 
faster to complete. Corps reform should make the Corps of Engineers 
more efficient, less expensive and faster in the execution of civil 
works studies and completion of projects, not eliminate the program.
    I would now like to comment on our specific requests for the future 
economic well-being of the citizens residing in the four-State Red 
River Basin regions.
    Navigation.--The J. Bennett Johnston Waterway is living up to the 
expectations of the benefits projected. We are extremely proud of our 
public ports, municipalities and State agencies that have created this 
success. The official calendar year 2003 statistics, just released, 
shows that the J. Bennett Johnston Waterway tonnage was 4.2 million 
tons, a 12.6 percent increase from calendar year 2002. We also point 
out that the 4.2 billion tons is exactly on track with the projected 
tonnage that justified the project. This upward ``trend'' in usage will 
continue, as we know the public ports experienced a 40 percent increase 
in tonnage in calendar year 2004.
    You are reminded that the Waterway is not complete; 6 percent 
remains to be constructed, $119 million. We appreciate Congress's 
appropriation level in fiscal year 2005 of $13 million, however, the 
President's fiscal year 2006 budget drastically cuts that to $1.5 
million, which is unacceptable. There is a capability for $20 million 
of work, but we realistically request $10 million to keep the project 
moving toward completion.
    Now that the J. Bennett Johnston Waterway is reliable year round we 
must address efficiency. Presently a 9-foot draft is authorized for the 
J. Bennett Johnston Waterway. Our Waterway feeds into the Mississippi 
River, Atchafalaya River and Gulf Inter-coastal Canal, which are all 
authorized at a 12-foot draft. A 12-foot channel would allow an 
additional one-third cargo capacity, per barge, which will greatly 
increase the efficiency of our Waterway and reduce transportation 
rates. This one action would have the greatest, positive impact to 
reduce rates to a competitive level that would bring more industries to 
use waterborne transportation. We request that the Corps conduct a 
reconnaissance study, to evaluate this proposal, at a cost of $100,000.
    The feasibility study to continue navigation from Shreveport-
Bossier City, Louisiana into the State of Arkansas will be completed in 
calendar year 2005. We appreciate that Congress appropriated adequate 
funding to complete this study. There is great optimism that the study 
will recommend a favorable project. This region of SW Arkansas and NE 
Texas continues to suffer major unemployment and this navigation 
project, although not the total solution, will help revitalize the 
economy. We request funding of $400,000 to initiate planning, 
engineering and design, PED.
    Bank Stabilization.--One of the most important, continuing 
programs, on the Red River is bank stabilization in Arkansas and North 
Louisiana. We must stop the loss of valuable farmland that erodes down 
the river and interferes with the navigation channel. In addition to 
the loss of farmland is the threat to public utilities such as roads, 
electric power lines and bridges; as well as increased dredging cost in 
the navigable waterway in Louisiana. These bank stabilization projects 
are compatible with subsequent navigation and we urge that they be 
continued in those locations designated by the Corps of Engineers to be 
the areas of highest priority. We appreciated the Congressional funding 
in fiscal year 2005 and request you fund this project at a level of $10 
million in fiscal year 2006.
    Flood Control.--You will recall that in 1990 major areas of 
northeast Texas, Southwest Arkansas and the entire length of the Red 
River in Louisiana were ravaged by the worst flooding to hit the region 
since 1945 and 1957. More than 700,000 acres were flooded with total 
damages estimated at $20.4 million. However, it could have been much 
worse. The Corps of Engineers estimates that without the flood control 
measure authorized by Congress over the past several decades an 
additional 1.3 million acres would have been flooded with an estimated 
$330 million in additional flood damage to agriculture and urban 
developments.
    We continue to consider flood control a major objective and request 
you continue funding the levee rehabilitation projects ongoing in 
Arkansas. Five of eleven levee sections have been completed and brought 
to Federal standards. Appropriations of $5 million will construct two 
more levee sections in Lafayette County, AR.
    The levees in Louisiana have been incorporated into the Federal 
system; however, they do not meet current safety standards. These 
levees do not have a gravel surface roadway, threatening their 
integrity during times of flooding. It is essential for personnel to 
traverse the levees during a flood to inspect them for problems. 
Without the gravel surface the vehicles used cause rutting which can 
create conditions for the levees to fail. A gravel surface will insure 
inspection personnel can check the levees during the saturated 
conditions of a flood. Funding has been appropriated and approximately 
50 miles of levees in the Natchitoches Levee District will be completed 
this year. We request $2 million to continue this important project in 
other Louisiana parishes.
    Water Quality.--Nearly 3,500 tons of natural salts, primarily 
sodium chloride, enter the upper reaches of the Red River each day, 
rendering downstream waters unusable for most purposes. The Truscott 
Brine Lake project, which is located on the South Fork of the Wichita 
River in King and Knox Counties, Texas became operational in 1987. An 
independent panel of experts found that the project not only continues 
to perform beyond design expectations in providing cleaner water, but 
also has an exceptionally favorable cost-benefit ratio.
    Due to a conflict over environmental issues, raised by the U.S. 
Fish and Wildlife Service, completion of the SFEIS was delayed pending 
further study to determine the extent of possible impacts to fish and 
wildlife, their habitats and biological communities along the Red River 
and Lake Texoma. In an effort to resolve these issues and ensure that 
no harmful impact to the environment or ecosystems would result, a 
comprehensive environmental and ecological monitoring program was 
implemented. It evaluates the actual impacts of reducing chloride 
concentrations within the Red River watershed. This base line data is 
crucial to understanding the ecosystem of the Red River basin west of 
Lake Texoma and funding for this must continue.
    The Assistant Secretary of the Army (Civil Works), in October 1998, 
agreed to support a re-evaluation of the Wichita River Basin tributary 
of the project. The re-evaluation report was completed and the 
Environmental Record of Decision was signed by the Director of Civil 
Works. The plan was found to be economically justified. Completion of 
this project will reclaim Lake Kemp as a usable water source for the 
City of Wichita Falls and the region. This project will provide 
improved water quality throughout the four States of the Red River 
providing the opportunity to use surface water and reduce dependency on 
ground water. We request appropriations of $3,000,000 to continue this 
important environmental monitoring and to complete plans and 
specifications of the Wichita River control features.
    Over the past year there has been a renewed interest by the Lugart-
Altus Irrigation District to evaluate construction of Area VI, of the 
Chloride Control Project, in Oklahoma. They have obtained the support 
of many State and Federal legislators, as well as a letter from the 
Oklahoma Governor in support of a re-evaluation report. We request an 
appropriation of $250,000 to initiate a re-evaluation report.
    Water Supply.--Northwest Texas has been overrun with non-native 
species of brush and mesquite. It now dominates millions of acres of 
rangelands and has negatively impacted water runoff. Studies have 
indicated that brush management could increase runoff by as much as 30 
percent to 40 percent. This would be of great value in opportunities 
for more surface water use and less dependency on ground water. Other 
benefits include an ecological diversity of plant and animal species, 
range fire control and cattle production. A $100,000 reconnaissance 
study would determine if there is a Federal interest and what magnitude 
these benefits would be.
    Lake Kemp, just west of Wichita Falls, TX, is a water supply for 
the needs of this region. Due to siltation the available storage of 
water has been impacted. A $750,000 reallocation study is requested to 
determine water distribution needs and raising the conservation pool. 
$375,000 is requested in fiscal year 2006 to initiate this 2-year 
study.
    Operation & Maintenance.--We appreciate the support of your 
subcommittee to support navigation to Shreveport/Bossier City, which is 
now providing a catalyst to our industrial base, creating jobs and 
providing economic growth. Our major project for O&M is the J. Bennett 
Johnston Waterway. From this project four public ports and three 
private terminals have been established. The President's budget 
included $10,115,000; however, a minimum of $11,800,000 is required to 
address our annual dredging needs and operations costs for the five 
locks and dams. This does not address any backlog maintenance.
    Full O&M capability levels are not only important for our Waterway 
project but for all our Corps projects and flood control lakes. The 
backlog of critical maintenance only becomes worse and more expensive 
with time. We urge you to appropriate funding to address this serious 
issue at the expressed full Corps capability.
    We are sincerely grateful to you for the past support you have 
provided our projects. We hope that we can count on you again to fund 
our needs and complete the projects started that will help us diversify 
our economy and create the jobs so badly needed by our citizens. We 
have included a summary of our requests for easy reference.
    Thank you for the opportunity to present this testimony and project 
details of the Red River Valley Association on behalf of the 
industries, organizations, municipalities and citizens we represent 
throughout the four-State Red River Valley region. We believe that any 
Federal monies spent on civil work projects are truly investments in 
our future and will return several times the original investment in 
benefits that will accrue back to the Federal Government.

           ATTACHMENT.--SUMMARY OF FISCAL YEAR 2006 REQUESTS
                      RED RIVER VALLEY ASSOCIATION

    Note.--Projects are NOT in any order of priority.
General Investigation Studies (GI)
    Red River Navigation, SW Arkansas.--This is a feasibility study 
initiated on March 24, 1999 to investigate the potential to extend 
navigation from Shreveport/Bossier, LA to Index, AR. To date $3,428,000 
has been appropriated for this study and matched by the State of 
Arkansas. These funds will complete the study in fiscal year 2005. The 
initial study results indicate the probability that a project will be 
recommended. Funds are requested in fiscal year 2006 to initiate pre-
construction, engineering and design (PED). Total Fiscal Year 2006 
Request.--$400,000.
    J. Bennett Johnston Waterway, LA, 12 Channel Reconnaissance 
Study.--The waterway flows directly into the Atchafalaya River and then 
to the Gulf Inter-coastal Waterway, both have authorized 12 channels. 
Except under extreme low water conditions the Mississippi River 
accommodates barges of 12 draft. It is inefficient for industry to 
have to ``special load'' barges destined for the Red River to 9 when 
all other barges are loaded to 12. More important the added cargo per 
barge (one-third more) will have a dramatic impact on reducing the 
waterborne rates for the Waterway, making it more competitive. Total 
Fiscal Year 2006 Request.--$100,000.
    Southeast Oklahoma Water Resource Study.--Conduct a reconnaissance 
study to evaluate the water resources in the study area. The study area 
includes the Kiamichi River basin and other tributaries of the Red 
River. A comprehensive plan will be developed to determine how best to 
conserve and utilize this water. In fiscal year 2004 $50,000 was 
received for this study. This is a complex 11-year study of ecosystem 
restoration issues and the Oklahoma Water Resource Board has signed on 
as the local sponsor. Total Fiscal Year 2006 Request.--$350,000.
    Washita River Basin, OK.--The Washita River is a tributary of the 
Red River that flows into Lake Texoma. The initial reconnaissance 
report identified that a feasibility study should be conducted to study 
problems caused by golden algae. The Oklahoma Department of Wildlife 
Conservation has expressed an interest in being the local sponsor. 
Funding of $100,000 was received in fiscal year 2004 to initiate the 
study and $105,000 was appropriated in fiscal year 2005. Total Fiscal 
Year 2006 Request.--$75,000.
    Southwest Arkansas Study.--Conduct a reconnaissance report in the 
four county areas of the Red River/Little River basins. Included would 
be the four Corps lakes; DeQueen, Dierks, Gillham and Millwood. The 
watershed study would evaluate; flooding, irrigation, fish and wildlife 
habitat, water quality, recreation and water releases for navigation. 
The State of Arkansas has expressed an interest in cost sharing the 
feasibility study. Total Fiscal Year 2006 Request.--$400,000.
    Red River Basin Above Denison Dam, OK & TX, Water Resources 
Development and Ecosystem Restoration.--Over the past 200 years 
invasive and non-native brush species have taken over this region. 
These species, especially mesquite and salt cedar, absorbs enormous 
amount of water. Brush control could yield as much as 30 percent to 40 
percent increase in rangeland runoff. Other benefits include an 
ecological diversity of plant and animal species, range fire control 
and cattle production. This is an eco-system restoration study. Total 
Fiscal Year 2006 Request.--$100,000.
    Bossier Parish Levee and Flood Control, LA.--A multipurpose 
reconnaissance study was initiated in fiscal year 2004 receiving 
$65,000. Additional funds of $153,000 were appropriated in fiscal year 
2005. Bossier Parish has agreed to be the local sponsor. The study will 
investigate competing demands of flooding, increased water use and a 
decline of environmental resources. Total Fiscal Year 2006 Request.--
$332,000.
Construction General (CG)
    Red River Waterway Project, J. Bennett Johnston Waterway, LA.--Two 
projects will be completed in fiscal year 2005 as well as recreation 
facilities and continued mitigation. These ongoing projects will be 
completed using the $13.0 million appropriated in fiscal year 2005. 
Additional funds could be used for new projects, which include; 
Westdale Realignment ($1,400,000), Gahagan Reinforcement ($3,200,000), 
Fausse/Natchitoches/Clarence Reinforcement ($1,200,000), Teague Parkway 
Revetment ($1,900,000), Lumbra Dikes ($5,416,000), Lindy C. Boggs 
Barrier Upgrade ($3,700,000) and continued mitigation ($1,684,000). 
Total Fiscal Year 2006 Request.--$20,000,000.
    Red River Chloride Control Project (Wichita River Basin), TX:
  --Wichita River Basin, TX.--A reevaluation for the Wichita River 
        Basin features have been ongoing using reprogrammed funds. The 
        office of the ASA (CW) has supported this project and the re-
        evaluation report was completed in March 2004. Funds are needed 
        for design, plans and specifications and to continue 
        environmental monitoring activities. Total Fiscal Year 2006 
        Request.--$3,000,000.
  --Area VI, OK.--Over the past year there has been a renewed interest 
        in Area VI in Oklahoma. The Governor of Oklahoma signed a 
        letter supporting a re-evaluation report be initiated. Many 
        State and Federal legislators have expressed support to 
        evaluate this project. Total Fiscal Year 2006 Request.--
        $250,000.
    Red River Below Denison Dam Levees & Bank Stabilization, LA, AR and 
TX:
  --Levee Rehabilitation, AR.--Funds are required to initiate and 
        complete construction of Levee Items 9A and 9B in north 
        Lafayette County and initiate design for Levee Item 6. Total 
        Fiscal Year 2006 Request.--$7,000,000.
  --Upgrade Levees, LA.--Approximately 220 miles of levees in Louisiana 
        do not have gravel surfaces on top of the levee, therefore do 
        not meet Federal standards. These levees are in the Federal 
        system and must be upgraded. This surface is required for safe 
        inspections of the levees during times of floods and to 
        maintain the integrity of the levee. The total project can be 
        completed in four phases over 4 years. $1,000,000 was 
        appropriated in fiscal year 2003 and approximately 50 miles of 
        levee are being upgraded in the Natchitoches Levee District, 
        LA. Total Fiscal Year 2006 Request.--$2,000,000.
    Red River Emergency Bank Protection, Arkansas.--Funds are required 
to initiate construction of Bois D'Arc Revetment ($4,200,000) and 
Dickson Revetment ($5,800,000). These funds would also complete the 
design on Finn Revetment Phase II. These are important projects for 
protection of valuable farmlands, public infrastructure and to maintain 
the existing alignment of the river in advance of navigation. Total 
Fiscal Year 2006 Request.--$10,000,000.
    Little River County (Ogden Levee), AR.--A reconnaissance report in 
1991 determined that flood control levees were justified along Little 
River. The project sponsor, Arkansas Soil and Water Conservation 
Commission requests that the project proceed directly to PED, without a 
cost shared feasibility study. We request language and funding to 
accomplish this. Total Fiscal Year 2006 Request.--$200,000.
    Big Cypress Valley Watershed (Section 1135).--The main focus of 
this study is within the City of Jefferson, Texas. Informal 
coordination with Jefferson has showed their continued support and 
intent to participate. Their total share is estimated to be $539,000 
with annual O&M costs of approximately $21,000. In fiscal year 2001 
$120,000 was appropriated to initiate this project. The Master Plan and 
acquisition of land by the local sponsor is being completed; however, 
funding can be used to complete the plans and specifications and to 
initiate construction. Total Fiscal Year 2006 Request.--$530,000.
    Lawton, Oklahoma, Waste Water Infrastructure Rehabilitation 
Project.--The City of Lawton is located approximately 100 miles 
southwest of Oklahoma City in Comanche County, Oklahoma. The project 
consists of constructing wastewater infrastructure for the City of 
Lawton, Oklahoma, which includes off base housing for Fort Sill. The 
sponsor and Corps will finalize the scope of the project. The Sponsor 
will begin design and the Corps will draft a Project Cooperation 
Agreement and initiate real estate acquisition. Total Fiscal Year 2006 
Request.--$50,000.
Operation & Maintenance (O&M)
    J. Bennett Johnston Waterway.--The President's budget is usually 
sufficient to only operate the waterway and perform preventive 
maintenance. There are major, unfunded backlog maintenance items that 
must be accomplished. These items include inspection and repair of lock 
& dam stop logs ($860,000) inspection and repairs to tainter gates 
($3,255,000), revetment repairs ($2,000,000) and other backlog items 
($3,176,000). The President's budget, of $10,115,000 included no 
funding for backlog maintenance. Total Fiscal Year 2006 Request.--
$19,406,000.
    Flood Control Lakes.--There are nine major flood control lakes in 
the Red River Valley, plus the Truscott Brine Reservoir. These lakes 
have served to prevent hundreds of millions of dollars of damage over 
the past 50 years. However, they are getting to the age where 
maintenance cannot be deferred any longer. Backlog maintenance items 
include repair to flood gates, powerhouse maintenance, dam structures 
and recreation facilities. If upgrades are not made at recreation 
facilities they may have to be closed due to safety concerns to the 
public. We request funding levels at the Full Corps capabilities.
    Support of MR&T Operations and Maintenance (O&M).--Old River Lock 
is the access tows have from the Mississippi River to the Red River 
Waterway. When this structure is not in service tows must go down the 
Atchafalaya River to the gulf and back to the Mississippi past New 
Orleans, LA, adding days to the trip. It is critical to the success of 
the Red River Waterway that the Old River structure be maintained.
                                 ______
                                 
   Prepared Statement of the Board of Mississippi Levee Commissioners

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

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

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


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

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

    Mr. Chairman and members of the subcommittee, thank you for the 
opportunity to submit testimony in support of the Channel Deepening 
Project at the Port of Los Angeles/Los Angeles Harbor, the largest 
container seaport in the United States. Our testimony speaks in support 
of a fiscal year 2006 appropriation of $14 million for the Federal 
share of continued construction of the Channel Deepening Project at the 
Port of Los Angeles, which we anticipate will be the final year's 
appropriation for this project. This critical Federal navigation 
improvement project underpins the United States' decisive role in 
international trade. Consistent with the goals and priorities of the 
administration and Congress, the Channel Deepening Project will provide 
immediate and significant economic return to the Nation, fulfill the 
commitment to environmental stewardship, and foster positive 
international relations. We respectfully request the subcommittee to 
fully fund our fiscal year 2006 appropriation request of $14 million.

                      REVISED TOTAL PROJECT COSTS

    The Corps of Engineers recently revised the Total Project Cost for 
the Channel Deepening Project. This revision accounts for credits for 
in-kind services provided by the Port and other project modifications. 
These modifications include adjustments to the disposal costs for the 
dredged material, adjustments for construction contract changes, and 
project administration costs. The Corps' revised Total Project Cost is 
now $222,000,000, representing a Federal share of $72,000,000 and a 
local share of $150,000,000. Furthermore, in fiscal year 2003, the Port 
experienced a funding shortfall challenging us to meet construction 
contract earnings. As such, under authority provided by Section 11 of 
the Rivers and Harbors Act of 1929, the Port of Los Angeles advanced to 
the Corps of Engineers more than $13,000,000 in fiscal year 2003 to 
cover the shortfall, thereby avoiding costly construction shutdown or 
debt service on interest accruals. Mr. Chairman, the increased Total 
Project Cost requires an immediate modification in the next Water 
Resources Development Act, or in an appropriations bill. The Corps 
anticipates that the Section 902 limit established for the project may 
be exceeded close to the end of this fiscal year. Without this 
modification, we will be forced to shut down the project. While we are 
pleased the President's fiscal year 2006 budget includes $2.7 million 
for the Channel Deepening Project, the increased project costs and 
previous funding shortfalls compel us to request this higher funding 
level for fiscal year 2006.

                        PORT NAVIGATION DEMANDS

    Dramatic increases in Pacific Rim and Latin American trade volumes 
have made infrastructure development at the Port of Los Angeles more 
critical than ever. Currently, more than 42 percent of containerized 
cargo entering the United States through the San Pedro Bay port 
complex. The Port of Los Angeles, alone, handled more than 7.4 million 
20-foot equivalent units of containers (TEUs) in calendar year 2004, 
representing unprecedented growth for any American seaport. This 
burgeoning international trade has resulted in the manufacture of 
larger state-of-the-art containerships with drafts of more than -50 
feet. As such, the Port embarked upon the Channel Deepening Project--
along with its Federal partner, the Army Corps of Engineers--to deepen 
its Federal channel from -45 feet to -53 feet. Currently, more than 50 
of these state-of-the-art containerships are on order to serve the 
United States West Coast container fleet. The first of these deeper-
draft ships began calling at the Port of Los Angeles in August of 2004, 
carrying 8,000 TEUs and drafting at -50 feet. Some of the deeper-draft 
ships have been diverted to the Port of Long Beach because our channels 
are too shallow to accommodate them.
    As we have testified before, cargo throughput for the San Pedro 
Bay--the Port of Los Angeles in particular--has a tremendous impact on 
the United States economy. We at the Port of Los Angeles cannot over 
emphasize this fact. The ability of the Port to meet the spiraling 
demands of this phenomenal growth in international trade is dependent 
upon the speedy construction of sufficiently deep navigation channels 
to accommodate the new containerships. These new ships provide greater 
efficiencies in cargo transportation, carrying one-third more cargo 
than most of the current fleet, and making more product inventory of 
imported goods available to American consumers at lower prices. In 
addition, exports from the United States have become more competitive 
in foreign markets. However, for American seaports to keep up, they 
must immediately make the necessary infrastructure improvements that 
will enable them to participate in this rapidly changing global trading 
arena.
    Mr. Chairman, these state-of-the-art container ships represent the 
new competitive requirements for international container shipping 
efficiencies in the 21st Century, as evidenced by the increased volume 
of international commerce. As such, we strongly urge Congress to 
appropriate the $14 million for fiscal year 2006 which will enable the 
Corps of Engineers to continue construction of the Channel Deepening 
Project, on schedule, through the project's anticipated completion in 
2006.

                           ECONOMIC BENEFITS

    The Channel Deepening Project is clearly a commercial navigation 
project of national economic significance and one that will yield 
exponential economic and environmental returns to the United States 
annually. The national economic benefits are evidenced by the creation 
of more than 1 million permanent well-paying jobs across the United 
States; more than $1 billion in wages and salaries, as well as local, 
State and Federal sales and income tax revenues deposited into the 
Federal treasury. As an aside, the 7.4 million TEUs handled by the Port 
of Los Angeles in 2004 had a commercial value of more than $300 billion 
in container cargo, with significant tax revenues accruing to the 
Federal Government. Similarly, according to the U.S. Customs Service, 
users of the Port pay approximately $12 million a day in Customs 
Duties. The Los Angeles Customs District leads the Nation in total 
duties collected for maritime activities, collecting $5.5 billion in 
2004 alone. Clearly, the return on the Federal investment at the Port 
of Los Angeles is real and quantifiable, and we expect it to surpass 
the cost-benefit ratio--as determined by the Corps of Engineers' 
project Feasibility Study--many times over.
    In closing, Federal investment in the Channel Deepening Project 
will ensure that the Port of Los Angeles, the Nation's busiest 
container seaport, remains at the forefront of the new international 
trade network well into this century. The Channel Deepening Project 
marks the second phase of the 2020 Infrastructure Development Plan that 
began with the Pier 400 Deep-Draft Navigation and Landfill Project. The 
Port of Los Angeles is moving forward with the 2020 Plan designed to 
meet the extraordinary infrastructure demands placed on it in the face 
of the continued high volume of international trade. Mr. Chairman, the 
Port of Los Angeles respectfully urges your subcommittee to appropriate 
$14 million in fiscal year 2006 to support the U.S. Army Corps of 
Engineers' continued construction of the Channel Deepening project on 
behalf of the Port of Los Angeles.
    Thank you, Mr. Chairman, for the opportunity to submit this 
testimony for continued Congressional support of the Channel Deepening 
Project at the Port of Los Angeles. The Port has long valued the 
support of your subcommittee and its appreciation of the port 
industry's importance to the economic vitality of the United States, 
and, in particular, the role of the Port of Los Angeles in contributing 
to this country's economic strength.
                                 ______
                                 
     Prepared Statement of The American Society of Civil Engineers

    The American Society of Civil Engineers (ASCE) respectfully 
recommends that Congress appropriate $5.6 billion for the U.S. Army 
Corps of Engineers Civil Works program, including a minimum of $2.55 
billion for the inland waterways programs, in fiscal year 2006. 
Congress should appropriate the entire balance of $307 million in the 
Inland Waterways Trust Fund and the entire current balance of $2.6 
billion in the Harbor Maintenance Trust Fund for critical 
infrastructure projects maintained and operated by the Corps. Congress 
also needs to appropriate $150 million for beach nourishment 
investigations and construction in fiscal year 2006.

                      INLAND WATERWAYS TRUST FUND

    The U.S. Army Corps of Engineers maintains more than 12,000 miles 
(19,200 kilometers) of inland waterways, and owns or operates 257 locks 
at 212 sites on inland waterways. These waterways--a system of rivers, 
lakes and coastal bays improved for commercial and recreational 
transportation--carry about one-sixth of the Nation's intercity 
freight, at a cost per ton-mile about half that of rail, or one-tenth 
that of trucks. The physical condition of these waterways received a 
grade of D- from ASCE on our 2005 Report Card for America's 
Infrastructure released on March 9, 2005.
    Waterways are excellent ways to move large volumes of bulk 
commodities over long distances. The cargo capacity of a typical barge 
is equivalent to that of 15 large railroad cars, or 58 semi-trucks. A 
representative 15-barge tow on a main stem waterway moves the same 
cargo as 870 trucks stretching 35 miles on the interstate highway 
system. That same 15-barge tow would require two 100-car unit trains, 
extending nearly 3 miles in length.
    Locks and dams affect the environment. They slow the natural 
velocity immediately upriver from their locations, so that organisms 
adapted to fast-flowing water are replaced by those adapted to slow-
flowing water, and dams trap sediments that would otherwise flow 
farther downstream. Dredging is necessary to keep the navigation 
channels open.
    The 12,000 miles of inland and intracoastal waterways, as do 
highways, operate as a system, and much of the commerce moves on 
multiple segments. They serve as connecting arteries, much as 
neighborhood streets help people reach interstate highways. These 
waterways are operated by the Corps of Engineers as multi-purpose, 
multi-objective projects. They not only serve commercial navigation, 
but, in many cases, also provide hydropower, flood protection, 
municipal water supply, agricultural irrigation, recreation and 
regional development.
    Forty-one States, 16 State capitals and all States east of the 
Mississippi River are served by commercially navigable waterways. 
Domestic companies operating vessels on U.S. waterways increased 19.6 
percent from 2002 to 2003.
    Waterway usage is increasing, but the facilities are aging; many 
Corps-owned or -operated locks are well past their planned design life 
of 50 years. Of the 257 locks still in use in the United States, 30 
were built in the 19th century, another 92 locks are more than 60 years 
old. In other words, nearly 50 percent of all Corps-maintained locks 
were functionally obsolete by the beginning of 2005. Assuming that no 
new locks are built in the next 20 years, by 2020, another 93 existing 
locks will be obsolete--rendering more than 8 of every 10 locks now in 
service archaic.
    As the system ages, the infrastructure cannot support the growing 
traffic loads, resulting in frequent delays for repairs. At the same 
time, the repairs are more expensive due to long-deferred maintenance. 
We estimate that the inland waterways system requires $4 billion a year 
over the next 5 years to upgrade the system's locks and other 
facilities.
    The Inland Waterway Trust Fund, created in 1978, pays half the cost 
of the construction and major rehabilitation costs for specified 
Federal inland waterways projects. It receives money from a tax on fuel 
(currently set at 20 cents per gallon) on vessels engaged in commercial 
transportation on inland waterways.
    In recent years, there have been a number of major inland waterway 
infrastructure failures--a few years ago, the entire Ohio River system 
was closed for a time due to infrastructure breakdowns.
    The fund will earn $105 million in fiscal year 2006, including $92 
million paid by the barge and towing industry, and $13 million in 
interest. In fiscal year 2005, the Corps of Engineers received $149 
million for construction projects, leaving a balance of approximately 
$307 million. In fiscal year 2006, the Corps is planning to spend $394 
million on current maintenance projects, a sum that will not reduce the 
backlog of pending repairs that exceed $600 million.
    The Corps estimates that it would cost more than $125 billion to 
replace the present inland waterway system.
  --Congress should amend the Inland Waterways Trust Fund Act of 1978 
        to allow all funds collected to be used for repair and 
        construction of dams and locks. Congress should then 
        appropriate the full fund balance each year to pay for the cost 
        of rehabilitating the Nation's oldest locks. The government 
        needs to set a priority system for restoring locks that have 
        outlasted their design lives, with an initial focus on all 
        locks built in the 19th century. The current Federal budget 
        process does not differentiate between expenditures for current 
        consumption and long-term investment. This causes major 
        inefficiencies in the planning, design and construction process 
        for long-term investments.
  --In the interim, Congress must appropriate at least $2.55 billion 
        for inland waterways programs.
  --ASCE supports the creation of a Federal capital budget to create a 
        funding mechanism that would help reduce the constant conflict 
        between short-term and long-term maintenance needs. This would 
        increase public awareness of the problems and needs facing this 
        country's physical infrastructure, and would assist Congress in 
        focusing on those specific programs that are necessarily 
        devoted to long-term growth and productivity.

                     HARBOR MAINTENANCE TRUST FUND

    ASCE believes Congress must commit the entire current balance of 
$2.6 billion in the HMTF in fiscal year 2006 to port and harbor 
improvements. Growing traffic volumes and ever-larger ships are 
expected to strain U.S. port facilities in the first half of the 21st 
century. In a 2002 study for the U.S. Army Corps of Engineers on U.S. 
harbor needs through 2020, analysts concluded that foreign commerce now 
makes up about 27 percent of the U.S. Gross Domestic Product (GDP) and 
is worth roughly $1.5 trillion. Forecasts indicate that foreign cargo 
traffic will more than double by the year 2020. By 2040, imports and 
exports are expected to increase eightfold.
    There are about 9,300 commercial harbor and waterway piers, wharves 
and docks in the United States. Of these, 150 deep-draft ports account 
for more than 99 percent of foreign waterborne trade entering the 
United States. Moreover, about 75 percent of international tonnage and 
almost 90 percent of international cargo value flows through only 25 
U.S. ports. Increasingly, the cargo traffic entering U.S. ports is 
being carried on a new class of ``mega ships.''
    Containerships are growing in terms of both fleet capacity and 
vessel size. Their share of the world fleet's cargo-carrying capacity 
increased 8.8 percent per annum from 1985 to 1999 making containership 
fleet capacity the fastest growing for any type of vessel. 
Containerships are also becoming increasingly larger. Containership 
size is generally measured by the number of containers that a vessel 
can carry expressed in 20-foot equivalent units (TEUs). In the 1980's, 
containerships of 2,000 to 3,000 TEUs were considered the norm. Since 
then, deregulation of the transportation industry, consolidation among 
containership companies and growing volumes of container trade have 
spawned a race among major carriers to build larger vessels in pursuit 
of lower costs and increased competitiveness.
    Today, companies are introducing ``mega ships'' that range from 
6,000 to 7,500 TEUs, and plans are under way for vessels of 10,000 to 
12,000 TEUs. Fully loaded by weight, mega ships require channels of 50 
feet or more in depth. In the United States, only a handful of ports 
currently meet this requirement.
    Major port development is responding to growth in container 
shipping and larger containerships, as well as growth in dry and liquid 
bulk shipping. Ports are investing heavily in dockside infrastructure, 
such as expanded berths, newer and larger cranes, improved intermodal 
capabilities, and deeper channels. U.S. ports appear to be keeping pace 
with their foreign counterparts with regard to dockside infrastructure. 
Many major container ports in the United States are developing new 
terminals and implementing massive projects to reduce port congestion 
and accommodate mega ships that are wider, longer, and deeper, and that 
require quick turnaround times to remain profitable. But the Federal 
Government's effort to provide navigable waterways is falling behind 
the need. Ports are investing their funds with the understanding that 
the Federal Government will meet its responsibility in maintaining 
required water depths.
    Vessel demand on the Nation's ports is escalating, as commodity 
flows increase. The total number of annual vessel calls to and from the 
United States is expected to more than double by the year 2020 from 
about 114,500 in the year 2000 to approximately 261,000 in the year 
2020. Between 2000 through 2020 containership calls are projected to 
increase at a 5.5 percent annual rate and grow from about 42,000 to 
almost 121,000.
    The ultra-large crude oil tankers, the largest vessels in the world 
fleet, have vessel drafts of more than 70 feet. The average draft of 
the largest dry bulk vessels is almost 60 feet. The largest container 
vessels now have design drafts close to 50 feet, with the average 
design draft for the largest ones (more than 5,000 Twenty-foot 
Equivalent Unit container capacity) being more than 45 feet.
    Congress enacted the Harbor Maintenance Tax (HMT) and established 
the Harbor Maintenance Trust Fund (HMTF) in the Water Resources 
Development Act of 1986. The HMTF pays 100 percent of the Corps' 
eligible Operations and Maintenance expenditures for commercial harbors 
and channels. Section 201 of the Water Resources Development Act of 
1996 expanded the use of HMTF to pay Federal expenditures for 
construction of dredged material disposal facilities necessary for the 
operation and maintenance of harbors.
    Total HMTF revenues for fiscal year 2005 were $1 billion. The total 
Fund balance, however, was approximately $2.6 billion as of September 
30, 2004. But the President's budget for fiscal year 2006 calls for 
spending only $665 million from the Fund on port and harbor 
construction and maintenance. Congress must appropriate the full 
balance in the HMTF in fiscal year 2006 to pay for critically needed 
port and harbor improvements. The huge investment gap in our port and 
harbor infrastructure can be overcome by spending down the annual HMTF 
balances for the purposes the monies were intended.

                       BEACH NOURISHMENT PROGRAM

    ASCE recommends that Congress appropriate $150 million for studies 
and beach restoration projects throughout the Nation. We encourage 
Congress to: (1) continue to fund periodic beach renourishment, (2) 
fund new beach nourishment studies and construction starts, and (3) 
permit projects to move seamlessly from study to design to 
construction.
    The $150 million for beach nourishment investigations and 
construction in fiscal year 2006 equals a one-third increase over the 
fiscal year 2005 enacted level. The $49 million request for beach 
restoration in 2006 is wholly inadequate. It is only one-third the 
amount requested in 2005, and it is nearly two-thirds lower than the 
$111.7 million that Congress enacted for 2005. That means there will be 
less money to repair erosion and to restore critical coastal habitat, 
which represents a real threat to America's economy.
    With 20,506 miles of eroding shoreline (and 2,672 miles critically 
eroding), beach attrition is a serious threat to the Nation's tourism, 
which represents a significant threat to the national economy. 
Federally funded beach restoration projects return $1 to $7 on the 
initial investment.
                                 ______
                                 
              Prepared Statement of Cameron County, Texas

    We express full support of the inclusion in the fiscal year 2006 
budget for the full capability of the USACE for $1 million.

                         HISTORY AND BACKGROUND

    On September 15, 2001, a tugboat and several barges struck the 
Queen Isabella Causeway on the Gulf Intracoastal Waterway at the mouth 
of the Brownsville Ship Channel east of Port Isabel. The accident took 
the lives of eight people.
    A January 1997 Reconnaissance Report of the Gulf Intracoastal 
Waterway-Corpus Christi Bay to Port Isabel, Texas (Section 216), was 
conducted by the United States Army Corps of Engineers. The study was 
initiated to determine the Federal interest in rerouting the GIWW. The 
information available at the time indicated a less than favorable 
benefit to cost ratio for the proposed realignment. Since the September 
15 incident, the Corps, Cameron County officials, and a number of local 
entities and residents of the County have reopened discussion of the 
rerouting of the GIWW. The Corps of Engineers agrees that new facts 
regarding the safety of the current alignment warrants a revisiting of 
the issue to determine the viability of rerouting the channel in a 
direct line from the point where the waterway crosses underneath the 
causeway to the point where it reaches the Brazos Santiago Pass and the 
Brownsville Ship Channel. The route in question is the exact one 
traveled by the tugboat and barges that struck the bridge on September 
15, killing eight people. The tugboat captain failed to negotiate the 
sharp turn after it passed through the Long Island Swing Bridge. This 
particular turn is one of the most dangerous on the entire waterway.

                          PROJECT DESCRIPTION

    The reconnaissance study completed by the U.S. Army Corps of 
Engineers (USACE) confirmed the Federal interest in moving forward with 
reopening the study to reroute the Gulf Intracoastal Waterway at Port 
Isabel. The USACE moved forward with the initiation of a feasibility 
study that would allow the Corps to reopen the examination of the 
rerouting of the GIWW on the basis of safety. The measure would seek to 
eliminate safety hazards to Port Isabel and Long Island residents 
created by barges that move large quantities of fuel and other 
potentially dangerous explosive chemicals through the existing route 
under the Queen Isabella Causeway. The overall goal of the study would 
be to enhance safety and transportation efficiency on this busy Texas 
waterway by removing the treacherous turn tug and barge operators are 
forced to make as they navigate the passage through the Long Island 
Swing Bridge. In addition to the hazardous curve, the winding and 
congested course taken by the waterway through the City of Port Isabel 
adds needless distance and time to the transportation of goods to and 
from Cameron County ports. These costs are borne not only by commercial 
operators using the waterway, but also by consumers and businesses all 
across Texas and the Nation. The rerouting would also seek to correct 
the adverse impact of waterway traffic on Cameron County residents. 
Apart from the obvious potential for damage to the Queen Isabella 
Causeway, adverse impacts are created by waterway traffic in the form 
of traffic delays associated with the Long Island Swing Bridge and the 
transportation of hazardous materials within several hundred feet of 
densely populated areas in Port Isabel and Long Island. Currently, a 
1950's era swing bridge that floats in the waterway channel connects 
Long Island and the City of Port Isabel. As waterborne traffic 
approaches the bridge, cables are used to swing it from the center of 
the channel and then swing it back into place. This costly and time-
consuming process, which frequently backs up traffic into the downtown 
business district of Port Isabel, is estimated to drain hundreds of 
dollars a year from the economy of this economically distressed area. 
More serious problems are created when the heavily used cables or winch 
motors on the swing bridge fail, leaving the bridge stuck in an open or 
closed position. Equipment failures often cause delays for several days 
and leave Long Island residents cut-off from vehicle access or the 
ports of Port Isabel and Brownsville cut-off from in-bound and out-
bound barge traffic. During these times, supplies of vital commodities 
are halted all across the Rio Grande Valley as stocks dwindle and 
produce and finished goods begin to pile up.

                IMPACT OF THE GULF INTRACOASTAL WATERWAY

    The Gulf Intracoastal Waterway is an integral part of the inland 
transportation system of the United States. Stretching across more than 
1,300 coastal miles of the Gulf of Mexico, this man-made, shallow-draft 
canal moves a large variety and great number of vessels and cargoes. 
The 426 miles of the waterway running through Texas makes it possible 
to supply both domestic and foreign markets with chemicals, petroleum 
and other essential goods. Barge traffic is essential to many of the 
port economies from Texas to Great Lakes ports, indeed, throughout the 
entire GIWW. Some ports feel their future strategic plans are closely 
linked to the efficient operation of the GIWW. This is true for ports 
that rely almost entirely on barge traffic as well as ports that 
function primarily as recreational facilities. Most of the cargo moved 
along Texas waterways is petroleum and petroleum products. The GIWW is 
well suited for the movement of such cargo, and, therefore, has allowed 
many of the smaller, shallow-draft facilities to engage in both 
interstate and international trade. Commercial fishing access via the 
GIWW has had a significant impact on these port economies as well.

                               CONCLUSION

    A 1995 Lyndon Baines Johnson School of Public Affairs report 
entitled ``The Texas Seaport and Inland Waterway System'' warned of 
concern with the safe operation of barges on the GIWW citing, ``a 
serious accident perhaps involving a collision between two barges 
carrying hazardous materials could force closure of the waterway''. No 
one could foresee the terrible accident that occurred on September 15. 
The lives of eight people came to an end and the lives of their loved 
ones was irrevocably changed forever. This important waterway must be 
improved to prevent another tragedy. The $1 million that must be added 
to the fiscal year 2006 appropriations bill will allow the Corps of 
Engineers to continue to study a preferred plan to remedy this 
dangerous situation. The government has already invested nearly $2 
million to move this project forward. Cameron County, the users of the 
GIWW, and the residents of the area respectfully requests the addition 
of this much-needed appropriation.
                                 ______
                                 
   Prepared Statement of the Chambers County-Cedar Bayou Navigation 
                            District, Texas

    We express full support of the inclusion of the full capability of 
the USACE for fiscal year 2006 to complete PED for the project to 
deepen and widen Cedar Bayou, Texas:
  --President's budget included.--$0;
  --Additional funds needed in fiscal year 2006.--$505,000.

                         HISTORY AND BACKGROUND

    The Rivers and Harbor Act of 1890 originally authorized navigation 
improvements to Cedar Bayou. The project was reauthorized in 1930 to 
provide a 10 ft. deep and 100 ft. wide channel from the Houston Ship 
Channel to a point on Cedar Bayou 11 miles above the mouth of the 
bayou. In 1931, a portion of the channel was constructed from the 
Houston Ship Channel to a point about 0.8 miles above the mouth of 
Cedar Bayou, approximately 3.5 miles in length. A study of the project 
in 1971 determined that an extension of the channel to project Mile 3 
would have a favorable benefit to cost ratio. This portion of the 
channel was realigned from Mile 0.1 to Mile 0.8 and extended from Mile 
0.8 to Mile 3 in 1975. In October 1985, the portion of the original 
navigation project from project Mile 3 to 11 was deauthorized due to 
the lack of a local sponsor. In 1989, the Corps of Engineers, Galveston 
District completed a Reconnaissance Report dated June 1989, which 
recommended a channel improvement from the Houston Ship Channel Mile 3 
to Cedar Bayou Mile 11 at the State Highway 146 Bridge.
    The Texas Legislature created the Chambers County-Cedar Bayou 
Navigation District in 1997 as an entity to improve the navigability of 
Cedar Bayou.
    The district was created to accomplish the purpose of Section 59, 
Article XVI, of the Texas Constitution and has all the rights, powers, 
privileges and authority applicable to Districts created under Chapters 
60, 62, and 63 of the Water Code--Public Entity. The Chambers County-
Cedar Bayou Navigation District then became the local sponsor for the 
Cedar Bayou Channel.

                PROJECT DESCRIPTION AND REAUTHORIZATION

    Cedar Bayou is a small coastal stream, which originates in Liberty 
County, Texas, and meanders through the urban area near the eastern 
portion of the City of Baytown, Texas, before entering Galveston Bay. 
The bayou forms the boundary between Harris County on the west and 
Chambers County on the east. The project was authorized in Section 349 
of the Water Resources Development Act 2000, which authorized a 
navigation improvement of 12 feet deep by 125 feet wide from Mile 2.5 
to Mile 11 on Cedar Bayou.The feasibility report, completed in 2005 
indicated a preferred plan of widening the channel to 100 feet and 
deepening it to 10 feet.

                   JUSTIFICATION AND INDUSTRY SUPPORT

    First and foremost, the channel must be improved for safety. The 
channel is the home to a busy barge industry. The most cost-efficient 
and safe method of conveyance is barge transportation. Water 
transportation offers considerable cost savings compared to other 
freight modes (rail is nearly twice as costly and truck nearly four 
times higher). In addition, the movement of cargo by barge is 
environmentally friendly. Barges have enormous carrying capacity while 
consuming less energy, due to the fact that mulitple barges can move 
together in a single tow, controlled by only one power unit.
    The result removes a significant number of trucks from Texas 
highways. The reduction of air emissions by the movement of cargo on 
barges is a significant factor as communities struggle with compliance 
with the Clean Air Act.
    Several navigation-dependent industries and commercial enterprises 
have been established along the commercially navigable portions of 
Cedar Bayou. Several industries have dock facilities at the mile 
markers that would be affected by this much-needed improvement. These 
industries include: Reliant Energy, Bayer Corporation, Koppel Steel, 
CEMEX, US Filter Recovery Services and Dorsett Brothers Concrete, to 
name a few.

                       PROJECT COSTS AND BENEFITS

    Congress appropriated $100,000 in fiscal year 2001 for the Corps of 
Engineers to conduct the feasibility study to determine the Federal 
interest in this improvement project. The study indicated a benefit to 
cost ratio of the project of 2.8 to 1. The estimated total cost of the 
project is $16.5 million with a Federal share estimated at $13.5 
million and the non-Federal sponsor share of approximately $3.5 
million. Total annual benefits are estimated to be $4.8 million, with a 
net benefit of $3 million. Congress appropriated $400,000 each in 
fiscal year 2002 and fiscal year 2003, $374,000 in fiscal year 2004 and 
$135,000 in fiscal year 2005 to support the feasibility study. This 
project is environmentally sound and economically justified. We would 
appreciate the subcommittee's support of the required add of the 
appropriation needed by the Corps of Engineers to complete the plans 
and specifications of the project so that it can move forward at an 
optimum construction schedule. The users of the channel deserve to have 
the benefits of a safer, most cost-effective Federal waterway.
                                 ______
                                 
               Prepared Statement of Port Freeport, Texas

    Channel Improvement Project included in administration's fiscal 
year 2006 budget.--$500,000.
    Corps capability for fiscal year 2006.--$750,000.
    On behalf of the Brazos River Harbor Navigation District and the 
users of Freeport Harbor, we extend gratitude to Chairman Domenici and 
members of the subcommittee for the opportunity to submit testimony in 
support of the continuation of the feasibility study for the proposed 
channel improvement project for Freeport Harbor and Stauffer Channel, 
Texas.

                         HISTORY AND BACKGROUND

    Port Freeport is an autonomous governmental entity authorized by an 
act of the Texas Legislature in 1925. It is a deep-draft port, located 
on Texas' central Gulf Coast, approximately 60 miles southwest of 
Houston, and is an important Brazos River Navigation District 
component. The port elevation is 3 to 12 feet above sea level. Port 
Freeport is governed by a board of six commissioners elected by the 
voters of the Navigation District of Brazoria County, which currently 
encompasses 85 percent of the county. Port Freeport land and operations 
currently include 186 acres of developed land and 7,723 acres of 
undeveloped land, 5 operating berths, a 45" deep Freeport Harbor 
Channel and a 70 deep berthing area. Future expansion includes 
building a 1,300-acre multi-modal facility, cruise terminal and 
container terminal. Port Freeport is conveniently accessible by rail, 
waterway and highway routes. There is direct access to the Gulf 
Intracoastal Waterway, Brazos River Diversion Channel, and, State 
Highways 36 and 288. Located just 3 miles from deep water, Port 
Freeport is one of the most accessible ports on the Gulf Coast.

                          PROJECT DESCRIPTION

    The fiscal year 2002 Energy and Water appropriations signed into 
law included a $100,000 appropriation to allow the United States Army 
Corps of Engineers (USACE) to conduct a reconnaissance study to 
determine the Federal interest in an improvement project for Freeport 
Harbor, Texas. The USACE, in cooperation with the Brazos River Harbor 
Navigation District as the local sponsor, has completed that study. The 
report indicates that ``transportation savings in the form of National 
Economic Development Benefits (NED) appear to substantially exceed the 
cost of project implementation'', thus confirming ``a strong Federal 
interest in conducting the feasibility study of navigation improvements 
at Freeport Harbor''.
    In fact, early indications point to a benefit to cost ratio of the 
project to be at an impressive more than 20 to 1 benefit to cost.
    Port Freeport has the opportunity to solidify significant new 
business for Texas with this improvement project. In addition, the 
environment would be further protected since offshore lightering of 
large petroleum crude vessels would no longer be necessary. Moreover, 
the transportation of goods would be economically enhanced. Given the 
projected growth of international and domestic cargoes and the state of 
our Nation's current highway, rail and port infrastructures, Port 
Freeport represents an economical investment in the State of Texas and 
the Nation's ability to grow our G.D.P. for years to come. Freeport 
Pilots and users of Freeport Harbor confirm that the enhanced safety of 
a wider channel cannot be overstated.

                    ECONOMIC IMPACT OF PORT FREEPORT

    According to the USACE 2004 report entitled ``The U.S. Waterway 
System--Transportation Facts'', Port Freeport is 12th in foreign 
tonnage in the United States and 24th in total tonnage. The port 
handled over 30.5 million tons of cargo in 2003 and an additional 
70,000 T.E.U.'s of containerized cargo. It is responsible for 
augmenting the Nation's economy by $7.06 billion annually and 
generating 8,090 direct and an additional 8,116 indirect jobs. Its 
chief import commodities are petroleum crude, bananas, and fresh fruit 
and aggregate while top export commodities are rice and chemicals. The 
port's growth has been staggering in the past decade, becoming one of 
the fastest growing ports on the Gulf Coast. Port Freeport's economic 
impact and its future growth is justification for its budding 
partnership with the Federal Government in this critical improvement 
project. In addition, the port will be the home of one of the first 
Liquefied Natural Gas plants in Texas as Freeport LNG, a cooperative 
venture of Conoco-Phillips and Cheniere Energy received final FERC 
approval for the permit for the facility.

                     DEFENSE SUPPORT OF OUR NATION

    Port Freeport is a strategic port in times of National Defense of 
our Nation. It houses a critically important petroleum oil reserve--
Bryan Mound. Its close proximity to State Highways 36 and 288 make it a 
convenient deployment port for Fort Hood. In these unusual times, it is 
important to note the importance of our ports in the defense of our 
Nation and to address the need to keep our Federal waterways open to 
deep-draft navigation.

                     COMMUNITY AND INDUSTRY SUPPORT

    This proposed improvement project has wide community and industry 
support. The safer transit and volume increase capability is an 
appealing and exciting prospect for the users of Freeport Harbor and 
Stauffer Channel. The anticipated more than 20-to-1 benefit-to-cost 
ratio that was indicated from the Corps of Engineers reconnaissance 
study firmly solidified the Federal interest.

         WHAT WE NEED FROM THE SUBCOMMITTEE IN FISCAL YEAR 2006

    The administration's budget included $500,000 for the continuation 
of the feasibility study, which is being conducted at a 50/50 Federal 
Government/local sponsor share. The Corps had indicated a capability 
for fiscal year 2006 of $750,000 to continue the feasibility study and 
keep this project on an optimal and most cost-efficient time frame for 
the Federal Government and the local sponsor. Congress has thus far 
invested over $1 million in this project. We respectfully request the 
additional $250,000 for fiscal year 2006.
                                 ______
                                 
      Prepared Statement of the Santa Clara Valley Water District

 UPPER PENITENCIA CREEK FLOOD PROTECTION PROJECT, SANTA CLARA COUNTY, 
                               CALIFORNIA

                                SUMMARY

    This statement urges the committee's support for an administration 
budget request of $628,000 to continue with the feasibility study for 
the Upper Penitencia Creek Flood Protection Project.

                          STATEMENT OF SUPPORT
            UPPER PENITENCIA CREEK FLOOD PROTECTION PROJECT

    Background.--The Upper Penitencia Creek Watershed is located in 
northeast Santa Clara County, California, near the southern end of the 
San Francisco Bay. In the last two decades, the creek has flooded in 
1980, 1982, 1983, 1986, 1995, and 1998. The January 1995 flood damaged 
a commercial nursery, a condominium complex, and a business park. The 
February 1998 flood also damaged many homes, businesses, and surface 
streets.
    The proposed project on Upper Penitencia Creek, from the Coyote 
Creek confluence to Dorel Drive, will protect portions of the cities of 
San Jose and Milpitas. The floodplain is completely urbanized; 
undeveloped land is limited to a few scattered agricultural parcels and 
a corridor along Upper Penitencia Creek. Based on the U.S. Army Corps 
of Engineers' (Corps) 1995 reconnaissance report, 4,300 buildings in 
the cities of San Jose and Milpitas are located in the flood prone 
area, 1,900 of which will have water entering the first floor. The 
estimated damages from a 1 percent or 100-year flood exceed $121 
million.
    Study Synopsis.--Under authority of the Watershed Protection and 
Flood Prevention Act (Public Law 83-566), the Natural Resources 
Conservation Service (formerly the Soil Conservation Service) completed 
an economic feasibility study (watershed plan) for constructing flood 
damage reduction facilities on Upper Penitencia Creek. Following the 
1990 U.S. Department of Agriculture Farm Bill, the Natural Resources 
Conservation Service watershed plan stalled due to the very high ratio 
of potential urban development flood damage compared to agricultural 
damage in the project area.
    In January 1993, the Santa Clara Valley Water District (District) 
requested the Corps proceed with a reconnaissance study in the 1994 
fiscal year while the Natural Resources Conservation Service plan was 
on hold. Funds were appropriated by Congress for fiscal year 1995 and 
the Corps started the reconnaissance study in October 1994. The 
reconnaissance report was completed in July 1995, with the 
recommendation to proceed with the feasibility study phase. The 
feasibility study, initiated in February 1998, is currently scheduled 
for completion in 2005.
    Advance Construction.--To accelerate project implementation, the 
District submitted a Section 104 application to the Corps for approval 
to construct a portion of the project. The application was approved in 
December 2000. The advance construction is for a 2,600-foot long 
section of bypass channel between Coyote Creek and King Road. However, 
due to funding constraints at the District and concerns raised by 
regulatory agencies, the design was stopped and turned over to the 
Corps to complete.
    Fiscal Year 2005 Funding.--$273,000 was appropriated in fiscal year 
2005 for the Upper Penitencia Creek Flood Protection Project for 
project investigation.
    Fiscal Year 2006 Funding Recommendation.--It is requested that the 
congressional committee support the administration's fiscal year 2006 
budget request of $628,000 for the Upper Penitencia Creek Flood 
Protection Project to continue the Feasibility Study.

     UPPER GUADALUPE RIVER PROJECT, SANTA CLARA COUNTY, CALIFORNIA
                                SUMMARY

    This statement urges the committee's support for an appropriation 
add-on of $6.5 million to initiate construction for the Upper Guadalupe 
River Flood Protection Project.

                          STATEMENT OF SUPPORT
                     UPPER GUADALUPE RIVER PROJECT

    Background.--The Guadalupe River is one of two major waterways 
flowing through a highly urbanized area of Santa Clara County, 
California, the heart of Silicon Valley. Historically, the river has 
flooded the central district and southern areas of San Jose. According 
to U.S. Army Corps of Engineers (Corps) 1998 feasibility study, severe 
flooding would result from a 100-year flooding event and potentially 
cause $280 million in damages.
    The probability of a large flood occurring before implementation of 
flood prevention measures is high. The upper Guadalupe River overflowed 
in March 1982, January 1983, February 1986, January 1995, March 1995, 
and February 1998, causing damage to several residences and businesses 
in the Alma Avenue and Willow Street areas. The 1995 floods in January 
and March, as well as in February 1998, closed Highway 87 and the 
parallel light-rail line, a major commute artery.
    Project Synopsis.--In 1971, the Santa Clara Valley Water District 
(District) requested the Corps reactivate an earlier study of Guadalupe 
River. From 1971 to 1980, the Corps established the economic 
feasibility and Federal interest in the Guadalupe River only between 
Interstate 880 and Interstate 280. Following the 1982 and 1983 floods, 
the District requested that the Corps reopen its study of the upper 
Guadalupe River upstream of Interstate 280. The Corps completed a 
reconnaissance study in November 1989, which established an 
economically justifiable solution for flood protection in this reach. 
The report recommended proceeding to the feasibility study phase, which 
began in 1990. In January 1997, the Corps determined that the National 
Economic Development (NED) Plan would be a 2 percent or 50-year level 
of flood protection rather than the 1 percent or 100-year level. The 
Corps feasibility study determined the cost of the locally preferred 
100-year plan is $153 million and the Corps NED 50-year plan is $98 
million. The District requested that the costs of providing 50-year and 
100-year flood protection be analyzed during the preconstruction 
engineering design phase. The Corps is now proceeding with the 
preconstruction engineering design phase and has refined the NED Plan 
to address the District's comments and Endangered Species Act issues 
and has reevaluated the locally preferred plan for full Federal cost 
sharing. The findings were submitted to Corps Headquarters for approval 
in March 2004 in a Draft Limited Reevaluation Report on the Proposed 
Project Modifications. This report contains an evaluation of the 
revised NED Plan project and the Locally Preferred Plan project, which 
costs $165 million with a benefit-to-cost ratio of 1:1.42 and $212 
million with a benefit-to-cost ratio of 1:1.24, respectively. The Draft 
Limited Reevaluation Report also recommended for full cost-sharing on 
the Locally Preferred Plan project.
    Fiscal Year 2005 Funding.--$75,000 was authorized in fiscal year 
2005 for the Upper Guadalupe River Project to continue preconstruction 
engineering and design.
    Fiscal Year 2006 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $6.5 million 
in fiscal year 2006 to initiate construction on the Upper Guadalupe 
River Flood Protection Project.

      COYOTE CREEK WATERSHED STUDY, SANTA CLARA COUNTY, CALIFORNIA
                                SUMMARY

    This statement urges the committee's support of the administration 
budget request of $100,000 to initiate a Reconnaissance Study of the 
Coyote Creek Watershed.

                          STATEMENT OF SUPPORT
                      COYOTE CREEK WATERSHED STUDY

    Background.--Coyote Creek drains Santa Clara County's largest 
watershed, an area of more than 320 square miles encompassing most of 
the eastern foothills, the City of Milpitas, and portions of the Cities 
of San Jose and Morgan Hill. It flows northward from Anderson Reservoir 
through more than 40 miles of rural and heavily urbanized areas and 
empties into south San Francisco Bay.
    Prior to construction of Coyote and Anderson Reservoirs, flooding 
occurred in 1903, 1906, 1909, 1911, 1917, 1922, 1923, 1926, 1927, 1930 
and 1931. Since 1950, the operation of the reservoirs has reduced the 
magnitude of flooding, although flooding is still a threat and did 
cause damages in 1982, 1983, 1986, 1995, and 1997. Significant areas of 
older homes in downtown San Jose and some major transportation 
corridors remain susceptible to extensive flooding. The federally-
supported lower Coyote Creek Project (San Francisco Bay to Montague 
Expressway), which was completed in 1996, protected homes and 
businesses from storms which generated record runoff in the northern 
parts of San Jose and Milpitas.
    The proposed Reconnaissance Study would evaluate the reaches 
upstream of the completed Federal flood protection works on lower 
Coyote Creek.
    Objective of Study.--The objectives of the Reconnaissance Study are 
to investigate flood damages within the Coyote Creek Watershed; to 
identify potential alternatives for alleviating those damages which 
also minimize impacts on fishery and wildlife resources, provide 
opportunities for ecosystem restoration, provide for recreational 
opportunities; and to determine whether there is a Federal interest to 
proceed into the Feasibility Study Phase.
    Study Authorization.--In May 2002, the House of Representatives 
Committee on Transportation and Infrastructure passed a resolution 
directing the Corps to ``. . . review the report of the Chief of 
Engineers on Coyote and Berryessa Creeks . . . and other pertinent 
reports, to determine whether modifications of the recommendations 
contained therein are advisable in the interest of flood damage 
reduction, environmental restoration and protection, water conservation 
and supply, recreation, and other allied purposes . . .''.
    Fiscal Year 2006 Administration Budget Request.--The Coyote 
Watershed Study was one of only three ``new start'' studies proposed 
for funding nationwide in the administration budget request.
    Fiscal Year 2005 Funding.--No Federal funding was received in 
fiscal year 2005.
    Fiscal Year 2006 Funding Recommendation.--It is requested that the 
congressional committee support the administration budget request of 
$100,000 to initiate a multi-purpose Reconnaissance Study within the 
Coyote Creek Watershed.

   THOMPSON CREEK RESTORATION PROJECT, SANTA CLARA COUNTY, CALIFORNIA
                                SUMMARY

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

                          STATEMENT OF SUPPORT
                   THOMPSON CREEK RESTORATION PROJECT

    Background.--Thompson Creek, a tributary of Coyote Creek, flows 
through the City of San Jose, California. Historically, the creek was a 
naturally-meandering stream and a component of the Coyote Creek 
watershed. The watershed had extensive riparian and oak woodland 
habitat along numerous tributary stream corridors and upland savanna. 
Currently, these habitat types are restricted to thin sparse pockets in 
the Thompson Creek restoration project area.
    Significant urban development over the last 20 years has modified 
the runoff characteristics of the stream resulting in significant 
degradation of the riparian habitat and stream channel. The existing 
habitats along Thompson Creek, riparian forest stands, are threatened 
by a bank destabilization and lowering of the water table. Recent large 
storm events (1995, 1997, and 1998) and the subsequent wet years in 
conjunction with rapid development in the upper watershed have resulted 
in a succession of high runoff events leading to rapid erosion.
    The upstream project limits start at Aborn Road and the downstream 
project limit is Quimby Road where Thompson creek has been modified as 
a flood protection project. The project distance is approximately 1 
mile.
    Status.--In February 2000, the Santa Clara Valley Water District 
(District) initiated discussions with U.S. Army Corps of Engineers 
(Corps) for a study under the Corps' Section 206 Aquatic Ecosystem 
Restoration Program. Based on the project merits, the Corps completed a 
Preliminary Restoration Plan (PRP) and subsequent Project Management 
Plan (PMP). After approval of the PRP the Detailed Project Report (DPR) 
was initiated. The DPR will provide the information necessary to 
develop plans and specifications for the construction of the 
restoration project.

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

    Fiscal Year 2005 Funding.--$300,000 earmark was received in the 
fiscal year 2005 Section 206 appropriation to complete the PRP.
    Fiscal Year 2006 Funding Recommendation.--It is requested that the 
congressional committee support an earmark of $400,000 within the 
Section 206 Aquatic Ecosystem Restoration Program.

        GUADALUPE RIVER PROJECT, SANTA CLARA COUNTY, CALIFORNIA
                                SUMMARY

    This statement urges the committee's support for an administration 
budget request of $5.6 million and an appropriation add-on of $400,000, 
for a total of $6 million to continue construction of the final phase 
of the Guadalupe River Flood Protection Project.

                          STATEMENT OF SUPPORT
                        GUADALUPE RIVER PROJECT

    Background.--The Guadalupe River is a major waterway flowing 
through a highly developed area of San Jose, in Santa Clara County, 
California. A major flood would damage homes and businesses in the 
heart of Silicon Valley. Historically, the river has flooded downtown 
San Jose and the community of Alviso. According to the U.S. Army Corps 
of Engineers (Corps) 2000 Final General Reevaluation & Environmental 
Report for Proposed Project Modifications, estimated damages from a 1 
percent flood in the urban center of San Jose are over $576 million. 
The Guadalupe River overflowed in February 1986, January 1995, and 
March 1995, damaging homes and businesses in the St. John and Pleasant 
Street areas of downtown San Jose. In March 1995, heavy rains resulted 
in breakouts along the river that flooded approximately 300 homes and 
business.
    Project Synopsis.--In 1971, the local community requested that the 
Corps reactivate its earlier study. Since 1972, substantial technical 
and financial assistance have been provided by the local community 
through the Santa Clara Valley Water District in an effort to 
accelerate the project's completion. To date, more than $85.8 million 
in local funds have been spent on planning, design, land purchases, and 
construction in the Corps' project reach.
    The Guadalupe River Project received authorization for construction 
under the Water Resources Development Act of 1986; the General Design 
Memorandum was completed in 1992, the local cooperative agreement was 
executed in March 1992, the General Design Memorandum was revised in 
1993, construction of the first phase of the project was completed in 
August 1994, construction of the second phase was completed in August 
1996. Project construction was temporarily halted due to environmental 
concerns.
    To achieve a successful, long-term resolution to the issues of 
flood protection, environmental mitigation, avoidance of environmental 
effects, and project monitoring and maintenance costs, a multi-agency 
``Guadalupe Flood Control Project Collaborative'' was created in 1997. 
A key outcome of the collaborative process was the signing of the 
Dispute Resolution Memorandum in 1998, which modified the project to 
resolve major mitigation issues and allowed the project to proceed. 
Energy and Water Development Appropriations Act of 2002 was signed into 
law on November 12, 2001. This authorized the modified Guadalupe River 
Project at a total cost of $226.8 million. Subsequent to the 
authorization, the project cost has been raised to $251 million. 
Construction of the last phase of flood protection was completed 
December 2004 and a completion celebration held in January 2005. The 
remaining construction consists of railroad bridge replacements and 
mitigation plantings. The overall construction of the project including 
the river park and the recreation elements is scheduled for completion 
in 2006.
    Fiscal Year 2005 Funding.--$6 million was authorized in fiscal year 
2005 to continue Guadalupe River Project construction.
    Fiscal Year 2006 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $400,000, in 
addition to the $5.6 million in the administration's fiscal year 2006 
budget request, for a total of $6 million to continue construction of 
the final phase of the Guadalupe River Flood Protection Project.

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

    This statement urges the committee's support for an administration 
budget request of $600,000 and an appropriation add-on of $400,000, for 
a total of $1 million to continue a Feasibility Study to evaluate 
integrated flood protection and environmental restoration for the South 
San Francisco Bay Shoreline.

                          STATEMENT OF SUPPORT
                SOUTH SAN FRANCISCO BAY SHORELINE STUDY

    Background.--Congressional passage of the Water Resources 
Development Act of 1976, originally authorized the San Francisco Bay 
Shoreline Study, and Santa Clara Valley Water District (District) was 
one of the project sponsors. In 1990, the U.S. Army Corps of Engineers 
(Corps) concluded that levee failure potential was low because the 
existing non-Federal, non-engineered levees, which were routinely 
maintained by Leslie Salt Company (subsequently Cargill Salt) to 
protect their industrial interests, had historically withstood 
overtopping without failure. As a result, the project was suspended 
until adequate economic benefits could be demonstrated.
    Since the project's suspension in 1990, many changes have occurred 
in the South Bay. The State and Federal acquisition of approximately 
15,000 acres of South Bay salt ponds was completed in early March 2003. 
The proposed restoration of these ponds to tidal marsh will 
significantly alter the hydrologic regime and levee maintenance 
activities, which were assumed to be constant in the Corps' 1990 study. 
In addition to the proposed restoration project, considerable 
development has occurred in the project area. Many major corporations 
are now located within Silicon Valley's Golden Triangle, lying within 
and adjacent to the tidal flood zone. Damages from a 1 percent high 
tide are anticipated to far exceed the $34.5 million estimated in 1981, 
disrupting business operations, infrastructure, and residences. Also, 
historical land subsidence of up to 6 feet near Alviso, as well as the 
structural uncertainty of existing salt pond levees, increases the 
potential for tidal flooding in Santa Clara County.
    In July 2002, Congress authorized a review of the Final 1992 Letter 
Report for the San Francisco Bay Shoreline Study. The final fiscal year 
2004 appropriation for the Corps included funding for a new start 
Reconnaissance Study.
    Project Synopsis.--At present, large areas of Santa Clara, Alameda 
and San Mateo Counties would be impacted by flooding during a 1 percent 
high tide. The proposed restoration of the South San Francisco Bay salt 
ponds will result in the largest restored wetland on the West Coast of 
the United States, and also significantly alter the hydrologic regime 
adjacent to South Bay urban areas. The success of the proposed 
restoration is therefore dependent upon adequate tidal flood 
protection, and so this project provides an opportunity for multi-
objective watershed planning in partnership with the California Coastal 
Conservancy, the lead agency on the restoration project. Project 
objectives include: restoration and enhancement of a diverse array of 
habitats, especially several special status species; tidal flood 
protection; and provision of wildlife-oriented public access.
    Fiscal Year 2005 Funding.--$325,000 was appropriated in fiscal year 
2004 to conduct a Reconnaissance Study and initiate a Feasibility 
Study.
    Fiscal Year 2006 Funding Request.--It is requested that the 
congressional committee support an appropriation add-on of $400,000, in 
addition to the $600,000 in the administration's fiscal year 2006 
budget request, for a total of $1 million to continue the Feasibility 
Study to evaluate integrated flood protection and environmental 
restoration.

          LLAGAS CREEK PROJECT, SANTA CLARA COUNTY, CALIFORNIA
                                SUMMARY

    This statement urges the committee's support for an appropriation 
add-on of $900,000 for planning, design, and environmental updates for 
the Llagas Creek Flood Protection Project.

                          STATEMENT OF SUPPORT
                          LLAGAS CREEK PROJECT

    Background.--The Llagas Creek Watershed is located in southern 
Santa Clara County, California, serving the communities of Gilroy, 
Morgan Hill and San Martin. Historically, Llagas Creek has flooded in 
1937, 1955, 1958, 1962, 1963, 1969, 1982, 1986, 1996, 1997, 1998, and 
2002. The 1997, 1998, and 2002 floods damaged many homes, businesses, 
and a recreational vehicle park located in areas of Morgan Hill and San 
Martin. These are areas where flood protection is proposed. Overall, 
the proposed project will protect the floodplain from a 1 percent flood 
affecting more than 1,100 residential buildings, 500 commercial 
buildings, and 1,300 acres of agricultural land.
    Project Synopsis.--Under authority of the Watershed Protection and 
Flood Prevention Act (Public Law 566), the Natural Resources 
Conservation Service completed an economic feasibility study in 1982 
for constructing flood damage reduction facilities on Llagas Creek. The 
Natural Resources Conservation Service completed construction of the 
last segment of the channel for Lower Llagas Creek in 1994, providing 
protection to the project area in Gilroy. The U.S. Army Corps of 
Engineers (Corps) is currently updating the 1982 environmental 
assessment work and the engineering design for the project areas in 
Morgan Hill and San Martin. The engineering design is being updated to 
protect and improve creek water quality and to preserve and enhance the 
creek's habitat, fish, and wildlife while satisfying current 
environmental and regulatory requirement. Significant issues include 
the presence of additional endangered species including the red-legged 
frog and steelhead, listing of the area as probable critical habitat 
for steelhead, and more extensive riparian habitat than were considered 
in 1982. Project economics are currently being updated as directed by 
Corps Headquarters to determine continued project economic viability.
    Until 1996, the Llagas Creek Project was funded through the 
traditional Public Law 566 Federal project funding agreement with the 
Natural Resources Conservation Service paying for channel improvements 
and the District paying local costs including utility relocation, 
bridge construction, and right of way acquisition. Due to the steady 
decrease in annual appropriations for the Public Law 566 construction 
program since 1990, the Llagas Creek Project has not received adequate 
funding from U.S. Department of Agriculture to complete the Public Law 
566 project. To remedy this situation, the District worked with 
congressional representatives to transfer the construction authority 
from the Department of Agriculture to the Corps under the Water 
Resources Development Act of 1999 (Section 501). Since the transfer of 
responsibility to the Corps, the District has been working the Corps to 
complete the project.
    Fiscal Year 2005 Funding.--$450,000 was appropriated in fiscal year 
2005 for the Llagas Creek Flood Protection Project for planning and 
design.
    Fiscal Year 2006 Funding Recommendation.--Based upon the high risk 
of flood damage from Llagas Creek, it is requested that the 
congressional committee support an appropriation add-on of $900,000 in 
fiscal year 2006 for planning, design, and environmental updates for 
the Llagas Creek Project.
san francisquito creek flood damage reduction and ecosystem restoration 

                PROJECT, SANTA CLARA COUNTY, CALIFORNIA
                                SUMMARY

    This statement urges the committee's support for an administration 
budget request of $200,000 and an appropriation add-on of $150,000, for 
a total of $350,000 to continue a Feasibility Study of the San 
Francisquito Creek Watershed.

                          STATEMENT OF SUPPORT
SAN FRANCISQUITO CREEK FLOOD DAMAGE REDUCTION AND ECOSYSTEM RESTORATION 
                                PROJECT

    Background.--The San Francisquito Creek watershed comprises 45 
square miles and 70 miles of creek system. The creek mainstem flows 
through five cities and two counties, from Searsville Lake, belonging 
to Stanford University, to the San Francisco Bay at the boundary of 
East Palo Alto and Palo Alto. Here it forms the boundary between Santa 
Clara and San Mateo counties, California and separates the cities of 
Palo Alto from East Palo Alto and Menlo Park. The upper watershed 
tributaries are within the boundaries of Portola Valley and Woodside 
townships. The creek flows through residential and commercial 
properties, a biological preserve, and Stanford University campus. It 
interfaces with regional and state transportation systems by flowing 
under two freeways and the regional commuter rail system. San 
Francisquito Creek is one of the last natural continuous riparian 
corridors on the San Francisco Peninsula and home to one of the last 
remaining viable steelhead trout runs. The riparian habitat and urban 
setting offer unique opportunities for a multi objective flood 
protection and ecosystem restoration project.
    Flooding History.--The creeks mainstem has a flooding frequency of 
approximately once in 11 years. It is estimated that over $155 million 
in damages could occur in Santa Clara and San Mateo counties from a 1 
percent flood, affecting 4,850 home and businesses. Significant areas 
of Palo Alto flooded in December 1955, inundating about 1,200 acres of 
commercial and residential property and about 70 acres of agricultural 
land. April 1958 storms caused a levee failure downstream of Highway 
101, flooding Palo Alto Airport, the city landfill, and the golf course 
up to 4 feet deep. Overflow in 1982 caused extensive damage to private 
and public property. The flood of record occurred on February 3, 1998, 
when overflow from numerous locations caused severe, record 
consequences with more than $28 million in damages. More than 1,100 
homes were flooded in Palo Alto, 500 people were evacuated in East Palo 
Alto, and the major commute and transportation artery, Highway 101, was 
closed.
    Status.--Active citizenry are anxious to avoid a repeat of February 
1998 flood. Numerous watershed based studies have been conducted by the 
Corps, the Santa Clara Valley Water District, Stanford University, and 
the San Mateo County Flood Control District. Grassroots, consensus-
based organization, called the San Francisquito Watershed Council, has 
united stakeholders including local and State agencies, citizens, flood 
victims, developers, and environmental activists for over 10 years. The 
San Francisquito Creek Joint Powers Authority was formed in 1999 to 
coordinate creek activities with five member agencies and two associate 
members. The Authority Board has agreed to be the local sponsor for a 
Corps project and received Congressional authorization for a Corps 
reconnaissance study in May 2002.
    Fiscal Year 2005 Funding.--$100,000 was appropriated to San 
Francisquito Creek in fiscal year 2005 to initiate a Feasibility Study.
    Fiscal Year 2006 Funding Recommendation.--It is requested the 
congressional committee support an appropriation add-on of $150,000, in 
addition to the $200,000 in the administration's fiscal year 2006 
budget request, for a total of $350,000 to continue the Feasibility 
Study.

      PAJARO RIVER WATERSHED STUDY, SANTA CLARA COUNTY, CALIFORNIA
                                SUMMARY

    This statement urges the committee's support for an appropriation 
add-on of $400,000 for the Pajaro River Watershed Study.

                          STATEMENT OF SUPPORT
                      PAJARO RIVER WATERSHED STUDY

    Background.--Pajaro River flows into the Pacific Ocean at Monterey 
Bay, about 75 miles south of San Francisco. The drainage area 
encompasses 1,300 square miles in Santa Clara, San Benito, Monterey, 
and Santa Cruz counties. Potential flood damage reduction solutions 
will require cooperation between four counties and four water/flood 
management districts. There is critical habitat for endangered wildlife 
and fisheries throughout the basin. Six separate flood events have 
occurred on the Pajaro River in the past half century. Severe property 
damage in Monterey and Santa Cruz counties resulted from floods in 
1995, 1997, and 1998. Recent flood events have resulted in litigation 
claims for damages approaching $50 million. Twenty million dollars in 
U.S. Army Corps of Engineers (Corps) flood fight funds have been 
expended in recent years.
    Status.--Two separate Corps activities are taking place in the 
watershed. The first activity is a Corps reconnaissance study 
authorized by a House Resolution in May 1996 to address the need for 
flood protection and water quality improvements, ecosystem restoration, 
and other related issues. The second activity is a General Revaluation 
Report initiated in response to claims by Santa Cruz and Monterey 
Counties that the 13 mile levee project constructed in 1949 through 
agricultural areas and the city of Watsonville is deficient. The 
reconnaissance study on the entire watershed was completed by the San 
Francisco District of the Corps in fiscal year 2002. The decision to 
continue onto a cost-shared feasibility study is currently delayed 
pending the Corps resolution of the flooding problems on the lower 
Pajaro River (Murphy's Crossing to the Ocean) and defining feasibility 
study goals that meet the interests of all Authority members.
    Local Flood Prevention Authority.--Legislation passed by the State 
of California (Assembly Bill 807) in 1999 titled ``The Pajaro River 
Watershed Flood Prevention Authority Act'' mandated that a Flood 
Prevention Authority be formed by June 30, 2000. The purpose of the 
Flood Prevention Authority is ``to provide the leadership necessary to 
. . . ensure the human, economic, and environmental resources of the 
watershed are preserved, protected, and enhanced in terms of watershed 
management and flood protection.'' The Flood Prevention Authority was 
formed in July 2000 and consists of representatives from the Counties 
of Monterey, San Benito, Santa Clara, and Santa Cruz, Zone 7 Flood 
Control District, Monterey County Water Resources Agency, San Benito 
County Water District, and the Santa Clara Valley Water District. The 
Flood Prevention Authority Board sent a letter of intent to cost share 
a feasibility study of the Pajaro River Watershed to the Corps in 
September 2001.
    Fiscal Year 2005 Funding.--$50,000 was authorized in fiscal year 
2005 for the Pajaro Watershed Feasibility Study.
    Fiscal Year 2006 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $400,000 in 
fiscal year 2006 for the Pajaro River Watershed Study.
coyote/berryessa creek project, berryessa creek project element, santa 

                        CLARA COUNTY, CALIFORNIA
                                SUMMARY

    This statement urges the committee's support for an appropriation 
add-on of $1.75 million to continue with the General Reevaluation 
Report and update of environmental documents for the Berryessa Creek 
Flood Protection Project element of the Coyote/Berryessa Creek Project.

                          STATEMENT OF SUPPORT
                     COYOTE/BERRYESSA CREEK PROJECT
                    BERRYESSA CREEK PROJECT ELEMENT

    Background.--The Berryessa Creek Watershed is located in northeast 
Santa Clara County, California, near the southern end of the San 
Francisco Bay. A major tributary of Coyote Creek, Berryessa Creek 
drains 22 square miles in the City of Milpitas and a portion of San 
Jose.
    On average, Berryessa Creek floods once every 4 years. The most 
recent flood in 1998 resulted in significant damage to homes and 
automobiles. The proposed project on Berryessa Creek, from Calaveras 
Boulevard to upstream of Old Piedmont Road, will protect portions of 
the Cities of San Jose and Milpitas. The flood plain is largely 
urbanized with a mix of residential and commercial development. Based 
on the U.S. Army Corps of Engineers (Corps) 2004 report, a 1 percent or 
100-year flood could potentially result in damages of $225 million with 
depths of up to 3 feet.
    Study Synopsis.--In January 1981, the Santa Clara Valley Water 
District (District) applied for Federal assistance for flood protection 
projects under Section 205 of the 1948 Flood Control Act. The Water 
Resources Development Act of 1990 authorized construction on the 
Berryessa Creek Flood Protection Project as part of a combined Coyote/
Berryessa Creek Project to protect portions of the Cities of Milpitas 
and San Jose.
    The Coyote Creek element of the project was completed in 1996. The 
Berryessa Creek Project element proposed in the Corps' 1987 feasibility 
report consisted primarily of a trapezoidal concrete lining. This was 
not acceptable to the local community. The Corps and the District are 
currently preparing a General Reevaluation Report which involves 
reformulating a project which is more acceptable to the local community 
and more environmentally sensitive. Project features will include 
setback levees and floodwalls to preserve sensitive areas (minimizing 
the use of concrete), appropriate aquatic and riparian habitat 
restoration and fish passage, and sediment control structures to limit 
turbidity and protect water quality. The project will also accommodate 
the City of Milpitas' adopted trail master plan. Estimated total costs 
of the General Reevaluation Report work are $5.2 million, and should be 
completed in the summer of 2006.
    Fiscal Year 2005 Funding.--$338,000 was appropriated in fiscal year 
2005 for the Coyote/Berryessa Creek Flood Protection Project to 
continue the General Reevaluation Report and environmental documents 
update.
    Fiscal Year 2006 Funding Recommendation.--Based on the continuing 
threat of significant flood damage from Berryessa Creek and the need to 
continue with the General Reevaluation Report, it is requested that the 
congressional committee support an appropriation add-on of $1.75 
million for the Berryessa Creek Flood Protection Project element of the 
Coyote/Berryessa Creek Project.
                                 ______
                                 
       Prepared Statement of the Calaveras County Water District

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

    On behalf of the Calaveras County Water District, I want to thank 
the subcommittee for the opportunity to present our priorities for 
fiscal year 2006.

                    CALAVERAS COUNTY WATER DISTRICT

    Calaveras County (County) is located in the central Sierra Nevada 
foothills about 25 miles east of the Sacramento-San Joaquin Delta 
(Delta). Ground elevations within the County increase from 200 feet 
above mean sea level near the northwest part of the County to 8,170 
feet near Alpine County. It is a predominately rural county with a 
relatively sparse but rapidly developing population and limited 
agricultural and industrial development. Calaveras County is located 
within the watersheds of the Mokelumne, Calaveras, and Stanislaus 
Rivers. All three rivers flow west, through San Joaquin County into the 
Delta. Most of the County is underlain by the igneous and metamorphic 
rocks of the Sierra Nevada. Alluvial deposits of the Central Valley, 
which overlie the westward plunging Sierra Nevada, are present along an 
80-square-mile area located along the western edge of the county and 
are part of the Eastern San Joaquin County Groundwater Basin (ESJCGB). 
This on-going Calaveras County Watersheds Study under the authority of 
the Corps of Engineers' Sacramento and San Joaquin Comprehensive Basin 
Study is focused on the western part of Calaveras County.
    In the fall of 1946, the Calaveras County Water District (CCWD) was 
organized under the laws of the State of California as a public agency 
for the purpose of developing and administering the water resources in 
Calaveras County. Therefore, CCWD is a California Special District and 
is governed by the California Constitution and the California 
Government and Water Codes. CCWD is not a part of, or under the control 
of, the County of Calaveras. CCWD was formed to preserve and develop 
water resources and to provide water and wastewater service to the 
citizens of Calaveras County.
    Under State law, CCWD, through its Board of Directors, has general 
powers over the use of water within its boundaries. These powers 
include, but are not limited to: the right of eminent domain, authority 
to acquire, control, distribute, store, spread, sink, treat, purify, 
reclaim, process and salvage any water for beneficial use, to provide 
sewer service, to sell treated or untreated water, to acquire or 
construct hydroelectric facilities and sell the power and energy 
produced to public agencies or public utilities engaged in the 
distribution of power, to contract with the United States, other 
political subdivisions, public utilities, or other persons, and subject 
to the California State Constitution, levy taxes and improvements.

 COSGROVE CREEK PROJECT--UNDER THE AUTHORITY OF THE CORPS OF ENGINEERS 
                  SECTION 205 FLOOD PROTECTION PROGRAM

Current Issues
    Cosgrove Creek is an intermittent stream within the Calaveras River 
Watershed. The creek enters the lower Calaveras River downstream from 
the spillway of New Hogan Lake. During average precipitation years, 
stream flow is present from late fall through early summer. Cosgrove 
Creek is approximately 9.8 miles long and has a drainage area of 21 
square miles. The upper two thirds of the Cosgrove Creek watershed is 
used for grazing and the lower third has been subject to urban 
development. A portion of this lower reach, which passes through the 
adjacent communities of Valley Springs, La Contenta and Rancho 
Calaveras in western Calaveras County, has experienced significant 
incidents of flooding.
    The area is rapidly becoming urbanized and consists of residential 
and agricultural properties within the floodplain. The nature of the 
flood risk is overflows which occur on Cosgrove Creek and which have 
been estimated as 10- and 100-year flows of 2,220 cfs and 3,950 cfs, 
respectively. Calaveras County Public Works Department has identified 
flooding occurring along the creek three times in the past 10 years. 
The number of people within the area impacted is over 400 and a recent 
floodplain evaluation identified over 100 damageable structures in the 
100-year floodplain.

Project Objectives
    The Cosgrove Creek multi-purpose flood protection project in Valley 
Springs is to reduce flood damages, put flood flows to beneficial use, 
including sprayfields and conjunctive use of recycled water, restore 
wetlands and riparian habitat in Cosgrove Creek and provide recreation 
within the floodplain by developing suitable hiking/riding trails and 
playing fields. Current concepts for study review and formulation 
include a dike or set back levee, along with channel widening and the 
development of a detention basin to hold peak flows for beneficial use, 
along with multi-purpose use for environmental restoration and 
recreation for soccer, softball and open field sports.
    Local officials have identified the need for flood protection, 
beneficial use of peak flows and public recreation in this area and 
determined that these needs are compatible within the flood zone and 
the community will work to continue to ensure this compatibility.

Fiscal Year 2006 Request
    Five hundred fifty thousand dollars is requested to continue the 
feasibility phase of the project and initiate plans and specifications.
re-operations study of new hogan lake--under the authority of the corps 
           of engineers section 205 flood protection program

Project Need
    A re-operations study of New Hogan Lake is being requested in order 
to have the Corps evaluate re-operating New Hogan Lake to manage the 
existing storage for downstream water supply and conjunctive use.
    CCWD, which holds water rights in New Hogan Lake, believes that 
changing conditions and identified need for additional water supply in 
the developing foothills in Calaveras County could require a change in 
historic operations in the lake.
    While a broader San Joaquin and Sacramento River Basin Reservoir 
Re-operation Study is now underway by the Corps, its objective is not 
water supply and conjunctive use, nor does it focus in any detail on 
New Hogan Lake. Therefore, a limited re-operations study of New Hogan 
Lake is necessary and will be supported by key local partners.

Fiscal Year 2006 Request
    Six hundred thousand dollars is requested to complete the 
feasibility phase of the project and initiate plans and specifications.
                                 ______
                                 
        Prepared Statement of the City of St. Helena, California

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

    On behalf of the City of St. Helena, I want to thank the 
subcommittee for the opportunity to present our priorities for fiscal 
year 2006.

                           CITY OF ST. HELENA

    The City of St. Helena is located in the center of the wine growing 
Napa Valley, 65 miles north of San Francisco. The area was settled in 
1834 as part of General Vallejo's land grant. The City of St. Helena 
was incorporated as a City on March 24, 1876 and reincorporated on May 
14, 1889.
    The City from its inception has served as a rural agricultural 
center. Over the years, with the growth and development of the wine 
industry, the City has become an important business and banking center 
for the wine industry. The City also receives many tourists as a result 
of the wine industry. While, the main goal of the City is to maintain a 
small-town atmosphere and to provide quality services to its citizens, 
this is becoming increasingly difficult. Regulatory, administrative and 
resource requirements placed on the City through the listing of 
threatened and endangered species under the Endangered Species Act on 
the Napa River, as well as significant Clean Water Act requirements 
require the City with a small population base to face significant 
financial costs.
    The City of St. Helena is a General Law City and operates under the 
Council-City Manager form of government. The City Council is the 
governing body and has the power to make and enforce all laws and set 
policy related to municipal affairs. The official population of the 
City of St. Helena as of January 1, 2002 is 6,041. St. Helena is a full 
service City and encompasses an area of 4 square miles. Because of its 
size and its rural nature, St. Helena has serious infrastructure, as 
well as, flood protection and environmental needs that far exceed its 
financial capabilities.
    The Napa River flows along the north boundary of the City of St. 
Helena in northern Napa County. The overall Napa River Watershed 
historically supported a dense riparian forest and significant wetland 
habitat. Over the last 200 years, approximately 6,500 acres of valley 
floor wetlands have been filled in and 45,700 acres of overall 
watershed have been converted to urban and agricultural uses. This 
degradation of natural habitats has had a significant effect on water 
quality, vegetation and wildlife, and aquatic resources within the Napa 
River Watershed.
    Surface water quality of the Napa River is dependent upon the time 
of year, runoff from York and Sulphur Creeks, and urban area 
discharges. During the winter months when streamflow is high, 
pollutants are diluted; however, sedimentation and turbidity is high as 
well. During the summer months when streamflow is low, pollutants are 
concentrated and oxygen levels are low, thereby decreasing water 
quality. Agricultural runoff adds pesticides, fertilizer residue, and 
sometimes sediment. Discharges from urban areas can include 
contaminated stormwater runoff and treated city wastewater. The Napa 
River has been placed on the Clean Water Act 303(d) List and TMDL 
Priority Schedule due to unacceptable levels of bacteria, 
sedimentation, and nutrients. It is against this backdrop that the City 
of St. Helena faces its biggest challenges.

               ST. HELENA NAPA RIVER RESTORATION PROJECT

    The Napa River and its riparian corridor are considered Critical 
Habitat for Steelhead and Salmon Recovery. The Steelhead is one of 6 
Federally listed threatened and endangered species within the Napa 
River and its adjoining corridor which requires attention. Current 
conditions are such that natural habitats and geomorphic processes of 
the Napa River are highly confined with sediment transport and 
geomorphic work occurring in a limited area of the streambed and 
channel banks. Napa River's habitat for the steelhead is limited in its 
ability to provide prime spawning habitat. Limitations include: (1) 
urbanization removing significant amounts of shading and cover 
vegetation within and adjacent to the river; and (2) a detrimental lack 
of pool habitat. Encroachment and channelization of Napa River have 
degraded riparian habitat for rearing, resident, and migratory fish and 
wildlife. The lack of riparian cover, increasing water temperature and 
sedimentation in the river, has resulted in poor water quality. These 
changes have reduced the project area's ability to support the re-
establishment of listed species.
    In an effort to address these Federal environmental issues, the St. 
Helena Napa River Restoration Project, a Section 206 Aquatic Ecosystem 
Restoration Project, was identified in the Napa Valley Watershed 
Management Feasibility Study in April of 2001 as a specific opportunity 
for restoration. The project would restore approximately 3 miles (20 
acres) of riparian habitat and improve the migratory capacity of 
Federally listed threatened and endangered species, providing greater 
access to rearing, resident and migratory habitats in the 80 square 
mile watershed above the project area.
    The project will interface with and complement the City of St. 
Helena's multiple objective flood project, the St. Helena Flood 
Protection and Flood Corridor Restoration Project, which will provide 
flood damage reduction through restoration and re-establishment of the 
natural floodplain along the project reach, setting back levees and the 
re-creation and restoration of a natural floodway providing high value 
riparian forest.
    This Section 206 project is necessary to ensure and improve the 
viability of Federal and State listed species by providing rearing, 
resident and migratory habitat in the project's 3 mile stream corridor. 
The project will also work to improve area habitat to benefit the 
migration of steelhead to high value fisheries habitat in upper 
watershed channel reaches. In an effort to build on recent geomorphic 
and riparian studies on the Napa River, the Corps will use these 
efforts from Swanson Hydrology and Geomorphology and Stillwater Science 
to secure baseline information for this project.
    The City of St. Helena respectfully requests the committee's 
support for $600,000 for completing the Detailed Project Report and 
initiating plans and specifications for the St. Helena Napa River 
Restoration Project under the Corps' Section 206 Aquatic Ecosystem 
Restoration Program.

             YORK CREEK DAM REMOVAL AND RESTORATION PROJECT

    York Creek originates from the Coast Range on the western side of 
the Napa Valley Watershed at an elevation of approximately 1,800 feet 
and flows through a narrow canyon before joining the Napa River 
northeast of St. Helena. York Creek Dam on York Creek has been 
identified as a significant obstacle to passage for federally listed 
Steelhead in the Central California Coast. In fact, it has been 
determined that York Creek Dam is a complete barrier to upstream fish 
migration. In addition, since the City of St. Helena has owned York 
Creek Dam, there has been a number of silt discharges from the dam into 
York Creek that have caused fish kills.
    Under the Corps of Engineers' Section 206 Authority, a study is 
underway to remove the dam structure and to restore the creek in an 
effort to improve fish passage and ecological stream function for this 
Napa River tributary. Alternatives to be investigated and pursued 
include complete removal of York Creek Dam, appurtenances and 
accumulated sediment, re-grading and restoring the creek through the 
reservoir area. Rather than merely removing the dam and accumulated 
sediments, alternatives under consideration would use a portion of the 
material to re-grade the reservoir area to simulate the configuration 
of the undisturbed creek channel upstream. Material could also be used 
to fill in and bury the spillway and to fill in the scour hole 
immediately downstream of the spillway. Use of material on site will 
greatly reduce hauling and disposal costs, as well as recreating a more 
natural creek channel through the project area.
    The revegetation plan for the site following removal of the earthen 
dam will restore a self-sustaining native plant community that is 
sufficiently established to exclude nonnative invasive plants. 
Revegetation will replace vegetation that is removed due to 
construction and stabilize sediments in the stream channel riparian 
corridor and upper bank slopes. The species composition of the 
revegetated site will be designed to match that of (relatively) 
undisturbed sites both above and below the project site. In terms of 
expected outcomes for the project, the removal of York Creek Dam will 
open an additional 2 miles of steelhead habitat upstream of the dam, 
and the channel restoration will reestablish natural channel geomorphic 
processes and restore riparian vegetation.
    The City of St. Helena respectfully requests the committee's 
support for $350,000 in appropriations under the Corps of Engineers' 
Section 206 Aquatic Ecosystem Restoration Program, so that the efforts 
to allow the continuation of the Detailed Project Report can stay on 
schedule for the York Creek Dam Removal and Restoration Project.
                                 ______
                                 
    Prepared Statement of the American Shore and Beach Preservation 
                              Association

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

    Mr. Chairman and members of the subcommittee, I appreciate this 
opportunity to present The Nature Conservancy's recommendations for the 
Army Corps of Engineers' and Department of Energy's fiscal 2006 
appropriations. We understand and appreciate that the subcommittee's 
ability to fund programs within its jurisdiction is limited by the 
tight budget situation but appreciate your consideration of these 
important programs.
    The Nature Conservancy is an international, non-profit organization 
dedicated to the conservation of biological diversity. Our mission is 
to preserve the plants, animals and natural communities that represent 
the diversity of life on Earth by protecting the lands and waters they 
need to survive. The Conservancy has about 1,000,000 individual members 
and 1,900 corporate associates. We have programs in all 50 States and 
in 27 foreign countries. We have protected more than 15 million acres 
in the United States, approximately 102 million acres and 5,000 river 
miles with local partner organizations worldwide. The Conservancy owns 
and manages 1,400 preserves throughout the United States--the largest 
private system of nature sanctuaries in the world. Sound science and 
strong partnerships with public and private landowners to achieve 
tangible and lasting results characterize our conservation programs.
    The Conservancy urges the subcommittee to support the following 
appropriation levels in the fiscal 2006 Energy and Water Development 
Appropriation bill:

                    CONSTRUCTION GENERAL PRIORITIES

    Section 1135: Project Modification for the Improvement of the 
Environment.--The Section 1135 Program authorizes the Army Corps of 
Engineers (Corps) to restore areas damaged by existing Corps projects. 
This program permits modification of existing dams and flood control 
projects to increase habitat for fish and wildlife without interrupting 
a project's original purpose. This program continues to be in extremely 
high demand with needs far greater than the $25 million appropriated in 
fiscal 2005. This financial shortfall has stopped many important 
projects. The Conservancy is the non-Federal cost share partner on six 
ecologically significant Section 1135 restoration projects. These 
projects include Spunky Bottoms, a floodplain restoration/reconnection 
project on the Illinois River, for which we seek an earmark in the 
amount of $200,000 in fiscal 2005; and McCarran Ranch a stream meander 
and riparian habitat restoration project on the Truckee River in NV 
which is seeking $3.7 million to continue construction. The Conservancy 
strongly encourages full funding of $25 million for the Section 1135 
program in fiscal 2006, an increase over the President's $15.0 million 
request.
    Section 206: Aquatic Ecosystem Restoration.--Section 206 is a newer 
Corps program that authorizes the Corps to restore aquatic habitat 
regardless of past activities. This is another popular restoration 
program with demand far exceeding the $25 million appropriated for 
fiscal 2005. The Conservancy is the non-Federal cost-share partner on 
11 Section 206 projects. These projects restore important fish and 
wildlife habitats. Ecologically significant projects for which the 
Conservancy is the non-Federal sponsor include: Mad Island, TX, a 
coastal restoration project that needs $1.475 million to continue 
construction; Kanakakee Sands, IN, riparian and wetland prairie 
restoration that seeks $1.2 million for continuing construction; and 
Camp Creek, OR, a headwaters stream restoration project that needs 
$175,000 to continue the feasibility study. The Conservancy strongly 
encourages full funding of $25 million for the Section 1135 program in 
fiscal 2006, an increase over the President's $15.0 million request.
    Upper Mississippi River System Environmental Management Program.--
The Environmental Management Program (EMP) is an important Corps 
program that constructs habitat restoration projects and conducts long-
term resource monitoring of the Upper Mississippi and Illinois Rivers. 
The EMP operates as a unique Federal-State partnership affecting five 
States (Illinois, Iowa, Minnesota, Missouri, and Wisconsin). The EMP 
was reauthorized in WRDA 1999 with an increased authorization in the 
amount of $33.2 million. The Conservancy supports the President's 
request for full funding of $33.2 million for fiscal 2006.
    Estuary Habitat Restoration Program.--The Estuary Habitat 
Restoration Program was established with the intent to restore 1 
million acres of estuary habitat by 2010. This multi-agency program 
will promote projects that result in healthy ecosystems that support 
wildlife, fish and shellfish, improve surface and groundwater quality, 
quantity, and flood control; and provide outdoor recreation. The 
Conservancy supports $20 million in fiscal 2006. This is an increase 
over the President's budget request of $5.0 million.
    Florida Keys Water Quality Program.--The Florida Keys Water Quality 
Program is a unique restoration program designed to protect the Florida 
Keys' fragile marine and coral ecosystem. This nationally significant 
marine ecosystem is being impacted by excessive nutrients due to storm 
and wastewater pollution. This program is cost shared with State and 
local interests to repair and improve the storm and wastewater 
treatment facilities on the Florida Keys to reduce the harmful levels 
of nutrient pollution. The Nature Conservancy, and it's partners--the 
State of Florida, Florida Keys Aqueduct Authority, Monroe County, City 
of Islamorada, City of Layton, City of Key Colony Beach, City of 
Marathon, and City of Key West--support $30 million for fiscal 2006. 
This program was not included in the President's budget.

                    GENERAL INVESTIGATION PRIORITIES

    Middle Potomac River Watershed Study.--The preliminary Middle 
Potomac Watershed Section 905(b) analysis identified 14 feasibility 
studies to address flood control needs and environmental restoration 
opportunities within the Middle Potomac Watershed. The study team 
identified three study goals for the development of project management 
plans: (1) to conserve, restore, and revitalize the Potomac River 
basin; (2) to develop sustainable watershed management plans; and (3) 
to cooperate with and support public and private entities in developing 
watershed management plans. The Conservancy urges the committee to 
provide $500,000 in fiscal 2006 to continue the development of these 
plans. This study is not included in the President's budget.
    Savannah Basin Comprehensive Water Resources Study.--The Savannah 
Basin Comprehensive Water Resources Study will enable the Corps and 
other partners to gain a better understanding of the influence of 
hydrologic processes such as timing, duration, frequency, magnitude, 
and rate of change of river flows on the river's ecology. The Nature 
Conservancy, under a cooperative agreement funded by the Corps and its 
cost share partners, Georgia and South Carolina, developed a set of 
ecosystem flow recommendations for the Savannah River Basin. A test 
release of the new flow recommendation was conducted March 15-18, 2004 
and again in fall 2005. The Conservancy supports $436,000 in fiscal 
2006. This study is not included in the President's Budget.

                          DEPARTMENT OF ENERGY

    Carbon Sequestration Technology Area.--The Carbon Sequestration 
Technology Area of the Strategic Center for Coal at Department of 
Energy's (DOE) National Energy Technology Laboratory has been used to 
refine the tools and methods used to measure carbon emissions 
reductions and uptake from improved land management. These tools and 
methods are being tested on-the ground in Conservancy conservation 
priority areas in Brazil, Belize, Peru, Chile and the United States. 
The Conservancy is soon launching two more DOE funded projects to test 
remote carbon measurement techniques in Northern California and another 
study to evaluate the cost and location of carbon emissions reduction 
and uptake opportunities in eleven Northeastern States. These projects 
are producing cutting-edge technologies and methods that will lead to 
quantifiable and verifiable reductions in greenhouse gases. The 
Conservancy supports the President's request of $66,228,000, for 
continued and increased funding for research.
    Thank you for the opportunity to present The Nature Conservancy's 
comments on the Energy and Water Appropriations bill. We recognize that 
you receive many worthy requests for funding each year and appreciate 
your consideration of these requests and the generous support you have 
shown for these and other conservation programs in the past. If you 
have any further questions, please do not hesitate to contact me or Ted 
Illston, Senior Policy Advisor.
                                 ______
                                 
     Prepared Statement of the Green Brook Flood Control Commission

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



                                 ______
                                 

                       DEPARTMENT OF THE INTERIOR

                         Bureau of Reclamation

          Prepared Statement of Mid-Dakota Rural Water System

                    FISCAL YEAR 2006 FUNDING REQUEST

    The Mid-Dakota Project is requesting an appropriation of $5.015 
million provided through the Bureau of Reclamation's project 
construction program for fiscal year 2006. As with our past submissions 
to this subcommittee, Mid-Dakota's fiscal year 2006 request is based on 
a detailed analysis of our ability to proceed with construction during 
the fiscal year. In all previous years, Mid-Dakota has fully obligated 
its appropriated funds, including Federal, State, and local, and could 
have obligated significantly more were they available.
    An appropriation of $5.015 million for fiscal year 2006 will 
complete the Federal Government's funding obligation for the initial 
construction of the authorized Project. It is with pleasure that Mid-
Dakota agrees with President Bush's $5.015 million request for Mid-
Dakota in fiscal year 2006.

            TENTATIVE FISCAL YEAR 2006 CONSTRUCTION SCHEDULE

    Construction proposed for fiscal year 2006 would complete pipelines 
and appurtenances for the Mid-Dakota Project as is currently authorized 
pursuant to Public Law 102-575 Title XIX. Construction activities will 
be generally comprised of those construction projects begun in fiscal 
year 2005.
    Total project expenditures are currently greater than the amount 
remaining in authorized funds by $1 million to $2 million dollars. If a 
funding shortfall is realized, Mid-Dakota will examine its options for 
funding the shortfall when the amount is known.

                   IMPACTS OF FISCAL YEAR 2006 AWARD

    The most obvious impact of any significant reduction from Mid-
Dakota's request will be the potential for delay of construction of one 
or more Project components. The $5.015 million will allow for the 
completion of the Mid-Dakota Project as it is currently authorized. The 
requested appropriation will provide the necessary funds to proceed 
with construction of contracts already awarded and underway.

                       HISTORY OF PROJECT FUNDING

    The Project was authorized by Congress and signed into law by 
President George H.W. Bush in October 1992. The Federal authorization 
for the project totaled $100 million (1989 dollars) in a combination of 
Federal grant and loan funds (grant funds may not exceed 85 percent of 
Federal contribution). The State authorization was for $8.4 million 
(1989 dollars). A breakdown of Project cost ceilings and expenditures 
are provided on the following table(s):

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


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

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

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

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

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

                                CLOSING

    Mid-Dakota is aware of the tough funding decisions that face the 
Energy and Water Appropriations Subcommittee and we appreciate the 
difficult decisions the subcommittee must make. We strongly urge the 
subcommittee to look closely at the Mid-Dakota Project and recognize 
the need that exists. Consider the exceptionally high level of local 
and State support. And finally consider the fact that fully funding the 
fiscal year 2006 appropriation request as submitted by the President 
and by Mid-Dakota should fully fund the initial authorized components 
of the Mid-Dakota Project.
    Again, we thank the subcommittee for its strong support, both past 
and present.
                                 ______
                                 
                    Letter From the State of Wyoming
                                   Cheyenne, WY, February 25, 2005.
The Honorable Pete V. Domenici,
Chairman,
The Honorable Harry Reid,
Ranking Member,
Energy and Water Development Subcommittee, Committee on Appropriations, 
        United States Senate, 127 Dirksen Senate Office Building, 
        Washington, DC.
    Dear Chairman Domenici and Senator Reid: I write to request your 
support for an appropriation in fiscal year 2006 of $2,529,000 to the 
Bureau of Reclamation within the budget line item entitled ``Endangered 
Species Recovery Implementation Program'' for the Upper Colorado 
Region. The President's recommended budget for fiscal year 2006 
includes this line-item amount. The funding designation we seek is as 
follows: $1,401,000 for construction activities for the Upper Colorado 
River Endangered Fish Recovery Program; $572,000 for the San Juan River 
Basin Recovery Implementation Program; and $556,000 for Fish and 
Wildlife Management and Development.
    These highly successful, cooperative programs are ongoing 
partnerships among the States of Colorado, New Mexico, Utah and 
Wyoming, Indian tribes, Federal agencies and water, power and 
environmental interests. The programs' objectives are to recover 
endangered fish species while water use and development proceeds in 
compliance with the Endangered Species Act. These recovery programs 
have become national models for collaboratively working to recover 
endangered species while addressing water needs to support growing 
western communities in the Upper Colorado River Basin region of the 
Intermountain West. Since 1988, these programs have facilitated ESA 
Section 7 consultation (without litigation) for over 800 Federal, 
tribal, State and privately managed water projects depleting 
approximately 2.5 million acre-feet of water per year.
    The requested fiscal year 2006 appropriation will allow the Upper 
Colorado River Endangered Fish Program to proceed with construction of 
additional fish passage structures on the Green and Colorado Rivers to 
provide access to historic habitat upstream of existing diversion dams. 
The requested funding for the San Juan River Recovery Program will be 
used for contracts for construction and cooperative agreements with the 
State of New Mexico to provide and protect instream flows, fish 
ladders, flooded bottom land restoration, propagation facilities, 
stocking efforts, nonnative and sportfish management activities.
    The enactment of Public Law 106-392, as amended by Public Law 107-
375, authorized the Federal Government to provide up to $46 million of 
cost sharing for these two ongoing recovery programs' remaining capital 
construction projects. Raising and stocking of the endangered fish 
produced at program hatchery facilities, restoring floodplain habitat 
and fish passage, regulating and supplying instream habitat flows, 
installing diversion canal screens and controlling nonnative fish 
populations are key components of the programs' ongoing capital 
construction projects. Subsection 3(c) of Public Law 106-392 authorizes 
the Secretary of the Interior to accept up to $17 million of 
contributed funds from Colorado, Wyoming, Utah and New Mexico, to 
expend such contributed funds as if appropriated for these projects; 
and provides for an additional $17 million to be contributed from 
revenues derived from the sale of Colorado River Storage Project (CRSP) 
hydroelectric power. This substantial non-Federal cost-sharing funding 
demonstrates the strong commitment and effective partnerships embodied 
in both of these successful programs. The requested Federal 
appropriations are critically important to these efforts moving 
forward.
    The past support and assistance of your subcommittee has greatly 
facilitated the success of these multi-State, multi-agency programs. On 
behalf of the citizens of Wyoming, I thank you for that support and 
request the subcommittee's assistance for fiscal year 2006 funding to 
ensure the Bureau of Reclamation's continuing financial participation 
in these vitally important programs.
            Best Regards,
                                          Dave Freudenthal,
                                                          Governor.
                                 ______
                                 
               Letter From the Wyoming Water Association
                                      Cheyenne, WY, March 13, 2005.
The Honorable Pete V. Domenici,
Chairman,
The Honorable Harry Reid,
Ranking Member,
Energy and Water Development Subcommittee, Committee on Appropriations, 
        United States Senate, 127 Dirksen Senate Office Building, 
        Washington, DC.
    Dear Chairman Domenici and Senator Reid: On behalf of the members 
of the Wyoming Water Association, I am writing to request your support 
for an appropriation in fiscal year 2006 of $2,529,000 to the Bureau of 
Reclamation within the budget line item entitled ``Endangered Species 
Recovery Implementation Program'' for the Upper Colorado Region. The 
President's recommended budget for fiscal year 2006 has included this 
line-item amount. Founded in 1933, the Wyoming Water Association (WWA) 
is a Wyoming non-profit corporation and voluntary organization of 
private citizens, elected officials, and representatives of business, 
government agencies, industry and water user groups and districts. The 
Association's objective is to promote the development, conservation, 
and utilization of the water resources of Wyoming for the benefit of 
Wyoming people. The WWA provides the only statewide uniform voice 
representing all types of water users within the State of Wyoming and 
encourages citizen participation in decisions relating to multi-purpose 
water development, management and use.
    Consistent with the requests made by the Governor of Wyoming, the 
funding designation the Wyoming Water Association seeks is as follows: 
$1,401,000 for construction activities for the Upper Colorado River 
Endangered Fish Recovery Program; $572,000 for the San Juan River Basin 
Recovery Implementation Program; and $556,000 for Fish and Wildlife 
Management and Development.
    These highly successful, cooperative programs are ongoing 
partnerships among the States of Colorado, New Mexico, Utah and 
Wyoming, Indian tribes, Federal agencies and water, power and 
environmental interests. The programs' objectives are to recover 
endangered fish species while water use and development proceeds in 
compliance with the Endangered Species Act. These recovery programs 
have become national models for collaboratively working to recover 
endangered species while addressing water needs to support growing 
western communities in the Upper Colorado River Basin region of the 
Intermountain West. Since 1988, these programs have facilitated ESA 
Section 7 consultation (without litigation) for over 800 Federal, 
tribal, State and privately managed water projects depleting 
approximately 2.5 million acre-feet of water per year.
    The requested fiscal year 2006 appropriation will allow the Upper 
Colorado River Endangered Fish Program to proceed with construction of 
additional fish passage structures on the Green and Colorado Rivers to 
provide access to historic habitat upstream of existing diversion dams. 
The requested funding for the San Juan River Recovery Program will be 
used for contracts for construction and cooperative agreements with the 
State of New Mexico to provide and protect instream flows, fish 
ladders, flooded bottom land restoration, propagation facilities, 
stocking efforts, nonnative and sportfish management activities. These 
programs' substantial non-Federal cost-sharing funding demonstrates the 
strong commitment and effective partnerships embodied in both of these 
successful programs. The requested Federal appropriations are 
critically important to these efforts moving forward.
    The past support and assistance of your subcommittee has greatly 
facilitated the success of these multi-State, multi-agency programs. On 
behalf of the members of the Wyoming Water Association, I thank you for 
that support and request the subcommittee's assistance for fiscal year 
2006 funding to ensure the Bureau of Reclamation's continuing financial 
participation in these vitally important programs.
            Sincerely yours,
                                           John W. Shields,
                                               Executive Secretary.
                                 ______
                                 
   Letter From the Metropolitan Water District of Southern California
                           Los Angeles, California, March 18, 2005.
The Honorable Pete V. Domenici,
Chairman, Appropriations Subcommittee on Energy and Water Development, 
        SD-127 Dirksen Senate Office Building, Washington, DC 20510.
    Dear Chairman Domenici: The Metropolitan Water District of Southern 
California is writing in support of the following Federal programs, in 
priority order, under the Bureau of Reclamation and Department of 
Energy's budgets that we believe are deserving of your subcommittee's 
support during the fiscal year 2006 budget process:
  --(1) Colorado River Front Work and Levee System, Water Management 
        Reservoir Near the All American Canal Subactivity.--$30 
        million;
  --(2) Yuma Area Projects, Excavating Sediments Behind Laguna Dam.--
        $7.6 million;
  --(3) California Bay-Delta Restoration.--$35 million;
  --(4) Lower Colorado River, Water and Energy Management.--$300,000;
  --(5) Colorado River Basin Salinity Control--Title II Basin Wide 
        Program.--$17.5 million; and,
  --(6) Atlas Mill Tailings Removal in Moab, Utah.--$28 million.
    The Metropolitan Water District of Southern California is a public 
agency that was created in 1928 to meet the supplemental water demands 
of people living in what is now portions of a six-county region of 
southern California. Today, the region served by Metropolitan includes 
approximately 18 million people living on the coastal plain between 
Ventura and the international boundary with Mexico. It is an area 
larger than the State of Connecticut and, if it were a separate nation, 
would rank in the top ten economies of the world.
    Included in our region are more than 300 cities and unincorporated 
areas in the counties of Los Angeles, Orange, San Diego, Riverside, San 
Bernardino, and Ventura. We provide over half of the water used in our 
5,200-square-mile service area. Metropolitan's water supplies come from 
the Colorado River via our Colorado River Aqueduct and from northern 
California via the State Water Project's California Aqueduct.
    We are sensitive to the magnitude of these program requests during 
tight budget times. We are also committed to supporting these Federal 
programs as they are critical to meeting the challenges of water 
resources management and source water quality protection throughout 
California. These programs help to ensure long-term water security and 
meet the water quality requirements necessary to provide our member 
agencies with a safe, reliable water supply. We strongly urge your 
support for these funding requests.

               COLORADO RIVER FRONT WORK AND LEVEE SYSTEM

Water Management Reservoir Near the All-American Canal Subactivity
    Reclamation is completing a multi-phased study quantifying the need 
and options for regulatory storage to improve Colorado River management 
downstream of Lake Mead. Reclamation has concluded that locating up to 
a 10,000 acre-foot capacity water management reservoir near the All-
American Canal, near Drop 2, 15 miles east of the Imperial Valley. The 
reservoir's location would be of great benefit to the Colorado River 
Basin States. Benefits that include:
  --conservation of reservoir system storage;
  --improving river regulation and water delivery scheduling;
  --providing opportunities for water conservation;
  --storage and conjunctive use programs; and,
  --setting the stage for new cooperative water supply and water 
        quality management endeavors with Mexico.
    Reclamation funding of $30 million is needed in fiscal year 2006 in 
order to obtain permits, acquire land, clear and prepare the site, 
design the reservoir and its inlet and outlet canals, and procure 
materials for construction.
    This is one of four distinct subactivities to be undertaken in 2006 
under the Water and Energy Management and Development Activity of the 
Colorado River Front Work and Levee System Project.
    The President's fiscal year 2006 request for this Activity is 
$2.419 million. Metropolitan requests that Reclamation's funding for 
the Water Management Reservoir near the All American Canal subactivity 
be augmented so as to provide $30 million for this work to progress 
sufficiently.
Yuma Area Projects, Excavating Sediments Behind Laguna Dam
    While work on a reservoir near the All-American Canal proceeds, 
there is an immediate need to restore limited Colorado River regulatory 
storage capacity downstream of Parker Dam. This can be partly 
accomplished by excavating sediments that have accumulated behind 
Laguna Dam since its completion in 1909. Reclamation funding of $7.6 
million is needed in fiscal year 2006 to complete environmental 
compliance and procurement and begin dredging behind Laguna Dam.
    This subactivity under the Yuma Area Projects, Facilities 
Maintenance and Rehabilitation activity would restore 1,100 acre-feet 
of storage behind Laguna Dam. Not only would this enhance the ability 
to regulate flows arriving at Imperial Dam, it would capture and re-
regulate the water periodically released for the proper operation of 
Imperial Dam, benefiting both the Colorado River Basin States and 
Mexico.
    The President's fiscal year 2006 request for the sediment control 
subactivity is $2.6 million. Metropolitan requests that Reclamation's 
funding for sediment control be augmented so as to provide $7.6 million 
for the work to excavate sediments from behind Laguna Dam.
    The construction of a new regulating reservoir, and dredging 
sediments behind an existing dam will critically improve water delivery 
efficiencies and prevent the loss of up to 200,000 acre-feet per year 
from Colorado River reservoir storage.

                   CALIFORNIA BAY-DELTA AUTHORIZATION

    Metropolitan strongly recommends your support of a Reclamation 
fiscal year 2006 budget that includes $74,000,000 in funding for the 
CALFED Bay-Delta Program. This includes $35,000,000 in new funding 
authorized in Public Law 108-361. Metropolitan also supports the 
Association of California Water Agencies additional request of 
$28,000,000 for near-term, high priority projects. This Federal funding 
is needed to supplement the State's cost share of implementing CALFED-
related programs, including supply reliability, water quality, 
ecosystem restoration, water transfers, watershed protection, water use 
efficiency, science, and coordination.

           LOWER COLORADO RIVER, WATER AND ENERGY MANAGEMENT

    Metropolitan requests that Reclamation receive $300,000 to conduct 
a study to identify the concurrent and overlapping government programs 
that are aimed at improving resource efficiency, and to create a 
strategic map for integrating the individual efforts to realize better 
integration and identify cross-program beneficiaries. Through an 
assembled taskforce, the study will get agencies to look beyond their 
borders and share their strategy and vision, which will reap 
significant working benefits in the pursuit of resource efficiency.

        COLORADO RIVER BASIN SALINITY CONTROL PROGRAM--TITLE II

    We ask for your support for additional Federal funding for 
Reclamation's Colorado River Basin Salinity Control Program (Salinity 
Control Program)--Title II. We request that Congress appropriate $17.5 
million for implementation of the Title II-Basin Wide Program, an 
increase of $7.5 million from the President's request of $10 million, 
to ensure water quality protection for this important source of water 
supply to Arizona, California, and Nevada through construction of off-
farm measures to control Colorado River salinity. Concentrations of 
salts in the river cause hundreds of millions in damage in the United 
States.

                      ATLAS MINE TAILINGS CLEANUP

    In cooperation with the Utah State Environmental Quality 
Department, the Metropolitan Water District supports the President's 
budget request of $28 million in fiscal year 2006 for the purposes of 
moving forward with the clean-up of uranium mine tailings at the Atlas 
Site in Moab, Utah. Metropolitan stands firmly behind the Governor of 
Utah's position that these mine tailings must be removed from their 
dangerously close proximity to the Colorado River, and that by 
supporting that position, Metropolitan advocates removal as the only 
acceptable solution to this issue.
    We look forward to working with your office to further advance 
sound water management activities in California. Please contact 
Metropolitan's Executive Legislative Representative in Washington, DC, 
if we can answer any questions or provide additional information.
            Sincerely,
                                           Gilbert F. Ivey,
                                   Interim Chief Executive Officer.
                                 ______
                                 
   Prepared Statement of the New Mexico Interstate Stream Commission
  colorado river basin salinity control program, bureau of reclamation

                                SUMMARY

    This statement is submitted in support of fiscal year 2006 
appropriations for the Colorado River Basin salinity control program of 
the Department of the Interior's Bureau of Reclamation. Congress 
designated the Bureau of Reclamation to be the lead agency for salinity 
control in the Colorado River Basin by the Colorado River Basin 
Salinity Control Act of 1974, and reconfirmed the Bureau of 
Reclamation's role by passage of Public Law 104-20. A total of $17.5 
million is requested for fiscal year 2006 to implement the authorized 
Colorado River salinity control program of the Bureau of Reclamation. 
The President's appropriation request of $10 million is inadequate 
because studies have shown that the implementation of the salinity 
control program has fallen behind the pace needed to control damages 
from salinity. An appropriation of $17.5 million for Reclamation's 
salinity control program is necessary to protect water quality 
standards for salinity and to prevent unnecessary levels of economic 
damage from increased salinity levels in water delivered to the Lower 
Basin States of the Colorado River. In addition, funding for operation 
and maintenance of existing projects and sufficient general 
investigation funding is required to identify new salinity control 
opportunities.

                               STATEMENT

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

   U.S. BUREAU OF RECLAMATION AND WESTERN AREA POWER ADMINISTRATION 
                                PROGRAMS

    The Colorado River Energy Distributors Association (CREDA) 
appreciates this opportunity to submit its views on recommendations in 
the President's fiscal year 2006 budget proposal that affect Bureau of 
Reclamation (Bureau) and Western Area Power Administration (Western) 
programs in the Energy and Water Development Act of 2006. Our testimony 
will address three issues:
  --Our opposition to the proposal to change cost-based rates for power 
        generated by Federal power marketing administrations (PMAs) to 
        market rates;
  --Our request for the inclusion of clarifying language to fund 
        additional, post-9/11 security measures at multi-purpose 
        Federal dams from non-reimbursable appropriations; and
  --Our opposition to the proposal to fund the Utah Mitigation and 
        Conservation fund from reimbursable power revenues.
    CREDA is a non-profit, regional organization representing 155 
consumer-owned, non-profit municipal and rural electric cooperatives, 
political subdivisions, irrigation and electrical districts and tribal 
utility authorities that purchase hydropower resources from the 
Colorado River Storage Project (CRSP). CRSP is a multi-purpose Federal 
project that provides flood control, water storage for irrigation, 
municipal and industrial purposes; recreation and environmental 
mitigation, in addition to the generation of electricity. CREDA was 
established in 1978 and serves as the ``voice'' of CRSP contractor 
members in dealing with resource availability and affordability issues. 
CREDA represents its members in dealing with the Bureau--as the owner 
and operator of the CRSP--and with Western--as the marketing agency for 
CRSP hydropower.
    CREDA members serve over 4 million electric consumers in six 
western States: Arizona, Colorado, Nevada, New Mexico, Utah, and 
Wyoming. CREDA's member utilities purchase more than 85 percent of the 
power produced by the CRSP.

                  MARKET-BASED RATES FOR FEDERAL POWER

    The administration's fiscal year 2006 budget includes a 
recommendation that rates for hydropower marketed by the four PMAs 
(Western Area, Bonneville, Southwestern and Southeastern), which are 
currently cost-based, be increased by 20 percent per year until they 
reach ``market'' rates.
    If implemented, this proposal would increase rates considerably for 
customers served by CREDA members and consumers in 27 other States and 
have a significant negative impact on the economies of many regions of 
the country. CREDA members serve their consumers through a variety of 
resource portfolios. Some rely on a combination of the Federal 
resource, self-generation, and wholesale market purchases. Many of 
these utilities have already experienced significant cost impacts due 
to wholesale market conditions and long-term drought, which has reduced 
the availability of Federal hydropower and required customers and the 
PMAs to replace Federal hydropower purchases with higher cost market 
resources. In fact, since 1999, Western's CRSP purchased power costs, 
required as a result of drought, extreme market conditions and 
environmental experimentation, total $484,466,000.
    The budget documents accompanying the market-based rate proposal 
indicate that it is based on assertions made in an earlier Government 
Accountability Office (GAO) report, which claimed that the PMAs are 
subsidized by taxpayers. This claim is not true.
    Federal power customers repay 100 percent of the capital costs 
associated with the power function of Federal dams, with interest. They 
also pay all costs of operation and maintenance of PMA generation and 
transmission facilities. In addition, power customers pay the lion's 
share of the costs of irrigation facilities--those costs that are 
beyond the irrigators' ``ability to pay.''
    Further, in the case of CRSP, power revenues have contributed over 
$179 million to operations of the Glen Canyon Adaptive Management 
Program; approximately $18 million to the Colorado River Salinity 
Control Program and over $40 million for the Upper Colorado River Basin 
and San Juan Basin Endangered Fish Recovery Programs. CRSP power 
customer contributions to these non-power programs total about $20 
million per year.
    Power marketed by the PMAs is generally low-cost because its fuel 
source is falling water. Unlike other conventional power plant 
resources--nuclear, coal and gas--hydropower does not have any fuel 
costs. This fact and the fact that most of the Federal projects were 
built decades ago account for the favorable economics of PMA power. 
Private power companies that have hydroelectric resources enjoy the 
same favorable economics for those facilities.
    It is also important to recognize that PMA generators are not 
merchant generators that operate for profit to take advantage of market 
conditions. At all Federal multi-purpose projects, power generation is 
an incident to the other purposes of the project, such as flood 
control, water supply and, at some projects, navigation and treaty 
obligations. There is a great deal of law that would have to be 
overridden to implement this proposal. This is not a proposal which can 
be implemented without substantive legislation.
    We urge the subcommittee to ensure that this proposal does not 
become law.

     COSTS OF INCREASED SECURITY AT FEDERAL MULTI-PURPOSE PROJECTS

    Following the attacks of September 11, 2001, the Bureau embarked 
upon an aggressive program to enhance the security of Federal dams to 
protect the facilities against terrorist attacks. Based on historical 
precedent dating to World War II, the Bureau determined in 2002 that 
that the costs of increased security measures should remain a non-
reimbursable obligation of the Federal Government.
    For fiscal year 2003, the Bureau received $28.4 million in the 
Energy and Water Development Appropriations Act (Public Law 108-7) and 
an additional $25 million in supplemental appropriations. The Bureau 
also received $28.5 million for increased security costs in the Energy 
and Water Development Appropriations Act of 2004 (Public Law 108-137).
    Due to budget constraints, the President's fiscal year 2005 budget 
directed the Bureau to recover $12 million from entities that benefit 
from the multi-purpose projects. Of that amount, power customers were 
asked to pay an estimated 94 percent. Federal power customers objected, 
citing legislative precedent and the fact that the additional security 
measures are intended to protect all features of the Federal multi-
purpose projects, not just the power features, from attack and 
destruction (Power users agree that costs of pre-9/11 security measures 
attributable to the power function should be paid by power customers). 
In fact, in the event of a catastrophic failure of these projects, the 
power function could most likely be the purpose least impacted.
    Further, power users note that the Bureau's decision to allocate a 
majority of the reimbursable costs to power users was not based on any 
objective or risk analysis of the benefits of the security upgrades.
    Congress has spoken annually regarding treatment of these costs. In 
report language accompanying the Energy and Water Development 
Appropriations Act of 2005 (Public Law 108-447), Congress recognized 
the dramatic increase in security needs and corresponding costs at 
Bureau facilities following the September 11, 2001 attacks on our 
country. Congress also recognized that the Bureau security posture 
``will not likely approach pre-September 11, 2001 levels for many 
years, if ever.'' The conference committee then underscored its concern 
for the reimbursability of security costs by including the following 
directive to the Bureau:

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

    CREDA believes that the historic rationale established in the 1942 
and 1943 Interior Department Appropriation Acts for treating costs of 
increased security at multi-purpose Federal projects as non-
reimbursable obligations of the Federal Government is still valid. A 
legal analysis outlining this rationale is contained in a February 5, 
2002 letter to then-Assistant Secretary of Interior Bennett W. Raley.
    We urge Congress to add language to the Energy and Water 
Development Appropriations Act of 2006 to clarify that costs of 
increased security at dams owned and operated by the Bureau of 
Reclamation should continue to be non-reimbursable.

  CENTRAL UTAH PROJECT RECLAMATION MITIGATION AND CONSERVATION ACCOUNT

    Titles II through VI of the Reclamation Projects Authorization and 
Adjustment Act of 1992 (Public Law 102-575), known as the Central Utah 
Project Completion Act (CUPCA), establish and define the Utah 
Reclamation Mitigation and Conservation Commission (Commission). The 
Commission's mission is to develop policies and objectives for the 
implementation of fish, wildlife and recreation mitigation and 
conservation projects and features associated with the Central Utah 
Project (CUP), which is a ``participating project'' of the CRSP.
    Sec. 402(b) of the Reclamation Projects Act creates a Utah 
Reclamation Mitigation and Conservation Account (Account) in the 
Treasury of the United States and provides that contributions to the 
Account will include $5 million (cost-indexed) annually by the 
Secretary of Energy out of funds appropriated to Western, which will be 
considered ``nonreimbursable and nonreturnable.''
    During debate on the Reclamation Projects Act, CUPCA Congressional 
supporters attempted to add an amendment that would require CRSP power 
users to make a $5 million annual contribution to the Account. CRSP 
power users refused, arguing that, because there are no power features 
associated with the CUP, it would not be equitable to ask power 
customers to contribute to mitigation and conservation efforts. Faced 
with the potential opposition of the CRSP power customers to the CUPCA, 
the title's sponsors reconsidered and ultimately directed that the $5 
million/year be contributed by the Department of Energy (DOE) out of 
non-reimbursable funds appropriated for Western.
    The President's fiscal year 2006 budget recommends that this 
section of CUPCA be overturned, by the enactment of the following 
language:

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

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

              FISCAL YEAR 2006 CONSTRUCTION BUDGET REQUEST

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

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

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

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

    The administration's budget for this project in fiscal year 2006 
($22.447 million for construction) is a welcome improvement from last 
year that reflects the need to complete the project. The amount 
requested by the administration continues to fall short of the average 
amount needed to complete the project in fiscal year 2008. The project 
is now over 67 percent complete and can be completed in the next 3 
years. The project sponsors strongly urge that the funds previously 
allocated to the Mid-Dakota Project be used to supplement and complete 
the Mni Wiconi Project. The needs and merits of this project are 
considerable as described in Section 2.
    The project's operation, maintenance and replacement request from 
the sponsors is in addition to the construction request and is 
presented in Section 8.

                      UNIQUE NEEDS OF THIS PROJECT

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

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

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

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

    Indian support for this project has not come easily because the 
historical experience of broken commitments to the Indian people by the 
Federal Government is difficult to overcome. The argument was that 
there is no reason to trust and that the Sioux Tribes are being used to 
build the non-Indian segments of the project and the Indian segments 
would linger to completion. These arguments have been overcome by 
better planning, an amended authorization and hard fought agreements 
among the parties. The subcommittee is respectfully requested to take 
the steps necessary the complete the critical elements of the project 
proposed for fiscal year 2006.

 OSRWSS CORE PIPELINE TO REACH PINE RIDGE INDIAN RESERVATION IN FISCAL 
                               YEAR 2006

    The Pine Ridge Indian Reservation and parts of West River/Lyman 
Jones remain without points of interconnection to the OSRWSS core. The 
requested funding level for the OSRWSS Kadoka to White River pipeline 
will complete the project to the northeast corner of the Pine Ridge 
Indian Reservation where, in combination with the western part of West 
River/Lyman Jones, the remaining 50 percent of the design population 
resides. Funds will also be used by the Oglala Sioux Tribe to build the 
North Core westerly toward Hayes in the West River Lyman Jones service 
area with the intent to complete the OSRWSS North Core and all other 
core facilities in fiscal year 2007. Funding will also be required in 
fiscal year 2007 to complete the OSRWSS North Core system to serve the 
Reservation.
    The 2000 census confirms that the Oglala Sioux population on Pine 
Ridge is growing at a rate of 27 percent per decade or 1\1/2\ times 
greater than projected from the 1990 census. Delivery of Missouri River 
water to this area is urgently needed. Nearly half of the design 
population of the project is located on the Pine Ridge Indian 
Reservation.
    All proposed OSRWSS construction activity will build pipelines that 
will provide Missouri River water immediately to beneficiaries. In many 
cases, construction of interconnecting pipelines by other sponsors is 
ongoing, and fiscal year 2006 funds are required to complete projects 
that will connect with the OSRWSS core and begin others.
    Funding for OSRWSS core and distribution facilities is necessary to 
bring economic development to the Pine Ridge Indian Reservation, 
designated as one of five national rural empowerment zones in the late 
1990's. The designation serves to underscore the level of need. 
Economic development is largely dependent on the timely completion of a 
water system, which depends on appropriations for this project.
    Finally, the subcommittee is respectfully requested to take notice 
of the fact that fiscal year 2006 will significantly advance 
construction of facilities that continues our progress toward the end 
of the project. The subcommittee's past support has brought the Project 
to the point that the end can be seen. Key to the conclusion of the 
project in fiscal year 2008 is the completion of the OSRWSS core to the 
Pine Ridge Indian Reservation. Toward this end, funds are included in 
the fiscal year 2006 budget to build the connecting pipelines between 
the northeast corner of the Pine Ridge Indian Reservation and the 
central portion of the Reservation near Kyle. Rosebud is engaged in the 
construction of major connecting pipelines that will deliver water 
southerly to the central portions of the Rosebud Indian Reservation and 
to service areas for West River/Lyman Jones.
    The following sections describe the construction activity in each 
of the rural water systems.

          OGLALA SIOUX RURAL WATER SUPPLY SYSTEM--DISTRIBUTION

    With the conclusion of projects under construction in 2002, the 
Oglala Sioux Tribe completed all facilities that can be supported from 
local groundwater. The Tribe, representing nearly 50 percent of the 
project population, will rely on the OSRWSS core to convey Missouri 
River water to and throughout the Reservation as a additional water 
source. Much pipeline has been constructed, primarily between Kyle, 
Wounded Knee and Red Shirt and between Pine Ridge Village and the 
communities of Oglala and Slim Buttes.
    Of particular importance to the Oglala Sioux Tribe is the 
continuation of the main transmission system from the northeast corner 
(Highway 73/44 junction) of the Reservation to Kyle in the central part 
of the Reservation. The transmission line is needed to interconnect the 
OSRWSS core system with the distribution system within the Reservation 
in order to deliver Missouri River water to the populous portions of 
the Reservation. This critical segment of the project can be continued 
in fiscal year 2006 to coincide with the westward construction of the 
OSRWSS core to the northeast corner of the Reservation (see section 2). 
It will require funds in fiscal year 2006 and fiscal year 2007 to 
complete. This component of the Oglala system has been deferred for 
several years due to inadequate funding. The component is urgently 
needed for the OSRWSS core system to be utilized on the Pine Ridge 
Indian Reservation.

        WEST RIVER/LYMAN JONES RURAL WATER SYSTEM--DISTRIBUTION

    The requested appropriation is directed to serving members between 
Ft. Pierre and Philip. The highest priorities are for the Moenville 
Phase II service area and the water supply for the Moenville projects. 
These service areas are closest to the Mni Wiconi water treatment plant 
and are among the last to be served.
    The Kadoka Pump Station will take water from the OST core pipeline 
constructed with fiscal year 2005 funding and deliver water to the City 
of Kadoka and the West River/Lyman Jones Kadoka service area. The West 
River/Lyman Jones members are now being supplied from a groundwater 
source at Kadoka that exceeds the SDWA standard for radium. EPA has 
allowed the source to remain in service pending availability of Mni 
Wiconi project water.
    The distribution pipeline system in the Community of Vivian has 
long exceeded its service life. Residents in the community have become 
members of West River/Lyman Jones. The new distribution system will 
eliminate excessive water loss from the antiquated system and minimize 
operation and maintenance (O&M) costs.
    Continuing drought conditions in the WR/LJ project area has 
resulted in the addition of new services within the areas now being 
served. The Indefinite Quantities project meets that need. A 
significant portion of the non-Federal funds are payment from these 
add-on users.
    The Federal funds appropriated to date have made possible the 
construction of water service to WR/LJ members and contributed greatly 
to stability of livestock enterprises in the region. Providing a water 
supply that meets SDWA standards to the cities along Interstate Highway 
90 has removed health hazards to the traveling public and benefited 
tourism in the region. Further Federal appropriations authorized for 
the Mni Wiconi Project will extend similar benefits to the total 
project area. We sincerely appreciate your support.

            ROSEBUD RURAL WATER SYSTEM (SICANGU MNI WICONI)

    In the past year the Rosebud Sioux Rural Water System, or Sicangu 
Mni Wiconi, improved the quality of life for many people in south 
central South Dakota. The interconnection with the OSRWSS was put into 
service in August and surface water was pumped to both Rosebud and WR/
LJ users in Mellette County. The introduction of surface water reduced 
the pressure on the limited existing groundwater supply and ``freed 
up'' sufficient groundwater to supply the combined WR/LJ and Rosebud 
Mellette east service area. This unique project benefited both 
sponsors, the Federal Government and exemplifies the new relationships 
and spirit of cooperation resulting from this project. Most of all it 
benefited the people of Mellette County who have been waiting far too 
long for good water.
    Many others' lives have been improved by the project as well. Our 
transmission mains and distribution lines have brought water to 
hundreds of existing and new homes. We have brought water to a college 
campus, an alcohol treatment center, new housing areas and economic 
development projects as well. We have accomplished a lot, but a lot 
remains to be accomplished.
    As the end of the construction phase of the project comes into 
sight, we hope that completion of the Sicangu Mni Wiconi is not 
forgotten or overshadowed by other efforts. It provides people with a 
source of clean drinkable water that many have not had before. It 
creates infrastructure for the development of the reservation economy. 
Mni Wiconi is a promise for a better life on the Rosebud Reservation.
    In the coming year we plan to keep that promise by bringing water 
to more people through both the construction of new pipelines and 
rehabilitation of existing facilities. Most of the effort planned for 
2006 will utilize the recently completed transmission and distribution 
lines to make service connections in the Mission area and extend 
service progressively eastward to the Hidden Timber and rural Okreek 
areas. The second portion of the Mission Area improvements, which were 
initiated in 2005 will be completed in 2006. The completion of the 
Antelope to Okreek transmission main in 2003 alleviated a critical 
water shortage in the community and will now be used as a source for 
new distribution lines in an area where available water frequently has 
high nitrate concentrations.
    We have just completed the first phase of upgrades to the water 
supply to the community of Rosebud, the center of our tribal 
government. In 2006, we plan to replace many of the corroded cast iron 
pipelines with modern materials. The older corroded pipe is more prone 
to breakage, resulting in loss of service, increased operation and 
maintenance costs and health risks.
    In 2006, work will also begin on the Mellette West project. This 
project is possible because of the recent completion of the Rosebud 
Core Pipeline and relies entirely on surface water as a source of 
supply. The service area is one of the driest on the Reservation and 
the reliable supply of high quality water will now allow people to live 
on their land for the first time.
    Distribution lines and service connections for rural homes and 
livestock will continue to be a priority. A reliable supply of high 
quality water allows people to settle on land that was intended for 
settlement over 100 years ago. The livestock watering is also critical 
after so many years of drought. Emergency connections were initiated in 
the past year and this program is necessary to help maintain the 
economic viability of Reservation rangeland which provides income and 
livelihood to both landowners and ranchers.
    The costs of operation and maintenance are a concern. The Rosebud 
Sioux Tribe and particularly the Water and Sewer Commission, take pride 
in operating an efficient organization that provides high quality 
water. As our water system has expanded, the O&M burden has also 
increased, unfortunately, funding for O&M has not kept pace with the 
needs of the expanding system.
    We bring this to the attention of the subcommittee because we fear 
that while so much has been accomplished through the construction side 
of the project, if the operation and maintenance of the new facilities 
is under funded, maintenance will be deferred and the facilities and 
our people will suffer.
    We also request that you reconsider the application of 
underfinancing to our project. We understand that the use of 
underfinancing recognizes that, during the course of the year, it is 
inevitable that some projects and activities will fall behind schedule 
for a wide variety of reasons. While this may have delayed the 
expenditure of funds on large irrigation or dam projects, it is not as 
applicable to the types and sizes of contracts used in our project. The 
loss of funding through underfinancing extends the completion date of 
the project even further, which in turn increases the administrative 
costs.
    The project sponsors have taken numerous measures to use 
appropriations efficiently. We have already mentioned the Mellette east 
service area where working together, WR/LJ and Rosebud reduced federal 
expenditures by over $1 million. In the current fiscal year all the 
sponsors have agreed to ``fast track'' the completion of Lower Brule at 
a savings of roughly $1.8 million to the project.
    We ask that you give our efforts, both in providing water to our 
people and in using appropriations wisely, serious consideration this 
coming year. We appreciate your past and future efforts.

              LOWER BRULE RURAL WATER SYSTEM--DISTRIBUTION

    The Lower Brule Rural Water System (LBRWS) has gained the support 
of the other sponsors to complete its share of the project with funds 
appropriated in the fiscal year 2005 budget. This support is not only a 
benefit for LBRWS and its users but to the project as a whole. By 
funding LBRWS in this manner, a savings of approximately $1.8 million 
will be experienced by the project.
    With the funds received in fiscal year 2005, LBRWS will complete 
the construction of its entire system and provide water to all of the 
homes on the Lower Brule Indian Reservation. The fiscal year 2005 funds 
will also allow LBRWS to provide water lines and water to pasture taps. 
Since the area has been experiencing drought conditions, many of the 
dams are dry. The provision of water will allow some pastures to be 
utilized that would have otherwise been of no benefit to the ranchers.
    In addition, the fiscal year 2005 funds will allow the completion 
of a new 400,000 gallon elevated water tank in Lower Brule. The 
existing tank is in a location where slides (soil movement) have 
occurred. As a result, the stability of the tank's foundation is in 
question.
    As indicated earlier, the result is that the entire LBRWS has been 
completely funded by the funds appropriated in fiscal year 2005 and the 
good graces of the other sponsors. The result is a savings to the 
project of approximately $1.8 million. This will not end LBRWS's 
involvement in the project; however, as LBRWS will continue to work 
with and support the other sponsors in seeing the entire project come 
to fruition.

             OPERATION, MAINTENANCE AND REPLACEMENT BUDGET

    The sponsors have and will continue to work with Reclamation to 
ensure that their budgets are adequate to properly operate, maintain 
and replace (OMR) respective portions of the overall system. The 
sponsors will also continue to manage OMR expenses in a manner ensuring 
that the limited funds can best be balanced between construction and 
OMR. In fiscal year 2003, the approved budget for OMR was $8.228 
million, which was adequate. Funding was not adequate in fiscal year 
2004 and fiscal year 2005 at the $6.254 million level and will not be 
adequate at fiscal year 2006 at $7.053 million, albeit a good 
improvement.
    The project has been treating and delivering more water over the 
last 2 years from the OSRWSS Water Treatment Plant near Fort Pierre. 
Completion of significant core and distribution pipelines has resulted 
in more deliveries to more communities and rural users. The need for 
sufficient funds to properly operate and maintain the functioning 
system throughout the project has grown. The OMR budget must continue 
to be adequate to keep pace with the portion of the system that is 
placed in operation.
    The Mni Wiconi Project tribal beneficiaries (as listed below) 
respectfully request appropriations for OMR fiscal year 2006 in the 
amount of $8,276,000 as follows:

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

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

                               BACKGROUND

    The Lewis and Clark Rural Water System is requesting $35 million 
through the Bureau of Reclamation's Water and Related Resources account 
for continuing construction activities in 2006. These funds will be 
used for construction, acquisition of easements and property, 
engineering, and associated legal and professional costs. The project 
has completed required planning and environmental reviews, and major 
construction began in earnest last year. During the last year Lewis and 
Clark has installed the first two segments of the raw water pipeline 
(RWP), started construction on the third and final segment of the RWP, 
awarded a $9.4 million contract for the first segment of the treated 
water pipeline, and has made steady progress on acquiring the necessary 
easements and property.
    The President's budget requests $15.0 million for Lewis and Clark, 
which reflects the commitment he continues to demonstrate to the 
project. While this request is a welcome starting point, $35 million is 
necessary to fully fund the project this year to ensure construction 
activities will continue in 2006. Even though we are in the early 
stages of construction, it is important to keep the project on schedule 
in order to provide this much-needed water source to area communities 
as soon as possible.
    The Lewis and Clark Rural Water System Act became law in July 2000 
(Public Law 106-246). When complete, the project will provide safe, 
reliable drinking water to approximately 200,000 people in South 
Dakota, Minnesota, and Iowa. Lewis and Clark represents a unique 
regional approach by three States to address common problems with area 
water resources in a more effective and cost-efficient way than each 
State could do alone. Regional water problems include shallow wells and 
aquifers prone to contamination and drought, compliance with new 
Federal drinking water standards, and increasing water demand due to 
population growth and economic expansion.
    The Lewis and Clark project will utilize an aquifer adjacent to the 
Missouri River near Vermillion, South Dakota, and will distribute water 
to member communities in an area of approximately 5,000 square miles, 
roughly the size of Connecticut. When complete, the drinking water will 
pass through a well system, water treatment plant, and a non-looped 
distribution system. The system also will include water storage tanks 
that will provide approximately a 1-day supply. The project will 
require an estimated additional 10 years to complete.

                PLANS FOR CONSTRUCTION IN 2005 AND 2006

    Lewis and Clark developed a schedule for construction and related 
services to be performed during the next 2 years. The following work is 
anticipated in fiscal year 2005 and fiscal year 2006, subject to the 
availability of funding.
Projects Planned for Fiscal Year 2005
  --Site J Production Pump Test Well.--Lewis & Clark currently plans to 
        drill another test production well south and west of 
        Vermillion. The well will be a 105 deep vertical well and 
        will be sized to be an actual production well for the project.
  --Raw Water Pipeline--Segments 2 and 3.--This project is currently 
        under construction and should be completed in summer 2005. This 
        project is located near Vermillion, South Dakota.
  --Treated Water Pipeline--SD Segment 1.--The Treated Water Pipeline 
        Segment 1 will involve construction of a pipeline from west of 
        Sioux Falls to Tea, South Dakota. This project was recently 
        awarded and construction will begin in late spring 2005. The 
        project will include construction of the main 48" treated water 
        transmission pipeline for the Lewis & Clark System.
  --Treated Water Pipeline--SD Segments 2 and 3.--The next phase of the 
        treated water pipeline construction in South Dakota would 
        include construction 11 miles of the main 48" pipeline from Tea 
        south to Lennox and Highway 18. The plans for this project are 
        currently under review. Lewis & Clark plans to bid and award 
        this project in the summer of 2005.
  --Treated Water Pipeline--SD Segment 5.--Segment 5 will continue 
        construction of the main 48" diameter trunk line south from 
        Highway 18 to Highway 46. Segment 5 would include approximately 
        12 miles of pipe. This segment is currently under design. Lewis 
        & Clark plans to bid and award this project in late summer 
        2005.
  --Water Treatment Plant Final Design.--The pre-design has been 
        completed and a Value Engineering review was held in early 
        2005. Lewis & Clark needs to begin final design of the water 
        treatment shortly in order to start construction of the water 
        treatment plant in the spring of 2008.

Projects Planned for Fiscal Year 2006
    Fiscal year 2006 activities will include a continuation of the 
projects listed above for 2005, plus the following additional system 
components:
  --Treated Water Pipeline--SD Segment 4.--Segment 4 includes 
        construction of the pipeline to serve water to Sioux Falls and 
        two other members. Segment 4 includes approximately 6 miles of 
        36" diameter pipe in the area immediately west of Sioux Falls. 
        Lewis & Clark would bid and award this project in 2006.
  --Treated Water Pipeline--SD Segments 6 through 8.--These segments 
        complete the main 48" transmission pipeline from Highway 46 
        south to the water treatment plant site (approximately 22 
        miles). Design and land acquisition will be initiated on these 
        segments. If funds are available, Segment 6 would be advertised 
        for bids in 2006.
  --Treated Water Pipeline--SD Segment 9.--The route for Segment 9 is 
        immediately south of Sioux Falls and is rapidly being 
        developed. It is imperative for Lewis & Clark to begin design 
        and start acquisition of easements for this critical project 
        component. Construction would probably not be commenced until 
        2007, or later.
  --(Under Consideration) Treated Water Pipeline--IA Segment 1 (Iowa 
        Emergency Connection).--The first phase of the Iowa Emergency 
        Connection will involve a pipeline from the Sioux Center water 
        treatment plant to Hull, Iowa. The project will include 
        construction of the main treated water transmission pipeline 
        for the Lewis & Clark System and service connection lines for 
        Sioux Center and Hull. Lewis & Clark will be acquisition of 
        easements. Currently, no date for construction has been 
        established.
  --(Under Consideration) Treated Water Pipeline--IA Segment 3 (Iowa 
        Emergency Connection).--The next phase of the Iowa Emergency 
        Connection may include building a short section of Lewis & 
        Clark pipeline to connect Sheldon, Iowa to a temporary source 
        of water. If pursued, Lewis & Clark could bid and award this 
        project in summer of 2006.
                                 ______
                                 
Prepared Statement of the Pajaro Valley Water Management Agency (PVWMA)

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

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

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

                         BUREAU OF RECLAMATION

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

    As Chairman of the Deschutes River Conservancy (DRC) it is my 
pleasure to convey to the subcommittee the DRC Board's strong support 
for the $2 million funding request for fiscal year 2006 for the 
Deschutes Ecosystem Restoration Project (under the Bureau of 
Reclamation), sponsored by Congressman Walden. The Deschutes River 
Conservancy (DRC), is a non-profit, private corporation established in 
Oregon in 1996. In September 1996, Congress enacted and the President 
signed Public Law 104-208, which included S. 1662, the Oregon Resources 
Conservation Act establishing the DRC (then known as the Deschutes 
Basin Working Group under Section 301(h) (Division B, Title III)). In 
2000 Congress reauthorized the DRC through Public Law 106-270, the 
Deschutes Resources Conservancy Reauthorization Act of 2000 which 
authorized $2.0 million per year on a matching basis through fiscal 
year 2006. The DRC is limited to spending 5 percent of any 
appropriation on administration.

                       NEEDS AND ACCOMPLISHMENTS

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


    In sum, our past accomplishments and current and future projects 
are critical to ensuring a healthy future for the Deschutes watershed. 
Appropriations are critical to underpin DRC efforts to demonstrate that 
a pro-active, cooperative approach to meeting agricultural, municipal 
and instream water needs can succeed in the American West.

                   Appendix 1.--Background on the DRC

    The DRC is a partnership initiated by the Environmental Defense 
Fund (EDF), the Confederated Tribes of the Warm Springs Reservation and 
local irrigation districts. DRC founders recognized the need for a 
private organization with ecosystem-determined goals and methods based 
on positive incentives, consensus, and local governance. Since 
approximately half of the Basin's land area is managed by Federal 
agencies it was clear that such a private organization would need the 
capacity to partner on projects with the Federal agencies to be truly 
ecosystem and basin-wide in scope. In March, 1996, Senator Hatfield 
introduced S. 1662 authorizing Federal agencies to work with this 
private organization, known as the Deschutes Basin Working Group. Title 
III of the Oregon Resource Conservation Act of 1996, signed by the 
President in September, 1996, authorizes the following:
  --Federal agencies to work with the private Deschutes Basin Working 
        Group, dba Deschutes River Conservancy (DRC);
  --Secretaries of Interior & Agriculture to appoint DRC board members 
        for 3 year terms;
  --Federal participation with DRC in ecological restoration projects 
        on Federal and non-Federal land and water with 50-50 cost 
        share; and,
  --Emphasize voluntary market-based economic incentives.
    The DRC mission is to restore streamflow and improve water quality 
in the basin through on-the-ground projects that enhance the quality of 
the region's natural resources and add value to its economy.
    The DRC board consists of nine members from the Basin's private 
sector; hydropower, livestock grazing, recreation/tourism, timber, land 
development, irrigation (two), environmental (two), and two members 
from the Confederated Tribes of the Warm Springs Reservation. In 
addition to the private board members there are two board members 
appointed from the Departments of Interior and Agriculture, two board 
members representing the State of Oregon, and four members representing 
local governments within the Deschutes Basin.

            Appendix 2.--Fiscal Year 2005 Project Summaries

                      RIPARIAN RESTORATION PROGRAM

Tailwater Wetlands Program.--$100,000
    DRC will help the North Unit Irrigation District develop a 
tailwater wetlands management program to treat potentially nutrient 
rich tailwater flows before they return to local tributaries in 
Jefferson County. These tributaries suffer from a host of water quality 
issues including high stream temperatures, elevated nutrient levels, 
and low dissolved oxygen. Total costs of developing and initiating the 
program will be $200,000 with half coming from DRC Federal funds.

Stream Restoration in Partnership with Working Ranches.--$125,000
    The DRC will work with local watershed councils and soil and water 
conservation districts to provide technical and financial assistance to 
private landowners who wish to restore their lands. Restoration 
activities will include the implementation of grazing best management 
practices, streambank rehabilitation, stream channel restoration, and 
wetland restoration. Total costs of the restoration activities will be 
$250,000 with half coming from DRC Federal funds.

Riparian Revegetation Program.--$140,000
    The DRC will continue its work with riparian landowners on 
revegetation of streamside areas with native species in order to 
provide shade, buffering and other water quality benefits. Enrolling 
350 acres in the program will cost $280,000 with half coming from DRC 
Federal funds.

Deschutes Wetlands Initiative.--$150,000
    DRC will work with the Deschutes Basin Land Trust and other local 
partners to acquire and restore significant wetland habitats. Wetlands 
are rare in the Deschutes Basin but play an important role in naturally 
regulating streamflow, maintaining water quality, and providing 
important fish and wildlife habitat. Total costs of developing and 
initiating the program will be $300,000 with half coming from DRC 
Federal funds.

                       WATER ACQUISITIONS PROGRAM

Deschutes Water Alliance (DWA) Revolving Conservation Fund.--$320,000
    The DRC is initiating a revolving fund for financing of small- to 
medium-sized water conservation projects as part of the DWA. In fiscal 
year 2006 projects include the piping of a number of laterals in the 
Central Oregon, Swalley and Tumalo irrigation districts. These projects 
will return 3 cfs to the Middle Deschutes and Tumalo Creek. Initial 
capitalization of the fund is set at $700,000. The DRC Federal funds 
contribution in fiscal year 2006 is $320,000.

District Main Canal Piping and Lining Partnerships.--$1,000,000
    Irrigation districts in the Deschutes Basin manage 95 percent of 
water diverted from streams and rivers and with the help of DRC are 
willing to aggressively pursue large water conservation projects on 
their main canals such as lining and piping. The DRC is working with 
the North Unit Irrigation District (Main Canal Lining), Central Oregon 
Irrigation District (Pilot Butte Main Canal Piping), Swalley Irrigation 
District (Main Canal Piping), and Tumalo Irrigation District (Tumalo 
Feed Canal Piping) and Three Sisters Irrigation District (McKenzie and 
Main Canal Piping) to establish a prioritized list of large, phased 
conservation projects that will make significant improvements to 
irrigation district management of water and restore streamflows in the 
Deschutes River and its tributaries. With over $50 million in projects 
already identified the DRC is targeting $4 million in investments in 
fiscal year 2006 with $1 million coming from DRC Federal funds.

Water Leasing Program.--$50,000
    The DRC's highly successful water leasing program is projected to 
return 100 cfs instream in fiscal year 2006, representing a 10 percent 
gain over fiscal year 2005. The leasing program provides an inexpensive 
and flexible way to rapidly improve instream flows and educate the 
public and water right holders about flow restoration. The DRC-BOR 
contribution will be $75,000 of a $150,000 cash project that also 
features a considerable in-kind contribution by water rightholders.

DWA Water Reserves and Transfers Program.--$300,000
    Working with Swalley and Central Oregon Irrigation District, and 
the City of Bend, the DRC is building agricultural reserves and 
acquiring surplus water rights for instream protection. In fiscal year 
2006, the second year of the program, outputs are expected to grow by 
50 percent as the Alliance acquires 300 acres of reserves from 
urbanizing areas in Deschutes County. Total costs of the program are 
$900,000 with $300,000 coming from DRC Federal funds.

Three Sisters Irrigation District Water Exchange.--$50,000
    The DRC is partnering with the Three Sisters Irrigation District on 
an innovative surface to ground water switch through Oregon's water 
exchange provision. Temporary seasonal substitution of groundwater in 
place of diverted surface water will allow the DRC and TSID to keep 
Squaw Creek flowing at its State-mandated minimum of 20 cfs throughout 
the critical summer months, representing a gain of up to 15 cfs and 
helping irrigators to avoid future regulation as ESA listed steelhead 
trout are reintroduced to the creek, which originally provided the 
majority of steelhead habitat in the Upper Deschutes Basin. A project 
of between $400,000 and $600,000 is expected depending on the length of 
the operational contract and the resulting energy costs. Of this total 
$50,000 is expected from DRC Federal funds.

Instream Flow Acquisitions.--$250,000
    DRC will work on a number of high priority water transactions that 
will help address water quality and streamflow deficiencies in critical 
stream reaches for the recovery of listed species (steelhead and bull 
trout). The DRC is working with individual water right holders in Squaw 
Creek, and owners of urbanizing land and districts that are downsizing 
in the Middle Deschutes to find willing sellers. The total cost of the 
acquisitions is $500,000 with the DRC Federal funds covering half of 
this amount.
    The Non-Federal to Federal match on these projects is estimated at 
over 2:1.
                                 ______
                                 
                   Prepared Statement of Denver Water

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

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

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

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

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

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

        CALFED BAY-DELTA PROGRAM, SANTA CLARA COUNTY, CALIFORNIA
                                SUMMARY

    This statement urges the committee's support of the administration 
budget request of $35 million and an appropriation add-on of $65 
million, for a total of $100 million for California Bay-Delta 
Restoration.

                          STATEMENT OF SUPPORT
                        CALFED BAY-DELTA PROGRAM

    Background.--In an average year, half of Santa Clara County's water 
supply is imported from the San Francisco Bay/Sacramento-San Joaquin 
Delta estuary (Bay-Delta) watersheds through three water projects: The 
State Water Project, the Federal Central Valley Project, and San 
Francisco's Hetch Hetchy Project. In conjunction with locally developed 
water, this water supply supports more than 1.7 million residents in 
Santa Clara County and the most important high-tech center in the 
world. In average to wet years, there is enough water to meet the 
county's long-term needs. In dry years, however, the county could face 
a water supply shortage of as much as 100,000 acre-feet per year, or 
roughly 20 percent of the expected demand. In addition to shortages due 
to hydrologic variations, the county's imported supplies have been 
reduced due to regulatory restrictions placed on the operation of the 
State and Federal water projects.
    There are also water quality problems associated with using Bay-
Delta water as a drinking water supply. Organic materials and 
pollutants discharged into the Delta, together with salt water mixing 
in from San Francisco Bay, have the potential to create disinfection by 
products that are carcinogenic and pose reproductive health concerns.
    Santa Clara County's imported supplies are also vulnerable to 
extended outages due to catastrophic failures such as major earthquakes 
and flooding.
    Project Synopsis.--The CALFED Bay-Delta Program is an 
unprecedented, cooperative effort among Federal, State, and local 
agencies to restore the Bay-Delta. With input from urban, agricultural, 
environmental, fishing, and business interests, and the general public, 
CALFED has developed a comprehensive, long-term plan to address 
ecosystem and water management issues in the Bay-Delta.
    Restoring the Bay-Delta ecosystem is important not only because of 
its significance as an environmental resource, but also because failing 
to do so will stall efforts to improve water supply reliability and 
water quality for millions of Californians and the State's trillion 
dollar economy and job base.
    The recent passage of H.R. 2828 reauthorizes Federal participation 
in the CALFED Bay-Delta Program and provides $389 in new and expanded 
funding authority for selected projects, including the San Luis 
Reservoir Low Point Improvement Project. The San Luis Project is one of 
six new projects, studies or water management actions authorized to 
receive a share of up to $184 million authorized under the conveyance 
section of the bill. It is critical that Federal funding be provided to 
implement the actions authorized in the bill in the coming years.
    Fiscal Year 2005 Funding.--$7.5 million was appropriated for CALFED 
activities under the various units of the Central Valley Project in 
fiscal year 2005.
    Fiscal Year 2006 Funding Recommendation.--It is requested that the 
committee support an appropriation add-on of $65 million, in addition 
to the $35 million in the administration's fiscal year 2006 budget 
request, for a total of $100 million for California Bay-Delta 
Restoration.

  SAN JOSE AREA WATER RECLAMATION AND REUSE PROGRAM (SOUTH BAY WATER 
           RECYCLING PROGRAM), SANTA CLARA COUNTY, CALIFORNIA

                                SUMMARY

    This statement urges the committee's support for an administration 
budget request of $300,000 and an appropriation add-on of $2.7 million, 
for a total of $3 million to fund the program's work.

                          STATEMENT OF SUPPORT
  SAN JOSE AREA WATER RECLAMATION AND REUSE PROGRAM (SOUTH BAY WATER 
                           RECYCLING PROGRAM)

    Background.--The San Jose Area Water Reclamation and Reuse Program, 
also known as the South Bay Water Recycling Program, will allow the 
City of San Jose and its tributary agencies of the San Jose/Santa Clara 
Water Pollution Control Plant to protect endangered species habitat, 
meet receiving water quality standards, supplement Santa Clara County 
water supplies, and comply with a mandate from the U.S. Environmental 
Protection Agency and the California Water Resources Control Board to 
reduce wastewater discharges into San Francisco Bay.
    The Santa Clara Valley Water District (District) collaborated with 
the City of San Jose to build the first phase of the recycled water 
system by providing financial support and technical assistance, as well 
as coordination with local water retailers. The design, construction, 
construction administration, and inspection of the program's 
transmission pipeline and Milpitas 1A Pipeline was performed by the 
District under contract to the City of San Jose.
    Status.--The City of San Jose is the program sponsor for Phase 1, 
consisting of almost 60 miles of transmission and distribution 
pipelines, pump stations, and reservoirs. Completed at a cost of $140 
million, Phase 1 began partial operation in October 1997. Summertime 
2004 deliveries averaged 10.6 million gallons per day of recycled 
water. The system now serves over 470 customers and delivers over 7,200 
acre-feet of recycled water per year.
    Phase 2 is now underway. In June 2001, San Jose approved an $82.5 
million expansion of the program. The expansion includes additional 
pipeline extensions into the cities of Santa Clara and Milpitas, a 
major pipeline extension into Coyote Valley in south San Jose, and 
reliability improvements of added reservoirs and pump stations. The 
District and the City of San Jose executed an agreement in February 
2002 to cost share on the pipeline into Coyote Valley and discuss a 
long-term partnership agreement on the entire system. Phase 2's near-
term objective is to increase deliveries by the year 2010 to 15,000 
acre-feet per year.
    Funding.--In 1992, Public Law 102-575 authorized the Bureau of 
Reclamation to work with the City of San Jose and the District to plan, 
design, and build demonstration and permanent facilities for reclaiming 
and reusing water in the San Jose metropolitan service area. The City 
of San Jose reached an agreement with the Bureau of Reclamation to 
cover 25 percent of Phase 1's costs, or approximately $35 million; 
however, Federal appropriations have not reached the authorized amount. 
To date, the program has received $28.25 million of the $35 million 
authorization.
    Fiscal Year 2005 Funding.--$1.75 million was appropriated in fiscal 
year 2005.
    Fiscal Year 2006 Funding Recommendation.--It is requested that the 
congressional committee support an appropriation add-on of $2.7 
million, in addition to the $300,000 in the administration's fiscal 
year 2006 budget request, for a total of $3 million to fund the 
Program's work.

 SAN LUIS RESERVOIR LOW POINT IMPROVEMENT PROJECT, SANTA CLARA COUNTY, 
                               CALIFORNIA

                                SUMMARY

    This statement urges the committee's support an appropriation of 
$10 million to initiate the studies. This request is included in the 
$100 million CALFED Bay-Delta Program appropriation request.

                          STATEMENT OF SUPPORT
            SAN LUIS RESERVOIR LOW POINT IMPROVEMENT PROJECT

    Background.--San Luis Reservoir is one of the largest reservoirs in 
California, and is the largest ``off-stream'' water storage facility in 
the world. The Reservoir has a water storage capacity of more than 2 
million acre-feet and is a key component of the water supply system 
serving the Federal Central Valley Project (CVP) and California's State 
Water Project. San Luis is used for seasonal storage of Sacramento-San 
Joaquin delta water that is delivered to the reservoir via the 
California Aqueduct and Delta-Mendota Canal. The San Luis Reservoir is 
jointly owned and operated by the U.S. Bureau of Reclamation and the 
California Department of Water Resources.
    The San Luis Reservoir provides the sole source of CVP water supply 
for the San Felipe Division contractors--Santa Clara Valley Water 
District (District), San Benito County Water District and, in the 
future, Pajaro Valley Water Management Agency. When water levels in San 
Luis Reservoir are drawn down in the spring and summer, high water 
temperatures result in algae blooms at the reservoir's water surface. 
This condition degrades water quality, making the water difficult or 
impractical to treat and can preclude deliveries of water from San Luis 
Reservoir to San Felipe Division contractors. In order to avoid the low 
point problem, the reservoir has been operated to maintain water levels 
above the critical low elevation--the ``low point''--resulting in 
approximately 200,000 acre-feet of undelivered water to south of the 
Delta State and Federal water users.
    Project Goals and Status.--The goal of the project is to increase 
the operational flexibility of storage in San Luis Reservoir and ensure 
a high quality, reliable water supply for San Felipe Division 
contractors. The specific project objectives are to:
  --Increase the operational flexibility of San Luis Reservoir by 
        increasing the effective storage.
  --Ensure that San Felipe Division contractors are able to manage 
        their annual Central Valley Project contract allocation to meet 
        their water supply and water quality commitments.
  --Provide opportunities for project-related environmental 
        improvements.
  --Provide opportunities for other project-related improvements.
    Preliminary studies by the District have identified six potential 
alternatives to solve the problem. More funding is needed to fully 
explore these alternatives.
    The recent passage of H.R. 2828 reauthorizes Federal participation 
in the CALFED Bay-Delta Program. The San Luis Reservoir Low Point 
Improvement Project is one of six new projects, studies or water 
management actions authorized in the bill to receive a share of up to 
$184 million authorized under the conveyance section of the bill.
    Fiscal Year 2005 Funding.--No appropriation was requested in fiscal 
year 2005.
    Fiscal Year 2006 Funding Recommendation.--It is requested that the 
committee support an appropriation of $10 million for the San Luis 
Reservoir Low Point Improvement Project. The San Luis request is 
included in the $100 million CALFED Bay-Delta appropriation request.
                                 ______
                                 
     Prepared Statement of the Colorado River Commission of Nevada

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

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

    I am Anita Winkler, Executive Director, Oregon Water Resources 
Congress. This testimony is submitted to the United States Senate 
Appropriations Committee, Energy and Water Subcommittee, regarding the 
fiscal year 2006 Budget for the Bureau of Reclamation and Oregon 
Projects. The Oregon Water Resources Congress (OWRC) was established in 
1912 as a trade association to support member needs to protect water 
rights and encourage conservation and water management State-wide. OWRC 
represents non-potable agriculture water suppliers in Oregon, primarily 
irrigation districts, as well as member ports, other special districts 
and local governments. The association represents the entities that 
operate water management systems, including water supply reservoirs, 
canals, pipeline and hydropower production.

                         BUREAU OF RECLAMATION

    OWRC continues to support an increase in funding for the Bureau of 
Reclamation's Water and Related Resources program above the 
administration's proposed fiscal year 2006 Budget request for the 
Bureau of Reclamation's programs West-wide. The administration's 
current budget proposal is approximately $200 million less than what we 
in the water community feel is necessary to carryout an effective 21st 
Century water program for the West.
    With many Western States confronting significant budget deficits, 
increased emphasis is being placed on targeted Federal aid. In 
addition, we continue to be confronted by looming shortages associated 
with the on-going drought in the West. This is why we support the 
Western Water Initiative of the Bureau of Reclamation and the $30 
million request for the Water 2025 program, an important program to 
assist during this time of crises.

                              OREGON NEEDS

Conservation Implementation
    The largest need for funding for OWRC's members is to implement 
water conservation projects. Irrigation districts in Oregon continue to 
line and pipe open waterways to enhance both water supply and water 
quality. But the ability to continue this work depends on some public 
investment in return for the public benefits. Districts have conserved 
water and provided some of the saved or conserved water to benefit the 
fishery in-stream while also building reservoir supplies.
    Oregon districts hope to continue this work through enhanced 
conservation, but to do that the districts need support to implement 
effective alternative programs such as pilot water banking projects 
(Klamath Basin and the Deschutes Basin), energy reduction programs, 
additional measurement and telemetry monitoring, etc.
    While some of these districts will continue to benefit from the 
funding requested in the fiscal year 2006, others are going through a 
reauthorization process or new authorizations for projects in their 
districts that will continue this conservation ethic.

                           ROGUE RIVER BASIN

Medford Irrigation District
Rogue River Valley Irrigation District
Talent Irrigation District
Grants Pass Irrigation District
    Three contiguous districts in the Rogue Project (Medford, Rogue 
River and Talent irrigation districts) are requesting $1 million to 
fund the Bear Creek and Little Butte Optimization Study by the Bureau 
of Reclamation. That study will propose a plan to conserve water 
throughout the basin by lining and piping canals within the districts, 
considering the potential for raising Howard Prairie Dam and the 
feasibility of other conservation options.
    The Grants Pass Irrigation District (GPID) continues to address the 
eventual removal of the Savage Rapids Dam. The $1 million in the fiscal 
year 2006 Budget is an important continuation of the effort to address 
the agreements made in this area. However, that request is not adequate 
for the work schedule. OWRC supports the GPID request for $8 million in 
fiscal year 2006 for the Bureau of Reclamation to complete design, 
engineering, and installation of electric pumps to replace the Savage 
Rapids Dam.

                            DESCHUTES BASIN

Tumalo Irrigation District
Deschutes River Conservancy
Ochoco Irrigation District
    The Tumalo Irrigation District is currently working on new program 
and project authorizations and does not have a funding request at this 
time.
    The Deschutes River Conservancy is also currently working on new 
program and project authorizations and is seeking an appropriation of 
$2 million dollars for fiscal year 2006.
    The Ochoco Irrigation District (Prineville, Oregon) has worked with 
the Bureau of Reclamation, along with the North Unit Irrigation 
District (Madras, Oregon) for the better part of a decade to determine 
the use of unallocated water in the district's reservoir. Approximately 
$200,000 in additional dollars is required to finish the project. 
Reclamation earlier invested $500,000 in the process, which has not 
been completed.

                        UMATILLA/COLUMBIA BASINS

Stanfield Irrigation District
Westland Irrigation District
Hermiston Irrigation District
West Extension Irrigation District
East Valley Water District
East Fork Irrigation District
    The Umatilla districts draw their water supply from the Umatilla 
and Columbia Rivers. The districts have been in the process of 
exchanging Umatilla River water for Columbia River water to benefit 
fisheries resources. Phase III is the final component of the Project 
and will have the largest impact to the basin. The districts recognize 
the need to move forward with Phase III of the project and support the 
$200,000 in the fiscal year 2006 Budget.
    OWRC supports the fiscal year 2006 request of $250,000 by the East 
Valley Water District for an evaluation of the potential to deliver 
irrigation water to lands within the district so as to relieve pressure 
on local groundwater supplies.
    OWRC also supports the funding request of $500,000 by the East Fork 
Irrigation District for their Central Canal Upgrade/Neal Creek Inverted 
Siphon so the District can restore upstream and downstream passage of 
juvenile and adult anadromous and resident fish in Neal Creek, 
including threatened steelhead; and end the transport of glacial silt 
into Neal Creek and the District's canal system and reduce long-term 
O&M costs.

                             EASTERN BASINS

Burnt, Malheur, Owyhee and Powder River Basins Water Optimization Study
    The irrigation districts in these basins continue to seek support 
for this optimization study to seek alternatives for more effective 
water management through conservation projects and enhancement of water 
supply. This project has been identified by the Bureau of Reclamation 
as a regional need.
    OWRC supports the fiscal year 2006 Oregon Investigations program 
request that contains $450,000 to continue studies for these basins as 
well as several other basins in the State.

                             KLAMATH BASIN

    The Klamath Project districts continue to require support of their 
Water Resource Initiatives, Water Conservation Plan work and ongoing 
operations planning and other projects within Reclamation's budget for 
the Mid-Pacific Division. We continue to encourage the administration 
and in particular, the various Department of the Interior Agencies, to 
work closely with the districts in the project area on the overall 
funding and planning necessary for ongoing solutions.

                   OREGON WATER SUPPLY INVESTIGATIONS

    In addition, we support the State of Oregon request for an 
additional $450,000 for Water Supply Investigations in the State. As 
districts and the State continue their efforts at better planning, 
there is a fundamental need for better information. This request would 
help with assessing existing and future water needs in Oregon, 
completing a comprehensive inventory of above and below ground storage 
and quantify surplus winter water.
    Thank you for the opportunity to provide testimony regarding the 
fiscal year 2006 Federal budget. While we support existing proposals, 
we feel that given the record-setting droughts we have suffered in the 
past few years and in anticipation of another drought this year, we 
need to support an increased budget to stabilize the Nation's water 
supply for the many needs it must meet. Providing a stable water supply 
feeds the economy locally and at the national level.
                                 ______
                                 
  Prepared Statement of the Western Coalition of Arid States (WESTCAS)

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

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

    We are pleased to present this written testimony on the fiscal year 
2006 budget proposals for the U.S. Bureau of Reclamation and the 
Western Area Power Administration. Our Association consists of 25 
entities in Arizona which serve water and power from the Colorado River 
and other sources to rural and urban Arizona communities, farms and 
businesses.

                         BUREAU OF RECLAMATION

    While we generally support the proposed Reclamation budget, and 
indeed think it is too small, the following are specific items of 
concern that we urge the subcommittee to consider.
    Use of Receipts.--The budget proposes to allow Reclamation to 
capture power receipts from the Western Area Power Administration and 
use those for operation, maintenance, and research and development 
activities without having to come to Congress for appropriation of such 
monies. In the Colorado River Basin, power customers and water 
customers have a series of arrangements for customer involvement in 
reviewing spending proposals before they reach Congress. This funding 
shift would emasculate those relationships and make the oversight 
Congress rightly provides for these activities significantly more 
difficult. Congress has previously rejected similar proposals. Because 
of the lack of accountability that this proposal engenders, we do not 
believe that Congress should consider authorizing this monetary 
shortcut.
    Glen Canyon Dam.--In the 1992 Grand Canyon Protection Act, Congress 
gave specific direction to the Secretary of the Interior concerning 
assessing the impacts of the specific power operation criteria used at 
Glen Canyon Dam on the downstream environment in Marble Canyon and the 
Grand Canyon. Studies had already been underway on that subject for a 
decade by the time Congress acted. Some 23 years into this program, 
there are still no definitive answers. Nevertheless, Reclamation 
proposes to build temperature control devices into the outlet works at 
Glen Canyon Dam, impelled by an 11-year-old Final Biological Opinion 
under the Endangered Species Act. The budget proposal and its 
supporting documentation admit that no one knows whether this will have 
any beneficial effect on the downstream endangered fish, the humpback 
chub. Indeed, it could be harmful. Congress should withhold funds for 
construction of these temperature control devices until sound science 
shows that a beneficial effect will result. Congress should also direct 
Reclamation to provide a report on the impacts of the five power 
operating criteria at Glen Canyon Dam. Certainly 23 years of study has 
produced some answers.
    Security Costs.--We oppose the shift of $18 million to $20 million 
of currently non-reimbursable costs associated with increased security 
measures after 9/11 to power users. It is simply unfair to single out 
hydropower facilities to bear these increased costs when airports, 
train stations, etc., are receiving ongoing non-reimbursable 
appropriations many times larger than this. Shortly after 9/11, 
Reclamation established a non-reimbursable cost policy for increased 
security costs and Congress has since then consistently approved that 
policy and directed Reclamation to continue it. Indeed, in the Omnibus 
Appropriation Bill for fiscal year 2005, Congress specifically directed 
Reclamation to continue that policy, and to report back to Congress by 
May 1 of this year. Congress further directed Reclamation not to alter 
that policy without specific direction from Congress. Now Reclamation 
has dug itself into a financial hole by treating a large portion of 
these monies as reimbursable and not requesting appropriations for 
them. The sound public policy that engendered Reclamation's original 
position and approval of it by Congress should be continued.
    Public Law 108-451.--The President signed this bill, the Arizona 
Water Settlements Act, on December 10, 2004. While Reclamation's 
proposed budget mentions the passage of the Act, the only impact 
discernible in the budget request is a significant decrease in funding 
for CAP Indian distribution systems. We are concerned that the 
settlement that is embodied in the Act contains funding obligations to 
which the United States agreed which are not being reflected in this 
budget request.

                   WESTERN AREA POWER ADMINISTRATION

    We have three specific comments on Western's proposed budget.
    Average Market Rates.--The fiscal year 2006 budget proposes that 
the Power Marketing Administrations, including Western, raise rates by 
20 percent per year until achieving prices constituting something 
labeled ``average market rates''. This proposal is nothing short of 
asinine. Throughout the entire history of Federal power generation 
programs, Congress has directed that Federal power resources be sold to 
consumers at prices that will recover costs and, based on applicable 
Federal law, interest on the reimbursable portions of these severally 
authorized projects. Until recently, federally-regulated electric 
utilities and most State-regulated utilities were held to the same 
conceptual yardstick: cost-based rates. Recent studies have shown that 
allowing federally-regulated private electric utilities to venture into 
``market based rates'' has done nothing to lower power costs to 
consumers. Moreover, this massive public policy shift would require 
overriding the provisions of numerous major acts and Congressionally-
authorized projects and programs. The Congressionally-mandated 
yardstick for pricing Federal power has always been ``lowest possible 
cost consistent with sound business principles''. Since the record is 
devoid of evidence that the use of market rates by private utilities 
has benefited electric consumers, surely the government should not 
venture into this philosophical quagmire. Current Federal pricing 
policy is sound and in the best interests of electric consumers. We 
strongly oppose this misguided initiative.
    Use of Receipts.--We continue to oppose what is becoming a 
perennial suggestion that the PMA's, including Western, be authorized 
to use power receipts for operation and maintenance costs associated 
with their programs. Like the similar proposal for Reclamation, this 
proposal would destabilize existing agency/customer consultation 
arrangements, reduce Congressional oversight and provide a hugely 
expanded level of agency autonomy. The lack of checks and balances in 
this proposal renders it fatally flawed. Instead, Congress should 
direct the PMA's, including Western, to initiate and/or improve 
customer consultation and concurrence mechanisms. This would encourage 
customers to work with these agencies to ensure that truly needed 
funding for projects and programs was available.
    Parker-Davis Project.--Last year, the fiscal year 2005 Omnibus 
Appropriation Bill provided $6 million to replace one of two parallel 
transmission lines running from Topock Substation in western Arizona to 
Davis Dam and on to the Mead Substation near Hoover Dam in Nevada. The 
funds were deemed non-reimbursable. Since the funds then had to be 
taken out of available funds, this earmark made a significant dent in 
the construction funding for Western for fiscal year 2005 and caused a 
number of projects to be postponed. This conductor replacement was 
supposed to be an experiment and funded outside Western's budget. That 
didn't happen. Just as importantly, the administration is not proposing 
to continue funding for this ``experiment''. We heartily support the 
administration's decision and vigorously oppose any earmarking of funds 
within Western's budget for it. The proposed use of composite cable is 
extraordinarily expensive compared to traditional cable. The path being 
proposed to be upgraded is contractually constrained, not physically 
constrained, and there are substantially cheaper alternatives for 
improving transmission in northwestern Arizona. In short, it is a waste 
of money.
    In closing, we wish to inform the subcommittee that we endorse and 
support the testimony filed by the Colorado River Energy Distributors' 
Association, a regional association of which our Association is a 
member. We also endorse and support the testimony filed by the Central 
Arizona Water Conservation District, one of our members.
    We appreciate the opportunity to share the Association's positions 
with you and would be happy to respond to any requests for information 
or clarification.
                                 ______
                                 
            Prepared Statement of Colorado Springs Utilities

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

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

                          DEPARTMENT OF ENERGY

 Prepared Statement of the DOE University Research Program in Robotics 
                                 (URPR)

    The U.S. Department of Energy (DOE) has provided support to the DOE 
University Research Program in Robotics to pursue long range research 
leading to the: ``development and deployment of advanced robotic 
systems capable of reducing human exposure to hazardous environments, 
and of performing a broad spectrum of tasks more safely and effectively 
than utilizing humans.''
    The DOE University Research Program in Robotics (URPR) has proven 
highly effective in technology innovation, education, and DOE mission 
support. The URPR has incorporated mission-oriented university research 
into DOE, and, through close collaboration with the DOE sites, provides 
an avenue for developing creative solutions to problems of vital 
importance to DOE.
    The URPR would like to thank the committee members for their 
historically strong support of this successful program. Recognizing the 
shift in national priorities post-9/11/01, the URPR has begun to 
include new applications as the target for its technology development.
Request for the Committee
    The University Research Program in Robotics (URPR) is included in 
the President's budget at its traditional level of $4.5 million (fiscal 
year 2002-2005). To accelerate technology development and deployment 
within the DOE complex, we suggest an additional $1.5 million be added 
to the URPR while a separate allocation of $2.0 million be provided to 
participating NNSA laboratories and sites.

          DEVELOPING ADVANCED ROBOTICS FOR DOE AND THE NATION

Robotic Solutions for Work in Potentially Hazardous Environments
    The goal of this program is to invent and utilize state-of-the-art 
robotic technology in order to remove humans from potentially hazardous 
environments and expedite remediation efforts considered essential. 
Established by DOE in fiscal year 1987 to support advanced nuclear 
reactor concepts, the project was moved to EM to support the higher 
priority needs in environmental restoration. Reflecting the change in 
national priorities post-9/11, the URPR began supporting NNSA 
applications during fiscal year 2004. Because of the sensitive nature 
of some potential applications, this transition is proceeding smoothly 
but gradually as the new DOE participants begin to grasp the 
applicability of this technology to their future world, and the URPR 
participants obtain information regarding technology problems and 
potential applications.
    The URPR represents a DOE-sponsored consortium of five research 
universities (Florida, Michigan, New Mexico, Tennessee, and Texas) of 
long standing, working on the science of remote systems technologies to 
advance their effectiveness in performing physical tasks in hazardous 
environments associated with the DOE nuclear sites. The work of these 
universities is now widely recognized as some of the best in the field 
(the creation of spin-off companies, deployment requests from FEMA at 
Ground Zero, wins in national technology competitions, archival journal 
articles, etc.). Some of the focus technologies include innovative 
mobile platforms and their semi-autonomous navigation, kinesthetic 
input to teleoperation systems, simulation-based design and control, 
manipulation of unwieldy objects, machine vision and scene assessment 
for world modeling, improved radiation hardening of electronic 
components, and integration technology to assist in the assessment and 
deployment of complete solutions in the field. In addition to DOE 
specific applications, the team is increasingly able to deploy their 
technology for DOD applications (aircraft carrier weapon's elevator, 
anti-terrorism systems, submarine operations, etc.), for Homeland 
Security applications (surveillance and monitoring), for commercial 
applications (manufacturing, building construction, space) and for 
human augmentation and training (micro-surgery, rehabilitation of 
humans, reduction of drudgery). We constantly seek to explore strategic 
partnerships and utilize existing deployment resources to more rapidly 
export this technology to the DOE sites that could most benefit from 
this new technology.

Robotics and Automation for NNSA
    NNSA recognizes the need to develop advanced automation and 
robotics capabilities, as expressed in the NNSA Technology Roadmap for 
the modernized nuclear weapon complex. The report notes ``Perhaps the 
most significant transformation of the NWS complex will be the 
replacement of manually intensive production systems with automated, 
intelligent process and equipment.'' The URPR program provides 
capabilities that will improve ability and agility in responding to 
programmatic needs, and enhance personal safety, security, efficiency, 
and efficacy of weapons related activities within the complex through 
the application of intelligent automation. It supports the DOD research 
programs priorities of promoting scientific and engineering leadership, 
and vitality and workforce renewal, providing agile responses to future 
requirements, and offering assessment and implementation of new 
technology options during the planning and execution of major capital 
projects.
    The nuclear weapons complex represents one of our Nation's most 
vital pieces of defense infrastructure and warrants the country's 
finest technologies to accomplish its mission. In the commercial 
sector, advanced automation and robotic technologies have demonstrated 
the ability to increase security, personnel safety, precision and 
reproducibility, and productivity for tasks that are hazardous, 
routine, or require exceptional precision.
    Advances in robotic mobility, mapping, handling, simulation, safety 
and integration technology will minimize the risks to human operators 
and maximize the productivity of DOE sites. URPR will provide 
fundamental, long-range robotics and integration technologies that can 
be validated and systematically inserted into DOE sites. These world-
class technologies will support applications in the Stockpile 
Stewardship Program and other DOE programs. The specialized needs 
associated with the complex make many existing technologies 
inappropriate, unsuitable, or requiring significant further development 
or modification. Where new automation and robotics technologies will 
benefit the DOE mission, the URPR program seeks to meet that need.
    The current plans for the URPR transition into the NNSA 
organization call for the university consortium to interact through 
Sandia National Laboratory (SNL) to the project manager at DOE 
headquarters. SNL has been strongly supportive of the URPR mission, but 
lacks funds to participate materially in this program. At the top 
levels of NNSA, the URPR funds are being drawn from multiple campaigns 
since the benefits of this technology can impact many NNSA 
applications. URPR ties to specific sites having applications needing 
robotic technologies have begun.

Making the Nation Safer
    In the aftermath of the 9/11 tragedy, our Nation has engaged in a 
long-term war to counter terrorism. The National Research Council 
[2002] published a thorough study of the role of science and technology 
in countering terrorism entitled Making the Nation Safer. This book 
represents the collective thoughts of 164 top scientists and engineers 
focusing on homeland security of the United States. It represents the 
combined output of the National Academy of Sciences, the National 
Academy of Engineering, the Institute of Medicine, and the National 
Research Council. It identifies urgent research opportunities. Of the 
seven crosscutting technology challenges identified by the committee, 
autonomous mobile robotic technologies were highlighted. ``Continued 
development and use of robotic platforms will enable the deployment of 
mobile sensor networks for threat detection and intelligence 
collection. Robotic technologies can also assist humans and such 
activities as ordinance disposal, decontamination, debris removal, and 
firefighting.'' Robotic technologies, cited as a ``critical long-term 
research need,'' are featured throughout the individual chapters that 
address ways for mitigating our society's vulnerabilities to terrorism 
and responding to an attack. In addition, the report identifies the 
need to sustain the Nation's scientific and engineering talent base and 
recommends [Rec. 13.4] a human resource development program to increase 
training in those fields consistent with the government's long-term 
priorities for homeland security research. The report exhorts that 
``expanding the number of American scientists and engineers is 
particularly important.''
    In summary, the University Research Program in Robotics is a key 
player in executing the recommendations for making the Nation safer. We 
believe that the progress being demonstrated by the URPR will also be 
heralded by DHS as they develop a clearer vision of their needs.

Innovation, Education, and DOE Mission Support
    The URPR's strategic mission is to make significant advances in our 
Nation's robotic and manufacturing technology base while emphasizing: 
education, technology innovation through basic R&D, and DOE mission 
support. The URPR has demonstrated that the advantages of operating as 
a consortium are significant. The institutions of the URPR partition 
the technical development into manageable sections which allow each 
university to concentrate within their area of expertise (efficiently 
maintaining world-class levels of excellence) while relying on their 
partners to supply supporting concentrations. With full support of the 
host universities, this effort naturally generated the in-depth human 
and equipment capital required by the DOE community. Practically, the 
long-term distributed interaction and planning among these universities 
in concert with the DOE labs and associated industry allows for 
effective technology development (with software and equipment 
compatibility and portability), for a vigorous and full response to 
application requirements (component technologies, system technologies, 
deployment issues, etc.), and for the supported application of the 
technology. Considering the remarkable achievements of URPR over its 
history, the URPR is in the ideal position to execute its prominent 
role in education, technology innovation, and DOE mission support.
    The project has produced an impressive array of technological 
innovations, which have been incorporated into robotic solutions being 
employed across Federal and commercial sectors. This successful program 
demonstrates efficient technology innovation while educating tomorrow's 
technologists, inventing our country's intelligent machine systems 
technology of the next century, bolstering our manufacturing-related 
industries, and meeting tomorrow's applied research needs for DOE.

DOE Mission Contribution--Robotic Technologies
    Since its inception, DOE has promoted robotics as a necessary 
enabling technology to accomplish its mission. The motives for 
undertaking a comprehensive R&D effort in the application of advanced 
robotics to tasks in hazardous environments reflect economic 
considerations, efficiency, and health and safety concerns. The URPR is 
DOE's only needs-driven research program to develop new remote systems 
technologies to support the DOE thrust areas. In contrast, DOD, NIH, 
and NASA continue to prove the benefits of much larger mission-oriented 
robotics programs.
    The URPR's level of funding has been constant since fiscal year 
2002 and remains adequate for continuing basic research and development 
of this technology. However, the URPR participants are concerned about 
ensuring their technology provides direct benefit to NNSA applications. 
We are already aware of several applications in which robotics and 
automation should be employed to enhance safety, security, and 
productivity. Key Senate staff have recommended to augment the URPR 
funding and provide direct funding to NNSA sites in order to stimulate 
technology development and deployment for these and future applications 
(e.g., LANL TA-55, Y-12).

Request for the Committee
    We request the committee include the following language in the 
fiscal year 2006 Energy and Water Appropriations Bill: ``From within 
funds provided for the engineering campaigns, the Committee recommends 
that $6,000,000 be provided to continue the University Research Program 
in Robotics (URPR) for the development of advanced robotic technologies 
for strategic national applications. Also from within funds provided 
for the engineering campaigns, the Committee recommends that $2,000,000 
be provided to NNSA laboratories and sites to transfer, integrate and 
deploy robotics technology developed by the URPR.''
                                 ______
                                 
                   Prepared Statement of Cummins Inc.

    Cummins Inc. is pleased to provide the following statement for the 
record regarding the Department of Energy's fiscal year 2006 budget for 
Energy Efficiency and Renewable Energy and Fossil Energy programs. 
Cummins Inc., headquartered in Columbus, Indiana, is a corporation of 
complementary business units that design, manufacture, distribute and 
service engines and related technologies, including fuel systems, 
controls, air handling, filtration, emission solutions and electrical 
power generation systems. The funding requests outlined below are 
critically important to Cummins' research and development efforts, and 
would also represent a sound Federal investment towards a cleaner 
environment and improved energy efficiency for our nation. We request 
that the committee fund the programs as identified below.

                 ENERGY EFFICIENCY AND RENEWABLE ENERGY

Office of FreedomCAR and Vehicle Technologies (FCVT)
            Vehicle Technologies
    Advanced Combustion Engine R&D--Heavy Truck Engine.--This program 
supports R&D activities to increase heavy truck engine fuel efficiency 
while meeting EPA emissions regulations in 2007 and 2010. Modern heavy 
duty diesel engines convert approximately 41 percent of fuel energy 
into useful work. Technologies required to achieve EPA's 2007 and 2010 
emissions regulations will negatively impact engine efficiency (EPA 
regulations call for 90 percent emissions reductions by 2010). The 
objective of this program is to reach a 50 percent engine efficiency 
level under the new standards. A 45 percent efficiency level has been 
demonstrated at 2007 conditions in the laboratory. To further mitigate 
fuel efficiency penalties, additional research efforts are needed in 
advanced combustion and NOX and PM reduction. Heat rejection 
challenges and aftertreatment systems, including active particulate 
filters and NOX reduction technologies (adsorbers and SCR), 
will be addressed by the program in fiscal year 2006. Other areas of 
work include modeling and simulation techniques, system level controls, 
vehicle system integration and advanced lubricants. This program is 
critical to the success of engine manufacturers in meeting EPA's strict 
2007 and 2010 emissions regulations. Cummins urges that $20 million be 
appropriated for the program for fiscal year 2006.
    Advanced Combustion Engine R&D--Off-Highway Heavy Vehicle Engine 
R&D.--Technologies needed to meet EPA's strict Tier IV emissions 
regulations for off-road vehicles will result in significant fuel 
economy penalties. This program supports R&D efforts to help meet 
future emissions requirements while maintaining Tier II/Tier III fuel 
consumption. Off-highway vehicles and machines operate under severe 
environmental conditions, including high dust, debris, a wide range of 
altitudes, temperatures and vibration. Off-road engines are applied to 
hundreds of different types of equipment in a wide range of industries, 
such as agriculture, construction and mining. Manufacturers face unique 
challenges in meeting emissions regulations for off-highway vehicles. 
These markets are very sensitive to installed cost for engine 
components, and the lack of ram air and limited space for accessories 
and engine components significantly limits emissions compliance 
strategies. Progress has been made in recent years in combustion models 
to facilitate in-cylinder emissions solutions, meeting Tier III 
emissions levels with fuel economy levels close to Tier II engine 
designs. Level funding for the Off-Highway program in fiscal year 2006 
will allow continued research on improving combustion models for 
complex combustion systems, transient operations and validation of Tier 
IV technologies on single and multi-cylinder engines. Cummins urges 
that $3.5 million be appropriated for this program for fiscal year 
2006.
    Advanced Combustion Engine R&D--Combustion and Emission Control 
R&D.--In this program, the emphasis is on research in advanced 
combustion regimes that would achieve FreedomCAR and 21st Century Truck 
Partnership efficiency goals for personal and commercial diesel 
vehicles while maintaining near zero emissions. The light duty segment, 
less than 8,500 lb. GVW, is where most transportation fuel is currently 
used and where virtually all of the growth in transportation fuel use 
will occur. The ability to meet Tier II, Bin 5 emissions targets with 
light duty diesel engines has been demonstrated through the program 
with aftertreatment subsystems and controls. However, critical 
technology hurdles remain in the areas of lowering engine out 
emissions, improving aftertreatment system durability, engine managed 
regeneration and effective operation during transient and low 
temperature operations, on-board diagnostics, minimizing fuel economy 
penalties due to use of reductant and engine back pressure effects. 
Funding under the 21st Century Truck Partnership supports CRADA 
activities at the Department of Energy's national laboratories for 
broad research and development of advanced combustion systems to 
improved engine-out emissions and fuel efficiency. Recent DOE contract 
awards for research on High Efficiency Clean Combustion are funded 
under this program. Cummins urges that $28.5 million be appropriated 
for this program in fiscal year 2006. A funding split under the program 
between the 21 Century Truck Partnership (21CTP) and the FreedomCAR 
Partnership is recommended as follows: 21CTP--$7.7 million and 
FreedomCAR--$20.8 million (as requested by DOE).
    Advanced Combustion Engine R&D--Waste Heat Recovery.--This DOE 
program supports broader energy efficiency and emissions goals for 
diesel engines by funding technology development for waste heat 
recovery and boosting technologies. Over 50 percent of the fuel energy 
is lost in diesel engines through wasted heat in exhaust, lubricants or 
coolants. This program is focused on identifying and developing 
innovative energy recovery technologies, such as thermoelectric and 
turbo-compounding technologies, which are showing promise for 
recovering wasted energy by converting it to electrical energy. Planned 
activities for the program in fiscal year 2006 include design & 
development of components, subsystems and associated electronic 
controls, integration with engine controls and development of 
thermoelectric generator technologies. Cummins urges that $4 million be 
appropriated for this program in fiscal year 2006.
    Advanced Combustion Engines--Health Impacts.--The goal of this 
program is to evaluate health implications from new engine technologies 
being developed to meet energy efficiency goals. The Advanced 
Collaborative Emissions Study (ACES) is funded under this program. ACES 
is a cooperative effort between government (DOE, EPA) and industry 
(EMA, MECA, API, etc. . . . ) to assess health effects of emissions 
from heavy-duty engines equipped with new emissions control 
technologies. The ACES program will include emissions characterization, 
chronic exposure animal bioassays, and identification of any 
unanticipated emissions or health effects from new engine technologies. 
Cummins urges that $2.5 million be appropriated for this program in 
fiscal year 2006.

            Fuels Technologies
    Non-Petroleum Based Fuels & Lubes: Heavy and Medium Duty Truck 
Programs (Natural Gas Vehicle).--This program funds development efforts 
for natural gas engines for medium and heavy trucks. Current natural 
gas engines sacrifice fuel efficiency compared to diesels in similar 
applications. However, next generation natural gas combustion 
technologies offer the potential to meet 2010 emissions with simpler 
more durable systems and reduce or eliminate fuel efficiency losses. 
Natural gas engines are practical in urban applications including 
school and city buses, pick up and delivery trucks. The exhaust 
emissions signature of engines using natural gas and hydrogen mixture 
combustion has demonstrated potential for even lower emissions. Natural 
gas combustion, storage and infrastructure development also offers a 
bridge to the hydrogen economy. Cummins urges that $2 million be 
appropriated for this program in fiscal year 2006.
    Advanced Petroleum Based Fuels (APBF).--This important program 
supports activities to enable post-2010 combustion regime and emissions 
control systems to be as efficient as possible and ongoing study of 
sulfur effects on aftertreatment systems for heavy duty engines. 
Aftertreatment technologies required to meet new emissions regulations 
are new and relatively undeveloped. Engine companies are required to 
prove out emissions compliance for over 435,000 miles of useful life. 
The goal of this program is to study the impacts of sulfur content in 
fuel on durability and reliability of aftertreatment systems. Cummins 
urges that $8.5 million be appropriated for this program in fiscal year 
2006.

            Materials Technologies
    Propulsion Materials Technology--Heavy Vehicle Propulsion Materials 
Program.--This program supports research and development of next 
generation materials to enable improvements in diesel engine efficiency 
and reduce aftertreatment system costs. Technologies for NOX 
adsorbers and particulate filters are not yet fully developed. A better 
understanding of NOX adsorber systems, filtration media 
modeling and substrate degradation mechanisms is required. In addition, 
traditional heavy duty diesel engine materials may not be adequate for 
next generation combustion concepts, such as Homogeneous Charge 
Compression Ignition (HCCI) technologies. Lighter weight and higher 
strength materials are needed to obtain lighter, more robust and higher 
cylinder pressure engine systems. Reductions in engine weight yield 
significant improvements in fuel consumption and emissions. Increased 
funding for the program will support studies on a range of advanced 
materials technologies, including sulfur removal from NOX 
adsorber catalysts/soot oxidation, filtration media modeling, nano-
fiber filter technologies, and understanding lightweight/high strength 
material engine components. Cummins urges that $6.9 million be 
appropriated for this program in fiscal year 2006.

            Distributed Energy Resources
    Distributed Generation Technology Development--Advanced 
Reciprocating Engine Systems (ARES).--The goal of this multi-year 
program is to develop high efficiency, low emissions and cost effective 
technologies for stationary natural gas systems between 500-6,500 kW by 
the year 2010. Natural gas-fueled reciprocating engine power plants are 
preferred for reliability, low operating costs, high up-time, and 
unattended operations. However, these engines have not kept pace with 
the fuel efficiency of their diesel engine counterparts. Traditional 
natural gas engines are approximately 32-37 percent efficient. 
Technologies sponsored by the ARES program have demonstrated a 19 
percent efficiency improvement compared to baseline engines and a 19 
percent reduction in CO2 emissions. These systems are being 
ramped up for field evaluations, and fiscal year 2006 is a critical 
year for the program. Future technology challenges include analytical 
model development, combustion development, air handling optimization, 
hardware durability, ignition system life and advanced controls. The 
development of distributed power generation supports national energy 
security needs, improved protection of critical infrastructure to 
address homeland security concerns, less dependence on the national 
electrical grid system and point of use energy production. Cummins 
urges that $17 million be appropriated for this program in fiscal year 
2006.

                             FOSSIL ENERGY

Office of Fossil Energy/Coal and Other Power Systems/Distributed 
        Generation Systems
            Fuel Cells
    Innovative Concepts--Solid State Energy Conversion Alliance 
(SECA).--The goal of the Solid State Energy Conversion Alliance (SECA) 
project is the development of a commercially viable 3-10 kW solid oxide 
fuel cell module that can be mass-produced in modular form for RV, 
commercial mobile, and telecommunications markets. The program is also 
investigating products that can be used in auxiliary power units on 
long haul trucks to reduce idling. Solid oxide fuel cells can play a 
key role in securing the Nation's energy future by providing efficient, 
environmentally sound electrical energy. Fuel cell systems provide 
highly reliable power, with significantly lower noise, fuel consumption 
and exhaust emissions compared to existing fossil fuel technologies. 
Federal funding is critical to support research needed to keep this 
technology moving from the laboratory to commercial viability. Progress 
on Phase 1 of the program has been positive. In 2004, a 1 kW-scale 
prototype was constructed and tested. A 5 kW prototype is being 
constructed for evaluation in the fall of 2005. The program is moving 
forward toward production development beginning in calendar 2007, 
leading to possible commercial production in 2010. This is a 10-year 
program that combines the efforts of the DOE national laboratories, 
private industry, universities, and other research organizations. 
Cummins urges that the DOE request of $65 million be appropriated for 
this program in fiscal year 2006.
    Thank you for this opportunity to present our views on these 
programs which we believe are of great importance to the U.S. economy 
through viable transportation and power generation.
                                 ______
                                 
            Prepared Statement of the University of Oklahoma

    The University of Oklahoma (OU) respectfully requests appropriation 
of $1 million in fiscal year 2006 to initiate research in high-priority 
and near-term applications of single-walled carbon nanotubes (SWNT). 
This work will be performed through a newly formed Center for 
Applications of Single-Walled Carbon Nanotubes.

                     STATEMENT OF NATIONAL INTEREST

    Nanotechnology will undoubtedly play a central role in the future 
of energy. Lighter, stronger, more efficient nano-structured materials 
will result in superior utilization, transportation, and storage of 
energy. Within the realm of nanotechnology, single-walled carbon 
nanotubes (SWNT, also known as ``buckytubes'') play a crucial role. 
SWNT will function as arms, wires, pipes, circuit devices and nano-
scale transport devices that will make the nanotechnological revolution 
possible. SWNT serve as true ballistic conductors, molecular wires, and 
single-molecule transistors. In the next few decades we will see the 
silicon-based microelectronics of today rivaled or perhaps supplanted 
by carbon-based nanoelectronics technology that is much faster, smaller 
and energy-efficient. In the field of materials, nanotubes might 
represent in the 21st century what polymers did in the 20th century: a 
revolutionary material that changes the lives of everyone. The 
combination of extraordinary electrical properties, extremely high 
thermal conductivity, very large length-to-diameter ratio (typical of a 
polymer), and extreme stiffness (typical of a ceramic) means that a 
material unlike any other has been created. SWNT are 200 times stronger 
than steel at one-sixth the weight, and conduct heat more efficiently 
than any other material.
    The path to large-scale application of SWNT has been hampered by 
the high cost and low availability of these unique materials. SWNT 
synthesis methods are currently presumed to be impure and non-scalable, 
unable to operate under severe conditions, and demanding of high 
capital and operating costs. However, a new nanotube synthesis process 
developed at OU and known as CoMoCATTM (Resasco et al.), is 
a catalytic method of synthesis that has proven advantageous over all 
existing methods and can be scaled up to produce large amounts of high 
quality SWNT. Significantly, many of the proposed applications of SWNTs 
are likely to require quantities of nanotubes with high structural 
integrity, rather than nanotube mixtures and low-purity materials. 
Based on the novel CoMoCATTM technology, an OU startup 
company (South-West Nanotechnologies, SWeNT) is developing a large-
scale process that will position OU in the unique and enviable position 
of having available abundant amounts of SWNT of the highest quality for 
development of revolutionary products. The uniformity of nanotube 
structure and their easier dispersability are the world-wide recognized 
properties of our nanotube product. However, long-term economic 
competitive advantage will mostly be in the development and manufacture 
of products based on the SWNT produced in Oklahoma. This challenge will 
be the main focus of the funded program.

                          MISSION AND APPROACH

    Researches at OU and SWeNT have developed unique methods to handle 
the nanotubes in different forms (freeze dried nanotube webs, viscous 
gels, and stable nanotube suspensions). Each of these forms is suitable 
for specific applications and is customized for each potential user. 
The research lines that will be either expanded from existing groups at 
OU or developed around the proposed initiative will take advantage of 
the large-scale availability of high-quality nanotubes produced by 
SWeNT. The advantages of SWeNT nanotube material are described below in 
the section entitled Statement of Unique Technology. The research 
described herein will take our technological lead in production of 
carbon nanotubes, and turn it into an economic lead in products useful 
in the following applications of great impact in the Energy sector, 
such as:
  --Fuel cells;
  --Energy Storage;
  --Photovoltaic cells; and,
  --Lightweight strong composites.
    Their incomparable aspect ratio and high surface area, coupled with 
their extraordinary mechanical, electrical, and gas transport 
properties make SWNT excellent support elements for nanostructured fuel 
cell electrodes and essential components of supercapacitors and 
conducting coatings. The properties of our SWNT show great potential 
for improvement of fuel cell electrodes' performances. We have 
demonstrated that the nanotubes can stabilize high Pt dispersions, 
increase electronic conductivity in the electrodes, improve gas 
transport in the electrodes' reactive layers, and decrease peroxides' 
attack of the proton-transfer membrane. In addition, SWNT can be 
structured on the surface of the membrane at the nanometer level, thus 
offering the opportunity for maximizing utilization of Pt, a major 
driver of the fuel cell cost. All these advantages make SWNT excellent 
candidates as fuel cell electrodes.
    Also, within the scope of the research program on nanotube 
applications is the utilization of the remarkable ability of SWNT for 
gas adsorption and as a filler in polymer composites with unique 
strength, light weight, thermal and electrical conductivity. In 
particular, we plan to develop nanotube-based fire-resistant polymer 
composites, electrical and thermally conducting composites, as well as 
high-strength fibers. In confined areas, e.g. ships and airplanes, a 
very important safety hazard is melted plastic, e.g., plastic used as 
insulation for wires. Nanotubes entangle with the polymer and prevent 
the polymer from dripping when melted, thus averting severe injury to 
passengers, crew and safety personnel fighting the fire. Applications 
for high thermal conductivity materials include microelectronics; heat 
dissipation is one of the most important problems in making electronic 
components smaller and smaller.
    The use of high thermal conductivity materials will lead to even 
smaller and more powerful microelectronic components. Addition of SWNT 
to polymers results in electrical conductivity increases of many orders 
of magnitude. These electrically conductive composites can be designed 
with a wide range of conductivities for a variety of applications that 
include antistatic materials, electrostatic dissipation, and EMI/RFI 
shielding.
    Soft body armor materials made from polymers, (Kevlar and Spectra 
Shield) are lightweight and flexible; however the stopping power is 
significantly inferior to hard armor made from heavy, inflexible 
ceramics. SWNTs have polymer-like and ceramic-like qualities, and hence 
the possibility of making a material that has the flexibility and 
weight of soft-body armor and the stopping power of hard body armor. 
Better armor will improve survivability and mobility of our military 
and law enforcement personnel.
    Other promising SWNT applications include field emitters for flat 
panel displays, nanosensors, nanotransistors, nanostructured coatings, 
and molecular delivery of biomolecules.

                     STATEMENT OF UNIQUE TECHNOLOGY

    Our process is based on a formulation of solid catalyst that 
inhibits the formation of undesired forms of carbon and minimizes the 
residual catalyst left on the product; it can be readily scaled-up and 
may result in lower production costs. This method is based on the 
controlled reaction of carbon monoxide (CO) on a solid catalyst, under 
conditions that result in high yield and selectivity towards SWNT as 
opposed to other less desired forms of carbon, such as graphite 
nanofibers. Most importantly, this process can be operated in a 
continuous mode and be scaled-up while keeping high selectivity. These 
are significant elements for a cost-effective production system. Each 
of the known competitive processes lacks at least one or more of the 
key success factors of cost, selectivity, and consistent quality.
    Because the electronic and optical properties of SWNT depend upon 
sensitively of tube structure, a major goal in nanotube production is 
to control the distribution of nanotube diameters and chiralities in 
the product. For methods in which nanotubes are grown from gaseous 
precursors on metallic catalyst particles, the size distribution of the 
catalyst particles strongly influences the product composition. For 
example, dozens of distinct nanotube structures are formed in the well-
known HiPCOTM process, developed at Rice University. By 
contrast, with the unique catalyst formulation developed by OU, the 
product composition depends on catalyst design and parameters that 
precede the reaction process and nanotube growth. Adjustment of these 
parameters allows fine control over the specific catalyst activity and, 
therefore, of the nanotube structures.
    In our method, nanotubes are grown by CO disproportionation 
(decomposition into C and CO2) at 700-950C in flow of pure 
CO at a total pressure that typically ranges from 1 to 10 atm. This 
process is able to grow a significant amount of SWNT in several 
minutes, keeping selectivity towards SWNT of better than 90 percent. 
The difference of this technology compared to other catalytic 
decomposition methods is based on the stabilization of highly dispersed 
Co species on a solid substrate. The effect of having Co stabilized is 
dramatic. It avoids the formation of large metallic aggregates. These 
large metallic aggregates, present in all of the competing methods have 
the disadvantage of getting encapsulated in graphite layers, which 
remain in the product and are extremely difficult to remove. By 
contrast, in our process, Co atoms are initially in the form of cobalt 
molybdate and only begin to agglomerate under the reaction conditions 
and their growth is hindered by the interaction with the substrate.
    This process has the intrinsic ability to produce SWNT of different 
diameters, because by varying the operating temperature or the gas 
composition the distribution of diameters can be reproducibly varied. 
During the last 2 years, the process has been scaled up by a factor of 
20 without any change in the structural characteristics of the product. 
In addition to the better scalability of our process, the product 
itself exhibits uniquely superior features. Among several advantages, 
the uniformity of nanotube structure and their easier dispersability 
due to their thinner bundle size are perhaps the most remarkable.
    For many applications in nanoelectronics and nanosensors it is 
essential to have a nanotube material with specific electronic 
properties. The characteristics of nanotubes are directly related to 
their diameter and chirality. Therefore, a process that allows 
controlling in a reproducible way the structure of nanotubes has a 
remarkable edge over non-selective processes. The nanotubes produced by 
our process exhibit a uniquely narrow distribution of diameters, which 
can be controlled by adjusting the process parameters. This 
characteristic of the product has been confirmed by photoluminescence 
analysis performed in collaboration with scientists at Rice University. 
For instance, as demonstrated in a recent publication, the selectivity 
distribution of different semiconducting carbon nanotubes produced by 
our method is superior compared to that obtained in the competing 
processes. It can be observed that only two types of nanotubes 
represent the majority of the semiconducting nanotubes present in our 
samples. By contrast, a similar analysis of the competing material 
displays a much broader distribution of both diameters. The two types 
of nanotubes observed in our samples are the (6,5) and (7,5), whose 
diameters are 0.75 nm and 0.82 nm, respectively. This result is in 
perfect agreement with the 0.8 nm average diameter measured by Raman 
spectroscopy, TEM, and STM. The distribution of chiralities is also 
very narrow. Both, the (6,5) and (7,5) nanotubes have a chiral angle 
near 27 degrees. By contrast, competing materials exhibit a much 
broader distribution of chiralities.
    Due to the presence of the solid silica substrate that separates 
the growing nanotubes during the synthesis, the resulting bundles of 
SWNT are significantly thinner than those typically obtained with 
methods in which the catalyst is in the vapor phase. While each of the 
bundles produced by these other methods contain 50 to 100 nanotubes, 
those obtained in our process only contain 10 to 20 nanotubes. A sample 
with thinner bundles has several important advantages over one with 
thicker bundles. For example, for applications in flat panel displays 
(field emission), thinner bundles result in much lower voltage 
requirements for a given operating emission current. Lower onset 
voltages in field emission have a great impact on the cost and 
viability of flat panel displays. Similarly, in the area of polymer 
composites, thinner bundles can produce conducting composites with 
lower nanotube loadings, increasing the transparency of the material 
and reducing the cost.
    Tests conducted by companies who collaborate with OU and SWeNT, 
such as Applied Nanotechnologies Inc, Austin, TX; Zyvex, Dallas, TX; 
and Nomadics, Stillwater, OK confirm the higher dispersability in 
polymer matrices of our SWNT material compared to nanotubes produced by 
other methods. In addition to the photoluminescence analysis conducted 
at Rice, several reputed laboratories around the world have confirmed 
the quality and uniqueness of the SWNT produced by our method. For 
example, high-resolution STM images have been obtained at Harvard 
University in the group of Prof. Charles Lieber. The STM images reveal 
nanotubes of high quality and uniquely uniform diameter, in complete 
agreement with the photoluminescence results. Similarly, Dr. Ming Zheng 
at Dupont, working with our material and employing a separation method 
involving interaction of DNA of specific sequencing with the nanotubes, 
has been able to produce monodispersed samples of (6,5) nanotubes. This 
is the first time that a sizeable sample of only one type of nanotube 
is separated. This remarkable accomplishment can only be realized with 
the narrow distribution of our sample material. In addition to those 
mentioned above, our samples have been tested and analyzed by several 
other academic laboratories around the world (Prof. Manfred Kappes, 
Karlsruhe University, Germany; Prof. Hongjie Dai, Stanford; Prof. 
Michael Strano, Illinois; Prof. Antonio Monzon, Zaragoza, Spain) as 
well as industrial laboratories (Dupont, Zyvex, Eikos, ChevronPhillips, 
Dow) and Federal agencies (NASA). In all cases, the analyses have 
indicated that the material is of high quality and uniquely uniform.
                                 ______
                                 
          Prepared Statement of the Detroit Diesel Corporation

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

    Member institutions of CFFS: University of Kentucky, University of 
Pittsburgh, West Virginia University, University of Utah, and Auburn 
University.

 PRODUCTION OF HYDROGEN FROM FOSSIL FUELS USING C1 CHEMISTRY: OVERVIEW 
                          AND FUNDING REQUEST

    The ``hydrogen economy'' envisions a quantum leap in the 
improvement of air quality through the utilization of hydrogen as a 
fuel for a new generation of vehicles powered by fuel cells 
(``FreedomCar'') and for the production of electrical power 
(``FutureGen''). This document briefly outlines a hydrogen research 
program being conducted by research faculty and graduate students from 
the five universities (Kentucky, West Virginia, Pittsburgh, Auburn, and 
Utah) that comprise the Consortium for Fossil Fuel Science (CFFS). The 
primary goal of the research is to develop novel, improved methods of 
producing hydrogen from coal-derived syngas, hydrocarbon gases and 
liquids produced from syngas, coalbed methane, and natural gas using C1 
chemistry, an area in which the CFFS has significant expertise and 
experience. The development of novel hydrogen storage materials is also 
being investigated. A 3-year contract to conduct this research was 
initiated with the CFFS by the U.S. Department of Energy, Office of 
Fossil Energy, (DOE-FE) in 2005. The CFFS is requesting $2 million from 
DOE-FE in fiscal year 2006 to continue this research program. The five 
CFFS universities will provide $0.25 of cost-sharing for each Federal 
$1.00, for a total cost-share of $500,000 in fiscal year 2006.
    The overall goals of the program are to:
  --Develop non-traditional approaches for producing high purity 
        hydrogen from gaseous, liquid, and solid hydrocarbons that are 
        more efficient than those currently used.
  --Develop improved catalysts and reaction sequences for producing 
        hydrogen from coal-derived syngas via the water-gas shift (WGS) 
        reaction.
  --Develop improved methods for low-temperature reforming of alcohols 
        derived from coal.
  --Develop novel solid materials that have high capacity for safe 
        hydrogen storage.

                            RESEARCH PROGRAM

    The CFFS research program on hydrogen has been formulated through 
consultation and discussions with program managers at the DOE-FE 
National Energy Technology Laboratory (NETL) and with the members of 
the CFFS Industrial Advisory Board (Chevron-Texaco, Eastman Chemical, 
Conoco-Phillips, Air Force Research Laboratory, U.S. Army National 
Automotive Center-Tank & Automotive Command (TACOM), and Tier 
Associates). A brief summary of the research topics being addressed in 
this program is given below.
       non-traditional approaches for the production of hydrogen
  --Catalytic dehydrogenation of gaseous hydrocarbons has been shown by 
        the CFFS to be a simpler one-step method of producing hydrogen 
        than the traditional multiple step method. Future research will 
        focus on applying this approach to producing hydrogen from 
        liquid and solid hydrocarbons, including coal, diesel fuel, and 
        waste plastic.
  --Hydrogen production from C1 fuels by reforming in 
        supercritical water looks promising because of its ability to 
        act both as a solvent and a reactant.
  --Electrochemical production of pure hydrogen from fine coal slurries 
        may occur at lower potentials with less energy consumption than 
        direct electrolysis of water because coal supplies additional 
        electrons for the process.
  --Autothermal reforming of hydrocarbon fuels will be investigated 
        using novel iron-based catalysts with ceria supports.
  --Photocatalytic decomposition of water using photocatalysts 
        consisting of metal-doped titanium oxide aerogels will be 
        investigated. Metal nanoparticles will be incorporated into the 
        aerogels from volatile metal complexes.
      hydrogen production using the water-gas shift (wgs) reaction
  --A low temperature reaction sequence to produce hydrogen from coal-
        derived syngas using a potassium catalyst will be investigated.
  --Development of very high surface area WGS catalysts supported on 
        ceria aerogels should improve the yields and kinetics of that 
        process.
  --Identification of active sites and secondary metal promoters should 
        lead to more active iron-based WGS catalysts.

                 LOW TEMPERATURE REFORMING OF ALCOHOLS

  --Several companies favor steam reforming of alcohols as an approach 
        for producing hydrogen for vehicles and distributed power 
        generation. Three CFFS research projects will employ novel 
        approaches and catalysts for reforming readily available 
        alcohols such as methanol, ethanol, and ethylene glycol (anti-
        freeze).

                    NOVEL HYDROGEN STORAGE MATERIALS

    Novel materials that are being developed and investigated for 
hydrogen storage by the CFFS are listed below:
  --Chemical hydrides containing catalysts to improve hydrogen storage 
        and release.
  --Activated glassy carbons and stacked-cone carbon nanotubes.
  --Silica nano-balloons.
  --Metal nanoparticles on high surface area silica aerogels.
  --Hydrogen-carrier liquid hydrocarbons.

                                SUMMARY

    The Consortium for Fossil Fuel Science is requesting $2 million in 
fiscal year 2006 to continue an integrated 3-year research program 
initiated in fiscal year 2005 on the production and storage of hydrogen 
from coal using C1 chemistry. Achievement of the program goals will 
accelerate the development of a hydrogen economy. Producing the 
hydrogen from coal, our greatest domestic resource, could generate many 
new jobs in both the mining industry and in hydrogen production plants. 
Additionally, development of technology to produce hydrogen from coal 
should help to decrease petroleum imports, now surpassing $150 billion 
per year, and improve the U.S. balance of trade.
    The Consortium for Fossil Fuel Science is eager to continue its 
role in these exciting technical developments. The principal contacts 
for the CFFS at each of our five universities are: Gerald P. Huffman, 
Director, Consortium for Fossil Fuel Science, University of Kentucky; 
Christopher B. Roberts, Chair, Department of Chemical Engineering, 
Auburn University; Irving Wender, Distinguished Research Professor, 
Department of Chemical & Petroleum Engineering, University of 
Pittsburgh; Richard A. Bajura, Director, National Research Center for 
Coal and Energy, West Virginia University; and Ronald J. Pugmire, 
Associate Vice President for Research, University of Utah.
                                 ______
                                 
     Prepared Statement of the Biomass Energy Research Association

                            BIOMASS RESEARCH

    This testimony pertains to the fiscal year 2006 appropriations for 
biomass energy research, development, and deployment (RD&D) conducted 
by the Department of Energy's (DOE) Office of Energy Efficiency and 
Renewable Energy (EERE). This mission-oriented biomass RD&D is funded 
by the Energy and Water Development Bill, and is performed under the 
headings Energy Conservation, which was formerly funded under 
Industrial Technology by the Interior and Related Agencies Bill, Energy 
Supply, and Hydrogen, for which BERA's recommendations are limited to 
biomass-based hydrogen research.
    BERA recommends a total appropriation of $88,000,000 in fiscal year 
2006 under Biomass and Biorefinery Systems R&D (Energy Supply and 
Energy Conservation), and $7,000,000 under biomass-related Hydrogen 
Technology, for a total of $95,000,000.
  --$1,000,000 for Feedstock Infrastructure.
  --$29,500,000 for Platforms R&D: Thermochemical Platform 
        ($17,000,000) and Bioconversion Platform for Sugars 
        ($12,500,000).
  --$24,500,000 for Utilization of Platform Outputs: Integration of 
        Biorefinery Technologies, Thermochemical Conversion 
        ($14,500,000) and Bioconversion ($10,000,000).
  --$33,000,000 for Utilization of Platform Outputs R&D: Core 
        Technologies for Chemicals ($12,000,000), Biorefinery Systems 
        Development ($16,500,000), State & Regional Partnerships 
        ($4,500,000).
  --$7,000,000 for biomass-related projects under Hydrogen Technology.
    On behalf of BERA's members, I would like to thank you, Mr. 
Chairman, for the opportunity to present the recommendations of BERA's 
Board of Directors for the high-priority projects and programs that we 
strongly urge be continued or started. BERA is a non-profit association 
based in Washington, DC. It was founded in 1982 by researchers and 
private organizations that are conducting biomass research. Our 
objectives are to promote education and research on the production of 
energy and fuels from virgin and waste biomass that can be economically 
utilized by the public, and to serve as a source of information on 
biomass RD&D policies and programs. BERA does not solicit or accept 
Federal funding for its efforts.
    The level of earmarks in the last few years has resulted in 
premature reductions of scheduled programs by EERE. BERA respectfully 
asks the subcommittee to carefully consider the impacts of all earmarks 
on EERE's biomass energy RD&D. If they are for projects that are not 
included in DOE's formal funding request, BERA urges that they be add-
ons to the baseline funds rather than deductions.
    For fiscal year 2006, EERE has again prioritized sugar over 
thermochemical platform RD&D. BERA urges that this condition be 
eliminated as soon as possible because both platforms are equally 
important, particularly for large-scale, virgin biomass growth and 
waste biomass acquisition integrated with biorefineries. These are the 
systems that will permit biomass to have a major role in displacing 
petroleum and natural gas usage.
    The original goal of the Biomass and Bioproducts Initiative (BBI) 
created as a result of ``The Biomass Research and Development Act of 
2000'' and Title IX of the Farm Bill was to triple the usage of 
bioenergy and biobased products. Congress has provided annual funding 
for the BBI since fiscal year 2000. A strategic plan was developed by 
the multi-agency Biomass Research and Development Board (BRDB), co-
chaired by the Secretaries of Energy and Agriculture, to achieve this 
goal. Its achievement is necessary because of environmental and energy 
security and supply issues, and our increasing dependence on imported 
oil. We must determine whether practical biomass systems capable of 
displacing much larger amounts of fossil fuels can be developed. BERA 
strongly urges that the BBI be continued in fiscal year 2006 at the 
funding levels recommended by BERA for the cost-shared demonstration 
projects shown in the table on page 3. The highest priority should be 
given to this program component.

           PROGRAM INTEGRATION, COORDINATION, AND MANAGEMENT

    For several years, BERA has urged that all biomass-related research 
funded by DOE should be coordinated and managed at DOE Headquarters so 
that the program managers are heavily involved in this activity. We are 
pleased to note that this process, which began in fiscal year 2002, has 
been implemented and is in a constant state of improvement. BERA 
congratulates DOE on the progress made in restructuring the program and 
its management. BERA also congratulates DOE and USDA for the 
cooperation and joint coordination of the programs of each department 
to increase the usage of agricultural and forestry biomass for the 
production of much larger amounts of affordable fuels, electricity, and 
biomass-derived products than have been realized in the past. These 
efforts are expected to help facilitate the transformation of biomass 
into a major source of renewable energy, fuels, and chemicals.
    However, without full incorporation of the BBI into DOE's and 
USDA's biomass research programs, the time table for this transition 
will be stretched out for several decades and possibly never happen 
except to a very limited extent for niche markets. Large, strategically 
located, energy plantations are ultimately envisaged in which waste 
biomass acquisition and virgin biomass production systems are 
integrated with biorefineries and operated as analogs of petroleum 
refineries to afford flexible slates of multiple products from multiple 
feedstocks. Unfortunately, relatively large amounts of capital and 
inducements are required to convince the private sector to get involved 
in developing even modest size projects in the field. So to help 
implement this essential program, BERA includes the BBI as a line-item 
in its annual testimony.
    BERA also continues to recommend that implementation of the BBI 
should include identification of each Federal agency that provides 
funding related to biomass energy development and each agency's 
programs and expenditures, as is done today by the DOE and USDA. This 
is an on-going activity that should be expanded to include other 
agencies and departments to help fine-tune the critical pathways to 
program goals. Continuous analysis of the information compiled should 
enable the coordination of all federally funded biomass energy programs 
through the BRDB to facilitate new starts focused on high priority 
targets, and help to avoid duplication of efforts, unnecessary 
expenditures, and continuation of projects that have been completed or 
that do not target program goals. Full implementation of the BBI will 
enhance the value of the Federal expenditures on biomass research to 
the country in many different ways.

                          BERA RECOMMENDATIONS

    BERA's recommendations have always consisted of a balanced program 
of mission-oriented RD&D. Advanced thermochemical and microbial 
conversion processes and power generation technologies, alternative 
liquid transportation fuels, and hydrogen-from-biomass processes are 
currently emphasized. Biomass production RD&D for energy uses is 
expected to be done by the USDA.
    BERA continues to recommend that at least 50 percent of the Federal 
funds appropriated for biomass research, excluding the funds for scale-
up projects, are used to sustain a national biomass science and 
technology base via sub-contracts for industry and universities. While 
it is desirable for the national laboratories to coordinate this 
research, increased support for U.S. scientists and engineers in 
industry, academe, and research institutes that are unable to fund 
biomass research will encourage commercialization of emerging 
technologies and serious consideration of new ideas. It will also help 
to expand the professional development and expertise of researchers 
committed to the advancement of biomass technologies.
    Although progress has been made, EERE has terminated research in 
several critical thermochemical areas. BERA believes that a balanced 
program of high-priority research should be sustained and protected, so 
we continue to recommend both a diversified portfolio of research and 
an appropriate amount of funding for scale-up without diminishing 
either EERE's R&D or scale-up programs. BERA's specific dollar 
allocations are listed in the accompanying table. Additional commentary 
on each program area is presented on pages 3, 4 and 5. DOE's basic 
research on biomass energy performed by the Office of Science, which is 
not shown in the table, should be designed to complement EERE's 
mission-oriented biomass RD&D. All of DOE's biomass research should 
have the ultimate goal of commercialization by the private sector and 
fossil fuel conservation and displacement.
 allocation of appropriations recommended by bera for fiscal year 2006
    BERA recommends that the appropriations for biomass RD&D in fiscal 
year 2006 be allocated as shown in the table. Our recommendations are 
generally listed in the same order as the funding requests under EERE's 
headings and program area titles except several program areas are 
included that are either new or that BERA recommends be restored to 
maintain a balanced program. Note that the recommended budgets for the 
demonstration projects do not include industry cost-sharing, which is 
required to be a minimum of 50 percent of each project cost. BERA 
recommends that funds for the BBI be used for these scale-up projects 
after evaluating the projected contribution of each project to the 
BBI's goals.

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

           BIOMASS & BIOREFINERY SYSTEMS R&D (ENERGY SUPPLY)

    Feedstock Infrastructure, Harvesting Equipment, Storage, and 
Logistics.--EERE terminated biomass production research a few years ago 
and is now concentrating on infrastructure development, including novel 
systems for collecting agricultural residues. In fiscal year 2006, EERE 
plans to focus on single-pass harvester development for wheat straw and 
corn stover.
    Platforms R&D, Thermochemical Conversion.--In fiscal year 2006, 
EERE will continue to develop technologies for the production and 
conditioning of biomass syngas and pyrolysis oils suitable for the 
manufacture of fuels, chemicals, and hydrogen. Unfortunately, much of 
this research has been phased out. Continuation of advanced biomass 
combustion and gasification methods could have environmental and 
economic benefits that can lead to significant growth in power 
generation from waste biomass and combined energy recovery-disposal 
methods for certain kinds of high-moisture waste biomass such as 
biosolids (municipal sewage), MSW, agricultural residues, and wood 
wastes. BERA recommends continuation of this R&D to develop the next 
generation of advanced combustion and gasification processes for power 
generation. Also, the development of medium-Btu biomass gasification 
provides one of the most promising routes for production of liquid 
fuels, chemicals, and hydrogen from a broad range of biomass feedstocks 
including cellulosics and residual materials. Gasification can be the 
cornerstone of EERE's programs. Investigation into the refinement of 
gas cleanup technology and other supporting unit operations such as 
biomass feeding and downstream catalytic operations should be expanded. 
BERA has also recommended that EERE support thermochemical liquefaction 
processes such as pyrolysis. It has been a minimally funded R&D effort, 
particularly when compared with the effort expended on other conversion 
methods.
    BERA urges that thermochemical conversion R&D for biomass 
combustion, gasification, and liquefaction be restored, expanded, and 
given a higher priority by EERE.
    Platforms R&D, Bioconversion.--Although technology for fermentation 
of the five sugars in cellulosics is available, the cost of releasing 
them from recalcitrant biomass is still high. EERE has focused the R&D 
effort to reduce this cost on three major elements: advanced 
pretreatment, enzymatic hydrolysis, and process integration. Dilute 
acid pretreatment is also being studied. In fiscal year 2006, pilot-
scale work will be initiated on more chemistries and configurations for 
thermochemical pretreatment, and a solicitation is planned to address 
and optimize cellulase activity under these pretreatment regimes.
    Methane fermentation (anaerobic digestion) is unique in that it 
produces methane, the major component in natural gas, at high 
concentrations in the medium-Btu product gas from a full range of 
virgin and waste biomass. EERE has terminated most of this research, 
which can lead to advanced waste disposal-energy recovery processes as 
well as the alleviation of numerous environmental problems encountered 
during waste treatment in urban communities and agricultural 
facilities. This research should be restored.
    Bioconversion is useful for converting a variety of biomass and 
derivatives to a wide range of commodity chemicals or high-value 
organic chemicals and polymers. The use of selected microbial 
populations is in fact the only practical route to certain types of 
chemicals and polymers. An exploratory program to advance this 
technology is a natural adjunct to EERE's on-going Bioconversion R&D. 
BERA recommends that part of this research effort should focus on this 
field.
    Utilization of Platform Outputs, Integration of Biorefinery 
Technologies, Thermochemical Conversion and Bioconversion.--In fiscal 
year 2006, EERE reports that it will continue to integrate and test the 
handling, pretreatment, hydrolysis, and fermentation operations to 
allow for evaluation of the performance and costs of converting biomass 
to fuels at the bench- and/or pilot-scale to assist in the development 
of commercialization plans. This implies that thermochemical conversion 
will not be examined in EERE's program and that it will be limited to 
microbial systems. BERA strongly recommends that this effort not be 
limited to bioconversion because there are many thermochemical options 
that can be applied to design and operate integrated, multiple-product 
biorefineries. This is much preferred to a technology-limited plant and 
can often be changed with market conditions to maximize ROIs. Also, 
projects such as those conducted at the PDU and pilot-plant scales can 
more readily focus on efficient development of the critical data needed 
to overcome or eliminate existing scale-up barriers. It is essential 
that integrated feedstock acquisition-biorefinery systems be designed 
and built using this information for demonstration in the field on a 
sustainable basis. The pathways to successful development of these 
systems are in hand now.
    Additional commentary on the value of PDU and pilot-scale R&D is in 
order. For example, several projects performed at semi-commercial plant 
scales or that involved modules of commercial plants have been funded 
and carried out to develop processes for converting low-cost cellulosic 
feedstocks to fermentation ethanol. Unfortunately, the results of this 
effort have not led to operating systems despite the excessive time and 
relatively large budgets that have been provided to conduct the work. 
It is apparent that although the processes are feasible, the scale-up 
projects have not yet been successful. But it is still important to 
commercialize this technology; smaller scale PDU- and pilot-scale work 
will facilitate this transition.

 BIOMASS & BIOREFINERY SYSTEMS R&D (ENERGY CONSERVATION, FORMERLY PART 
                       OF INDUSTRIAL TECHNOLOGY)

    Utilization of Platform Outputs R&D, Core Technologies, 
Chemicals.--For fiscal year 2006, EERE reports that this R&D effort 
will continue the competitive selection of R&D projects aimed at core 
technology development to enable a broad suite of products. Core 
technology was defined via an analytical effort that resulted in the 
selection of the top 12 building block chemicals that can be produced 
from sugar intermediates via biological or chemical conversions. These 
12 chemicals can subsequently be converted to a number of high-value 
biobased chemicals or materials.
    BERA urges that this effort focus on commodity organic chemicals, 
which have established markets, rather than high-value chemicals, which 
are normally either new products without established markets or 
specialty chemicals with limited markets. On commercialization, this 
will have a greater probability of reducing petroleum and natural gas 
consumption. In fiscal year 1999 when this program was started under 
EERE's Industrial Technology program, the goal was to displace 10 
percent of the fossil feedstocks with biomass for the production of 
commodity organic chemicals. BERA estimated that when process energy is 
also included, this could save a total of about 0.6 quad annually in 
oil and gas consumption. BERA also urges that this effort not be 
limited to sugar intermediates; it should include direct conversion of 
other intermediates and biomass to commodity organic chemicals.
    Biorefinery Systems Development.--The recommended budget in Table 3 
is much smaller than actually needed, but will permit this program to 
be started. BERA has long believed that the highest priority should be 
given to this program component. Its objective should be the sustained 
operation of biorefineries integrated with biomass acquisition in 
relatively large demonstration facilities (energy plantations). This 
effort should address siting, plant design, financing, permitting, 
construction, environmental controls, waste processing and disposal, 
and sustained operations; feedstock acquisition, transport, storage, 
and delivery; all waste disposal and emissions issues; and storage and 
delivery of salable products to market.
    BERA recommends that industrial partners and States should be 
carefully selected for participation in this cost-shared program. Long-
range planning is essential to ensure that each project has a high 
probability of success and lays the groundwork for continued 
installation of similar systems by the private sector. Since only a 
minimal effort has been conducted to date in the United States on this 
type of program, BERA recommends that the first demonstration facility 
target the acquisition of waste and/or virgin biomass feedstocks for 
conversion into electricity, liquid and gaseous fuels, and chemicals. 
Existing moderate- and large-scale facilities from terminated and 
continuing EERE projects, such as biomass cofiring, gasification, 
liquefaction, and fermentation, should be carefully examined to 
determine whether one or more are suitable for these projects. The 
partnerships should be in place at the start of each demonstration 
project.
    State and Regional Partnerships (Formerly Regional Biomass Energy 
Program).--The Regional Biomass Energy Program (RBEP), which covered 
all States divided into five regions, has been a model outreach program 
for more than 20 years. The State & Regional Partnerships (SRP) was 
created last year to succeed the RBEP. Since its creation, the SRP has 
established and strengthened the regional government councils in each 
of the five regions, developed a methodology to document the 
effectiveness of the SRP, collaborated with several States to address 
market barriers, State policies and programs, initiated work to update 
State biomass resource assessments, conducted feasibility studies for 
specific projects, and continued development of guidebooks and software 
to allow biomass project developers to self-assess project feasibility. 
BERA strongly urges that the SRP be continued in fiscal year 2006.
    Hydrogen Technology.--Research on the thermal reforming of biomass 
and on splitting water with algae should be continued. In addition, 
innovative conversion methods such as the use of anaerobic digestion 
under ambient conditions and catalytic and non-catalytic thermochemical 
gasification under certain operating conditions that minimize methane 
formation while maximizing hydrogen formation should be studied. These 
technologies may lead to low-cost hydrogen production methods.
                                 ______
                                 
 Prepared Statement of the State Teachers' Retirement System, State of 
                               California

    Department of Energy--Elk Hills School Lands Fund.--$48 million for 
fiscal year 2006 installment of Elk Hills compensation.

CONGRESS SHOULD APPROPRIATE THE FUNDS NECESSARY TO FULFILL THE FEDERAL 
  GOVERNMENT'S SETTLEMENT OBLIGATION TO PROVIDE COMPENSATION FOR THE 
STATE OF CALIFORNIA'S INTEREST IN THE ELK HILLS NAVAL PETROLEUM RESERVE

                                SUMMARY

    Acting pursuant to Congressional mandate, and in order to maximize 
the revenues for the Federal taxpayer from the sale of the Elk Hills 
Naval Petroleum Reserve by removing the cloud of the State of 
California's claims, the Federal Government reached a settlement with 
the State in advance of the sale. The State waived its rights to the 
Reserve in exchange for fair compensation in installments stretched out 
over an extended period of time.
    Following the settlement, the sale of the Elk Hills Reserve went 
forward without the cloud of the State's claims and produced a winning 
bid of $3.65 billion, far beyond most expectations. Under the terms of 
the Settlement Agreement between the Federal Government and the State, 
the State is to receive a 9 percent share of the sales proceeds as 
compensation for its claims, to be paid in annual installments over 7 
years without interest. Each annual installment of compensation is 
subject to a Congressional appropriation. In each of the past 7 fiscal 
years (fiscal years 1999-2005), Congress has appropriated a $36 million 
installment of Elk Hills compensation for the State.
    The President's Budget for fiscal year 2006 requests an 
appropriation of $48 million of Elk Hills compensation for the State, 
in order to meet the Federal Government's obligations to the State 
under the Settlement Agreement. The State respectfully requests an 
appropriation of at least $48 million in the subcommittee's bill for 
fiscal year 2006.
    The Elk Hills appropriation has the broad bipartisan support of the 
California House and Senate delegation.

                               BACKGROUND

    Upon admission to the Union, States beginning with Ohio and those 
westward were granted by Congress certain sections of public land 
located within the State's borders. This was done to compensate these 
States having large amounts of public lands within their borders for 
revenues lost from the inability to tax public lands as well as to 
support public education. Two of the tracts of State school lands 
granted by Congress to California at the time of its admission to the 
Union were located in what later became the Elk Hills Naval Petroleum 
Reserve.
    The State of California applies the revenues from its State school 
lands to assist retired teachers whose pensions have been most 
seriously eroded by inflation. California teachers are ineligible for 
Social Security and often must rely on this State pension as the 
principal source of retirement income. Typically the retirees receiving 
these State school lands revenues are single women more than 75 years 
old whose relatively modest pensions have lost as much as half or more 
of their original value to inflation.

          CONGRESSIONAL DIRECTION TO SETTLE THE STATE'S CLAIMS

    In the National Defense Authorization Act for fiscal year 1996 
(Public Law 104-106) that mandated the sale of the Elk Hills Reserve to 
private industry, Congress reserved 9 percent of the net sales proceeds 
in an escrow fund to provide compensation to California for its claims 
to the State school lands located in the Reserve.
    In addition, in the Act Congress directed the Secretary of Energy 
on behalf of the Federal Government to ``offer to settle all claims of 
the State of California . . . in order to provide proper compensation 
for the State's claims.'' (Public Law 104-106,  3415). The Secretary 
was required by Congress to ``base the amount of the offered settlement 
payment from the contingent fund on the fair value for the State's 
claims, including the mineral estate, not to exceed the amount reserved 
in the contingent fund.'' (Id.)

             SETTLEMENT REACHED THAT IS FAIR TO BOTH SIDES

    Over the course of the year that followed enactment of the Defense 
Authorization Act mandating the sale of Elk Hills, the Federal 
Government and the State engaged in vigorous and extended negotiations 
over a possible settlement. Finally, on October 10, 1996 a settlement 
was reached, and a written Settlement Agreement was entered into 
between the United States and the State, signed by the Secretary of 
Energy and the Governor of California.
    The Settlement Agreement is fair to both sides, providing proper 
compensation to the State and its teachers for their State school lands 
and enabling the Federal Government to maximize the sales revenues 
realized for the Federal taxpayer by removing the threat of the State's 
claims in advance of the sale.

   FEDERAL REVENUES MAXIMIZED BY REMOVING CLOUD OF STATE'S CLAIM IN 
                          ADVANCE OF THE SALE

    The State entered into a binding waiver of rights against the 
purchaser in advance of the bidding for Elk Hills by private 
purchasers, thereby removing the cloud over title being offered to the 
purchaser, prohibiting the State from enjoining or otherwise 
interfering with the sale, and removing the purchaser's exposure to 
treble damages for conversion under State law. In addition, the State 
waived equitable claims to revenues from production for periods prior 
to the sale.
    The Reserve thereafter was sold for a winning bid of $3.65 billion 
in cash, a sales price that substantially exceeded earlier estimates.
    proper compensation for the state's claims as congress directed
    In exchange for the State's waiver of rights to Elk Hills to permit 
the sale to proceed, the Settlement Agreement provides the State and 
its teachers with proper compensation for the fair value of the State's 
claims, as Congress had directed in the Defense Authorization Act.
    While the Federal Government received the Elk Hills sales proceeds 
in a cash lump sum at closing of the sale in February, 1998, the State 
agreed to accept compensation in installments stretched out over an 
extended period of 7 years without interest. This represented a 
substantial concession by the State. Congress had reserved 9 percent of 
sales proceeds for compensating the State. The school lands owned by 
the State had been estimated by the Federal Government to constitute 
8.2 to 9.2 percent of the total value of the Reserve. By comparison, 
the present value of the stretched out compensation payments to the 
State has been determined by the Federal Government to represent only 
6.4 percent of the sales proceeds, since the State agreed to defer 
receipt of the compensation so that it was payable over a 7-year period 
and will receive no interest on the deferred payments.
    Accordingly, under the Settlement Agreement the Federal Government 
is obligated to pay to the State as compensation, subject to an 
appropriation, annual installments of $36 million in each of the first 
5 years (fiscal years 1999-2003) and the balance of the amount due 
split evenly between years 6 and 7 (fiscal year 2004-2005). Under the 
Settlement Agreement, if any installment is not fully paid, the balance 
rolls over and becomes payable in the following year.

                  THE MONEY IS THERE TO PAY THE STATE

    The funds necessary to compensate the State have been collected 
from the sales proceeds remitted by the private purchaser of Elk Hills 
and are now being held in the Elk Hills School Lands Fund for the 
express purpose of compensating the State.
    For each of the last 7 fiscal years, Congress has appropriated a 
$36 million installment of Elk Hills compensation to the State, leaving 
a balance of at least $66 million owing to the State.

   CONGRESS SHOULD APPROPRIATE $48 MILLION FOR THE FISCAL YEAR 2006 
INSTALLMENT OF ELK HILLS COMPENSATION, AS REQUESTED BY THE PRESIDENT'S 

                                 BUDGET

    The House Report on the fiscal year 2005 Interior Appropriations 
measure makes clear that Elk Hills compensation payments to the State 
should continue: ``[T]he payments to date were based on an estimate of 
the amount that would be required to pay the State of California 9 
percent of the net sales proceeds. The final amount due will be based 
on the resolution of equity determinations and is expected to be more 
than the amount made available in these seven payments.'' (House Report 
No. 108-542 ((Department of the Interior and Related Agencies 
Appropriations Bill, 2005), at 121).
     The administration has now requested appropriation of a $48 
million payment from the balance owed to the State for Elk Hills 
compensation: ``In keeping with the revised equity finalization 
schedule, the 2006 Budget requests $48 million in new budget authority 
. . .''. (Budget of the U.S. Government--Fiscal Year 2006, Appendix, at 
408).

                               CONCLUSION

    The State respectfully requests the appropriation of at least $48 
million for Elk Hills compensation in the subcommittee's bill for 
fiscal year 2006 installment of compensation, as called for by the 
President's Budget in order to meet the Federal Government's 
obligations to the State under the Settlement Agreement.



                                 ______
                                 
         Prepared Statement of The Society of Nuclear Medicine

    The Society of Nuclear Medicine (SNM) appreciates the opportunity 
to submit written comments for the record regarding funding in fiscal 
year 2006 at the Department of Energy (DOE). SNM is an international 
scientific and professional organization with over 16,000 members 
dedicated to promoting the science, technology and practical 
application of nuclear medicine. To that end, SNM advocates the 
restoration of funding to $37 million for the Medical Applications and 
Measurement Science Program at the DOE as well as $6.3 million for the 
creation of a National Radionuclide Enhancement Production (NRPE) 
program at the DOE in fiscal year 2006. The Society stands ready to 
work with policymakers at the local, State, and Federal levels to 
advance policies and programs that will that our Nation have a steady 
supply of radionuclides for the advancement of nuclear medicine 
research.

                       WHAT IS NUCLEAR MEDICINE?

    Nuclear Medicine is an established specialty that performs non-
invasive molecular imaging procedures to diagnose and treat diseases 
and to determine the effectiveness of therapeutic treatments--whether 
surgical, chemical, or radiation. It contributes extensively to the 
management of patients with cancers of the brain, breast, blood, bone, 
bone marrow, liver, lungs, pancreas, thyroid, ovaries, and prostate, 
and serious disorders of the heart, brain, and kidneys, to name a few. 
In fact, recent advances in the diagnosis of Alzheimer's Disease can be 
attributed to Nuclear Medicine imaging procedures.
    Annually, more than 16 million men, women and children need 
noninvasive molecular/nuclear medicine procedures. These safe, cost-
effective, procedures include positron emission tomography (PET) scans 
to diagnose and monitor treatment in cancer, cardiac stress tests to 
analyze heart function, bone scans for orthopedic injuries and lung 
scans for blood clots. Patients undergo procedures to diagnose liver 
and gall bladder functional abnormalities and to diagnose and treat 
hyperthyroidism and thyroid cancer.

             FUNDING CUTS AT DOE THREATEN NUCLEAR MEDICINE

    The mission of the Medical Applications and Measurement Science 
Program at the DOE is to deliver relevant scientific knowledge that 
will lead to innovative diagnostic and treatment technologies for human 
health. The modern era of nuclear medicine is an outgrowth of the 
original charge of the Atomic Energy Commission (AEC), ``to exploit 
nuclear energy to promote human health.'' This program supports 
directed nuclear medicine research through radiopharmaceutical 
development and molecular nuclear medicine activities to study uses of 
radionuclides for non-invasive diagnosis and targeted, internal 
molecular radiotherapy.
    Over the years, the DOE Medical Applications and Measurement 
Science Program has generated advances in the field of molecular/
nuclear medicine. For example, DOE funding provided the resources 
necessary for molecular/nuclear medicine professionals to develop PET 
scanners to diagnose and monitor treatment in cancer. PET scans offer 
significant advantages over CT and MRI scans in diagnosing disease and 
are more effective in identifying whether cancer is present or not, if 
it has spread, if it is responding to treatment and if a person is 
cancer free after treatment. In fact, the DOE has even stated that this 
program supports ``research in universities and in the National 
Laboratories, occupies a critical and unique niche in the field of 
radiopharmaceutical research. The NIH relies on our basic research to 
enable them to initiate clinical trials.''
    The majority of the advances in molecular/nuclear medicine have 
been sponsored by the DOE, including:
  --development of PET at Washington University, UCLA, Lawrence 
        Berkeley Laboratory and the University of Pennsylvania (as well 
        as the development of small animal imaging systems that was 
        pioneered at UCLA, with advances also made at the University of 
        Pennsylvania and University of California, Davis);
  --use of PET to carry out accurate treatment planning prior to 
        therapy with radionuclides (at many DOE-funded sites);
  --development of the molybdenum-99m technetium-99m generator, the 
        mainstay of nuclear medicine studies today, at Brookhaven 
        National Laboratory, as well as radionuclide thallium-201, 
        which is used in cardiac viability studies in the majority of 
        hospitals throughout the world;
  --development of NeutroSpec (recently approved by the FDA) for 
        imaging infection at Thomas Jefferson University;
  --synthesis of fluorine-18 labeled fluorodeoxyglucose at Brookhaven 
        National Laboratory (this agent is utilized in more than 95 
        percent of all PET scans carried out today);
  --the first imaging of tumor receptors (estrogen receptors were 
        imaged through a collaboration of the University of Illinois 
        and Washington University, St. Louis);
  --development of a whole series of ligands to study brain function at 
        many DOE-sponsored sites, and development of agents to study 
        tumor and other organ hypoxia at Washington University, St. 
        Louis;
  --pioneering work in the study of brain function (both in normal 
        brains and in the understanding of addiction), carried out 
        largely at UCLA and Brookhaven National Laboratory;
  --advances in the application of alpha-particle emitters for therapy 
        (at Duke University and MSKCC); and,
  --development of the Anger camera at Berkeley Lawrence Laboratory.
    With DOE funding, essential molecular/nuclear medicine research 
continues at universities, research institutions, national laboratories 
and small businesses as well as the continuation of research with 
radiochemistry, genomic sciences and structural biology to usher in a 
new era of mapping the human brain and using specific radiotracers and 
instruments to more precisely diagnose neuropsychiatric illnesses and 
cancer. The future of life-saving therapies and cutting-edge research 
in molecular/nuclear medicine and imaging depends on funding for the 
DOE Medical Applications and Measurement Science Program. Without 
funding for this program, future innovations in nuclear medicine 
research will never be developed, and millions of patients with heart, 
cancer and brain diseases will potentially be adversely affected. 
Therefore, SNM recommends that funding for the DOE Medical Applications 
and Measurement Science Program be restored to the fiscal year 2005 
funding level of $37 million.

   CREATION OF A NATIONAL RADIONUCLIDE PRODUCTION ENHANCEMENT (NRPE) 
                                PROGRAM

    The Nation needs a consistent, reliable supply of radionuclides for 
medical, security, space power, and research uses. Today, new 
radionuclides for diagnostic and therapeutic uses are not being 
developed, critical radionuclides for national security are in short 
supply, and demand for radionuclides critical to homeland security 
exceeds supply. New science, such as molecular nuclear medicine, is 
emerging that will require reliable supplies of radionuclides. The 
majority of radionuclides used in daily applications today are imported 
on a daily basis and those required for innovative research are either 
available sporadically and only in limited quantities or not at all. 
The demand for radionuclides is rising rapidly due to the blossoming 
therapeutic and diagnostic applications of nuclear medicine. The future 
of life-saving therapies and cutting edge research in nuclear medicine 
and molecular imaging depends on a reliable and reasonably priced 
supply of radionuclides. The challenge for our Nation is to secure a 
reliable and enhanced domestic radionuclide supply for the growing 
medical need of our patients and for research.
    Our Nation has only one research reactor, the University of 
Missouri Research Reactor) (MURR) that provides reactor-produced 
radionuclides for therapeutic applications. However it has a low power 
(10MW) that enables it to produce only relatively small quantities of 
radionuclides at a low specific activity (a few radioactive atoms and a 
much greater number of non-radioactive atoms) that limit their use. In 
addition, the United States has no functional accelerator that can 
provide cyclotron-produced radionuclides needed for specific diagnostic 
and therapeutic applications or creative research initiatives. 
Commercial or university based small and large accelerators exist but 
they produce only limited quantities of a small number of 
radionuclides, primarily for routine, approved uses. The resulting 
crisis in the availability of radionuclides will constrain existing 
nuclear medicine procedures and will have a chilling effect on research 
into new procedures to diagnose and treat serious and life-threatening 
diseases, such as cancer.
    Congress should realign current radionuclide resources to create a 
National Radionuclide Production Enhancement (NRPE) Program to improve 
the production of radionuclides in the United States so as to assure 
our Nation of a consistent and reliable supply of necessary 
radionuclides for research, diagnosis and therapeutic purposes.
    Major components of the NRPE Program include:
  --To establish a national program to meet the national need for 
        radionuclides. This program should develop the capability to 
        produce large quantities of radionuclides to maintain existing 
        technologies and to stimulate future growth in the biomedical 
        sciences. The overall production capacity must be sufficient to 
        insure a diverse supply of radionuclides for medical use in 
        quantities required to support research and clinical 
        activities. Radionuclides for clinical and research 
        applications should be supplied reliably and with diversity in 
        adequate quantity and quality;
  --Collaborate with medical, and industrial users to assess 
        radionuclide needs and transfer technologies to accelerate 
        applications;
  --To facilitate the transfer of commercially viable radionuclides 
        programs to the private sector;
  --To invest in research and development to improve radionuclide 
        production, processing, and utilization;
  --To monitor continuously the radionuclide needs of researchers and 
        clinicians;
  --To establish an education program to ensure that the next 
        generation of nuclear and radiochemists are trained and 
        available to support the Nation's needs. (Note.--No funds are 
        requested for this goal but the NRPE will provide the 
        infrastructure, personnel and environment, to support an 
        education program.); and
  --To upgrade the capability at the University of Missouri research 
        reactor and other existing facilities that produce 
        radioradionuclides and stable radionuclides required for their 
        production.
    A National Radionuclide Production Enhancement (NRPE) Program will 
continue innovation in nuclear medicine to meet the health care needs 
of the Nation. To that end, SNM advocates the allocation of $6.3 
million in fiscal year 2006 for the creation of the National Isotope 
Program and the upgrade of the capability of the University of Missouri 
research reactor and other existing facilities.

                               CONCLUSION

    The Society of Nuclear Medicine once again stands ready to work 
with policymakers to advance nuclear medicine research and innovation 
as well as ensure that our Nation has a steady supply of radionuclides. 
Again, we thank you for the opportunity to present our views on funding 
for these initiatives at the DOE and stand ready to answer any 
questions you may have.
                                 ______
                                 
         Prepared Statement of Geophysical Survey Systems, Inc.

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

                           OIL & GAS PROGRAMS

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

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

    SAGE Electrochromics, Inc., located in Faribault, Minnesota, is a 
developer of energy saving electrochromic (EC) window products and is 
working in partnership with the U.S. Department of Energy (DOE). We at 
SAGE urge you to recommend a budget level of $7,500,000 for the Windows 
Technologies Program at the DOE including $1,500,000 million for a 
competitive electrochromics industry R&D, engineering and systems 
integration program in fiscal year 2006 Energy and Water 
Appropriations.

                     DESCRIPTION OF ELECTROCHROMICS

    An electrochromic window (door or skylight) is a solar control 
device that regulates the flow of light and heat with the push of a 
button. The window tint can be varied from fully colored to completely 
clear or anywhere in between. The EC properties are achieved through 
thin metal oxide layers on one of the glass surfaces, otherwise the 
construction is similar to the standard insulating glass unit (IGU) 
used in millions of homes and office buildings.

                 THE UNIQUE BENEFITS OF ELECTROCHROMICS

    Industrial and government partners in the DOE EC program are 
performing cost shared research and development that will lead to 
significant energy and cost savings by fundamentally changing the 
nature and function of window products for tomorrow's buildings. 
Significant savings in the cooling and lighting loads can be achieved 
while reducing peak electricity demand. Just as important is the 
ability of EC technologies to improve visual and thermal comfort and 
thereby increase worker productivity and the aesthetics of the home or 
office space.
    Traditionally, adding windows to a building envelope has meant 
reducing energy efficiency because the other materials in the structure 
are much more energy efficient. However, with EC technology, windows 
will become multifunctional energy saving appliances in the home or 
office space and thereby will allow increased use of windows for 
aesthetic reasons. The Lawrence Berkeley National Laboratories (LBNL) 
estimated that the use of EC in average size windows in commercial 
buildings will reduce cooling electricity consumption by up to 28 
percent, lower peak electrical power demand by 6 percent and decrease 
lighting costs by up to 19 percent for the entire building perimeter 
zone.
    In the residential sector, use of electrochromic windows could lead 
to a 65 percent reduction in cooling over the existing installed base 
and a 47 percent reduction in cooling over the best performing glass 
used today--spectrally selective low-E. Heating savings compared to the 
installed base and that used in new construction today are 61 percent 
and 31 percent respectively. This will be even more important for the 
customer's bottom line as the cost of energy becomes increasingly 
market driven.
    National energy savings are also impressive. The calculated 
national total energy savings for all market segments due to EC glazing 
adoptions show energy savings of 0.71 quads across all market sectors, 
which translates into total annual national energy cost savings of 
$11.5 billion. These estimates are based on current EC technology, 
which is expected to improve during the marketing period. Additionally, 
the LBNL estimates do not include the use of occupancy sensors, which 
could substantially reduce cooling costs in the summer and heating 
costs in the winter simply by switching the EC glass to the completely 
darkened or clear states at the appropriate time.
    Although energy and energy-related costs savings are significant, 
additional benefits accrue from using EC technology and may even be 
more important. Reduced fading of fabrics has significant cost impacts 
in many installations. Glare control and greater thermal comfort, as 
well as the ability for full daylighting have been shown to increase 
worker productivity and reduce absenteeism. Ability to change building 
design to take advantage of more window space is a significant 
architectural benefit and may result in additional energy savings. It 
is estimated that EC windows for architectural applications could 
easily grow to be a $15 billion industry in the United States alone--
with another $12 billion in military, specialty and transportation 
sectors.

         ADDITIONAL WORK TO BE DONE REQUIRES FURTHER INVESTMENT

    DOE has supported this research and development for the past few 
years, but insufficient funding has been split among a number of 
players in the Electrochromics industry. Traditionally, funding has 
focused on technical support for development of durable electrochromic 
materials for building applications. Over those years, it has become 
clear that the electrochromic industry needs expanded, cost-shared, 
precompetitive research in three areas. First, continued materials and 
basic processing research for electrochromic windows. Second, 
technology and engineering activities focused on large area 
manufacturing, improved productivity, and high yields. And third, 
systems engineering and applications research focused on design, 
specifications, installation and reliability of EC windows in 
buildings.
    In Materials and Processing Research and Development, near term 
activities must focus on continued optimization of the device and the 
individual thin film layers. Improved optical performance is needed to 
ensure user satisfaction and broad adoption of this energy saving 
technology. Advanced materials for better dynamic range will result in 
maximum daylighting for building occupants yet still eliminate glare 
from computer display terminals when direct sunlight impinges on the 
workspace. Nanocomposite materials must be incorporated to achieve a 
more neutral color with enhanced fracture toughness of critical films. 
Low cost materials will be introduced along with rapid processing 
technologies (e.g. total in-line, high throughput vacuum deposition of 
all coatings). Additionally, the EC device electrical properties must 
be adjusted to enable reproducible switching to any transmission state 
without complex control hardware that adds cost and degrades 
reliability.
    With respect to Large Area Manufacturing Technology and 
Engineering, future activities should include development of rapid, 
large area inspection tools to reduce defects for higher yields. Also, 
advanced manufacturing technologies such as laser patterning and bar 
coding will be implemented for flexible manufacturing with reduced 
costs for tooling and product changeovers. High volume production of 
large area EC glazings will require the implementation of in-situ 
diagnostics for real-time automatic control of thin film uniformity. 
Additionally, consensus electrochromic window performance requirements 
must be developed together with standards setting organizations and 
will entail significant testing in the initial stage to establish the 
technical basis for performance requirements.
    In Systems Engineering and Application, the DOE program must 
include extensive field trials of electrochromic windows in buildings. 
Occupant feedback on performance, comfort level and other parameters 
will be solicited and utilized to design ergonomic control algorithms 
and hardware. Multiple window control should also be demonstrated so we 
can learn how to tie the adjacent windows together for solar management 
of the overall space. Long term testing of switchable window systems 
over the full range of outdoor climatic conditions is required to 
assess product reliability.
    An important DOE goal is the attainment of zero energy buildings 
(ZEB). This requires highly insulated dynamic control windows. 
Switchable smart windows will be combined with high R-value 
technologies (e.g. aerogels) to develop the type of ``superwindow'' 
needed for maximum energy savings. Partnerships must be established 
among advanced technology organizations, major window companies, and 
the DOE to fabricate, install and test these next generation window 
systems.
                                 ______
                                 
     Prepared Statement of the Coalition of Northeastern Governors

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

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

   DOE BUDGET FOR 2006--NATURAL GAS INFRASTRUCTURE AND GAS (METHANE) 
                            HYDRATES SUPPLY

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

                                CLOSURE

    Continuing technology development for the U.S. natural gas industry 
is essential not only for growth, but also for maintaining our present 
competitive position in an expanding and technology oriented worldwide 
energy market. New technology to insure that gas is a major energy 
resource to serve the United States' 21st Century growing need for low-
cost, environmentally friendly, energy has broad near-term and long-
term strategic benefits that serve the public interest.
    However, today's competitive environment within the U.S. natural 
gas industry has resulted in an emphasis on short-term profitability 
and cost control. This emphasis has, in turn, compromised the gas 
industry's ability to invest in long-range public benefit programs 
involving the environment, energy efficiency, and economic growth. The 
recognized need for urgency in dealing with these longer term issues 
and objectives can best be achieved with government support of 
cooperative RD&D with the gas industry in supply and infrastructure, 
and areas that produce benefits to the gas and power industry, its 
customers, the U.S. economy, and the public in general. The U.S. 
Department of Energy, through its Natural Gas RD&D programs, in the 
Office of Fossil Energy (FE) is the appropriate agency to address this 
need to ensure the public continues to benefit from reasonable gas 
costs with its energy efficiency, clean air, and economic and job 
growth advantages. These advantages can be realized by insuring that 
sufficient supplies and infrastructure are in place for the next 20 
years, supported by joint industry/government RD&D.
    We thank you for your consideration of these funding increases in 
the FE budget as needed to provide a better balance of the DOE energy 
R&D portfolio that will best serve the public and national interest.
                                 ______
                                 
 Prepared Statement of Advanced Composite Products and Technology, Inc.

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

    The American Public Power Association (APPA) is the national 
service organization representing the interests of over 2,000 municipal 
and other State and locally owned utilities throughout the United 
States (all but Hawaii). Collectively, public power utilities deliver 
electricity to one of every seven electric consumers (approximately 43 
million people), serving some of the Nation's largest cities. However, 
the vast majority of APPA's members serve communities with populations 
of 10,000 people or less. We appreciate the opportunity to submit this 
statement outlining our fiscal year 2006 funding priorities within the 
Energy and Water Development and Related Agencies Subcommittee's 
jurisdiction.

             FEDERAL POWER MARKETING ADMINISTRATIONS (PMAS)

Market-based Rates for Federal Power
    The administration's fiscal year 2006 budget includes a 
recommendation that rates for hydropower marketed by the four PMAs 
(Western Area, Bonneville, Southwestern and Southeastern), which are 
currently cost-based, be increased by 20 percent per year until they 
reach ``market'' rates. The proposal to raise the rates PMAs charge for 
power generated at Federal hydropower facilities is simply a hidden tax 
on a select group of electricity consumers. The assumptions 
underpinning this proposal, including the assumption that these rates 
are subsidized by taxpayers, are false. The rates paid by customers of 
the PMAs not only cover all of the costs of generating this power, 
including repayment of the Federal debt, with interest, in many cases 
they also cover much of the costs associated with other purposes of 
these projects including recreation, navigation, and irrigation. The 
House budget resolution appropriately excluded this proposal, and we 
urge the subcommittee to do the same in the context of its fiscal year 
2006 bill.

Purchase Power and Wheeling
    We urge the subcommittee to authorize appropriate levels for use of 
receipts so that the Western Area Power Administration (WAPA), the 
Southeastern Power Administration (SEPA), and the Southwestern Power 
Administration (SWPA) can continue to purchase and wheel electric power 
to their municipal and rural electric cooperative customers. Although 
appropriations are no longer needed to initiate the purchase power and 
wheeling (PP&W) process, the subcommittee continues to establish 
ceilings on the use of receipts for this important function. The PP&W 
arrangement is effective, has no impact on the Federal budget, and is 
supported by the PMA customers who pay the costs. Therefore, we request 
that the subcommittee authorize the use of receipts in fiscal year 2006 
as follows:
  --Western Area Power Administration (WAPA).--$279 million 
        authorization needed in the fiscal year 2006 bill ($130.5 
        million more than the administration's request because of the 
        severe drought conditions in the West that have greatly 
        diminished the availability of the hydropower resource over the 
        last 5 years).
  --Southeastern Power Administration (SEPA).--$32.7 million 
        authorization needed in the fiscal year 2006 bill (the amount 
        requested by the administration).
  --Southwestern Power Administration (SWPA).--$12.4 million and of 
        that, $3 million would come from customer receipts (the 
        administration's budget request recommends a total of $10.6 
        million and of that, only $1.2 million from receipts).

Costs of Increased Security at Federal Multi-Purpose Projects
    Following the attacks of September 11, 2001, the Bureau of 
Reclamation (Bureau) embarked upon an aggressive program to enhance the 
security of Federal dams to protect the facilities against terrorist 
attacks. Based on historical precedent dating to World War II, the 
Bureau determined in 2002 that protecting these multi-purpose water 
projects was a national responsibility and that the costs of increased 
security measures should remain a non-reimbursable obligation of the 
Federal Government. We urge Congress to add language to its fiscal year 
2006 bill to clarify that costs of increased security at dams owned and 
operated by the Bureau of Reclamation should continue to be non-
reimbursable.
    In report language accompanying the Energy and Water Development 
Appropriations Act of 2005, Congress recognized the dramatic increase 
in security needs and corresponding costs at Reclamation facilities 
following the September 11, 2001, attacks on our country. The 
conference committee then underscored its concern for the 
reimbursability of security costs by including the following directive 
to the Bureau: ``Reclamation shall provide a report to the conference 
no later than May 1, 2005, with a breakout of planned reimbursable and 
non-reimbursable security costs by project, by region. The conference 
directs the Commissioner [of Reclamation] not to begin the 
reimbursement process until the Congress provides direct instruction to 
do so.''
  central utah project reclamation mitigation and conservation account
    The President's fiscal year 2006 budget recommends that a portion 
of the Central Utah Project Completion Act (CUPCA) be overturned in 
order to shift the costs of the Utah Mitigation and Conservation Fund 
from the Federal Government to power customers in Arizona, New Mexico, 
Wyoming, Colorado, Nevada and Utah. This would set an unfortunate and 
inappropriate precedent that would allow the Federal Government to 
shift other non-power-related Federal costs to power users or other 
sets of taxpayers. We urge the subcommittee to oppose this proposal and 
to insist that the contribution continue to come from the Department of 
Energy through non-reimbursable, non-returnable funds appropriated for 
the Western Area Power Administration.

   RENEWABLE ENERGY PRODUCTION INCENTIVE (REPI) AND RENEWABLE ENERGY 
                                PROGRAMS

    The Department of Energy's REPI program was created in 1992's 
Energy Policy Act (EPAct) as a counterpart to the renewable energy 
production tax credits made available to for-profit utilities. EPAct 
authorizes DOE to make direct payments to not-for-profit public power 
systems and rural electric cooperatives at the rate of 1.5 cents per 
kWh (1.8 cents when adjusted for inflation) from electricity generated 
from solar, wind, geothermal and biomass projects. According to DOE 
sources, in order to fully fund all past and current REPI applicants, 
$80 million would be needed for fiscal year 2006. Despite the 
demonstrated need, however, DOE has asked for only $5 million for 
fiscal year 2006, citing budgetary constraints. We greatly appreciate 
the subcommittee's interest in this small but important program as 
evidenced by its support of funding for the program over and above the 
administration's budget requests in the last few years despite the 
tight budgetary environment. We urge the subcommittee to continue its 
support with an even greater increase.
    As is demonstrated by our strong support for REPI, APPA believes 
that investing in energy efficiency and renewable energy programs is 
critical. We urge the subcommittee to support adequate funding to 
ensure that renewable energy usage continues to increase as part of the 
portfolio of fuel options available to our Nation's electric utilities.

                   ENERGY INFORMATION ADMINISTRATION

    The Energy Information Administration (EIA) has extensive 
legislative authority to collect data needed to answer a broad range of 
energy policy questions. In order to fulfill this responsibility in 
regard to the electric power industry, EIA has had to revise and expand 
its data collection to include new participants. EIA now collects 
information from all sectors of the power industry: investor-owned 
utilities, rural electric cooperatives, public power systems and 
Federal utilities, as well as power marketers and non-utility 
generators.
    Most EIA data forms are filled out by all industry sectors. 
However, the Federal Energy Regulatory Commission (FERC) collects data 
from its jurisdictional utilities (investor-owned utilities) and the 
Department of Agriculture's Rural Utilities Service (RUS) collects 
information from its utility borrowers (rural electric cooperatives). 
EIA does not duplicate electricity data collected by these Federal 
agencies. Thus EIA uses a small number of forms to collect comparable 
information from electric industry sectors not subject to the FERC or 
RUS reporting requirements. EIA-412 is one of these forms.
    Funding for the distribution, collection and analysis of EIA-412 
was eliminated by EIA in fiscal year 2005, but EIA has not yet 
abandoned the program. We urge the subcommittee to encourage the EIA to 
provide funding for this form in fiscal year 2006 within the context of 
its overall appropriation. The elimination of form EIA-412 will leave a 
gap in the electricity industry's data coverage.

                  STORAGE FOR HIGH-LEVEL NUCLEAR WASTE

    We support the administration's efforts to finalize the location of 
a permanent storage site at Yucca Mountain, Nevada. The President 
requested $651 million for fiscal year 2006 for the nuclear waste 
repository at Yucca Mountain. While somewhat less than we would like, 
we appreciate the fact that this year's budget does not assume that a 
portion of the request would be taken ``off-budget'' through 
authorizing legislation.

                  ADVANCED HYDROPOWER TURBINE PROGRAM

    APPA is disappointed with the administration's proposal to sharply 
cut funding from the $5 million it requested and received in fiscal 
year 2005 to a request of just $500,000 for fiscal year 2006 for the 
Advanced Hydropower Turbine Program. DOE has indicated its intention to 
phase out this important program that is a joint industry-government 
cost-share effort to develop a hydroelectric turbine that will protect 
fish and other aquatic habitats while continuing to allow for the 
production of emissions-free hydroelectric power. We urge the 
subcommittee to consider providing additional funding for this 
important initiative.

                          ENERGY CONSERVATION

    APPA appreciates the subcommittee's interest in energy conservation 
and efficiency programs at DOE and we hope that the subcommittee will 
once again allocate a funding level over and above the administration's 
request for fiscal year 2006.

            WEATHERIZATION AND INTERGOVERNMENTAL ACTIVITIES

    APPA supports the administration's request of $[sic] million for 
fiscal year 2006 for helping to increase the efficiency of commercial 
and residential buildings, including weatherization assistance, the 
State and community energy conservation programs.

        COAL RESEARCH INITIATIVE AND CLEAN COAL POWER INITIATIVE

    APPA supports the administration's request of $286 million for 
fiscal year 2006 for the Coal Research Initiative. APPA also strongly 
urges the subcommittee to support the administration's request of $68 
million for fiscal year 2006 for the Clean Coal Power Initiative. This 
initiative makes possible joint government-industry research, 
development and demonstration of new technologies to enhance the 
reliability and environmental performance of coal-fired generators.

                   DISTRIBUTED GENERATION FUEL CELLS

    APPA supports the administration's request of $84 million for 
fiscal year 2006 for distributed generation fuel cell research and 
development.

                           HYDROGEN RESEARCH

    APPA supports the administration's efforts to improve the 
feasibility of making available low-cost hydrogen-powered fuel cell 
vehicles, and support its request of $260 million for hydrogen research 
in fiscal year 2006.

              NAVAJO ELECTRIFICATION DEMONSTRATION PROGRAM

    APPA supports full funding for the Navajo Electrification 
Demonstration Program at its $15 million authorized funding level for 
fiscal year 2006. The purpose of the program is to provide electric 
power to the estimated 18,000 occupied structures in the Navajo Nation 
that lack electric power.

             NATIONAL CLIMATE CHANGE TECHNOLOGY INITIATIVE

    APPA supports the administration's efforts to promote greenhouse 
gas reductions through voluntary programs and investments in new 
technologies. We are therefore disappointed that the administration has 
failed to request funding through the National Climate Change 
Technology Initiative to spur innovation of technologies that will 
reduce, avoid, or capture greenhouse gas emissions, and encourage the 
subcommittee to consider allocating funds for this important research.

              FEDERAL ENERGY REGULATORY COMMISSION (FERC)

    The Federal Energy Regulatory Commission (FERC) has requested 
$220.4 million for fiscal year 2006 for its overall operations. APPA 
supports this request.
                                 ______
                                 
              Prepared Statement of MASI Technologies, LLC

    Agency.--Department of Energy, Office of Fossil Energy.
    Program.--Gas/Oil--Drilling, Completion and Stimulation.
    Project.--``Enhanced Wellbore Stabilization and Reservoir 
Productivity with Aphron Drilling Fluid Technology,'' Award Number DE-
FC26-03NT42000.
    Award.--$1.11 million for 2 years.
    This project was initiated to evaluate how aphron drilling fluids 
decrease fluid invasion in mature gas and oil reservoirs. The novelty 
of aphron technology necessitates ``proof'' of its capabilities in 
order to increase its acceptance by the U.S. drilling industry. 
Although use of aphron drilling fluids is expected to decrease drilling 
costs significantly and reduce the cost of gas and oil to American 
consumers, unfortunately operators and service companies do not have 
the wherewithal to carry out this kind of study. Consequently, this 
important work would not be done without the financial assistance 
provided by DOE.
    As world energy consumption grows at an increasing rate, the United 
States' reliance on foreign sources is also growing. This is happening 
at a time when oil production may be nearing a peak and inevitable 
decline. Oil prices are spiking as a consequence, putting pressure on 
the world's economies. This ``perfect storm'' clearly demonstrates the 
necessity of finding and producing new reserves while working to 
develop alternative renewable energy sources. Just as important, 
though, is the ability to maximize production of existing reserves as 
the energy backbone while these longer term objectives are in progress.
    Many of the fields in the United States have been producing for 
many years and, although there is still significant oil and gas in 
place, the difficulty of exploiting these fields is increasing. For 
example, the dynamics of these depleted fields change when the pressure 
of the producing zones is reduced through years of production. The 
remaining production must be accessed by remediation, secondary 
recovery, and infill drilling. All these methods require working in 
conditions made much more difficult by the depletion of the pressures 
in the payzone. The industry is making tremendous progress in the 
development of new tools and techniques to explore and drill more 
challenging wells. This level of progress is necessary to help in 
maximizing production of the existing reserves to help fill the gap of 
current demand.
    Because of the level of difficulty due to the severe depletion, 
many wells are now left undrilled or not remediated. They either cannot 
be drilled or would be so expensive that they have become uneconomical. 
Aphron drilling fluid technology was developed to provide a new way to 
address this problem by changing the way the drilling and workover 
fluid works. This technology has allowed the drilling of many of these 
wells without problems and with demonstrated protection of the 
producing zones. Even though they are severely depleted, these zones 
were drilled or remediated and are now producing. Most of these early 
aphron-drilled wells were in depleted sands which were the first zones 
of interest to be exploited by the industry. More difficult to drill 
and remediate are fractured zones, which are now being drilled as 
prolific producers especially when horizontal drilling techniques are 
employed.
    Because of the increased understanding of aphron drilling fluid 
technology that has been made through this grant from the Department of 
Energy, the depleted sands are now being drilled more effectively. Even 
more significant is the progress made through this research to increase 
the efficiency of drilling these fractured reserves. This is proving 
effective in extending the development of these difficult reserves and 
enhancing the effectiveness of horizontal drilling techniques in this 
effort to enhance production. Even though we have made much progress, a 
great deal of benefit to our domestic, and indeed global production, 
will be realized by continued support from the Department of Energy for 
these R&D efforts.

                 BACKGROUND AND IMPETUS FOR THE PROJECT

    Many oil and gas reservoirs in the United States are mature and are 
becoming increasingly depleted of hydrocarbons, which makes for ever 
more costly drilling. While the formations above and below these 
producing zones typically have much higher pore pressures and require 
high fluid density to stabilize them, exposure of a depleted zone to 
this high-density fluid can result in significant loss of whole 
drilling fluid and differential sticking. Both of these events are 
extremely expensive to correct.
    Uncontrollable drilling fluid losses are at times unavoidable in 
the often large fractures characteristic of these formations. 
Furthermore, pressured shales are often found interbedded with depleted 
sands, thus requiring stabilization of multiple pressured sequences 
with a single drilling fluid. Drilling such zones safely and 
inexpensively is very difficult with conventional rig equipment. A 
popular solution is to drill such wells with fluids of density that is 
low enough to balance the pore pressure in the depleted zone. However, 
this action results in drilling the zones above and below the depleted 
zone ``underbalanced,'' a condition that risks wellbore collapse and 
blow-outs. A new drilling fluid technology was developed recently that 
does not entail drilling underbalanced, yet is designed to mitigate 
loss of fluid and differential sticking. This novel technology is based 
on the use of uniquely structured micro-bubbles of air called 
``aphrons.''
    Aphron drilling fluids have been used successfully to drill 
depleted reservoirs and other low-pressure formations in a large number 
of wells in North and South America. However, as the name ``aphron'' 
implies, a key component of these fluids is the introduction of air 
into the fluid. Air in a drilling fluid is generally considered 
detrimental, for the oxygen in the air causes corrosion, and the air 
may create variable pressures and well control issues.
    Aphrons are composed of two fundamental elements: (1) a core that 
is usually fluid and which, as applied here, typically is air; and (2) 
a protective shell. This shell is considerably different from a 
conventional air bubble, which is stabilized in a liquid medium only by 
a thin surfactant film. Aphrons possess two additional layers outside 
of that inner surfactant layer: a sheath of viscosified water overlays 
the inner surfactant film, and outside of that is a bi-layer of 
surfactants that ultimately renders the aphron hydrophilic and, 
therefore, compatible with the continuous aqueous phase. However, the 
outermost surfactant layer in the bi-layer is thought to be only weakly 
associated with the rest of the aphron and can be shed by shear or when 
aphrons are compressed together. Thus, when aphrons are forced together 
in a pore throat, they may acquire sufficient hydrophobic character 
that they can agglomerate and help seal off the pore.
    Much of the scenario described above about the role of aphrons in 
reducing fluid losses down hole is conjecture that has not been 
confirmed under stringent laboratory conditions. Furthermore, the 
overall manner in which the drilling fluid is able reduce fluid losses 
down hole has been brought into question. Consequently, some operators 
have shown considerable resistance to acceptance of aphron drilling 
fluid technology.

            HOW THE PROJECT WILL ADVANCE DRILLING TECHNOLOGY

    Lost circulation is one of the most vexing and costly problems of 
many drilling operations. This is particularly true when drilling into 
depleted oil and gas reservoirs. Preventive measures currently focus on 
underbalanced drilling or use of a low concentration of a plugging 
agent in the entire circulating system. Remediation is the most common 
alternative. This entails periodic injection down hole of a pill--a 50-
bbl to 100-bbl slug of fluid--that contains a high concentration of a 
plugging agent or a settable/cross-linkable fluid. Underbalanced 
drilling is hazardous and costly, while the plugging materials are not 
only damaging to producing formations, they also are not always 
effective. Aphron drilling fluids use a combination of very high low-
shear rheology to slow the progress of fluids through loss zones and 
specially constructed micro-bubbles (aphrons) to reversibly plug the 
loss zones. But little is known about the details of these processes in 
porous/fractured media at the elevated pressures encountered down hole. 
Developing some understanding of the physicochemical properties of 
aphron drilling fluids--and aphrons in particular--under down hole 
conditions would help greatly to elucidate the roles played by the 
various components of the drilling fluids and provide guidance for 
optimization of the system.

         KEY DISCOVERIES DURING THE FIRST PHASE OF THE PROJECT

    In contrast to conventional bubbles, which do not survive long past 
a few hundred psi, aphrons have been found to survive compression to at 
least 27.3 MPa (4,000 psi) long enough to enable them to act as a 
separate phase. When a fluid containing bubbles is subjected to a 
sudden increase in pressure above a few hundred psi, the bubbles 
initially shrink in accordance with the modified Ideal Gas Law. 
However, conventional bubbles begin to lose air rapidly and, in 
seconds, they disappear. Aphrons lose air, too, but they do so very 
slowly, shrinking at a rate that depends on fluid composition, bubble 
size, and rate of pressurization and depressurization. Air is lost via 
slow diffusion through the aphron shell and dissolution in the aqueous 
medium. Less important is loss of oxygen by chemical reaction with 
various components in the fluid, a process that usually takes minutes 
and results in nitrogen-filled aphrons. Thus, corrosion of tubulars by 
aphrons is negligible.
    When aphrons reach a critical minimum size--either as a result of 
compression or slow diffusion of air--they undergo a structural change 
that leads to their rapid demise, and the expelled air dissolves in the 
fluid. However, decompression to a sufficiently low pressure results in 
supersaturation of the aqueous medium, whereupon the air is released; 
most of the expelled air goes into existing aphrons, though it may also 
create new aphrons.
    The base fluid in aphron drilling fluids was shown to yield a 
significantly larger pressure loss (or, for a fixed pressure drop, 
lower flow rate) in long conduits than any conventional high-viscosity 
drilling fluid. Similarly, if flow is restricted or stopped, aphron 
drilling fluids (at a fixed wellbore pressure) generate significantly 
lower downstream pressures than do other drilling fluids. The same 
phenomena are evident in permeable sands. Furthermore, in permeable 
sands of moderate permeability (up to at least 8 darcy), aphrons 
themselves slow the rate of fluid invasion and increase the pressure 
drop across the sands. Lastly, and most importantly, aphrons were shown 
to move more rapidly through the sands than the base fluid. This 
phenomenon, called ``bubbly flow,'' appears to follow conventional 
Navier-Stokes theory, which has been used successfully in the past to 
describe transport of both low-density and high-density internal 
phases. This theory appears to be as applicable to bubbly flow in a 
conduit or in a permeable medium (flow in opposition to a pressure 
differential) as it is to buoyancy (upward flow of bubbles in 
opposition to gravity). For a rigid sphere in a fluid under the 
influence of a one-dimensional pressure gradient, DP/L, the relative 
velocity of the bubble in an infinitely wide conduit is

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

where r is the bubble radius and m is the fluid viscosity.
    Qualitative tests indicated that aphrons have very little affinity 
for each other or for the mineral surfaces in rock formations 
encountered during drilling. This lack of affinity does not result from 
shedding surfactant layers, as was thought before, but is an intrinsic 
characteristic of the whole aphron structure. Thus, aphrons resist 
agglomeration and coalescence and can be pushed back out of a permeable 
formation easily by reversing the pressure differential, thus 
minimizing formation damage.
    Finally, leak-off tests demonstrated that the base fluid in aphron 
drilling fluids is primarily responsible for sealing permeable zones 
and is capable of sealing rock as permeable as 80 darcies. Properly 
designed aphrons can reduce these losses even further. It was learned 
from flow visualization tests that, although the amount of air in a 
typical aphron drilling fluid is very small (15 vol percent air at 
ambient temperature and pressure amounts to only 0.02 wt percent), 
bubbly flow can cause the aphrons to move at a velocity greater than 
the liquid phase, thus accumulating at the fluid front and inhibiting 
movement of the liquid.

                           POTENTIAL SPINOFFS

    Conventional surfactant-stabilized bubbles are not strong enough or 
impermeable enough to withstand pressures of just a few hundred psi. 
Compression itself will reduce a bubble of 100 mm diameter at 
atmospheric pressure to 38 mm when subjected to a pressure of 250 psi, 
and 19 mm at 2,500 psi. But the biggest effect of pressure by far on 
the fate of a bubble is increased gas solubility. When a fluid 
containing 15 percent v/v entrained air at ambient pressure is 
compressed to just 250 psi, all of the air becomes soluble. If the 
stabilizing membrane in an aphron is permeable, the air will diffuse 
into the surrounding medium and go into solution. This is indeed what 
happens with ordinary bubbles, and it occurs within a matter of seconds 
after compression. Aphrons do not lose their air as readily; indeed, 
even at 250 psi, the aphrons are stable indefinitely. Understanding 
this phenomenon has wide implications, inasmuch as this behaviour has 
only been observed previously with thick hollow plastic or glass beads. 
Such technology might be used to encapsulate many different materials 
in drilling and completion fluids.
                                 ______
                                 
   Prepared Statement of U.S. Petroleum Engineering Department Heads

    On behalf of the Heads of Petroleum Engineering Departments in the 
United States, whose names are attached to this letter, we would like 
to submit the following written testimony relating to the proposed DOE 
budget recommendations for fiscal year 2006.
    In the administration's recently proposed budget recommendations 
for fiscal year 2006, the Department of Energy's (DOE) Oil & Natural 
Gas Technology Programs have been zeroed out. These proposed cuts are 
intended to terminate all programs that address research and technology 
development in the domestic oil and gas sector. We, the undersigned, 
want to bring to your attention the significant negative impact that 
these cuts would have on domestic oil and gas production and on our 
efforts to reduce dependence on foreign oil.
    The elimination of DOE funding for research related to oil and gas 
will have three major negative consequences for the domestic energy 
industry and for our national energy security:
  --We will be unable to train sufficient numbers of Petroleum 
        Engineering undergraduate and graduate students for the 
        domestic industry.
  --It will significantly curtail our ability to develop new 
        technologies so as to continue to make the United States the 
        world leader in technological innovation in the oil and gas 
        sector and to effectively develop our domestic oil and gas 
        resources.
  --Our ability to build bridges with energy producers around the world 
        through educational and technological exchange will be 
        significantly impaired.
    Each one of these items is discussed in further detail and specific 
data are provided below.
       impact on the domestic workforce in the oil and gas sector
    Since 1982, the number of B.S. programs in Petroleum Engineering 
has decreased from 34 to 19, a 44 percent decrease. Concurrently, the 
B.S. Petroleum Engineering enrollment in the United States has 
decreased from 9,492 in 1982 to 1,845 in 2004, an 80 percent decrease. 
The number of B.S. degrees granted in Petroleum Engineering has 
decreased from 1,280 in 1982 to 272 in 2004, a 78 percent decrease.
    Studies conducted by independent organizations, such as the 
American Petroleum Institute and the Department of Labor, have shown 
that we have a significant shortfall in the available talent pool in 
Petroleum Engineering. The average age of the engineers and 
geoscientists in the oil and gas sector in the United States is now 54 
and climbing. Within 5 to 7 years more than half of the engineers in 
the industry will be eligible to retire. With the small number of 
graduates emerging from Petroleum Engineering schools, the large number 
of expected retirements and demographics in the oil and gas sector, a 
workforce crisis is looming. It is, therefore, vital to support 
programs that train Petroleum Engineers and geoscientists for the 
domestic oil and gas industry.
    The DOE budget for oil and gas research in the United States has a 
huge impact on our ability to train qualified people for the domestic 
oil and gas sector. The DOE Oil & Gas Program provides vital support to 
Petroleum Engineering Departments cross the country. Through this 
support, faculty is able to interact with oil and gas operators within 
the United States and develop a better understanding of the problems 
faced by the industry. This knowledge is transmitted to students in 
classrooms and through opportunities to work in these research 
projects, enhancing their understanding and appreciation of the 
domestic industry. Our ability to retain the best faculty who are 
needed to train Petroleum Engineers, for the coming decades largely 
depends entirely on our being able to provide research funding to our 
faculty to work on domestic oil and gas issues. Lacking this 
opportunity, there will not be many viable Petroleum Engineering 
programs left in the United States.

 IMPACT OF BUDGET CUT ON DEVELOPMENT OF DOMESTIC OIL AND GAS RESOURCES

    The United States has traditionally been a leader in oil and gas 
research and technology development. We have held this position 
primarily through cutting edge technology development both at oil and 
gas companies and at universities across the country. With the 
globalization of research and technology, this position can no longer 
be taken for granted. Failing to have technological leadership in this 
vital energy sector can have profound implications for the United 
States both in terms of our ability to develop domestic resources and 
in terms of our dealings with oil and gas producing countries.
    A vast majority of our domestic resources are in mature fields that 
require the use of novel technologies to produce hydrocarbons. Good 
examples of technology plays are the development of unconventional gas 
resources (such as the Barnett shale) in many U.S. basins. These energy 
resources that constitute an ever-increasing proportion of our domestic 
energy supply would not have emerged as technologically and 
commercially viable energy sources without the application of new 
technologies. There are many such examples. DOE oil and gas research 
programs provided vital support for the development of these 
technologies.

   IMPACT OF BUDGET CUT ON OUR ABILITY TO BUILD BRIDGES WITH ENERGY 
                          PRODUCERS WORLDWIDE

    The United States has successfully built bridges with energy 
producing countries around the world through exchange of technology and 
educational partnerships for many decades. Indeed, some of the world's 
largest oil and gas producers are lead by graduates of American 
universities. The shrinking and possible elimination of Petroleum 
Engineering programs in the United States will have a devastating 
effect on our ability to continue this tradition. Over the long run 
this will have a significant negative impact on our ability to partner 
with and work with many of these oil and gas producing nations in the 
future. Maintaining healthy and vital centers of higher education in 
the oil and gas sector should be a priority for the United States 
because they provide a training ground for engineers and geoscientists 
not only for the domestic oil and gas industry but also for technology 
and business leaders in oil and gas producing countries in other parts 
of the world. This allows significant long-term global partnerships for 
the U.S. domestic oil and gas industry and has in the past been very 
successful in facilitating partnerships with these oil and gas rich 
nations.

                                SUMMARY

    We, the undersigned, would like to request, that the oil and gas 
budget for DOE Fossil Energy be restored to fiscal year 2005 levels 
($78 million). This amount constitutes a very small portion of the 
overall DOE budget. In our opinion, this budget needs to grow and 
expand much beyond where it currently stands. Its elimination will most 
certainly have a devastating effect on the domestic oil and gas 
industry and educational infrastructure.
            Thank you,
                                   Mukul M. Sharma,
                                  The University of Texas at Austin
                                   S. Ameri,
                                           West Virginia University
                                   Roland Horne,
                                                Stanford University
                                   Julius Langlinais,
                                         Louisiana State University
                                   Turgay Ertekin,
                                              Penn State University
                                   Mohan Kelkar,
                                            The University of Tulsa
                                   Steve Holditch,
                                               Texas A&M University
                                   Iraj Ershaghi,
                                  University of Southern California
                                   Dr. Robert W. Chase,
                                                   Marietta College
                                   Santanu Khatanier,
                                    University of Alaska, Fairbanks
                                   Dean S. Oliver,
                                         The University of Oklahoma
                                   Thomas W. Engler, Ph.D, P.E.,
                                                    New Mexico Tech
                                   Ali Pilehvari,
                                               Texas A&M University
                                   Craig W. Van Kirk,
                                           Colorado School of Mines
                                   Lawrence R. Weatherly,
                                               University of Kansas
                                   Ali Ghalambor,
                               University of Louisiana at Lafayette
                                   Jalal Torabzadeh,
                                        California State University
                                   Shari Dunn-Norman,
                                     University of Missouri--Rolla.
                                 ______
                                 
 Prepared Statement of the Commission on Marginally Producing Oil and 
                               Gas Wells

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

    Thank you for this opportunity to provide the American Geological 
Institute's perspective on fiscal year 2006 appropriations for 
geoscience programs within the subcommittee's jurisdiction. The 
president's budget requests significant cuts in the Department of 
Energy (DOE). In particular, the president's request would eliminate 
the Office of Fossil Energy oil and natural gas research programs, and 
we ask for restoration of those to their fiscal year 2003 levels. 
Additionally, as the largest supporter of physical science research in 
the United States, DOE's Office of Science deserves the subcommittee's 
full support and restoration of the proposed budget cut.
    AGI is a nonprofit federation of 42 geoscientific and professional 
associations that represent more than 100,000 geologists, 
geophysicists, and other earth scientists. The institute serves as a 
voice for shared interests in our profession, plays a major role in 
strengthening geoscience education, and strives to increase public 
awareness of the vital role that the geosciences play in society's use 
of resources and interaction with the environment.

               DOE FOSSIL ENERGY RESEARCH AND DEVELOPMENT

    AGI urges you to take a critical look at the Department of Energy's 
Fossil Energy Research and Development (R&D), Natural Gas Technology 
R&D and Oil Technology R&D accounts as you prepare to craft the fiscal 
year 2006 Energy and Water Appropriations bill. Over the past 4 years, 
members of Congress have strongly emphasized the need for a 
responsible, comprehensive energy policy for the country. The growing 
global competition for fossil fuels has led to a repeated and concerted 
request by Congress to ensure the Nation's energy independence. The 
President's proposal that these programs be eliminated is short-sighted 
and will not allow us to achieve energy independence.
    The research dollars spent by these programs go largely to 
universities, State geological surveys and research consortia to 
address critical issues like enhanced recovery from known fields and 
unconventional sources that are the future of our natural gas supply. 
This money does not go into corporate coffers, but it helps American 
businesses remain competitive by giving them a technological edge over 
foreign companies. All major advances in oil and gas production can be 
tied to research and technology. AGI strongly encourages the conferees 
to restore these funds and bring these programs back to at least fiscal 
year 2003 levels.
    Today's domestic industry has independent producers at its core. 
With fewer and fewer major producing companies and their concentration 
on adding more expensive reserves from outside of the contiguous United 
States, it is the smaller independent producers who are developing new 
technologies concentrated on our domestic resources. However, without 
Federal monetary contributions to basic research that drives 
innovation, small producers cannot develop new technologies as fast, or 
as well, as they do today. The program has produced many key successes 
among the typical short-term (1 to 5 years) projects usually chosen by 
the DOE for support. And even failed projects have proven beneficial, 
because they've often resulted in redirection of effort toward more 
practical exploration and production (E&P) solutions. Ideally, DOE and 
private sector participants share the programs R&D funding on a 50-50 
basis, with the government contributing actual dollars and the company 
contributing dollars or ``in kind'' products and services. To justify 
the use of public funds, new technology developed from such projects is 
made available to the industry.
    In 2003, at the request of the Interior Appropriations 
Subcommittee, the National Academies of Science released a report 
entitled ``Energy Research at DOE: Was It Worth It? Energy Efficiency 
and Fossil Energy Research 1978 to 2000''. This report found that 
Fossil Energy R&D was beneficial because the industry snapped up the 
new technologies created by the R&D program, developed other 
technologies that were waiting for market forces to bring about 
conditions favorable to commercializing them and otherwise made new 
discoveries. In real dollars from 1986-2000 the government invested 
$4.5 billion into Fossil Energy R&D. During that time, realized 
economic benefits totaled $7.4 billion. This program is not only paying 
for itself, it has brought in $2.9 billion in revenue. Why not continue 
to fund oil and gas R&D so we can attain the energy independence we 
need for stable and continued economic growth?
    The Federal investment in energy R&D is particularly important when 
it comes to longer-range research with diversified benefits. In today's 
competitive markets, the private sector focuses dwindling research 
dollars on shorter-term results in highly applied areas such as 
technical services. In this context, DOE's support of fossil energy 
research, where the focus is truly on research, is very significant 
both in magnitude and impact compared to that done in the private 
sector, where the focus is mainly on development. Without more emphasis 
on research, we risk losing our technological edge in this global and 
increasingly more expensive commodity.
    As we pursue the goal of reducing America's dependence on unstable 
and expensive foreign sources of oil, we must continue to increase 
recovery efficiency in the development of existing domestic oilfields, 
conserving the remaining in-place resources. Since the 1980's, 80 
percent of new oil reserves in this country have come from additional 
discoveries in old fields, largely based on re-examination of 
previously collected geoscience data. These data will become even more 
important in the future with development of new recovery technologies.
    The research funded by DOE leads to new technologies that improve 
the efficiency and productivity of the domestic energy industry. 
Continued research on fossil energy is critical to America's future and 
should be a key component of any national energy strategy. The societal 
benefits of fossil energy R&D extend to such areas as economic and 
national security, job creation, capital investment, and reduction of 
the trade deficit. The Nation will remain dependent on petroleum as its 
principal transportation fuel for the foreseeable future and natural 
gas is growing in importance. It is critical that domestic production 
not be allowed to prematurely decline at a time when tremendous 
advances are being made in improving the technology with which these 
resources are extracted. The recent spike in both oil and natural gas 
prices is a reminder of the need to retain a vibrant domestic industry 
in the face of uncertain sources overseas. Technological advances are 
necessary to maintaining our resource base and ensuring this country's 
future energy security.

                         DOE OFFICE OF SCIENCE

    The DOE Office of Science is the single largest supporter of basic 
research in the physical sciences in the United States, providing more 
than 40 percent of total funding for this vital area of national 
importance. The Office of Science manages fundamental research programs 
in basic energy sciences, biological and environmental sciences, and 
computational science and, under the president's budget request, would 
be cut by 3.8 percent from about $3.6 billion last year to $3.5 
billion. AGI asks that you restore this cut.
    Within the Office of Science, the Basic Energy Sciences (BES) 
program supports fundamental research in focused areas of the natural 
sciences in order to expand the scientific foundations for new and 
improved energy technologies and for understanding and mitigating the 
environmental impacts of energy use. BES also discovers knowledge and 
develops tools to strengthen national security.
    While the Basic Energy Sciences account is slated for an increase, 
the entire increase would be devoted to Materials Sciences and 
Engineering (MES) and the Chemical Sciences, Geosciences and Energy 
Biosciences (CSGEB) account would decline by 7.4 percent. The 
geosciences activity within CSGEB supports mineral-fluid interactions; 
rock, fluid, and fracture physical properties; and new methods and 
techniques for geosciences imaging from the atomic scale to the 
kilometer scale. The activity contributes to the solution of problems 
in multiple DOE mission areas, including reactive fluid flow studies to 
understand contaminant remediation; seismic imaging for reservoir 
definition; and coupled hydrologic-thermal-mechanical-reactive 
transport modeling to predict repository performance. In short, this 
account deserves your full support and well-rounded funding.
    Thank you for the opportunity to present this testimony to the 
subcommittee. If you would like any additional information for the 
record, please contact me.
                                 ______
                                 
     Prepared Statement of the American Forest & Paper Association

   FISCAL YEAR 2006 APPROPRIATIONS FOR FEDERAL ENERGY EFFICIENCY AND 
                     RENEWABLE ENERGY R&D PROGRAMS

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

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

   FUNDING FOR THE U.S. DEPARTMENT OF ENERGY HYDROGEN INITIATIVE FOR 
                            FISCAL YEAR 2006

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

    This testimony is submitted by SoftSwitching Technologies, Inc., 
(SoftSwitching) for the information of the committee during its 
consideration of the Department of Energy's (DOE) fiscal year 2006 
budget requests for the Office of Electricity and Energy Assurance.
    SoftSwitching is a leading provider of power quality, power 
reliability and power monitoring systems, including the Dynamic Sag 
Corrector (DySC) and the innovative I-Grid web-based power 
monitoring system. The I-Grid is a grid monitoring system with over 
1,000 power monitors deployed throughout the United States. 
Approximately 200 monitors deployed at industrial, utility, commercial, 
and residential locations in the Midwest and Northeastern States 
provided a near real-time record of the August 2003 blackout. Data from 
the SoftSwitching I-Grid data system subsequently was utilized by the 
joint U.S.-Canadian task force that investigated the blackout.

                         FUNDING FOR GRIDWORKS

    SoftSwitching supports DOE's request for $5 million for the 
GridWorks program in fiscal year 2006. The GridWorks program has a 
vital role to play in accelerating the development of new technologies 
to modernize and expand the electric grid, and in so doing, reducing 
the likelihood of costly blackouts and power interruptions.\1\ The 
focus of GridWorks is on key grid components, including substations and 
protective systems, power electronics, and cables and conductors. In 
the area of substations and protective systems, an important emphasis 
is on the development of next generation components and subsystems, 
addressing the need to move from today's primarily mechanical system to 
one that relies on solid state devices capable of rapid reactions. The 
GridWorks program also recognizes that the use of the existing grid may 
be maximized through improved operational and diagnostic tools that 
will enable faster identification of problems and responses. GridWorks 
will be coordinated with the other OEAA research initiatives, including 
transmission reliability R&D and the GridWise program, which 
concentrates on software-based solutions to grid modernization.
---------------------------------------------------------------------------
    \1\ A recent study from the Lawrence Berkeley National Laboratory 
placed the annual cost to the U.S. economy from power interruptions--
including momentary interruptions as well as longer power outages--at 
approximately $80 billion. See Kristina LaCommare and Joseph Eto, 
``Understanding the Cost of Power Interruptions to U.S. Electricity 
Consumers, Lawrence Berkeley National Laboratory'', September 2004 at 
xiv.
---------------------------------------------------------------------------
    Adequate funding is needed for the core GridWorks program to permit 
continuing progress on implementation of the GridWorks Multi-Year Plan, 
which was released on March 8. The GridWorks Plan was developed through 
extensive consultation with industry on how best to modernize the 
electric grid through both near-term and longer term activities. It 
should guide DOE's allocation of research and development funding.

                   CHALLENGES IN MODERNIZING THE GRID

    There is general agreement that the electric transmission grid is 
under great stress today. The North American bulk power grid was 
constructed largely from the 1960's through the 1980's. With the 
opening of wholesale electricity markets, and retail markets in some 
States, the grid has come to be used in ways for which it was not 
designed. Grid stress manifests itself not only in occasional, highly 
visible outages such as the August 2003 blackout that affected 50 
million people in the United States and Canada, but also in more subtle 
ways, such as increasing transmission line congestion, reductions in 
power quality, and electricity prices that are higher than they should 
be.
    Investment in the transmission system has not kept pace with the 
growth in demand for electricity. The list of reasons why investment is 
not made in transmission is lengthy. It begins with the inherent 
difficulty in siting new transmission. Even if siting difficulties can 
be overcome, proponents of new transmission face an uncertain 
regulatory path to recovery of costs. There are also the uncertainties 
attributable to the changing structure of the electricity industry, 
with regional transmission organizations in some regions, but not 
others, and with open markets in some, but not all, States. The result 
is that progress in upgrading aging transmission infrastructure often 
is contentious, incremental and slow.
    Resolving the uncertainty over recovery and allocation of 
transmission upgrade costs and simplifying the rules for siting of new 
transmission lines are important long-term public policy objectives 
that must be achieved in order to ensure a robust, reliable 
transmission system. The Federal Energy Regulatory Commission, the 
States and Congress have an important role here. But while these 
difficult issues are being addressed, opportunities to optimize the 
existing grid through the deployment of new technologies should be 
pursued.

                     TECHNOLOGY FOR A SMARTER GRID

    For all of its technological sophistication, the interconnected 
interstate AC transmission system is essentially a reactive system that 
is not easily controlled. Today's grid relies on relatively slow 
electro-mechanical switches (essentially 1950's technology) and 
imperfect information. Power flows according to Ohm's law (the path of 
least resistance), not necessarily to where it is wanted or needed. AC 
transmission system operators have little ability to control where 
power flows, except by ramping power generators up and down at various 
points on the system. The system is subject to unexpected (and usually 
uncompensated) ``loop flows'' that cause congestion, impair scheduled 
transactions and threaten reliability. In addition, adequate real time 
information regarding the operation of the grid is not always 
available.
    To meet the needs of our highly electricity-dependent economy, the 
grid must evolve into a real-time, digital electronically controlled 
``smart'' system that is self-healing, more controllable, more fault 
tolerant and less reliant on error prone human beings. Such a ``smart'' 
grid might not have been susceptible to some of the failures that 
caused the August 2003 blackout.
    Breakthrough technologies in the area of digital control of the 
power delivery network are a building block of a truly 21st Century 
electricity grid. Such a ``smart'' power delivery system would link 
information technology and energy delivery using automated capabilities 
to optimize the performance and resiliency of the grid, recognize and 
respond to grid disturbances and restore stability to the system after 
a disturbance. The basic building blocks for this system would include 
advanced sensors, data-processing and pattern-recognition software, and 
solid-state power flow controllers, including flexible AC transmission 
system (FACTS) and new distributed controllers now in testing. Many of 
these technologies offer relatively lower cost alternatives to 
expansion of the transmission system. By making more efficient use of 
existing rights of way, in some areas of the country, new technologies 
such as FACTS devices may eliminate altogether the need to expand the 
existing system by adding new, difficult to site, lines.
    While FACTS technology has been commercially available for more 
than 10 years, still relatively few installations have been purchased 
by utilities. This is due to a number of factors. Deploying a large 
number of FACTS systems across the grid would be extremely expensive, 
due in part to the need for a specially skilled work force to maintain 
and operate the system. There are certain technical issues regarding 
insulation requirements and fault currents that stress the power 
electronics system and make implementation of FACTs systems costly and 
difficult. Moreover, in today's electricity market, it is hard to value 
the benefits--decreasing congestion, increasing system capacity or even 
increasing reliability--that use of FACTs technology would produce.
    Active power flow control remains difficult to implement. But the 
ability to control power flows on a more active basis by effectively 
changing the line reactance would provide substantial benefits. 
Technology to control power flows would allow full utilization of line 
capacity while meeting contingency operating requirements, thereby 
enabling the transmission system to be operated closer to its thermal 
limits. Further, the ability to control power flows could reduce line 
congestion or overloading by diverting current to other lines. The 
problem of loop flows, which exacts operational and economic costs, 
could be minimized, allowing power to actually flow along contract 
paths.

                            ``SMART WIRES''

    SoftSwitching is pioneering a new approach for enhancing 
transmission system reliability and controllability through the use of 
a massively distributed FACTS approach, known as ``Smart Wires.'' Smart 
Wires features the deployment of many modules of a Distributed Static 
Series Compensator (DSSC) device, which can be clamped onto existing 
power lines. The DSSC devices then can be operated to control the 
impedance of the conductor, and thereby control the power flow on the 
line.
    The DSSC modules consist of a small rated single phase inverter and 
a single turn transformer, along with associated controls, power supply 
circuits and built-in communications capability. The two parts of the 
module can be physically clamped around a transmission conductor. The 
weight and size of the DSSC module is low, allowing the unit to be 
suspended mechanically from the power line. The unit normally sits in 
bypass mode until the inverter is activated. Once the inverter is 
turned on, the DSSC module can inject voltage or reactive impedance in 
series with the line. The DSCC module can increase line impedance and 
thereby ``push'' current into other parts of the network, or it can 
reduce line impedance and ``pull'' current in from other parts of the 
network.
    The overall system control function is achieved by using a large 
number of modules coordinated through communications and smart 
controls. An additional advantage of the Smart Wires system is that 
modules would also contain appropriate sensors to monitor the condition 
of the line on a distributed basis so that the line can be fully 
utilized.
    A distributed, technology oriented ``smarter grid'' solution cannot 
be expected to solve all problems associated with our stressed 
transmission system, but it is an important start. Technology offers 
transmission owners an opportunity to more efficiently operate their 
systems to effectively increase useable transfer capacity. Distributed 
solutions, phased into operation, also offer improved return on capital 
employed; improved system reliability; reduced possibility of cascading 
outages; reduced delays in expanding system capacity; reduced 
environmental impact; and the ability to defer the purchase of over-
sized assets until required by demand. Massively distributed advanced 
transmission technologies also may offer a way out of the regulatory 
gridlock which stymies many needed transmission investments.

                               CONCLUSION

    Public-private partnership will be necessary to take full advantage 
of opportunities that new technologies present to optimize the existing 
grid. Continued commitment by government to research and development of 
``smart grid'' technologies, as well as programs to assist in 
integrating many of the promising technologies being developed today 
into the grid, would be a wise use of Federal resources. The DOE 
GridWorks and GridWise initiatives are important first steps.
    Smart Wires offers a new approach for realizing a smart, fault 
tolerant, controllable and asset efficient power grid. A massively 
dispersed deployment of the Smart Wires system promises much needed 
system-wide benefits: increased transmission line and overall grid 
capacity; increased grid reliability and improved operation under 
contingency situations; greater information about the grid operating 
conditions; and reduced environmental impacts. DOE's OEAA programs 
should foster the continued development and deployment of this 
promising new technology solution.
                                 ______
                                 
 Prepared Statement of the Coal Utilization Research Council (CURC) \1\
---------------------------------------------------------------------------
    \1\ The CURC is an ad-hoc group of electric utilities, coal 
producers, equipment suppliers, State government agencies, and 
universities. CURC members work together to promote coal utilization 
research and development and to commercialize new coal technologies. 
Our 50+ members share a common vision of the strategic importance for 
this country's continued utilization of coal in a cost-effective and 
environmentally acceptable manner.
---------------------------------------------------------------------------
    Synopsis of CURC Testimony.--This testimony focuses upon the 
following three topics: (1) the adequacy of funding to achieve the 
goals of the DOE/CURC/EPRI technology roadmap; (2) total recommended 
funding increase of $90.7 million for selected, critical DOE coal R&D 
and demonstration programs; and (3) continued support for funding of 
the FutureGen project and CCPI program.

                              INTRODUCTION

    Members of CURC believe that use of coal will be assured through 
the aggressive development of technologies, which improve the cost 
competitiveness of coal, enhance the efficiency and reliability by 
which coal is converted to useful energy, and minimize the 
environmental impacts of coal use through the development of near zero 
emissions coal-based power plants. A long-term, sustained public and 
private investment is required if we are to achieve these goals.

                   THE CLEAN COAL TECHNOLOGY ROADMAP

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

                               CONCLUSION

    Success in advanced clean coal technology development promises to 
preserve the coal option for fuel diversity and assures that continued 
growth in the use of coal will be accompanied with low costs to 
consumers, minimal impacts upon the environment, and guaranteed energy 
security for our Nation now and well into the future. DOE/CURC/EPRI 
roadmap identifies a variety of advanced coal-based energy systems to 
achieve those goals. To ensure that these technologies will be 
developed the government's long-term commitment must be assured with 
continued and focused funding for these programs.
                                 ______
                                 
            Prepared Statement of Direct Drive Systems, Inc.

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

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

    The Mid-West Electric Consumers Association (``Mid-West'') 
represents over 300 rural electric cooperatives, municipally-owned 
utilities, and public power districts in the nine States of the 
Missouri River Basin: Colorado, Iowa, Kansas, Minnesota, Montana, 
Nebraska, North Dakota, South Dakota and Wyoming. Mid-West's members 
serve over 3 million consumers in the region. Mid-West supports the 
fiscal year 2006 budget request of $186.8 million for operations, 
maintenance and program direction utilizing the ``net-zero'' approach 
proposed by the administration. Mid-West also requests a higher funding 
level of $279 million in fiscal year 2006 for the Western Area Power 
Administration's (``Western'') Purchase Power and Wheeling (``PP&W'') 
program that more accurately reflects the current reservoir conditions 
in the Pick-Sloan Missouri Basin Program.
    The administration's budget request has several proposals that 
address some of the issues attendant to the Federal transmission 
system. Mid-West and its members have a vital interest in maintaining 
the efficiency and reliability of the Federal power program. Electric 
utilities throughout the region rely upon the more than 8,000 miles of 
Federal high-voltage transmission operated by Western for delivery of 
power.
    1. Mid-West supports the fiscal year 2006 budget request of $186.8 
million for operations, maintenance and program direction utilizing the 
``net-zero'' approach proposed by the administration.--A net-zero 
approach that recognizes the nature of Western's annual expenses will 
enable Western to continue timely operations and maintenance 
activities. To make this approach truly effective, however, receipts 
used to pay down the appropriations should be reclassified from 
``mandatory'' to ``discretionary.''
    2. Mid-West also requests a higher funding level of $279 million in 
fiscal year 2006 for Western's PP&W program that more accurately 
reflects the current reservoir conditions in the Pick-Sloan Missouri 
Basin Program.--Also, The language in previous appropriations acts 
should be retained so that Western can continue to utilize customer-
generated receipts to help fund PP&W costs.
    3. Mid-West supports the concept, but not the form proposed by the 
administration, of access to receipts for the hydropower operations and 
maintenance activities of the Federal generating agencies (U.S. Army 
Corps of Engineers and the U.S. Bureau of Reclamation).
    4. Mid-West opposes the administration's proposal to arbitrarily 
raise the rates charged for Federal firm power sales to ``market'' 
levels.
    5. Mid-West encourages the committee to consider increasing 
Western's appropriations in an amount equivalent to any funds 
``earmarked'' for special activities.

              ``NET ZERO'' APPROPRIATIONS FOR FEDERAL PMAS

    Adequate and timely funding is critical to maintaining efficient 
and reliable operation of the Federal transmission system that is so 
vital to Western's customers.
    Budget deficits present Congress with a daunting task in funding 
Federal programs. The annual costs of Western are currently included in 
the budget ``scoring'' that Congress uses to help keep control of 
Federal spending. However, those annual costs are returned to the U.S. 
Treasury every year, and so really are not an outlay by the Treasury.
    The administration's fiscal year 2006 budget request proposes a 
``net-zero'' funding approach for operations, maintenance and program 
direction. The ``net-zero'' proposal recognizes that certain Federal 
outlays for a given fiscal year will be returned to the Treasury in 
that same fiscal year. This approach is not ground-breaking, because it 
is already used to fund other Federal energy agencies. The Power 
Marketing Administration's (``PMAs'') budgets cover all the costs of 
their operations. This $186.8 million budget request, in concert with 
the ``net-zero'' approach, is supported by Mid-West. However, a budget 
scoring adjustment is required to make this approach truly effective. 
Receipts collected by Western to repay program direction and operation 
and maintenance expenditures should be reclassified from ``mandatory'' 
to ``discretionary.''

                      PURCHASE POWER AND WHEELING

    Mid-West believes that the administration's budget request of 
$148.5 million for PP&W funding is based on unrealistic assumptions and 
is inadequate. Western and the other PMAs are contractually committed 
to deliver hydropower generated at Federal dams to eligible consumer-
owned utilities on a firm basis. The persistent drought in the Missouri 
River Basin means that the 2005 generation estimated by the Corps of 
Engineers will be 58 percent of normal. Present projections might 
reduce hydropower generation in 2006 to 46 percent of normal. In light 
of the record low reservoir levels and resulting severely reduced 
generation, Western must purchase much more replacement power to 
fulfill their firm contract obligations. These increased purchases at 
soaring energy costs dictate that a higher level of funding is required 
for PP&W. To insure adequate funding in fiscal year 2006, Western will 
need access to receipts for $279 million to cover PP&W costs.
    The language in the fiscal year 2002-2004 appropriations bills 
should be retained so that the PMAs can continue to utilize customer-
generated receipts to help fund their PP&W costs. Otherwise, small 
utilities, such as rural electric cooperatives, municipally-owned 
utilities, Native American tribes, irrigation and public power 
districts, would have to develop their own transmission and power 
firming agreements which would increase their costs. Accordingly, Mid-
West requests that the following language be included in the fiscal 
year 2006 Energy and Water Development Appropriations Act:

    ``Provided, that up to $279,000,000 collected by the Western Area 
Power Administration pursuant to the Flood Control Act of 1944 and the 
Reclamation Project Act of 1939 to recover purchase power and wheeling 
expenses shall be credited to this account as offsetting collections, 
to remain available until expended for the sole purpose of making 
purchase power and wheeling expenditures.''

 CORPS OF ENGINEERS AND BUREAU OF RECLAMATION ACCESS TO POWER RECEIPTS

    Mid-West finds some merit in the administration's proposal in the 
fiscal year 2006 budget request to permit the Bureau of Reclamation 
access to receipts to fund hydropower operations, maintenance and other 
activities. However, without specific safeguards and focus, we cannot 
support the specific proposal. These specific additional provisions are 
as follows: (1) Congress must set the specific amount of receipts to be 
provided to the Bureau from Western's receipts; (2) The Western 
Administrator, after specific consultation with the Bureau and the 
affected Federal power customers, will determine the amount of receipts 
to be transferred; (3) The only type of operations and maintenance 
activity which would be eligible would be annual activities allocated 
exclusively to the power function; (4) No inclusion of hydropower's 
share of joint use operation and maintenance; (5) No inclusion of small 
capital expenditures; (6) Western receipts to the Bureau must be spent 
in the year those receipts are provided; and (7) No funding for the 
Bureau's Science and Technology program should be provided from 
Western's receipts. We are very concerned that without these safeguards 
Western's customers will be providing an ``open checkbook'' with no 
protection from cash flow issues and funding unrelated purposes. With 
respect to the Science and Technology program, the customers have never 
participated in this program and the administration even proposed 
eliminating funding for the Department of Energy's Hydropower Research 
program because it ``has advanced to the point that it can now be 
conducted by industry.''
    The administration has also proposed that the Corps of Engineers 
fund its hydropower operating and maintenance expenses utilizing 
receipts of the PMAs. Again, Mid-West finds some merit in the concept, 
but cannot support this provision without modifications to protect both 
customer and Congressional oversight to ensure only funding of 
appropriate activities while recognizing the need for rate stability. 
In addition to the points noted above, Midwest believes that this 
program cannot go forward without the following safeguards: (1) There 
is no clear definition of what constitutes hydropower operation and 
maintenance costs--we are concerned that unrelated costs would be 
charged to the PMAs and our members; (2) Customer participation and 
oversight of the operation and maintenance activities is necessary; (3) 
The appropriate PMA Administrator, rather than the Corps, must make the 
determination on funding levels to ensure all appropriate costs are 
covered; (4) Only annual operations and maintenance expenses allocated 
exclusively to hydropower should be permitted; (5) Joint customer, PMA, 
Corps planning, in advance, of proposed expenditures should be 
required; (6) Congressional oversight, including audits of 
expenditures, on a regular basis should be established; (7) PMA 
revenues provided to the Corps should specifically remain with the 
marketing area of that PMA and be dedicated to the intended purpose--
Mid-West is concerned that this funding mechanism would be utilized to 
offset a lack of funding in non-hydropower operation and maintenance 
activities; (8) No reprogramming of dollars provided by the affected 
PMA to the Corps should be permitted without the explicit approval of 
the customers and the affected PMA Administrator; (9) PMA revenues 
could only be utilized with the agreement of the PMA Administrator; 
(10) Unused dollars in any fiscal year would be returned to the 
affected PMA; and (11) A procedure to address cost overruns and 
priority of use and shortfalls would need to be established in advance.

               FEDERAL POWER PROGRAM AND COST-BASED RATES

    Mid-West opposes the administration's proposal to require the PMAs 
to sell power at market-based rates. This would dramatically increase 
electric rates and have a crippling economic impact on communities 
served by 1,200 consumer-owned utilities in 33 States, and especially 
in the Missouri River Basin. This proposal is nothing more than a tax 
increase on the consumers in our region. Federal hydropower has always 
been sold at cost through consumer-owned utilities. Charging market 
rates would devastate farmers, homeowners, business and industry. These 
proposed 20 percent per year increases, in addition to increases 
already being imposed because of the longstanding drought, fly in the 
face of sound, longstanding policy and law. It was contained in the 
Flood Control Act of 1944 (Section 5) and reaffirmed in Section 505 of 
the 1992 Energy and Water Development Appropriations Act (105 Stat. 
536).
    Again, to be clear, these cost-based rates are not subsidized by 
the U.S. Treasury. The PMA's rates are set to recover the costs of the 
Federal investment, plus interest, in the hydropower and transmission 
facilities. Raising PMA rates will take millions of dollars out of 
fragile local economies.

       EARMARKING OF EXPENDITURES WITHIN WESTERN'S APPROPRIATIONS

    Congressional ``earmarks'' in the fiscal year 2005 Appropriations 
Act have severely disrupted Western's planned construction activities. 
In Pick-Sloan, without additional appropriations to cover the increased 
expenditures, construction budgets were slashed by 90 percent, 
resulting in deferrals of needed construction activities. Mid-West 
certainly recognizes Congress' prerogative in earmarking funds, but is 
concerned that, without additional funding to cover increased costs, 
earmarking seriously disrupts the orderly planning and timely execution 
of Western's construction program.

                               CONCLUSION

    Thank you for the opportunity to provide written testimony to the 
subcommittee on these important issues. We stand ready to respond to 
any questions.
                                 ______
                                 
            Letter From Virtual Engineering Solutions, Inc.
                                  Melrose, Florida, April 26, 2005.
Senate Committee on Appropriations,
Subcommittee on Energy and Water Development.

      SUBJECT: U.S. DOE FOSSIL ENERGY PROGRAM FUNDING RESTORATION

    Dear Congressman Domenici: Mr. Chairman, thank you for the 
opportunity to provide written comments on the proposed fiscal year 
2006 budget. I am writing this letter on behalf of the State oil and 
gas regulatory agencies nationwide to encourage you to restore 
Congressional appropriations of $100,000,000 for the Department of 
Energy's (U.S. DOE's) Office of Fossil Energy Oil and Natural Gas 
Supply Research and Development (R&D) program. I can offer you five 
reasons for why the research and technical assistance this U.S. DOE 
program is providing is vitally important to the health and security of 
the United States: (1) Improved environmental protection; (2) 
Streamlined enforcement of State environmental regulations; (3) Reduced 
regulatory and compliance costs for producers; (4) A demonstrated 
increase in exploration activity by small and independent operators; 
and (5) Increased domestic oil and gas production.

                   IMPROVED ENVIRONMENTAL PROTECTION

     This DOE Fossil Energy Program provides valuable research and 
technical assistance that benefits all of the citizens of the United 
States through increased environmental protection made possible through 
continued monies generated by oil and natural gas production.
    An example of these cost-effective research programs is the Risk 
Based Data Management System (RBDMS). State oil and gas regulatory 
agencies in partnership with the Ground Water Protection Council (GWPC) 
are responsible for the development and operation of this information 
system in 23 oil and natural gas producing States. This project is an 
example of how Federal/State partnerships can really work. Your home 
State of Ohio has contributed almost $600,000 in State capital 
improvement and $400,000 of operations funding to implement RBDMS. 
California has matched $500,000 of Federal money with $1,500,000 in 
State funds. Every State now using the system also has contributed to 
building the system. Through the GWPC, the oil- and natural gas-
producing States are working together to protect ground water 
resources, hold down the cost of environmental compliance, and provide 
improved access to essential data for new oil and gas exploration.

       STREAMLINED ENFORCEMENT OF STATE ENVIRONMENTAL REGULATIONS

    Funding from the DOE has given the States the opportunity to 
develop additional software and information management tools that 
enable both State and Federal agencies to share data and facilitate 
electronic commerce via the Internet. The States in turn share that 
information with the public and companies we regulate, many of which 
are small businesses that would not otherwise have the ability to 
access such accurate information. We are learning that electronic 
commerce mutually saves time and money for both the oil and gas 
industry and the regulatory agencies. The Federal share of cost for 
this program was $1.15 million in fiscal year 2004. States collectively 
contributed over $4 million this fiscal year.
    As another example, online permitting and reporting has been 
targeted as a way to save industry time and money. One California 
operator estimated that an automated permitting system for new drills 
and reworks could increase production from one of its larger oil and 
gas fields by 500,000 barrels per year. Therefore, any delay in issuing 
a permit caused by the inefficiencies of manual processes and analyses 
can have a significant impact on production.
    Continued funding from U.S. DOE will provide the smaller, 
independent oil and gas producers access to this environmental data 
management system. Smaller producers are often the most in need of such 
systems because high compliance costs hit them the hardest. Without 
this funding, many of these development efforts would have to be 
abandoned.

     INCREASED EXPLORATION ACTIVITY BY SMALL, INDEPENDENT OPERATORS

    At this time, small, independent oil and gas companies produce the 
vast majority of oil and natural gas in this country. These companies 
are efficient in their operations, but lack the necessary research 
programs needed to fully exploit our domestic resources. This research 
is a role for the Federal Government. We view this program as vital to 
the health and security of the United States.
    The process of planning a drilling program and scheduling equipment 
use can be easier and less expensive as a result of Internet 
information lookup. The ability to receive immediate approval of a well 
recompletion or workover permit allows the operator the opportunity to 
perform the work the same day the well went down or that a rig becomes 
available. Therefore, the operator can move a rig from a low-rate well 
or less important workover to a higher-rate well, thereby producing 
more oil.

               INCREASED DOMESTIC OIL AND GAS PRODUCTION

    The largest reserves of oil and natural gas exist in currently 
operated oil and gas fields. By increasing our recoverable reserves by 
only 5 percent, the United States would produce billions of barrels of 
additional domestic oil. Conversely, failure to use new technologies to 
fully recover these proven reserves would result in the loss of 
billions of dollars of revenues for this country because the money 
would instead be sent overseas for oil imports.
     The agencies who use RBDMS nationwide have documented that the 
information access afforded by the DOE-funded research and investment 
in RBDMS also has helped industry maximize the recovery of oil and gas 
from marginal wells. Nationwide, many marginal wells are being reworked 
and brought back online at a significant cost savings through new 
technology, redrilling, or horizontal drilling. For example, in North 
Dakota, more than 250 wells over the last 5 years have been re-entered 
and drilled horizontally. Before well information was readily available 
through RBDMS and associated e-commerce initiatives, many of these 
wells would have been plugged or shut in. The cost savings to drill a 
well horizontally from an existing well rather than grass-roots well is 
estimated to be at least $300,000. By keeping these wells available, 
industry has saved in excess of $75,000,000 in North Dakota alone.
    RBDMS is one of the best examples we have seen of how the States, 
working with the Federal Government and the private sector, can improve 
both industry production and environmental protection at the same time. 
Continuing to fund the U.S. DOE's Office of Fossil Energy Oil and 
Natural Gas Technologies R&D program in this manner allows us to tailor 
our regulatory program needs to the industry which operate in our 
respective States. There is no Federal alternative, or ``one size fits 
all'' national approach that would work as efficiently as this 
cooperative multi-State effort.

                                SUMMARY

    DOE Fossil Energy program funding is a sound investment in domestic 
energy production and environmental protection.--The DOE Fossil Energy 
program office funds research projects like RBDMS that are leveling the 
playing field by encouraging small- and medium-sized industry operators 
to expand into previously cost-prohibitive areas. The better access to 
information afforded by these projects is increasing industry's ability 
to make more knowledgeable decisions about resource deployment, 
exploration, and well management and is reducing overhead costs 
associated with regulatory compliance. Moreover, reducing obstacles to 
permitting and reporting requirements through streamlined data 
management in the agencies is beginning to reduce industry's 
administrative burdens and ease compliance requirements across 
regulatory jurisdictions. Finally, the regulatory compliance tracking 
accomplished through these programs offers enhanced protection of water 
resources.
    I submit to you that this combination of factors makes the 
restoration of funding for the DOE Fossil Energy Program an urgent 
priority for smart development of domestic oil and gas and sustained 
environmental protection. I ask for your support. Thank you.
            Sincerely,
                                         Deborah Gillespie,
                                            Technical Communicator.
                                 ______
                                 
  Prepared Statement of the Ecotoxicology and Water Quality Research 
      Laboratory, Department of Zoology, Oklahoma State University

              FISCAL YEAR 2006 BUDGET AND DOE R&D PROGRAM

    In 2004, I received a research grant through the Department of 
Energy's Research and Development Program. The $183,827 that was 
awarded over a 3-year period is providing full support for a graduate 
student (at the doctoral level) in addition to providing important data 
on the potential to reuse the produced water that is generated during 
the process of drilling and pumping oil and gas (please see the project 
description below). Studies such as these will actually enhance the 
cost effectiveness of oil and gas production, but the administration's 
fiscal year 2006 budget proposes phasing out the DOE program that 
supports this work. These cuts would not only put a graduate student 
out of work, but will cut short a research project that is providing 
useful data in its first year of existence.
    Simply put, the type of research supported by DOE has consistently 
been focused on applied issues that will enhance our Nation's oil and 
gas production capabilities. As such, I respectfully request that the 
committee supports re-establishing the funds for DOE's R&D program--the 
return from the money that is spent is very well worth the cost.

Project Overview.--Project No. DE-FC26-04NT15544
    Significant quantities of produced water are generated by inland 
oil and gas facilities in areas where beneficial reuse would provide a 
cost effective method of disposal. The quality of produced water, its 
potential for reuse and its need for treatment prior to reuse will 
ultimately be determined by State water quality standards for 
individual chemical constituents and freshwater toxicity bioassays as 
mandated by Federal and associated State requirements for effluent 
discharges. While toxicity testing plays an important role in 
environmental protection and regulation of wastewater discharges, it is 
important to understand how well the results of laboratory evaluations 
actually represent the behavior and potential effects of aqueous wastes 
in the field. A very limited number of freshwater laboratory bioassays 
have been conducted on produced water, and practically no field 
assessments have investigated its influence on freshwater communities. 
The application of test methods that overestimate impacts may limit the 
potential for reuse by indicating the need for costly treatment that is 
actually unnecessary. Given the growing interest in reuse of produced 
water and the associated increase in toxicity assessments that will 
accompany its release, it is imperative to generate field data that 
will evaluate how well laboratory bioassays of produced water represent 
the true potential for environmental effects and whether existing 
discharge standards are appropriate. The proposed study will help to 
fill this critical data gap by comparing the results of standard 
laboratory bioassays of produced water with field evaluations in a 
system subject to produced water input. An understanding of how 
standard indicators of produced water quality relate to true effects in 
the environment will ultimately lead to better decision making with 
regard to produced water reuse and surface discharge, will help to 
optimize methods for both treatment and assessment of produced water 
quality, and will help avoid over-regulation in cases where predicted 
environmental effects are not realized in the receiving system.
                                 ______
                                 
             Prepared Statement of APS Technology, Inc.\1\
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    \1\ 800 Corporate Row, Cromwell, CT 06416.
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    Mr. Chairman and Honorable Senators, I wish to address two related 
expenditure components of the Department of Energy (DOE) budget 
proposed for fiscal year 2006.\2\ The first item is the ``orderly 
termination of activities'' for Oil & Gas Research & Development within 
the DOE,\3\ for which a total of $20 million has been allocated.\4\ The 
other item is the apparent zeroing out of both the Small Business 
Innovation Research (SBIR) and Small Business Technology Transfer 
(STTR) programs.\5\ I believe strongly that these proposed terminations 
are not in the best interest of the United States, its energy 
independence or its technological leadership.
---------------------------------------------------------------------------
    \2\ Fiscal year 2006 Budget Appendix, pp. 395-411, ``Energy 
Programs''.
    \3\ Ibid, p. 401.
    \4\ Ibid., p. 400, Identification Code: 89-0213-0-1-271 00.03. This 
compares with $77 million (actual) and $83 million (estimated) in 2004 
and 2005, respectively.
    \5\ Ibid., p. 395, Identification Codes: 89-0222-0-1-251 00.18 & 
00.19, Since these funds represent a fixed fraction of departmental 
research budget, I assume that they will be cut as well.
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    Before stating my arguments, I wish to make perfectly clear that my 
company has benefited, and continues to benefit, from these programs. 
We currently have two cost-sharing research contracts \6\ \7\ from the 
National Energy Technology Laboratory, one SBIR \8\ and one STTR \9\ 
grant. We have recently submitted a proposal for another cost-sharing 
research project.\10\ This support has been critical to the growth of 
APS and its introduction of new products for the industry.
---------------------------------------------------------------------------
    \6\ DE-FC26-02NT41664, ``Drilling Vibration Monitor and Control 
System;''.
    \7\ DE-FC26-04NT15501, ``Novel High-Speed Drilling Motor for Oil 
Exploration & Production.''
    \8\ DE-FG02-02ER83368, ``Rotary Steerable Motor System for Deep Gas 
Drilling.''
    \9\ DE-AC26-98FT40481, ``Downhole Fluid Analyzer''.
    \10\ Under Announcement DE-PS26-05NT42395-1, ``Drilling, Completion 
& Stimulation Program Analysis; Part 1: Deep Trek.''
---------------------------------------------------------------------------
    I will not discuss in detail the general justifications that you 
know so well--the necessity of our striving toward energy independence 
or near-independence; the importance of new technologies to reaching 
this goal, while protecting the environment, etc. While these are 
clearly important considerations, I would rather cite some particular 
examples from my personal experience. I will give three: an example of 
an outstanding success story, a description of the changes in the 
business environment for oil and gas exploration, and some reasons that 
DOE support for oil and gas research and development is more important 
today than ever.

             A SUCCESS STORY--TELECO OILFIELD SERVICES INC.

    In 1972, I began a new venture, Teleco Oilfield Services Inc., with 
the support of my then employer, Raymond Engineering \11\ and the 
European oil company, S.N.P.A.\12\ The purpose of this new company was 
to develop and commercialize a new technology, Measurements-While-
Drilling (or MWD). Even then, before there was a commercial tool, the 
industry recognized MWD as a transformative technology. By transmitting 
data to the surface in real time from the bottom of a well as it was 
being drilled, it would open the door to directional and horizontal 
drilling, real-time analysis of the oil and gas content of a well, and 
other marvels that are now standard operating procedure in oilfields 
around the world. In 1978, dozens of companies were trying to develop 
these systems,\13\ including large corporations within the oil industry 
and without. Most, however, were unsuccessfully trying to adapt 
existing wireline technology to the much more severe environment within 
a well during drilling. Teleco took the opposite approach\14\--it 
adapted the proven reliable military and space technology of Raymond 
Engineering and applied it to the new environment in a effort to attain 
the reliability needed for such service.
---------------------------------------------------------------------------
    \11\ Now a part of Kaman Corporation.
    \12\ Societe Nationale des Petroles d'Aquitaine, now a part of 
TotalElfFina.
    \13\ Cf., ``MWD: State of the Art,'' series of articles in the Oil 
& Gas Journal, 1978.
    \14\ R.F. Spinnler & F.A. Stone, ``MWD: State of the Art--4; MWD 
Program nearing commerciality,'' Oil & Gas Journal, May 1, 1978.
---------------------------------------------------------------------------
    In 1975, after several years of intense and expensive self-funded 
development, Teleco was ready to build and field test its first 
prototype tools. The combination of their complexity and the 
requirement that they work in an extreme environment made this a 
prohibitive task. The oil companies were unwilling to invest in this 
technology without a successful field test. It was at this time that 
the company applied for, and received, $2 million in development 
funding from the DOE. With these funds, the field testing could proceed 
and proved successful. At this point, six major oil companies \15\ 
provided an additional $0.9 million funding in return for future 
repayment through the company's sales. These funds allowed the 
commercial launch of MWD in 1978.
---------------------------------------------------------------------------
    \15\ Exxon, Shell, Chevron, Conoco, Amoco and Placid.
---------------------------------------------------------------------------
    As anticipated, the commercial introduction of MWD by Teleco 
revolutionized oil and gas exploration, first primarily offshore, but 
now on land as well. Teleco was the sole provider of these services for 
over 2 years, and the leading supplier throughout its existence. Over 
the next 2 decades, with two successful stock offerings and its 
acquisition by SONAT, Inc., the company grew to revenues of $140 
million in 1992. It had 1,200 employees worldwide, including 850 in the 
United States, with its headquarters in Connecticut, a major facility 
in Louisiana, and offices in Texas, California, Wyoming, Alaska and 
Oklahoma. In 1992, it was acquired by Baker Hughes for $380 million, 
and ceased to exist as a separate company.
    What was the role of the DOE in this success? MWD would have 
certainly been developed in time, but it took over 2 years for other 
companies to enter the market. The Teleco system remained the leader in 
reliability over its entire existence. The support of the DOE was 
critical to making the leap from a laboratory demonstration to fully 
commercial systems in use worldwide. Thus, the small investment by the 
DOE led directly to the development of a company and an industry that 
served to improve the efficiency and safety of oil and gas exploration, 
led to many advances that help restrain the price of oil including such 
innovations as horizontal drilling, and created thousands of jobs in 
the United States.

    CHANGES IN THE OIL AND GAS INDUSTRY OVER THE PAST THREE DECADES

    In the past 3 decades, the oil and gas industry has undergone 
dramatic changes. In the 1970's the major production companies were the 
principal sources of new technology for the industry. Exxon, Mobil, 
Texaco and ARCO, to cite a few, maintained research facilities staffed 
by the most experienced experts in their fields. These companies 
developed many of the key innovations in the drilling and well logging 
industry, despite their recognition that, as commodity producers, they 
were neither equipped to market, nor particularly interested in, 
technology per se. This was the province of the oil service companies, 
to whom the producers licensed their use, often giving non-exclusive, 
royalty-free licenses to any company that requested them.
    In the ensuing decades, the industry has consolidated. For example, 
all of the companies mentioned above have either merged or been 
acquired since then, also consolidating their research programs. In the 
volatile oil and gas industry, it difficult to justify to shareholders 
investments in long-term programs that will not produce any direct 
revenues or competitive advantage. Thus, companies have striven to 
``right size'' their organizations, often at the expense of research.
    A similar contraction has taken place in the oilfield services 
business. New technologies were once transferred from the producers, 
developed by the major service companies, or introduced by small, 
specialized companies (such as Numar \16\ or Landmark Graphics\17\). 
Many of the researchers laid off in the consolidation of the producers' 
research labs found their way to service companies. The service 
companies also acquired many of the smaller companies, such as those 
listed above. Now, after significant consolidation and downsizing on 
the part of the service companies, and under the continuous, short-term 
scrutiny of the market, even they are moving away from the costs 
associated with long-term development. To cite one example, 
Schlumberger is closing its world-renowned Schlumberger-Doll Research 
Center in Ridgefield, CT, and relocating to Cambridge, MA. In doing so, 
they hope to do the work currently done by industry experts using 
university professors, research associates and student. The service 
companies are also outsourcing many high-risk projects to small 
companies such as APS.
---------------------------------------------------------------------------
    \16\ Now a part of Halliburton Corp, see: http://
www.halliburton.com/news/archive/1997/corpnws_093097.jsp.
    \17\ Now a subsidiary of Halliburton Corp, see: http://www.lgc.com.
---------------------------------------------------------------------------
    In this environment, the growth and success of a Teleco would be 
impossible. The large companies have become more risk-averse and 
oriented toward current revenues. Small companies lack the resources to 
pursue high-risk, long-term developments. The government, through the 
DOE, is the backer of last resort for these efforts.

                   CURRENT NECESSITY FOR DOE SUPPORT

    The U.S. oil and gas province is quite mature. Production of oil 
peaked in the 1970's and gas production is nearly at its peak. To 
produce additional reserves, technical progress is needed in two areas: 
(a) drilling in deeper waters offshore and in deeper formations 
onshore, requires operating at higher temperatures and pressures; and 
(b) more completely producing the hydrocarbons in known fields through 
reentry or infill drilling into smaller, dispersed pay zones, requires 
new, lower cost drilling and production techniques to produce them 
economically.
    With Defense Department procurement now emphasizing ``off-the-
shelf'' components, there is little impetus for developing new, higher 
temperature components and systems. Thus, high-temperature drilling 
tools become more complex and expensive. In the market climate 
described above, it will be extremely difficult to successfully launch 
these new products and service. With the producers concentrating on 
their core business, and the service companies emphasizing cost 
efficiencies and outsourcing, it falls primarily to the small, 
independent companies such as APS to produce these breakthroughs, but 
they cannot fund them unilaterally. The DOE R&D support, which requires 
cost-sharing by the applicant and outside sources, is the ideal 
stimulant.
    To cite one example, consider our ``Drilling Vibration Monitor and 
Control System,'' currently under development. In 2002, the National 
Energy Technology Laboratory (NETL) of the DOE launched the Deep Trek 
initiative, aimed at developing new technologies to reduce the cost of 
deep gas drilling. After review by outside experts of both a pre-
application and application, APS was granted a Cooperative Agreement to 
develop this new tool, with the DOE paying 75 percent of the first 
phase. During this period we designed and modeled this tool, which 
senses the vibration of the bit and drillstring, and continually 
adjusts the stiffness of an active vibration damper located above the 
bit. As a result, the bit does not bounce off bottom, and applies the 
optimal force to enhance the rate of drilling. Our calculations show 
that use of this tool will increase the drilling speed by 10-50 
percent, and reduce wear and failure of downhole components. We are now 
near the end of Phase II (65 percent DOE), and have laboratory results 
that demonstrate that the system operates as expected. Several major 
producing and supply companies have expressed interest in supporting 
the field tests of Phase III (50 percent DOE), and then using or 
distributing the tool.
    None of this development would have been possible without the DOE 
support. APS was not in a position to fund it; the major service 
companies were not interested until there was an indication of value to 
the end user; and, the production companies needed something more 
concrete before investing in the technology. We anticipate major 
improvements in efficiency for the oil and gas drilling industry 
through use of this product, and significant revenues for our company.
    As one indicator of the value of this support, APS Technology has 
been named for the second year in a row as a Connecticut Fast 50 
Company, one of the fasted growing technology companies in the State. 
Our revenues have been growing at 40 percent per year, and we have 
increased our employment from 12 to 48 employees over the past 5 
years, in the face of a very weak labor market.
    Finally, the current run-up of the price of crude oil, and its 
effect on our entire economy, is putting additional political pressure 
on our government to ``do something.'' This ``something'', to be 
effective, must address all possible solutions to our energy dilemma. 
These include greater attention to energy conservation; development of 
renewable energy sources; environmentally sound exploitation of our 
existing resources, such as coal; increased domestic exploration and 
production, etc. The most important key to increased oil and gas 
production from our mature domestic fields is the development of new 
technology. For the reasons described above, it is critical that the 
government, through the DOE, provide timely support aimed at 
commercializing these new technologies.
    In summary, these DOE research initiatives are essential to ``prime 
the pump'' of new technology development. This is even more important 
in these times of high fuel prices, ``lean'' corporations and increased 
dependence on foreign oil source. I urge you, in the strongest possible 
terms, to restore the funding for these programs at least at the level 
of the 2005 budget. Thank you.
                                 ______
                                 
 Prepared Statement of The Independent Petroleum Association of America

    Statement of The Independent Petroleum Association Of America, The 
US Oil & Gas Association, The International Association Of Drilling 
Contractors, The International Association of Geophysical Contractors, 
The National Stripper Well Association, The Petroleum Equipment 
Suppliers Association, The Association Of Energy Service Companies, 
Public Lands Advocacy, and California Independent Petroleum 
Association, Colorado Oil & Gas Association, East Texas Producers & 
Royalty Owners Association, Eastern Kansas Oil & Gas Association, 
Florida Independent Petroleum Association, Illinois Oil & Gas 
Association, Independent Oil & Gas Association of New York, Independent 
Oil & Gas Association of Pennsylvania, Independent Oil & Gas 
Association of West Virginia, Independent Oil Producers Association 
Tri-State, Independent Petroleum Association of Mountain States, 
Independent Petroleum Association of New Mexico, Indiana Oil & Gas 
Association, Kansas Independent Oil & Gas Association, Kentucky Oil & 
Gas Association, Louisiana Independent Oil & Gas Association, Michigan 
Oil & Gas Association, Mississippi Independent Producers & Royalty 
Association, Montana Oil & Gas Association, National Association of 
Royalty Owners, Nebraska Independent Oil & Gas Association, New Mexico 
Oil & Gas Association, New York State Oil Producers Association, 
Northern Alliance of Energy Producers, Ohio Oil & Gas Association, 
Oklahoma Independent Petroleum Association, Oklahoma Commission on 
Marginally Producing Oil and Gas Wells, Panhandle Producers & Royalty 
Owners Association, Pennsylvania Oil & Gas Association, Permian Basin 
Petroleum Association, Petroleum Association of Wyoming, Tennessee Oil 
& Gas Association, Texas Alliance of Energy Producers, Texas 
Independent Producers and Royalty Owners, Virginia Oil & Gas 
Association, Wyoming Independent Producers Association.
    These organizations represent petroleum and natural gas producers, 
the segment of the industry that is affected the most when national 
energy policy does not recognize the importance of our own domestic 
resources. Independent producers drill 90 percent of domestic oil and 
natural gas wells, produce approximately 85 percent of domestic natural 
gas, and produce about 65 percent of domestic oil--well above that 
percentage of the oil in the lower 48 States.

                               THE ISSUE

    The administration's budget proposal for fiscal year 2006 
eliminates all Federal funding of oil and natural gas technology and 
regulatory evaluation programs. Funding for these programs needs to be 
restored to fiscal year 2005 levels. The Department of Energy should 
provide Congress with R&D plans at several levels of appropriations 
($50 million, $75 million, & $100 million/year) over at least a 5-year 
planning period.
    The Office of Fossil Energy oil and natural gas technologies 
programs are a vital investment in domestic oil and natural gas 
development. They have a proven track record of success. These programs 
include research and development (R&D), technology transfer, and 
participation in regulatory development regarding domestic production 
issues.
    Independent producers are the beneficiaries of 85 percent of the 
programs' R&D focus. Without this Federal research, domestic oil and 
natural gas production will suffer from the loss of technology 
development and enhancements that are essential to maintain domestic 
production from existing resources and to find and produce new ones.
    But these programs are more than just R&D. They include funding 
that supports efforts like the Petroleum Technology Transfer Council 
(PTTC)--an organization that creates the conduit to move research into 
the hands of producers, particularly small producers, where it becomes 
a production tool. Similarly, Federal research is a significant element 
of the university research that educates the coming generations of 
petroleum geologists and engineers--professionals that are essential to 
maintain a strong domestic exploration and production industry. 
Significantly, these funds also provide for participation within the 
Federal Government on domestic oil and natural gas issues as they are 
considered by Federal agencies; they keep the Department of Energy as 
an effective voice during these long and complicated processes.
    Successful during its initial years, the Fossil Energy R&D program 
has been plagued recently by inconsistent and decreasing funding. For 
example, DOE research efforts on coal bed methane yielded a 34-to-1 
return on its investment. But now, planning a program based on annual 
budget requests hampers the continuity that is essential to develop 
long-term research strategies. Long-term project funding becomes 
uncertain and short-term projects must be created. A better framework 
would improve the program. Requiring plans based on different funding 
levels could provide Congress with a clearer understanding of the 
potential research that could be done.

Research and Development--Improving Domestic Oil and Natural Gas 
        Production--Looking Over the Horizon for New Technologies
    Faced with enormous potential research challenges, changing 
mandates for research, and inconsistent funding patterns, the Fossil 
Energy R&D program has, nonetheless, created a diverse R&D program. 
Moreover, the program requires significant cost sharing from non-
Federal partners to assure its projects have a meaningful value. The 
program broadly addresses two key research needs--projects to improve 
the development of existing resources, including improved environmental 
management, and projects to meet future needs that will be essential to 
domestic resource development. Much of the research is conducted by 
universities and provides opportunities to attract strong students in 
petroleum geology and petroleum engineering--disciplines where 
enrollment has dropped 70 percent over the past 20 years--disciplines 
that are key to a strong domestic industry. Brief descriptions of some 
of the projects follow, but more details are available at the Fossil 
Energy Oil & Natural Gas Supply and Delivery R&D website (http://
www.fe.doe.gov/programs/oilgas/index.html).

Marginal and Stripper Well Revitalization
    This research effort supports an industry-driven program that 
identifies technology research and development needs that can sustain 
and improve the production performance of the Nation's low-producing 
oil and gas wells. Particular attention is focused on preventing the 
premature abandonment of marginal properties in the United States where 
significant quantities of unproduced oil and natural gas remain.

Enhanced Oil Recovery/CO2 Injection
    Production at most oil reservoirs includes three distinct phases: 
primary, secondary, and tertiary, or enhanced, recovery. With much of 
the easy-to-produce oil gone from U.S. oil fields, producers have 
attempted several tertiary, or enhanced oil recovery (EOR), techniques 
that offer prospects for ultimately producing 30 to 60 percent of the 
reservoir's original oil. The Department of Energy's Fossil Energy 
program has worked to develop and test a variety of EOR techniques. EOR 
still holds considerable promise for recovering literally billions of 
barrels of oil that left behind in the Nation's oil fields.
    The potential dual benefits of CO2 injection for both 
oil recovery and carbon sequestration have led the Energy Department to 
reorganize its EOR research efforts to concentrate on this method in 
the near-term. CO2 injection remains a highly specialized 
niche application, but if DOE's research program can expand its 
applicability, especially in regions where large power plants are 
located, the technology could gain additional market acceptance.

``Deep Trek'' and Other Drilling R&D
    ``Deeper'' and ``smarter'' will likely be the watchwords of 
America's drilling industry in the coming years. To help develop the 
high-tech drilling tools industry will need to tackle these deeper 
deposits, Fossil Energy kicked off ``Project Deep Trek''. The goal is 
to develop a ``smart'' economical drilling system to withstand the 
extreme conditions of deep reservoirs. Project ``Deep Trek'' builds on 
a solid track record of achievements in past drilling R&D partnerships. 
Fossil Energy's drilling program produced what could be the next major 
advance in downhole telemetry, a new system called 
IntelliPipeTM that turns an oil and gas drill pipe into a 
high-speed data transmission tool. Revolutionary new drill bits are 
also one of the ``success stories'' of the Energy Department's research 
program. The prime example is the polycrystalline diamond drill bit, 
now the industry standard for drilling into difficult formations.

Methane Hydrates--The Gas Resource of the Future
    If only 1 percent of the domestic methane hydrate resource could be 
made technically and economically recoverable, the United States could 
more than double its domestic natural gas resource base. With no 
immediate economic payoff, the private sector is not vigorously 
pursuing research that could make methane hydrates technically and 
economically viable. Therefore, Federal R&D is the primary way the 
United States can begin exploring the future viability of a high-risk 
resource.

Improving Environmental Management
    A host of advanced technologies now make it possible for America's 
oil and gas industry to produce resources from beneath sensitive 
environments. In the past 30 years, production footprints have shrunk 
dramatically--by up to 80 percent--providing one of the best ways of 
protecting the surface environment surrounding exploration and 
production activities.

         TECHNOLOGY TRANSFER--PUTTING NEW TECHNOLOGIES TO WORK

    Using its National Energy Technology Laboratory, Fossil Energy has 
created programs to move technology from the laboratory to the field. 
For example, the PUMP (Preferred Upstream Management Practices) program 
helps slow the decline in America's oil production. PUMP pairs ``best 
practices'' with solutions coming from new technologies to an active 
campaign of disseminating information to domestic oil producers. 
Through organizations like the Petroleum Technology Transfer Council, 
jointly funded with industry and universities, R&D from the Fossil 
Energy program expands throughout the Nation. PTTC conducts workshops 
and seminars throughout the Oil Patch making research efforts and case 
study applications of new technology available to domestic producers--
primarily small producers. Since its inception in 1994, PTTC has 
conducted over 1,000 workshops and seminars. PTTC recently estimated 
economic impact in just 11 areas identified and directed by industry 
where independents are broadly applying technologies. Of 1,266 million 
barrels of oil equivalent reserves that were realized, 88 million 
barrels could be clearly attributed to PTTC activity.

Protecting Our National Energy Security--Making the Case in the 
        Regulatory Arena
    The Department of Energy lists, as one of its principal strategic 
goals, protection of `` . . . our National and economic security by 
promoting a diverse supply and delivery of reliable, affordable, and 
environmentally sound energy.'' Federal regulation development requires 
interagency consultation. The Office of Fossil Energy evaluates the 
impact of Federal regulations and regulatory proposals on domestic oil 
and natural gas production. Because the May 2001 Executive Order 
requires agencies to assess the energy impact of major Federal 
regulations, this role has become more critical. But, it is not a new 
role. Throughout its history, Fossil Energy has contributed to the 
regulatory debate. Whether it is EPA regulation of drilling fluids and 
produced waters under RCRA or OPS regulation of gathering lines or EPA 
regulation of storm water discharges during the construction of 
exploration and production operations, Fossil Energy develops the 
technical analysis of the regulation on domestic production and argues 
for sound regulatory approaches during the interagency reviews. It does 
comprehensive reviews of regulations and evaluates the environmental 
benefits of using advanced oil and natural gas exploration and 
development technologies. Retaining these key functions is essential 
for domestic oil and natural gas production to be maintained and 
expanded.
                                 ______
                                 
        Prepared Statement of the Ecological Society of America

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

    On behalf of the nuclear energy industry, I thank you for your 
support of a comprehensive long-term solution to our energy needs, 
including the Department of Energy's nuclear technology-related 
programs. I also commend you for your continued oversight of the 
Nuclear Regulatory Commission for fiscal 2005. My statement for the 
record addresses three key points:
  --The industry urges continued support for DOE's nuclear energy 
        programs.--NEI recommends funding the DOE's Office of Nuclear 
        Energy at its request of $503 million. We recommend restoration 
        of the Nuclear Energy Plant Optimizaton program at $10 million. 
        The industry also encourages DOE to increase Next Generation 
        Nuclear Plant funds by $30 million to $75 million and 
        University Fuel and Support program funds by $8 million to $32 
        million. To support basic science, we recommend funding the 
        Nuclear Energy Research Initiative at $10 million.
  --Congress should provide secure, environmentally responsible 
        management of used nuclear fuel by fully funding the Yucca 
        Mountain project.--NEI recommends that the program be funded at 
        the President's request of $651.4 million, absent 
        reclassification of the Nuclear Waste Fund. With fund 
        reclassification, the program should receive funding of $750 
        million--the amount the Federal Government collects each year 
        from electricity consumers specifically for the program.
  --The NRC's budget of $701.7 million should be reassessed.--This is 
        essential in view of the higher appropriations of the agency, 
        allocation of increased industry resources on plant security 
        upgrades and reduced demands on its budget in fiscal 2005 owing 
        to delays in Yucca Mountain licensing. The NRC must be ready to 
        revise its Yucca Mountain regulations in the second half of 
        fiscal 2005 and fiscal 2006.
    I also will discuss briefly several important programs that the 
nuclear energy industry supports.
    The Nuclear Energy Institute is responsible for developing policy 
for the U.S. nuclear energy industry. NEI's 250 corporate and other 
members represent a broad spectrum of interests, including every U.S. 
energy company that operates a nuclear power plant. NEI's membership 
also includes nuclear fuel cycle companies, suppliers, engineering and 
consulting firms, national research laboratories, manufacturers of 
radiopharmaceuticals, universities, labor unions and law firms. The 
industry is providing electricity for one of every five U.S. homes and 
businesses and is taking steps to develop energy resources for the 
future. Nuclear energy is a clean, reliable and sustainable source 
generated here in the United States. We urge Chairman Domenici, Ranking 
Member Reid and members of this committee to recognize nuclear energy 
as an important part of a diverse, comprehensive, long-term energy 
policy for America for generations to come.
   research and development necessary for new nuclear energy systems
    The industry supports increased funding for fiscal 2006 for DOE's 
R&D programs for new nuclear energy systems. The nuclear energy 
industry urges the committee to approve $56 million for the Nuclear 
Energy 2010 program. Within the program, funding should be allocated 
for demonstrating NRC regulatory processes for new nuclear plants, 
including those for early site permits and the combined construction 
and operating license. The industry remains fully committed to these 
initiatives. DOE should support deployment of proven Generation III+ 
technology for this program.
    The industry believes that the government has an early role in 
bringing advanced reactor concepts, known as Generation IV reactors, to 
the marketplace. NEI urges the committee's support for the development 
of a next-generation nuclear plant at the new Idaho National 
Laboratory, funded through the Generation IV Nuclear Energy Systems 
Initiative program at $75 million. The industry also supports the 
Nuclear Hydrogen Initiative at $20 million.
    Although DOE continues to fund the International Nuclear Energy 
Research Initiative (I-NERI), the domestic version of this program, 
NERI, has been superseded by a new initiative that continues the basic 
science of NERI under other nuclear energy programs at DOE. The 
industry believes a collaborative basic science program between 
national laboratories, industry and universities like NERI should be 
continued at $10 million for fiscal 2006.
    The administration originally recommended another R&D initiative--
the Nuclear Energy Plant Optimization (NEPO) program--to produce 
additional electricity from America's 103 commercial reactors. Through 
NEPO, the Energy Department has been working with the nuclear industry 
and the department's national laboratories to apply new technology to 
nuclear and non-nuclear equipment. The industry encourages the 
committee to allocate $10 million for the NEPO program to help fund 
important research on materials science and materials management issues 
at nuclear power plants. This research would focus on improving the 
availability of and maintenance at nuclear plants; developing 
technology to predict and measure the extent of materials degradation 
from plant aging; and introducing new materials to mitigate materials 
effects. DOE proposed no funding for the program in fiscal 2006, 
despite the benefits that the national laboratories can bring to bear 
on these issues.
    The industry also requests $32 million for DOE's University Support 
Program, which provides for vital research and educational programs in 
nuclear science at the Nation's colleges and universities. With nuclear 
plant license renewal continuing at a brisk pace and the industry 
developing plans for new nuclear plants, demand for highly educated and 
trained professionals will continue. NEI encourages the committee to 
consider a new $2 million program within the Office of Nuclear Energy, 
Science and Technology to support universities that have undergraduate 
and graduate programs in health physics. The industry's most recent 
human resources survey reveals an increasing demand for health physics 
professionals. This need will become acute in the next few years as 
many of today's nuclear professionals retire.

 INDUSTRY SUPPORTS BUDGET REQUEST OF $651.4 MILLION FOR YUCCA MOUNTAIN

    Congress has approved Yucca Mountain, a remote desert site in 
Nevada about 90 miles northwest of Las Vegas, as suitable for a 
national repository for used nuclear fuel currently stored at nuclear 
plant sites around the country. Under a Federal Government plan, used 
nuclear fuel will be shipped to Yucca Mountain in highly engineered, 
federally approved containers.
    The industry greatly appreciates the support of this committee for 
funding the Federal used nuclear fuel disposal program. NEI recognizes 
the difficult challenge that the committee faced in fiscal 2005, in 
view of assumptions included in the budget request regarding the 
treatment of the Nuclear Waste Fund. This year, the administration has 
requested nearly $80 million more than was appropriated for fiscal 
2005, including a significant increase in funds for transportation-
related activities. However, there is still a funding shortfall that 
affects the schedule for developing a repository. Absent sufficient 
funding in fiscal 2006, the industry does not believe the program will 
meet key milestones for used fuel acceptance. These potential delays 
will result in higher costs for the program and increased liabilities 
to the Federal Government resulting from breach of contracts with 
energy companies.
    Although the repository program is the keystone of our national 
policy for managing used nuclear fuel, the industry also recognizes the 
value in researching emerging technology for used fuel treatment and 
management. Such farsighted programs will allow our Nation to remain 
the world leader in nuclear technologies. However, technologies such as 
transmutation--the conversion of used nuclear fuel into a smaller 
volume of less toxic materials--still require a Federal repository for 
disposal of the radioactive byproducts generated from the process.

           CONGRESS SHOULD RECLASSIFY THE NUCLEAR WASTE FUND

    The industry urges Congress to reclassify the Nuclear Waste Fund 
this year, consistent with the President's fiscal 2006 budget 
recommendation. For each year of delay in the Yucca Mountain program, 
the Federal Government accrues another $1 billion in costs relating to 
disposal of defense nuclear materials and failure to meet contractual 
obligations to move commercial used fuel.
    Congressional action is required in the context of the fiscal 2006 
budget resolution and reconciliation process to enact the necessary 
legislation in a timely manner for the fiscal 2007 budget and 
appropriations. The Nuclear Waste Fund has three unique characteristics 
that justify modifying the current budget rules governing its use:
  --The Federal Government is obligated by law and contracts signed 
        with electric companies that operate nuclear power plants to 
        implement the used fuel management program.
  --The Nuclear Waste Fund is intended to cover the entire cost of the 
        Federal Government's commercial used fuel management program 
        over several decades.
  --The disposal of used nuclear fuel from commercial reactors is 
        financed entirely through a fee established by Federal law and 
        paid by consumers of electricity generated at nuclear power 
        plants.

              NRC BUDGET AND STAFFING SHOULD BE REASSESSED

    The NRC's proposed fiscal 2006 budget totals $701.7 million, an 
increase of $32 million from the fiscal 2005 budget, and the highest 
ever for this agency. Five years ago, the NRC's budget was $488 
million. Fiscal year 2006 is an appropriate time for the NRC to review 
its budget and resource allocations in light of current demands, and 
the other resources available.
    In accordance with a 2004 Federal appeals court ruling, the 
Environmental Protection Agency must review and reconsider its Yucca 
Mountain radiation standard. This action by EPA may require the NRC to 
begin revising its Yucca Mountain regulations. Promulgation of the new 
final NRC rules and related regulatory guidance must not stand in the 
way of reviewing DOE's Yucca Mountain license application.
    The NRC's budget for fiscal 2006 shows that approximately $61 
million is for the purpose of regulating security at nuclear plants. 
The nuclear industry believes that much of this funding is for the 
purpose of providing for the national defense and should not be 
included in the NRC's fees, of which 90 percent are reimbursed by the 
industry. The Senate expressed concern over this issue by including a 
provision in the energy bill indicating that security funding should 
not be included in user fees.
    America's nuclear power plants were the most secure industrial 
facilities in the United States before the Sept. 11, 2001, terrorist 
attacks, and are even more secure today. Over the past 3 years, the 
industry has invested an additional $1.2 billion in security-related 
improvements and added one-third more security officers. Security at 
commercial nuclear facilities is unmatched by any other private sector 
or area of the critical infrastructure. The industry should not be 
expected to solely fund efforts to provide for the national defense.

               INDUSTRY SUPPORT FOR ADDITIONAL ACTIVITIES

    Nuclear Nonproliferation.--The industry supports the disposal of 
excess weapons-grade nuclear materials through the use of mixed-oxide 
fuel in U.S. and Russian reactors.
    Low-Dose Radiation Health Effects Research.--The industry supports 
continued funding for the DOE's low-dose radiation research program.
    Nuclear Research Facilities.--The industry is concerned with the 
declining number of nuclear research facilities. We urge the committee 
to fully fund the new DOE lead lab in Idaho for nuclear energy research 
and development.
    Uranium Facility Decontamination and Decommissioning.--The industry 
fully supports cleanup of the gaseous diffusion plants at Paducah, KY; 
Portsmouth, OH; and Oak Ridge, TN. Commercial nuclear power plants 
contribute more than $150 million to the Decontamination and 
Decommissioning Fund for government-managed uranium enrichment plants 
each year. Other important environmental, safety and/or health 
activities at these facilities should be funded from general revenues.
    International Nuclear Safety Program and Nuclear Energy Agency.--
NEI supports the funding requested for the DOE and NRC international 
nuclear safety programs. They are programs aimed at improving the safe 
commercial use of nuclear energy worldwide.
    Medical Isotopes Infrastructure.--The nuclear industry supports the 
administration's program for the production of medical and research 
isotopes.
                                 ______
                                 
   Prepared Statement of the University Corporation for Atmospheric 
                            Research (UCAR)

    On behalf of the University Corporation for Atmospheric Research 
(UCAR) and the university community involved in weather and climate 
research and related education, training and support activities, I 
submit this written testimony for the record of the Senate Committee on 
Appropriations, Subcommittee on Energy and Water. The major requests 
that I address in this document are that funding for the DOE Office of 
Science be restored in fiscal year 2006 to the fiscal year 2005 level 
of $3.6 billion, and that, within the Office of Science, the Advanced 
Scientific Computing Research program be restored in fiscal year 2006 
to its fiscal year 2005 level of $234 million.
    UCAR is a 68-university member consortium that manages and operates 
the National Center for Atmospheric Research (NCAR) and additional 
programs that support and extend the country's scientific research and 
education capabilities. In addition to its member research 
universities, UCAR has formal relationships with approximately 100 
additional undergraduate and graduate schools including several 
historically black and minority-serving institutions, and 40 
international universities and laboratories. UCAR's principal support 
is from the National Science Foundation (NSF) with additional support 
from other Federal agencies including the Department of Energy (DOE).

                         DOE OFFICE OF SCIENCE

    The atmospheric and related sciences community appreciates 
Congress' continued support for the DOE Office of Science, but we are 
troubled by the downward trend in funding. The needs of the country 
demand that DOE continue to produce a world-class program in science 
and energy security research. The Office of Science manages fundamental 
research programs in basic energy sciences, biological and 
environmental sciences, and computational science, and it supports 
unique and vital parts of U.S. research in climate change, geophysics, 
genomics, life sciences, and science education. As in previous years, 
the House Science Committee's recently released ``Views and Estimates'' 
for fiscal year 2006, calls the administration's budget request for 
DOE's Office of Science ``inadequate.'' It points out that the request 
for the Office of Science is well below the amounts authorized in H.R. 
6, the Energy Policy Act of 2003, and H.R. 610, the Energy Research, 
Development, Demonstration, and Commercial Application Act of 2005.
    DOE is the largest Federal sponsor of basic research in the 
physical sciences, but the level of funding for its peer reviewed, core 
science programs has remained stagnant for years. If enacted, the 
fiscal year 2006 request of $3.46 billion, a 3.8 percent cut, will 
diminish the Office of Science's ability to serve the country. The 
request would cut the Office of Science by $136.0 million. Of this 
amount, $79.6 million is the elimination of add-ons, but factoring in 
inflation, the Office takes a real cut of several percent.
    I urge the subcommittee to fund the DOE Office of Science at the 
level of the fiscal year 2005 Original Appropriation, or $3.6 billion, 
at the very least, and to enable the agency to apply the entire 
appropriated amount toward planned agency research priorities. This 
level of research funding will augment and reinvigorate critical work 
of researchers throughout the Nation.

              BIOLOGICAL AND ENVIRONMENTAL RESEARCH (BER)

    Within the Office of Science, the Biological and Environmental 
Research (BER) program develops the knowledge necessary to identify, 
understand, and anticipate the potential health and environmental 
consequences of energy production and use. These are issues that are 
absolutely critical to our country's well-being and security, yet the 
request of $455.7 million for BER is down over 9 percent from the 
fiscal year 2005 enacted level of $502.3 million, a figure that does 
not include add-ons.
    Peer-reviewed university research programs play a critical role in 
the BER program involving the best researchers the Nation's 
institutions of higher learning have to offer, and developing the next 
generation of researchers. Approximately half of BER basic research 
funding supports university-based activities directly and indirectly. 
All BER research projects, other than those in the ``extra projects'' 
category, undergo regular peer review and evaluation. I urge the 
subcommittee to fund Biological and Environmental Research at the level 
of the fiscal year 2005 Omnibus Appropriation, or $502.3 million (this 
figure does not reflect add-ons), and to enable BER to apply the entire 
appropriated amount toward planned agency research priorities that are 
peer-reviewed and that involve the best researchers to be found within 
the Nation's university research community as well as the DOE labs.
    Climate Change Research.--Within BER, the Climate Change Research 
long-term goal is to deliver improved climate data and models for 
policy makers to determine safe levels of greenhouse gases for the 
Earth system. This work is critical to the health of the planet. The 
Climate Change Research Request of $142.9 million is a 1.4 percent 
increase over the fiscal year 2005 appropriated level. I urge the 
subcommittee to fund Climate Change Research at a level that is 
consistent with the request for BER stated above.
    Also within Climate Change Research, Atmospheric Chemistry and 
Carbon Cycle is a program that includes Atmospheric Science, the work 
of which is essential for assessing the effects of energy production on 
air quality and climate through the quantification of the impacts of 
energy-related aerosols on climate. Atmospheric Science is down by 1.6 
percent in the President's Request. I urge the subcommittee to fund 
Atmospheric Chemistry and Carbon Cycle at a level that is consistent 
with the request for Climate Change Research.

             ADVANCED SCIENTIFIC COMPUTING RESEARCH (ASCR)

    Within DOE's Office of Science, the Advanced Scientific Computing 
Research program provides advances in computer science and the 
development of specialized software tools that are necessary to 
research the major scientific questions being addressed by the Office 
of Science. ASCR's continued progress is of particular importance to 
atmospheric scientists involved with complex climate model development, 
research that takes enormous amounts of computing power. By their very 
nature, problems dealing with the interaction of the earth's systems 
and global climate change cannot be solved by traditional laboratory 
approaches. The Intergovernmental Panel on Climate Change (IPCC) is 
drafting its Fourth Assessment Report to be completed in 2007, and 
ASCR's contribution to this international document is critical. Yet 
ASCR is proposed to be cut in the fiscal year 2006 request by 11 
percent, from the fiscal year 2005 level of $234 million for the fiscal 
year 2006 request of $207.1 million.
    The proposed ASCR cut eliminates one particularly important 
component of ASCR--the National Collaboratories program. This program 
develops, integrates and deploys a wide range of software tools that 
enable geographically-distributed research teams to work together 
effectively and that facilitate remote access to both facilities and 
data resources. Researchers from industry, academia and national labs, 
through this program, share access to facilities, large datasets and 
environments, support the frequent interactions needed to address 
complex problems, and speed up discovery and innovation. The National 
Collaboratories Program has accomplished much in scientific computing 
in its short history. One example is the establishment of the Earth 
System Grid, an on-line repository of climate data providing over 100 
terabytes of climate data to the U.S. climate research community. The 
program and its predecessors have produced the innovations that 
underpin the emerging major grid computing market that is expected to 
reach a value of $10 billion by 2007.
    In order to maintain our international leadership in 
supercomputing, I urge the subcommittee to provide ASCR with the fiscal 
year 2005 level of $234 million (this number does not reflect the 
rescission), and to direct DOE's Office of Advanced Scientific 
Computing Research to restore full funding for the National 
Collaboratories program, an economic engine for U.S. competitiveness.

                               CONCLUSION

    A recent report by the Task Force on the Future of American 
Innovation states, ``For more than half a century, the United States 
has led the world in scientific discovery and innovation . . . However, 
in today's rapidly evolving competitive world, the United States can no 
longer take its supremacy for granted. Nations from Europe to Eastern 
Asia are on a fast track to pass the United States in scientific 
excellence and technological innovation.'' DOE plays an important role 
in sustaining U.S. scientific leadership. On behalf of UCAR and the 
atmospheric sciences research community, I want to thank the 
subcommittee for the important work you do for U.S. scientific 
research. We appreciate your attention to the recommendations of our 
community concerning the fiscal year 2006 budget of the Department of 
Energy. We understand and appreciate that the Nation is undergoing 
significant budget pressures at this time, but a strong Nation in the 
future depends on the investments we make in science and technology 
today.
                                 ______
                                 
  Prepared Statement of the Interstate Oil and Gas Compact Commission

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

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

    NMA represents producers of coal, uranium, metals and minerals, 
manufacturers of processing equipment, mining machinery and supplies, 
transporters, and engineering, consulting, and financial institutions.

                        OFFICE OF FOSSIL ENERGY

    The NMA strongly supports the $18 million requested for the 
FutureGen Initiative, the deferral and designation of $257 million in 
prior year Clean Coal Technology Program funds for FutureGen's use in 
fiscal year 2007, and the $283 million requested for base coal research 
and development programs. However, the NMA believes the $50 million 
requested for the Clean Coal Power Initiative should be increased to 
$132 million, thus ensuring a robust demonstration program for advanced 
coal technologies.
    FutureGen Initiative/Coal R&D/Clean Coal Power Initiative (CCPI).--
This project will be a prototype of the world's first, near-zero 
emissions coal-fueled hydrogen and electricity generation plant, and it 
will be the first power plant in the world to include large-scale 
sequestration of CO2. The FutureGen facility will be managed 
and cost-shared by an alliance of coal and utility companies with 
extensive experience in building large-scale coal-fueled projects, 
while meeting budget and performance requirements. The industry 
alliance, currently negotiating a cooperative agreement with the 
Department of Energy, remains committed to moving the FutureGen 
Initiative forward, provided a multi-year funding scenario is secure 
and the funding does not come at the expense of other coal research and 
demonstration programs.
    Technological advancements achieved in the base coal research and 
demonstration programs such as gasification, turbines, and carbon 
sequestration, provide the component technologies that will ultimately 
be integrated into the FutureGen. Other advanced research efforts 
focused on coal combustion, mercury control, and coal derived fuels, 
will provide the United States with a suite of advanced coal 
technologies necessary to meet environmental requirements while 
providing the projected 50 percent increase in electricity demand by 
the year 2025. Industry alone is unable to assume the financial risks 
associated with the full-scale commercial demonstration of promising 
technologies, such as those selected in the Clean Coal Power 
Initiative. Therefore, the government's share in this program should be 
increased $82 million above the $50 million request.
    In addition, NMA recommends a $3 million level of funding for the 
Center for Advanced Separation Technology (CAST), which is led by a 
consortium of seven universities with mining research programs. The 
advanced separations program conducts high-risk fundamental research 
which will lead to revolutionary advances in separation processes for 
the coal industry and develop technologies which crosscut the full 
spectrum of mining and minerals industries. This program is highly 
valued by the mining industry for both making new technology available 
and for its workforce development in educating graduate students.

            OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY

    Mining Industry of the Future Program.--The fiscal year 2006 budget 
request included only $1.1 million for the Mining Industry of the 
Future program. This request represents a 72 percent cut from the 
fiscal year 2005 enacted level of $3.9 million. Not only is the 
requested level not enough to allow any new solicitations or new starts 
for this important program, but it is unlikely that projects already 
approved under the Mining Grand Challenge will be given the promised 
funding. Currently there are 40 projects in the pipeline, and 36 have 
been completed. The requested level of funding will certainly mean that 
not all the projects in the pipeline will be completed. According to 
DOE the proposed reduction is meant to ``allow for canceling and 
closing out lower priority projects . . . ''--a clear indication that 
DOE intends to phase out this important program.
    The Mining Industry of the Future Program is an important U.S. 
government/industry partnership designed to demonstrate, evaluate, and 
accelerate new technologies in the areas of exploration, extraction, 
processing, utilization, environment, and safety and health. This 
program is not only very popular as a technology development program, 
but as an educational program as well, since each solicitation receives 
many proposals involving most, if not all, major mining companies and 
mining universities. Finally, we would like to note that NMA has 
incorporated Mining Industry of the Future into our Mining Climate 
Action Plan (MICAP) developed in response to the administration's 
request to industry to voluntarily reduce greenhouse gas emissions. The 
fiscal year 2006 proposed level of funding will jeopardize the 
industry's ability to meet the goals of this plan.

                  U.S. ARMY CORPS OF ENGINEERS (USACE)

    Civil Works Program.--NMA reviewed the proposed fiscal year 2006 
request for the USACE's Civil Works Program and supports the request 
for additional expenditures from the Inland Waterway Users Fund and the 
strategy to accelerate high-priority projects that provide benefits to 
the Nation. However, NMA is very concerned that the proposed fiscal 
year 2006 budget does not provide sufficient funding to keep critical 
navigation projects on schedule, allow for the start of new projects, 
and address the maintenance backlog for existing navigation projects. 
Therefore, NMA provides the following recommendations:
  --A minimum of $5.5 billion should be appropriated in fiscal year 
        2006 for the Civil Works Program. This level balances the need 
        to address the significant project backlog and the capability 
        of the Corps with our Nation's needs for jobs, economic growth, 
        homeland security and national defense.
  --The effort to develop criteria for budgeting purposes is long 
        overdue. However, NMA is very concerned that performance based 
        budgeting and specifically the performance budgeting tool, 
        Remaining Benefit/Remaining Cost (RB/RC) ratio, that was 
        applied to navigation projects for the fiscal year 2006 budget 
        has not been fully developed and will have significant impacts 
        on project appropriations. The navigation projects span many 
        years and the benefits for many of the projects are not 
        realized until completion. In addition, the lack of sufficient 
        funding levels needed to keep projects on schedule compounds 
        the impact. An example is the Kentucky Lock and Dam project 
        that has received zero funding and has been placed on the 
        suspension list for fiscal year 2006. Using the RB/RC, the 
        project has a 2.7 ratio. If the project had received sufficient 
        funding from fiscal year 2002 until now, the ratio would be 3.1 
        (ratio for the fiscal year 2006 budget is 3.0 or higher to 
        receive funding). With more than 25 percent of the total 
        project cost expended ($163 million of the $639 million has 
        been spent), NMA strongly supports funding this project at its 
        full capability funding level of $40 million.
  --The fiscal year 2006 appropriations for the Corps' General 
        Investigations account should be increased from $95 to $200 
        million. These studies are critical to ascertaining and 
        developing future projects.
  --The fiscal year 2006 proposed funding in the amount of $1.979 
        billion for the Corps' Operations and Maintenance (O&M) 
        functions should be increased by $100 million. More than half 
        of the locks are more than 50 years old and in need of 
        significant maintenance. Delaying necessary maintenance impacts 
        the ability to move commerce efficiently, exacerbates further 
        deterioration and accelerates the need for major rehabilitation 
        and possibly at higher costs than necessary. This was 
        exemplified at Greenup Locks and Dams in 2003 when a scheduled 
        3-week outage lasted 54 days and conservatively cost the 
        navigation industry (shippers and carriers) an estimated $14 
        million in lost revenue. The current backlog of critical 
        maintenance is estimated to be more than $1 billion with more 
        than 62 percent for navigation on the inland and coastal 
        systems. Other work, not as sensitive, is estimated to be $1.9 
        billion. The replacement value of the lock and dam facilities 
        in the United States are estimated to be $125 billion. As a 
        Nation, we cannot abandon our inland waterway system and we 
        must increase the monies spent on O&M.
  --Below is a table indicating NMA's fiscal year 2006 Priority 
        Projects needing additional funds.

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

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

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

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

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

    The following testimony is submitted on behalf of General Electric 
Energy (GE) for the consideration of the committee during its 
deliberations regarding the fiscal year 2006 budget requests for the 
Department of Energy's (DOE) Fossil Energy program. GE requests that 
the committee add $15 million to the budget request for the Solid State 
Energy Conversion Alliance (SECA) program for fiscal year 2006 (in the 
Distributed Power Generation, Fuel Cells, Innovative System Concepts 
line item). These added funds should be used to continue the program to 
develop a MW-Scale SECA Hybrid system for stationary power generation.

                     MW-SCALE SECA HYBRIDS PROGRAM

    Solid-oxide fuel cells (SOFC) utilize an electrochemical process to 
cleanly convert a range of fuels into electricity. A SOFC/gas turbine 
system utilizes the fuel cell as the primary power generation source. 
The residual fuel and energy from the fuel cell is combusted in a gas 
turbine to create additional power. By combining these two 
technologies, SOFC/gas turbine hybrid systems have the potential to 
revolutionize fossil-based power generation with new standards for 
efficiency and reduced emissions. SOFC/gas turbine systems would be 
capable of using a range of fuels--coal syngas, biomass derived syngas, 
hydrogen, and natural gas. Fuel cell/gas turbine systems can be a 
building block for the hydrogen economy and can be compatible with 
carbon sequestration. GE sees SOFC/gas turbine systems beginning in the 
1MW to 10MW size range being deployed in dispersed power applications. 
This would mitigate grid congestion, enhance reliability, and enhance 
power quality while being more efficient and cleaner than any fossil 
energy electric generating technology today. A successful SOFC hybrid 
system would reduce fuel consumption by at least 10 percent and perhaps 
as much as 20 percent, while simultaneously reducing emissions by an 
even greater amount.
    In fiscal year 2005, Congress provided $5 million to initiate MW 
scale SECA hybrids work. This funding is to be awarded via a 
competitive solicitation entitled ``Fuel Cell Coal-Based Systems.'' DOE 
issued this solicitation on April 13, with responses due in early June 
and initial selections targeted to occur in early July. In fiscal year 
2006, DOE's $65 million budget request for the SECA program includes 
the continuation of the SECA fuel cell and MW-class fuel cell hybrids 
work, although the amount of funding that would be devoted to SOFC/gas 
turbine hybrids is not specified. GE envisions the SOFC/gas turbine 
hybrid program as a multiyear (8 to 9 year) effort. The pace at which 
the program is conducted is contingent on the availability of Federal 
funding and the number of participants. The successful testing of such 
a SECA-derived system will be an important step on the path toward 
larger systems and eventually systems in the hundreds of megawatt size.
    In view of the uncertainty in the market today, the time frame for 
development of this technology, and the technical challenges to realize 
the benefits of cost effective systems, industry is not in the position 
to develop the technology alone. Additional Federal cost-share funding 
is required in fiscal year 2006, and will be necessary for several 
years thereafter, for the MW-Scale SECA Hybrid program. Federal funding 
will be leveraged with private industry cost share that will grow as 
the program moves from the early technology development phase toward 
the technology demonstration phase. Adequate Federal funding now will 
allow a competitive program to progress.
    GE is uniquely able to apply the broad technology resources needed 
to succeed in this effort. GE will bring its vast technology expertise 
and its rigorous development process to this important program. GE will 
have key engagement of our world leading gas turbine technology center 
of excellence located in Greenville, SC, our leading center of SOFC 
development in Torrance, CA, and our premier corporate Global Research 
Center in Niskayuna, NY.

                              SECA PROGRAM

    GE is a SECA participant through our Torrance, CA, Hybrid Power 
Generation Systems team. GE appreciates the Congressional support for 
the SECA program in the past, and commends the administration for its 
substantially increased request for the SECA program in fiscal year 
2006.
    GE is moving toward completion of the Phase 1 SECA program in 
September 2005, with the completion of a prototype system demonstrating 
the Phase 1 milestones of 35 percent efficiency at a projected cost of 
$800 per kilowatt. As the SECA program transitions into Phase 2, the 
scope of work will increase, and accordingly an increased funding 
commitment will be required from government and industry. In view of 
budget realities, and the necessity of keeping the program on schedule 
to achieving the ultimate goal of $400 per kilowatt cost, Congress and 
DOE need to carefully review the structure of SECA Phase 2. Six 
industry teams are currently participating in Phase 1. Continued SECA 
funding at traditional levels (excluding funding provided for the MW-
Scale SECA Hybrid program) will at most support four industrial teams. 
A reduction in teams is necessary to maintain a strong, effective 
program in Phase 2.
    We urge the committee not to impose any restrictions on DOE's use 
or distribution of SECA funds. Such a requirement would limit DOE's 
ability to manage the SECA program based upon performance and merits of 
the individual participants. DOE should have the flexibility to direct 
SECA resources where they can be applied most cost-effectively to 
advance technology.

                                  IGCC

    A resurgence of interest in coal-fired generation is underway. We 
are experiencing a high level of interest in Integrated Gasification 
Combined Cycle (IGCC) technology for the next generation of coal 
plants. IGCC reduces emissions of sulfur dioxide, nitrogen oxides, and 
particulate matter by approximately 50 percent compared to a state of 
the art pulverized coal plant. IGCC also is more cost effective at 
removing mercury and carbon dioxide.
    Initially, these plants will be more expensive. GE Energy has taken 
important steps to reduce the technology and commercial risk that has 
been associated with this cleaner coal technology. To lower costs, GE 
will provide a standard plant coal-to-grid IGCC solution. Until 
recently, an IGCC power plant has required multiple separate technology 
vendors. With the acquisition last year of ChevronTexaco gasification, 
GE Energy has joined the two key technology pieces of IGCC--
gasification technology and turbine technology. We are making the 
technology investment and applying the resources to lower cost and 
improve performance of the integrated IGCC power plant.
    In October 2004, GE Energy and Bechtel announced the establishment 
of an alliance to develop a standard commercial offering that is 
focused on Bituminous coals for IGCC projects in North America. The GE 
Energy-Bechtel Alliance will integrate the development, marketing, 
commercialization and implementation of GE's IGCC process with 
Bechtel's engineering, procurement and construction expertise to 
produce a product that can meet utility requirements for cost, 
performance and schedule. The GE-Bechtel Alliance will offer a standard 
IGCC plant will full performance and price guarantees and take 
responsibility from coal pile to putting electrons on the grid. In 
time, our standard IGCC offering will achieve cost parity with 
traditional coal plants.
    We also need to advance IGCC technology so that it can more 
efficiently use lower rank coals, such as those from the Powder River 
Basin, that are increasing in importance as a low cost, domestic fuel 
source. On April 4, the Governors of Wyoming, Utah, Nevada and 
California jointly announced their partnership to develop what is known 
as the ``Frontier Line,'' a 500 kV transmission line that would be a 
major enhancement to the transmission grid in the West. The Frontier 
Line is intended to be used to export electricity generated from the 
coal and wind resources in the region to meet the growing demand for 
electricity in Western markets, including California.
    The Rocky Mountain Area Transmission Study assumes the addition of 
more than 6,000 MW of new, coal-fired generation to produce electricity 
to be transmitted via the Frontier Line or other new transmission 
projects. This presents a significant opportunity for the use of IGCC. 
However, in recognition of the level of interest in IGCC deployment 
evident in the Eastern United States, GE's standard IGCC design will 
operate on bituminous coal. Realizing the great potential for IGCC in 
the West requires a specific first-of-a-kind engineering design for 
lower rank western coals.
    Unlike natural gas plants, advanced coal plant designs require 
significant preliminary engineering development for first-of-a-kind 
designs and technology integration. We therefore recommend that the 
budget for DOE's IGCC program be increased by $10 million in fiscal 
year 2006 to be used to partially offset the first-of-a-kind project 
engineering development costs that are required to deliver commercial 
IGCC plants capable of utilizing low rank coals. This would relieve 
launch customers and early adopters of being differentially burdened 
with advancing this technology, and will ultimately lead to benefits 
throughout the industry as this up-front development engineering is 
captured to provide designs for like-plants.

                                TURBINES

    GE recommends that funding be increased by $7 million to a total of 
$25 million for the Turbines program, within the Fossil Energy/Coal and 
Other Power Systems/Central Systems/Advanced Systems budget line. This 
program represents the Department's primary research effort focusing on 
gas turbines for electricity production and is designed to enable the 
low cost implementation of major policy initiatives in the areas of 
climate change, reduced powerplant emissions and future generation 
technologies. Continued turbine research and development provides a 
path to greater efficiency and lower emissions in the use of the 
Nation's most abundant domestic energy resource--coal--as well as the 
technology base for the eventual use of hydrogen.
    Turbines fueled by syngas are an indispensable step on the 
technology continuum that must evolve for a future hydrogen economy. 
Thus, while the Turbine program is being transitioned to a Hydrogen 
Turbine Program, adequate funding must be provided for syngas turbine 
technology R&D programs. DOE issued a Hydrogen Turbine solicitation 
this spring. It is essential that efforts under this solicitation be 
targeted to those research areas with the greatest potential for near 
term applications (i.e., for the FutureGen power plant). Any other 
approach would dilute the funding available, to the detriment of 
program goals.
    GE has experience with gas turbines operating on fuel blends 
containing hydrogen, and has performed laboratory demonstration tests 
on high hydrogen content fuel. This experience highlighted the need for 
development of advanced combustion technology in order to drive down 
NOX emissions and enable advanced hydrogen generation 
processes. In addition, current strategies for effective integration of 
all major subsystems need to be reviewed and redefined for use with 
hydrogen fuel.
    GE recommends the committee's attention to the testimony submitted 
by the Gas Turbine Association (GTA) relative to the allocation of 
additional funding above the budget submission within the Turbine 
program budget. In particular, GE encourages the committee to assure 
adequate funding for combustion work at the National Energy Technology 
Laboratory, and to fully fund the University Turbine Systems Research 
Program.

                      HYDROGEN FROM COAL RESEARCH

    Early hydrogen production will be provided by centralized reforming 
of natural gas and distribution of compressed gaseous and liquid 
hydrogen. However, coal will have to be developed as a primary source 
for hydrogen and concurrently as a means to low carbon power generation 
from coal. The synthetic gas produced from feedstock gasification in an 
IGCC system permits the economical removal of carbon to provide a 
hydrogen-rich feedstock for either low-CO2 combustion in a 
turbine, direct export to transportation demand, or chemical 
production. IGCC thus offers the opportunity for first commercially 
relevant steps to a hydrogen economy based on our most abundant energy 
resource--coal. GE supports funding for the Fossil Energy hydrogen from 
coal program, which ties closely to IGCC development.

                 NATURAL GAS INFRASTRUCTURE RELIABILITY

    Within the Natural Gas Technologies program area, funding should be 
restored to the fiscal year 2005 level ($7 million) for the delivery 
reliability subprogram within the infrastructure program. Continued 
activities to assure the reliability of the natural gas delivery 
infrastructure represent a prudent expenditure of Federal resources, 
and are particularly important in light of the increased pipeline 
inspection requirements of the Pipeline Safety Act of 2002. Increased 
inspections will result in increased costs and also has the potential 
to affect availability as lines are taken out of service for inspection 
or repair. To meet these challenges, industry needs new or enhanced 
technologies to find more of the potential defects faster and with 
greater accuracy/characterization. Additionally, more risks need to be 
covered in a single passage of the inspection systems (i.e., corrosion 
and cracking, metal loss and deformations, etc.). The cost of 
developing such new tools can be in the tens of millions of dollars. 
With no proven track record and lacking market acceptance for these new 
technologies, the investment risk is unacceptably high. The DOE R&D 
program provides a vital link to bridge the gap between the need for 
new technology and substantial risks associated with developing that 
technology.

          CROSSCUTTING TECHNOLOGIES--CERAMIC MATRIX COMPOSITES

    GE recommends that funding be provided for Ceramic Matrix Composite 
(CMC) crosscutting technology material development. CMCs offer greater 
than 200 degrees F capability when compared to current metal plus 
coating technology in power generation (gas turbine) products. This 
increased capability provides potential benefits in power output, 
efficiency, emissions, and part life depending on the component and how 
it is utilized in product system operation. Other potential energy-
related opportunities for CMCs include power generation (gas turbines), 
nuclear system piping and transportation (truck brakes).
                                 ______
                                 
     Prepared Statement of Departments of Mechanical and Chemical 
             Engineering, University of Illinois at Chicago

    As a researcher in the field of Energy and Environment I am 
concerned about the country's future energy resources. In particular, 
our natural gas and oil supplies require careful attention so that they 
can best be used for our country's security and prosperity. It is a 
considerable solace to me to know that the NETL Strategic Center for 
Natural Gas and Oil exists. Through the Strategic Center, research 
critical to the country's needs is addressed. For example, a number of 
programs are focused on the use of methane hydrates. These hydrates 
contain more carbon than all the proven sources of oil, coal and 
natural gas. They may eventually provide us with the fuel our country 
needs for growth, energy independence and security. NETL's leadership 
in this area is significant. Similarly, the Oil program's concern for 
the environment is in accord with our citizens' awareness of and 
sensitivity to environmental effects on health. Cognizance on the part 
of our national energy organizations, such as NETL, and the research 
conducted under its auspices are an essential part of meeting our 
energy needs while maintaining the public's health and confidence in 
our government's effort to provide clean and safe energy. For a 
contrary example, look at how the use of nuclear energy in this country 
has been bungled.
    I have given only two examples of the importance of the Strategic 
Center for Natural Gas and Oil to our country's welfare. There are 
many, many more housed under ``Exploration and Production'', 
``Environmental Solutions'' and ``Petroleum Fuels'' within the Office 
of Petroleum and, within the Office of Natural Gas, under ``Methane 
Hydrates'', ``Transmission, Distribution and Storage'', and again 
``Exploration and Production''. A quick look at the Projects buttons on 
the NETL Strategic Center web site reveals the depth of research being 
conducted through these Offices. A look at the Reference Shelf buttons 
further confirms the significance and impact of the research.
    In summary, as an active researcher in the fields related to the 
missions of the Offices of Petroleum and Natural Gas, I can say with 
certainty that continued support for these Offices and the Strategic 
Center is critical to the overall research and development programs 
currently being conducted and those that still need to be conducted. I, 
therefore, whole-heartedly encourage the Senate Appropriations 
Committee to continue, if not expand, the financial support of this 
Strategic Center as well as the NETL Strategic Center for Coal, the 
Office of Science, Technology and Analysis, and the Office of Advanced 
Initiatives.
                                 ______
                                 
Prepared Statement of the National Research Center for Coal and Energy 
                              (NRCCE) \1\
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    \1\ The National Research Center for Coal and Energy is located at 
West Virginia University. This statement has been prepared by Richard 
Bajura, Director. George Fumich, Program Advisor and now deceased, 
contributed to this statement. For additional information, contact our 
web site at http://www.nrcce.wvu.edu.
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    This testimony focuses on three accounts from two agencies 
administered by the subcommittee: (1) Office of Fossil Energy--Coal and 
Oil & Gas Programs; (2) Office of Energy Efficiency and Renewable 
Energy--Vehicle Technologies Programs; (3) U.S. Army Corps of 
Engineers--Construction (General) Programs.

          OFFICE OF FOSSIL ENERGY--COAL AND OIL & GAS PROGRAMS

    The NRCCE believes that fossil fuels, used in an efficient and wise 
manner, will provide the bulk of our energy needs in the near term. 
Clean coal technologies offer the promise of increased efficiency with 
reduced emissions, including the sequestration of carbon dioxide. We 
are pleased with the level of support recommended by the administration 
for the Coal and Power R&D Program for fiscal year 2006. The Nation 
will also need continued investments in oil and natural gas research; 
we disagree with the administration recommendation to terminate these 
programs. We offer the following comments.
Coal Fuels and Combustion Programs
    The administration has provided funding for the worthy goal of 
developing hydrogen fuels from coal. We are concerned, however, that 
other aspects of our Nation's fuel needs require similar support. C-1 
Chemistry research conducted under Advanced Fuels Research in the Fuels 
program focuses on the production of hydrogen while also developing 
technologies which can produce clean liquid fuels for transportation 
using an indigenous fuel (coal) as the feedstock. We recommend 
continuation of this program at $2 million for fiscal year 2006.
    Continued research is also needed in the solids fuels area to 
develop advanced technologies to improve the environmental performance 
of the coal sector and to develop new applications for coal products 
for a wide range of industrial and transportation industries. Advanced 
separations research conducted under Solid Fuels & Feedstocks in the 
Fuels program develops new technologies to produce cleaner coal in an 
environmentally acceptable manner. This research also provides 
technologies to meet emissions requirements from coal power systems, 
especially for mercury, in response to the lower emissions limits 
recently implemented by the Environmental Protection Agency (EPA). We 
recommend continuation of the advanced separations program at $3 
million.
    Coal extraction research conducted under the Solid Fuels & 
Feedstocks subprogram provides new technologies for deriving carbon 
products from coal. These products replace increasingly scarce 
petroleum-based coke used in anodes for aluminum and steel 
manufacturing. Other carbon products can be used to make lighter weight 
vehicles to reduce gasoline and diesel fuel consumption. We recommend 
continuation of the coal extraction program in fiscal year 2006 at $0.7 
million.
    The advent of high-speed multi-processor computing promotes the 
development of new energy technologies more rapidly and with less 
expense if the performance of systems and/or individual process 
components can be studied initially via computer modeling rather than 
in full scale experiments. We recommend the addition of $1 million to 
the Computational Energy Science program for a total of $5 million for 
fiscal year 2006.
    We recommend the addition of $6 million for an advanced combustion 
program with a focus on chemical looping technologies for 
CO2 capture, ultra supercritical steam cycles, component 
development for carbon capture, and design studies of advanced 
combustion plants. Advanced combustion research will support the 
continued improvement of existing coal power generation units and 
develop new technologies. The subcommittee supported this program at $5 
million for fiscal year 2005.
    We thank the Appropriations Committee for their support of the zero 
emissions research and technology (ZERT) program in fiscal year 2005 
and recommend continued support for this center.
Oil & Natural Gas Programs
    Termination of the oil and natural gas extraction programs will be 
a disservice to our national interests. Many small producers contribute 
substantially to our oil and natural gas supplies. These smaller 
producers require R&D support to improve the performance of their 
reserve fields. Termination of the oil and natural gas programs would 
deprive these essential industries of advanced technology needed to 
produce our exceedingly scarcer resources. We recommend reinstatement 
of the oil and natural gas programs.
    Of particular interest is the Petroleum Technology Transfer Council 
(PTTC) Resource Centers program. With the 10 regional centers, the PTTC 
program works directly with industry to promote the deployment of 
advanced technologies. We recommend continuation of this program at a 
level of $2.6 million for fiscal year 2006. Participants provide a 38 
percent match to Federal funding.

OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY--VEHICLE TECHNOLOGIES 
                                PROGRAM

    Along with the need to provide adequate supplies of liquid 
transportation fuels, critical R&D is needed for integration of the 
fuels-emissions-engines-vehicles component systems of transportation 
vehicles. While we support the administration's programs in developing 
hydrogen-based transportation technology, we believe that it is also 
essential to improve the performance of our more conventional vehicles 
since they will be the mainstay of our transportation infrastructure 
well into the future. Three programs of interest to NRCCE in Vehicles 
Technologies are described below.
    Transportable Emissions Testing Laboratory.--EPA has established 
stringent emissions standards for 2007 and 2010. Measuring emissions 
from vehicles compliant with those standards requires sophisticated 
techniques, especially for mobile measurement facilities which can be 
transported to sites where fleet vehicles are located to reduce the 
out-of-service time of such vehicles. The Office of Freedom Car and 
Vehicle Technologies has developed a transportable emissions testing 
laboratory that produces extensive data on alternative liquid fuels, 
hydrogen, and advanced technologies that can not be obtained from any 
other laboratory in the world. We recommend continued funding for this 
laboratory at $2 million.
    Composite Materials Program.--Metal matrix and polymer matrix 
composites are used as lightweight and durable materials for heavy duty 
vehicles (trucks and trailers). Composites permit substantial weight 
reductions in critical systems such as chassis, suspensions, brakes, 
joints, engines, enclosures and support structures. Lighter vehicles 
increase fuel efficiency, reduce life-cycle-costs and reduce air 
pollutant emissions. The metal matrix composites program supports the 
high priority goals of the Freedom Car and Vehicle Technologies 
programs to reduce energy demand and air pollution, and should be 
continued at $1 million.
    Cylinder Inspection Program.--With increased emphasis on the use of 
alterative fuels for transportation, there are over 300,000 compressed 
gas cylinders in vehicles used for road service which carry fuels like 
natural gas and hydrogen. Current regulations and also equipment 
manufacturers require that a detailed visual inspection be performed 
every 3 years or 36,000 miles by certified inspectors. Many vehicles 
are being resold in the public sector for the first time. Training and 
certification of inspectors is needed to ensure safe operation of these 
vehicles. The Office of Vehicle Technologies initiated a cylinder 
safety inspection program in fiscal year 2005. We recommend 
continuation of this program in fiscal year 2006 at $0.5 million.

      U.S. ARMY CORPS OF ENGINEERS CONSTRUCTION (GENERAL) PROGRAMS

    NRCCE recommends consideration for two projects conducted under the 
U.S. Army Corps of Engineers Construction [General] programs.
Acid Mine Drainage Demonstration Program
    Acid mine drainage continues to be the primary source of 
degradation in Appalachian streams. While Federal and State programs 
have enabled progress to be made in cleaning many streams, the 
technologies that are being used now were to a large extent developed 
10 to 20 years ago. Since then, there has been little research effort 
into developing less expensive, more reliable treatment methods that 
address large volume discharges. The U.S. Army Corps of Engineers 
(USACE) should undertake a program of research and demonstration that 
would focus on developing and demonstrating improved reclamation 
methods in conjunction with the Appalachian States and the National 
Mine Land Reclamation Center.
    This program seeks to identify and develop a new generation of 
innovative AMD remediation technologies that will demonstrate 
substantial improvement in cost, performance, and reliability over 
existing AMD remediation technologies. Recognizing the importance of 
innovation, the project will encourage phased development with 
appropriate technical milestones to demonstrate the feasibility of a 
new technology prior to full-scale demonstration.
    The USACE Technical Working Group for the Acid Mine Drainage 
Demonstration Program will develop a standard set of criteria as a 
guide to rank the quality of proposed demonstration projects. For 
example, the proposed projects must demonstrate the development and 
implementation of innovative technologies to mitigate adverse 
environmental impacts of acid mine drainage. Other criteria include 
emphasis on system wide technologies, efficient designs to prevent or 
mitigate public health and safety hazards and damage to surface and 
underground water resources. Proposed demonstration projects are 
expected to quickly generate outcomes of value to the Corps' Ecosystem 
Restoration Program and also be transferable to other locations.
    We recommend that the Corps of Engineers undertake a 5-year, $20 
million Acid Mine Drainage Demonstration program in partnership the 
Appalachian States and request funding of $4 million in fiscal year 
2006 to initiate this effort.

Appalachian Water Resource Center
    Appalachian States are recognizing the value of their water 
resources in future economic development. Larger metropolitan areas 
external to Appalachia seek to obtain future supplies of drinking water 
from the region. Water facilitates the use of mineral resources to 
generate electricity and transportation fuels for local and national 
consumption. Insufficient water resources are already forcing new power 
generation projects to look for alternate water supplies, an outcome 
which may be exacerbated in the future if coal conversion technologies 
are deployed.
    Impacts from previous mining impair thousands of miles of streams 
in Appalachian States and contaminate large segments of our groundwater 
with the attendant destruction of fisheries and drinking water 
supplies. Discharges of pollutants from point sources and non-point 
sources such as farm wastes and other industrial wastes jeopardize the 
health of our waterways for both local residents and downstream 
communities and downstream States. Drought and flooding inflict untold 
damage to communities and businesses. Contaminated drinking water 
supplies cause illnesses which are particularly dangerous to residents 
who are economically disadvantaged, as is often the case in Appalachian 
communities.
    We recommend funding of $1 million in fiscal year 2006 to initiate 
an Appalachian Water Resource Center (AWRC) through the U.S. Army 
Engineer Research and Development Center. The AWRC will work closely 
with the National Energy Technology Laboratory and the National Mine 
Land Reclamation Center. The programs of the Appalachian Water 
Resources Center would focus on research and technology assessment to 
enable States to: (1) determine their current status regarding the 
extent and quality of their water resources, (2) conduct projects to 
develop cost-effective remediation measures for correcting water 
problems, and, (3) provide advice to States regarding economic and 
policy issues which can improve the standard of living within the 
State.
    Thank you for your consideration.
                                 ______
                                 
Prepared Statement of the National Coalition for Food and Agricultural 
                                Research

    On behalf of the National Coalition for Food and Agricultural 
Research (National C-FAR), we are pleased to submit comments in strong 
support of enhanced public investment energy biosciences research as a 
critical component of Federal appropriations for fiscal year 2006 and 
beyond.

                   SUMMARY POSITION--FISCAL YEAR 2006

    National C-FAR urges the subcommittee and committee to provide for 
an increase in the administration's fiscal year 2006 request of $32.5 
million for the Department of Energy's Energy Biosciences program in 
the Office of Science and Office of Basic Energy Sciences, to at least 
$35 million. National C-FAR also urges that funding for the Department 
of Energy Office of Energy Efficiency and Renewable Energy (EERE) be 
sustained, and enhanced to the extent practicable.
    At a time when our Nation's energy security is being seriously 
challenged, this modest increase in a small, but highly effective 
program is a wise investment with potentially momentous benefits to the 
Nation.
    Basic energy research on plants and microbes supported by the 
Energy Biosciences program contributes to advances in renewable 
resources for fuel and other fossil resource substitutes from American 
agriculture, clean-up and restoration of contaminated environmental 
sites, and in discovering new knowledge leading to home-grown products 
and chemicals now derived from petroleum.

                       INTEREST OF NATIONAL C-FAR

    National C-FAR serves as a forum and a unified voice in support of 
sustaining and increasing public investment at the national level in 
food and agricultural research, extension and education. National C-FAR 
is a nonprofit, nonpartisan, consensus-based and customer-led coalition 
established in 2001 that brings food, agriculture, nutrition, 
conservation and natural resource organizations together with the food 
and agriculture research and extension community. More information 
about National C-FAR is available at http://www.ncfar.org.\1\
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    \1\ National C-FAR seeks to increase awareness about the value of, 
and support for, food and agricultural research, extension and 
education. For example, National C-FAR is hosting an educational series 
of ``Break & a Briefing'' seminars on the hill, featuring leading-edge 
researchers on timely topics to help demonstrate the value of public 
investment in food and agricultural research, extension and education. 
The April 11 seminar was entitled ``Energy--A `Growing' Need,'' 
featuring Dr. Lonnie Ingram, Director of the Florida Center for 
Renewable Chemicals and Fuels, Institute of Food and Agricultural 
Science, University of Florida. National C-FAR also circulates a series 
of 1-page Success Profiles highlighting some of the many benefits 
already provided by public investment in food and agricultural 
research, extension and education. Each provides a contact for more 
information. Profiles released to date are titled `Anthrax,' 
`Mastitis,' `Penicillin,' `Witchweed,' `Making Wine,' `Fighting 
Allergens,' and `Harnessing Phytochemicals.' The Profiles can be 
accessed at http://www.ncfar.org/research.asp.
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    National C-FAR is deeply concerned that shortfalls in funding in 
recent years for food and agricultural research, extension and 
education--both through the U.S. Department of Agriculture and through 
relevant programs in other agencies--jeopardize the food and 
agricultural community's continued ability to maintain its leadership 
role and more importantly respond to the multiple, demanding challenges 
that lie ahead. Federal funding for food and agricultural research, 
extension and education has been flat for over 20 years, while support 
for other Federal research has increased substantially. Public funding 
of agricultural research in the rest of the world during the same time 
period has reportedly increased at a nearly 30 percent faster pace.
    National C-FAR believes it is imperative to lay the groundwork now 
to respond to the many challenges and promising opportunities ahead 
through Federal policies and programs needed to promote the long-term 
health and vitality of food and agriculture for the benefit of both 
consumers and producers. Stronger public investment in food and 
agricultural research, extension and education is essential in 
producing research outcomes needed to help bring about beneficial and 
timely solutions to multiple challenges.
    The Department of Energy's biosciences program is an excellent 
example of where a modest Federal investment can yield tremendous 
societal benefits. Energy costs are escalating, dependence on petroleum 
imports is growing and concerns about greenhouse gases are rising. 
Research, extension and education can enhance agriculture's ability to 
provide new, renewable sources of energy and cleaner burning fuels, 
sequester carbon, and provide other environmental benefits to help 
address these challenges, and indeed generate value-added income for 
agricultural producers and stimulate rural economic development.

         NATIONAL C-FAR FISCAL YEAR 2006 FUNDING RECOMMENDATION

    National C-FAR urges the subcommittee and committee to provide for 
an increase in the administration's fiscal year 2006 request of $32.5 
million for the Department of Energy's Energy Biosciences program in 
the Office of Science and Office of Basic Energy Sciences to at least 
$35 million. National C-FAR also urges that funding for the Department 
of Energy Office of Energy Efficiency and Renewable Energy (EERE) be 
sustained, and enhanced to the extent practicable.
    At a time when our Nation's energy security is being seriously 
challenged, this modest increase in a small, but highly program is a 
wise investment with potentially momentous benefits to the Nation.
    Basic energy research on plants and microbes supported by the 
Energy Biosciences program contributes to advances in renewable 
resources for fuel and other fossil resource substitutes, clean-up and 
restoration of contaminated environmental sites, and in discovering new 
knowledge leading to home-grown products and chemicals now derived from 
petroleum.
    The Energy Biosciences program supports world-leading research on 
plants and microbes conducted primarily by university-based scientists 
throughout the country. Competitive grants are awarded through a peer 
review process based on the highest standards of scientific merit.
    The Energy Biosciences program is dependent upon the knowledgeable 
and experienced plant biologists who run the program, but who have 
either resigned or are retiring. National C-FAR believes that for the 
program to remain effective, it must be properly staffed. A fully 
staffed, Energy Biosciences program is necessary for the continued 
convening of panels, reviewing of proposals and awarding of grants for 
the best research proposals adhering to the highest scientific 
selection standards. This could lead to future discoveries that will 
make environmentally benign, home-grown energy sources more plentiful 
and cost-competitive with imported petroleum products, such as gasoline 
and industrial chemicals.
    We hope the committee will commend the Office of Science for its 
support of Energy Biosciences, so that America's producers of domestic 
energy crops can reach their huge and realistic potential of being able 
to replace much of the imported petroleum products used for 
transportation fuels and industrial chemicals, and urge the Office to 
increase its emphasis in the areas of biology research sponsored by 
Energy Biosciences.
    As a coalition representing stakeholders in both the research, 
extension and education community and the ``customers'' who need and 
depend upon their outcomes, National C-FAR urges expanded public 
participation in the administration's research, extension and education 
priority setting and funding decision process and stands ready to work 
with the administration and other interested stakeholders in such a 
process.
    National C-FAR appreciates the opportunity to share its views and 
stands ready to work with the Chair and members of the subcommittee and 
committee in support of these important funding objectives.
                                 ______
                                 
             Prepared Statement of Alliance to Save Energy

    The Alliance to Save Energy (the Alliance) is a bipartisan, 
nonprofit coalition of business, government, environmental, and 
consumer leaders committed to promoting energy efficiency worldwide to 
achieve a healthier economy, a cleaner environment, and greater energy 
security. The Alliance, founded in 1977 by Senators Charles Percy and 
Hubert Humphrey, currently enjoys the leadership of Senator Byron 
Dorgan as Chairman; Washington Gas Chairman and CEO James 
DeGraffenreidt, Jr. as Co-Chairman; and Representatives Ralph Hall, 
Zach Wamp and Ed Markey and Senators Jeff Bingaman, Susan Collins and 
Jim Jeffords as its Vice-Chairs. More than 90 companies and 
organizations currently support the Alliance as Associates. The 
Alliance recommends increases of $15.3 million in several energy 
efficiency and renewable energy deployment programs, increased funding 
for building energy efficiency R&D, and $3 million for EIA end-use 
surveys, compared to last year's appropriated levels.
    Energy efficiency programs at DOE are largely voluntary programs 
that further the national goals of broad-based economic growth, 
environmental protection, national security, and economic 
competitiveness. The Office of Energy Efficiency and Renewable Energy 
does this through the development of new energy-efficient technologies 
in cooperation with the national laboratories, by working with the 
private sector to deploy those technologies, and by fostering energy 
efficiency activities in the States.

                               BACKGROUND

    Rationale for Federal Energy Efficiency Programs.--Both natural gas 
and oil prices have more than doubled in the last few years, and both 
continue to rise. High natural gas prices have caused plant closings, 
loss of manufacturing jobs, and a variety of other direct and negative 
impacts to the U.S. economy. In a recent survey, business leaders 
placed energy costs as their second greatest concern after rising 
healthcare costs.
    Energy efficiency and conservation measures taken since 1973 now 
displace the need for 40 Quads of energy each year, exceeding the 
Nation's consumption of petroleum. Federal policies and programs such 
as appliance standards, research and development, and Energy Star made 
major contributions to these savings. Yet much more remains to be done 
to increase our Nation's energy efficiency.
    Energy efficiency must play a central role in the Nation's energy 
future. With only 2 percent of known world oil reserves within our 
domestic borders, flat natural gas production even as prices soar, and 
an electricity grid that is under significant and growing stress in 
many regions of the country, there is simply no choice. Even the 
National Petroleum Council has concluded that natural gas supplies from 
traditional North American production will not be able to meet 
projected demand, and that ``greater energy efficiency and conservation 
are vital near-term and long-term mechanisms for moderating price 
levels and reducing volatility.''
    A record of success.--Federal energy efficiency programs provide 
enormous economic and environmental returns. A 2001 National Research 
Council report found that every $1 invested in 17 DOE energy efficiency 
research and development (R&D) programs returned nearly $20 to the U.S. 
economy in the form of new products, new jobs, and energy cost savings 
to American homes and businesses. Environmental benefits were estimated 
to be of a similar magnitude. DOE itself estimates that its efficiency 
and renewables programs will result in major savings, including $134 
billion in energy bills, 157 GW of avoided new conventional power 
plants, 1.9 quads of natural gas, and 213 MMTC of greenhouse gas 
emissions in 2025.
    Budget Studies and Recommendations.--A series of reports and bills 
have supported a substantial increase in funding for DOE energy 
efficiency programs. The 2004 energy bill conference report (H.R. 6) 
would have authorized $772 million for energy efficiency R&D and $725 
million for grants in fiscal year 2006. The authorization increases up 
to a total of $1.625 billion in fiscal year 2008, an increase of 87 
percent over the actual fiscal year 2005 appropriation. The National 
Commission on Energy Policy's December 2004 report recommends a 
doubling after inflation of current investments in energy RD&D, 
including on efficiency, over 5 years. These recommendations echo 
earlier calls for doubling by the President's Committee of Advisors on 
Science and Technology and the Energy Futures Coalition, and support 
for expanding the programs in the president's National Energy Policy.
    Summary of the President's Request.--The President's overall fiscal 
year 2006 budget request for DOE energy efficiency programs is $847 
million, down $21 million from the fiscal year 2005 appropriation. This 
continues a gradual slide from the $913 million appropriated for energy 
efficiency programs in fiscal year 2002. However, in addition to the 
overall decline, there are some major changes in priorities. The 
President has requested significant increases for fuel cell vehicle and 
biorefineries research. The money for these increases was taken from 
other energy efficiency programs. Thus the core research, development 
and deployment (RD&D) programs for energy efficiency--buildings, 
industry, other vehicles R&D, distributed energy, Federal energy 
management, and deployment programs--would be cut 16 percent overall 
from fiscal year 2005 levels. Particularly distressing are a 19 percent 
cut to the appliance standards program--a program that is already 
plagued by long delays due in part to a lack of financial resources--
and a 21 percent cut in work to improve State building energy codes. 
The proposed budget also cuts other Buildings RD&D, Industrial RD&D, 
Federal Energy Management, and other critical programs.

                        ALLIANCE RECOMMENDATIONS

    The Alliance to Save Energy believes that a substantial increase in 
support for DOE energy efficiency programs is vital for addressing the 
critical energy problems facing our Nation, and that the proven track 
record of DOE programs in reducing energy demand provides a solid 
justification for such an increase. Thus the Alliance recommends a 
doubling of funding for Federal energy efficiency programs over the 
next 5 years (2006-2010), in line with the budget recommendations 
above, with an allocation similar to the budget included in the 
National Commission on Energy Policy report. However, given fiscal 
realities, we have included much smaller recommendations for funding 
increases to specific programs below.
    The impact of DOE energy efficiency programs has been multiplied by 
the combination of research to create new technologies, voluntary 
deployment and market transformation programs to move them into the 
marketplace, and standards and codes to set a minimum threshold for 
using cost-effective technologies. All three legs are vital. However, 
the Alliance believes that energy efficiency deployment programs 
(including standards) are especially critical right now to meeting our 
Nation's natural gas and electricity needs. The administration's fiscal 
year 2006 budget request includes an important increase in funding for 
the Energy Star program, but cuts other key deployment programs 
including appliance standards, building codes, Federal energy 
management, industrial best practices, State Energy Program grants, and 
all the Gateway Deployment programs other than Energy Star. Such cuts 
are not consistent with achieving our national energy policy goals of 
reducing energy costs, promoting environmentally sound economic 
development, and reducing our reliance on imported oil.
    It is important that the program increases in the administration's 
budget and proposed below not be paid for through cuts to other highly-
effective efficiency programs, which also address critical national 
energy needs. While we support the fuel cell programs, they do not take 
the place of core RD&D programs that can have broad energy savings 
impacts and more certain and more near-term impact than fuel cells. In 
particular, the Alliance opposes repeated cuts that now threaten the 
viability of Industrial Technologies research programs.

                        EERE DEPLOYMENT PROGRAMS

    Equipment Standards and Analysis (Building Technologies).--Federal 
appliance standards already save an estimated 2.5 percent of all U.S. 
electricity use; existing and draft standards are expected to save 
consumers and businesses $186 billion by 2020. However, a number of 
standards are many years behind schedule and appear stalled. DOE has 
missed Congressionally-set legal deadlines for updating or establishing 
18 appliance standards. In fact, some standards are over a decade 
overdue. DOE has not issued a new energy-saving standard in more than 4 
years. In December, the agency announced additional 24 to 30 month 
delays for the three standards the agency terms its highest priorities. 
Yet the administration's budget proposes to reduce this line by 19 
percent. In recognition of the fact that establishing standards 
requires a rigorous, time consuming, and costly rulemaking process, the 
Alliance recommends a $2.5 million increase over the fiscal year 2005 
appropriations level for total funding of $12.6 million.
    Residential and Commercial Building Energy Codes.--While 
residential and commercial building codes are implemented at the State 
level, the States rely on DOE for technical specifications, training, 
and implementation assistance. We are concerned that the Department is 
significantly behind in providing information and guidance to the 
States on both residential and commercial building energy codes. A few 
States are currently considering the adoption of the current model 
residential energy code--the 2004 IECC Supplement. This year, the 2006 
IECC will be finalized, following the recent publication of the 2004 
ASHRAE commercial code. DOE will be required to make determinations as 
to whether these codes should be adopted; however, DOE still has not 
made the required determinations on the 2003 IECC, the 2004 Supplement, 
or the 2001 ASHRAE code. DOE must apply the necessary human and 
financial resources to ensure timely determinations on the codes.
    As the 2006 IECC code will include measures to simplify the code 
and ease the burden of implementation (as the 2004 Supplement does 
now), these determinations will lead to exciting opportunities to 
increase the number of States that adopt the model code.
    In addition, compliance with existing codes remains a major 
problem. DOE needs increased financial resources in order to assist 
States in the adoption of codes, and to provide training and assistance 
that can boost compliance. We estimate that full adoption of and 
compliance with building codes could save 7.2 quads of energy by 2025. 
Yet the administration proposes to reduce overall codes funding by 21 
percent, largely reversing funding Congress added last year. The 
Alliance recommends:
  --a $2.8 million increase for the Building Codes Training and 
        Assistance (Weatherization and Intergovernmental Programs), for 
        total funding of $7.4 million.
    Federal Energy Management Program.--The Federal Government is the 
Nation's largest consumer of energy. Federal agencies use 1 percent of 
all energy consumed in the U.S. DOE's Federal Energy Management Program 
(FEMP) has helped cut Federal building energy waste by 24 percent from 
1985-2001--a reduction that now saves Federal taxpayers roughly $1 
billion each year in reduced energy costs. A vital tool for upgrading 
the efficiency of Federal buildings is the use of Energy Savings 
Performance Contracts (ESPCs). However, authority for ESPCs lapsed from 
October 1, 2003 until late last year, when Congress provided an 
extension of the ESPC program until October 1, 2006 as part of the 
defense authorization bill. During the lapse in authority, nearly $500 
million worth of energy savings projects were stalled. Additional 
funding is needed for FEMP to assist agencies in finalizing these 
contracts and reviving this program. Yet the fiscal year 2006 budget 
request would cut funding to this program by 4 percent from the fiscal 
year 2005 appropriated level. The Alliance recommends a $3 million 
increase, for total funding of $20.9 million.
    Energy Star (Weatherization and Intergovernmental Programs).--
Energy Star is a successful voluntary deployment program at EPA and DOE 
that has made it easy for consumers to find and buy many energy-
efficient products. For every Federal dollar spent, Energy Star 
produces average energy bill savings of $75 and sparks $15 in 
investment of new technology. Last year alone, Americans, with the help 
of Energy Star, prevented 30 million metric tons of greenhouse gas 
emissions--equivalent to the annual emissions from 20 million vehicles, 
and saved about $10 billion on their utility bills. The President 
proposed a significant increase for the Energy Star program, from $4.1 
million to $5.8 million, but even more is needed both to add new 
products and to increase consumer awareness and market penetration of 
Energy Star products. The Alliance recommends a slightly higher $2 
million increase for total funding of $6.1 million.
    Industrial Best Practices (Industrial Technologies--
Crosscutting).--One of the most effective DOE industrial programs 
conducts plant-wide energy assessments, develops diagnostic software, 
conducts training, develops technical references, and demonstrates 
success stories. Oak Ridge National Laboratory reports that DOE-ITP's 
BestPractices outreach saved 82 trillion Btu in 2002, worth $492 
million. University-based Industrial Assessment Centers have an 
immediate impact on the competitive performance of hundreds of smaller 
U.S. factories. The same efforts train industry's next generation of 
innovators. Additional DOE funding can allow these programs to impact 
thousands, as opposed to hundreds, of U.S. factories. The Alliance 
recommends:
  --a $3 million increase for Best Practices, for total funding of 
        $11.4 million, and
  --a $2 million increase for Industrial Assessment Centers, for total 
        funding of $9.1 million.

                           OTHER KEY PROGRAMS

    Building Technologies R&D.--Energy use by residential and 
commercial buildings accounts for over one-third of the Nation's total 
energy consumption, including two-thirds of the electricity generated 
in the United States. Of all the DOE energy efficiency programs, 
Building Technologies continues to yield perhaps the greatest energy 
savings. The National Research Council study found that just three 
small buildings R&D programs--in electronic ballasts for fluorescent 
lamps, refrigerator compressors, and low-e glass for windows--have 
already achieved cost savings totaling $30 billion, at a total Federal 
cost of about $12 million. Current buildings research programs, such as 
advanced windows and solid state (LED) lighting, are equally promising. 
Yet the administration's proposed budget would reduce overall Building 
Technologies funding by 11 percent, and eliminate the important Thermal 
Insulation and Building Materials R&D. Buildings R&D should be a 
priority for funding increases, especially for Window Technologies, in 
addition to the Building Technologies deployment programs highlighted 
above.
    Energy Information Administration (EIA) End-Use Surveys.--Last 
year, the Congress recognized the value that EIA's energy end-use 
surveys provide to policymakers, congressional staff, national 
laboratories and industry with report language urging an increase in 
funding for this program. This year, the administration's budget 
request includes $3.5 million (up from $2.2 million), just enough to 
continue the valuable Residential, Manufacturing, and Commercial 
Buildings Energy Consumption Surveys (RECS, MECS, and CBECS). The 
Alliance strongly supports the administration's requested budget 
increase for the existing surveys. In addition, the Alliance recommends 
an increase of $1.5 million above the President's request, for total 
funding of $5.0 million, in order to reinstate the residential 
transportation energy consumption survey, last conducted in 1994, and 
to conduct the surveys every 3 years as required by the Energy Policy 
Act of 1992, instead of the current 4-year schedule.

                               CONCLUSION

    DOE's energy efficiency programs have a proven track record of 
developing and deploying new energy efficiency technologies. With 
natural gas and oil prices continuing to skyrocket, there is a 
compelling need to increase these programs this year, as energy 
efficiency continues to be the quickest, cheapest, and cleanest way of 
making energy supplies meet energy needs. The Alliance recognizes that 
the fiscal situation is tight, but the returns from these programs will 
be large, and the cost of not making the investment--to the economy, to 
energy security and reliability, and to the environment--is simply too 
high.
                                 ______
                                 
 Prepared Statement of the Center for Advanced Separation Technologies

    Chairman Domenici and members of the subcommittee, I represent the 
Center for Advanced Separation Technologies (CAST), which is a 
consortium of seven leading U.S. mining schools. I appreciate the 
opportunity to submit this testimony requesting your committee to add 
$3 million to the 2006 Fossil Energy Research and Development budget, 
U.S. Department of Energy, for Advanced Separations research. Research 
in advanced separations is an integral part of the Solid Fuels and 
Feedstocks Program of the Fossil Energy R&D.
    I am joined in this statement by my colleagues from the consortium: 
Ibrahim H. Gundiler, New Mexico Tech; Maurice C. Fuerstenau, University 
of Nevada-Reno; Peter H. Knudsen, Montana Tech of the University of 
Montana; Jan D. Miller, University of Utah; Richard A. Bajura, West 
Virginia University; and Richard J. Sweigard, University of Kentucky.

  FUNDING REQUEST FOR THE CENTER FOR ADVANCED SEPARATION TECHNOLOGIES

    Oil is the largest source of energy used in the United States, 
providing 40 percent of the Nation's energy needs. At present, the 
United States imports oil to meet nearly 60 percent of its domestic 
consumption, and the oil import in 2004 accounted for nearly one-third 
of the increase in the trade deficit that year. The situation can get 
worse if world oil production reaches a peak any time between now and 
2020 as many petroleum geologists predict. In anticipation of the 
growing imbalance between energy supply and demand, President Bush has 
developed a comprehensive National Energy Policy which stresses the 
importance of increasing supplies while protecting the environment. 
Unfortunately, coal contains many undesirable impurities and, hence, 
emits pollutants during the course of production and utilization. 
Therefore, there is a need to develop advanced separation technologies 
that can be used to efficiently produce cleaner solid fuels in an 
environmentally acceptable manner.
    Availability of the new technologies will help industry meet the 
stringent requirements of the Clean Air Interstate Rule (CAIR) and the 
Clean Air Mercury Rule (CAMR) promulgated in March, 2005. The former 
requires coal-burning power plants to reduce SO2 and 
NOX emissions by 70 and 60 percent, respectively, while the 
latter requires that mercury emissions be reduced to 38 and 15 tons-
per-year levels beginning 2010 and 2018, respectively. CAST is an 
excellent vehicle to develop advanced technologies that can be used to 
meet these new requirements.

                              ORGANIZATION

    The Center for Advanced Separation Technologies (CAST) was formed 
in 2001 between Virginia Tech and West Virginia University with the 
objective of developing technologies that can help the U.S. coal 
industry produce cleaner solid fuels with maximum carbon recovery in 
environmentally acceptable ways. Initially, the scope of work was 
limited to developing efficient physical separation methods 
encompassing solid-solid and solid-liquid separations. In 2002, five 
other universities, New Mexico Tech; the University of Nevada, Reno; 
Montana Tech of the University of Montana; the University of Utah; and 
the University of Kentucky joined the consortium to develop 
crosscutting technologies that can also be used by the U.S. minerals 
industry. As a result, the scope of work was expanded to chemical/
biological separations and environmental control. By working together 
as a consortium, the Center can take advantage of the diverse expertise 
available in the member universities, and the research activities can 
address the diverse interests at different geographical regions of the 
country. A recent National Research Council (NRC) report suggested that 
``consortia are a preferred way of leveraging expertise and technical 
inputs to the mining sector,'' and recommended that the U.S. Department 
of Energy should support ``academia, which helps to train technical 
people for the industry.''

                         PROGRESS AND NEXT STEP

    At present, a total of 40 research projects are being carried out 
at the seven CAST member universities. The project selection was made 
by an industry panel in accordance with the priorities set forth in the 
CAST Technology Roadmap, which was created as a result of the workshop 
held in Charleston, WV, August 14-15, 2002. The research results were 
presented at the First CAST Workshop, Charleston, WV, November 19-21, 
2003. The meeting was attended by 120 participants, 60 percent of whom 
were from industry. The Second CAST Workshop will be held July 26-27, 
2005, in Blacksburg, VA.
    The price of coal increased sharply beginning January, 2004, due to 
factors such as increased demands in export coal markets, low U.S. 
dollar value, depletion of long-wall mineable coal beds, shortages of 
skilled manpower, and increasing pressure to reduce SO2 and 
mercury. It is unfortunate that despite the favorable market 
conditions, many coal companies are losing considerable amounts of coal 
during cleaning operations due to the lack of appropriate separation 
technologies. The loss of coal, particularly of fine particles, 
contributes to high production costs and creates environmental problems 
at mine sites. NRC reported recently that there are more than 760 
impoundments in the eastern United States, many of which are rated as 
``high risk.'' Therefore, the CAST Roadmap gave the highest priorities 
to dewatering fine coal (solid-liquid separation) and fines 
classification (size-size separation).
    CAST conducted several fine coal dewatering research projects. In 
one, pilot-scale tests were conducted on drill core samples from the 
waste impoundment at the Pinnacle Mine, WV. The coal sample was cleaned 
of ash and sulfur by means of an advanced solid-solid separation device 
and was subsequently dewatered with an advanced solid-liquid separation 
method to obtain marketable products. The same samples treated with 
conventional technologies contained high levels of impurities and 
contained too much water to be shipped. As a result of the successful 
test work, Beard Technologies signed an agreement with PinnOak Mining 
Company in September, 2004, to build a recovery plant which is capable 
of producing 200 tons/hr of clean coal. It is anticipated that plant 
construction will be completed by September, 2005. If successful, this 
will be the first operation that can recover practically all of the 
coal fines that have been discarded to a waste impoundment without the 
benefit of the Section 29 tax credit.
    In another dewatering project, CAST is developing a hyperbaric 
centrifuge that can remove water from fine coal using a combination of 
air pressure and centrifugal force. While a bench-scale semi-continuous 
unit was being constructed by CAST, a license agreement was signed with 
Decanter Machine Company in Johnson City, TN, in January of 2005. Based 
on the bench-scale test results, a proof-of-concept (POC) module will 
be constructed by Decanter and tested at a mine site. In another 
dewatering project, a flocculant injection system has been developed to 
minimize the loss of fine coal in screenbowl centrifuges, which are the 
most widely used dewatering machines used in the U.S. coal industry. To 
date, the new injection system has been installed in a total of 18 
preparation plants operating in the U.S. coal industry. In addition, 
CAST is developing a deep-cone thickener which is designed to increase 
the consistency of refuse materials (mainly clay) so that they can be 
disposed of without using refuse ponds.
    Most of the coarse coal is cleaned by density-based separators. One 
can, therefore, determine the efficiency of separation by using density 
tracers. Typically, tracers of different densities are added to a feed 
stream and manually collected from product streams, processes which are 
cumbersome and entail inaccuracies. Therefore, a new method has been 
developed in which each tracer is tagged with a transponder so that the 
fate of each tracer can be determined accurately by means of an 
appropriate electronic device. This technology has been tested 
successfully in several coal plants and is ready for commercial 
deployment this year.
    Alternatives to copper smelting, e.g., chemical leaching, have been 
sought for years to reduce cost and minimize environmental impact. It 
is difficult, however, to leach certain types of copper minerals, such 
as chalcopyrite, because its leach product (elemental sulfur) forms a 
coherent layer on the mineral surface and impedes the leaching process. 
It was found that chalcopyrite leaching is greatly enhanced in the 
presence of nano-size silica particles, possibly due to their effect on 
sulfur layer. Based on the successful test results obtained with dilute 
suspensions, work is continuing on concentrated suspensions. In another 
leaching project, a method is being developed for extracting gold using 
alkaline sulfide rather than toxic cyanide as a lixiviant. On the basis 
of the thermodynamic and kinetic studies conducted during the first 
year, bench-scale leach tests have been conducted successfully on 
actual ore samples. Initial tests showed very high (95 percent) gold 
recoveries.
    Processing water-soluble minerals, such as potash (KCl) and trona 
(NaCO3), poses unique challenges. Potash has been mined in 
New Mexico for the past 60 years, but depleting high-grade ore reserves 
threatens the survival of the industry in the future. Therefore, CAST 
has developed a new method in which potash ore is deslimed prior to 
flotation and reagent additions are optimized. After a successful plant 
trial last summer, Mosaic Potash, formerly IMC Potash, implemented the 
new flotation process to increase the recovery by more than 10 percent. 
CAST is also working with both Interpid Mining and Mosaic Potash to 
develop a process of recovering potash from mixed ores containing large 
amounts of clay, which cannot be processed otherwise.
    Almost all of the U.S. soda ash production comes from the Green 
River Basin of Wyoming. At present, high purity soda ash is being 
produced by a process involving dissolution in a brine solution, which 
is costly. CAST has developed a flotation process which can produce 
trona concentrate with a high purity (99 percent). During the fall of 
2004, a series of pilot-scale flotation tests were conducted at the 
mine site. At present, continuous flotation tests are being conducted 
at a much smaller scale to establish optimal operating conditions.
    CAST is carrying out many other projects that cannot be reported 
here due to page limit. Many of them are long-term, high-risk research 
projects, which include fundamental studies, sensor development, 
modeling, and computations.

                     RATIONALE FOR FUNDING REQUEST

    The United States is the second largest mining country in the world 
after China, followed by South Africa and Australia. In 2004, the U.S. 
mining industry produced a total of $63.9 billion worth of raw 
materials, including $19.9 billion from coal and $44 billion from 
minerals. Australia is a much smaller mining country but has five 
centers of excellence in advanced separations as applied to coal and 
minerals processing. In the United States, CAST is the only such 
center.
    CAST is developing a broad range of advanced separation 
technologies that can be used by the U.S. coal and minerals industries. 
Although CAST is a relatively new center, many of our research projects 
have yielded technologies that have already been transferred to 
industry. However, many other promising projects are on-going and 
require continued support. It has been found that working as a 
consortium is an effective way of exchanging ideas and utilizing 
different expertise required to solve difficult problems. Continued 
funding will allow CAST to develop advanced technologies that can be 
used to remove impurities from coal, including sulfur and mercury, in a 
manner that is acceptable to the environment. Furthermore, the advanced 
technologies can be used to clean up the waste impoundments created in 
the past and to control acid mine water.
    For fiscal year 2006, we are requesting $3 million of funding to 
continue development of crosscutting advanced separation technologies. 
In view of the CAIR and CAMR promulgated in March, 2005, we will also 
study methods of removing mercury from coal prior to combustion. Recent 
research conducted by CAST member universities has shown that 
approximately 70 to 80 percent of mercury can be removed from eastern 
U.S. coals. In order to do this, the coal must be pulverized first to 
liberate iron sulfide minerals such as pyrite (FeS2) in 
which most of the mercury is dispersed in solid solution. The fine coal 
dewatering technologies being developed at CAST can minimize the costs 
associated with processing the pulverized coal. Some of the advanced 
separation technologies developed by CAST can also be used to recover 
kerogen and bitumen from oil shale and tar sands and to help develop 
zero-emission coal technologies.
                                 ______
                                 
          Prepared Statement of the Ohio Oil & Gas Association

                          SUMMARY INTRODUCTION

    This is a statement of the Ohio Oil and Gas Association (``OOGA''), 
a trade association primarily comprised of oil and natural gas 
producers. OOGA's membership also includes oilfield drilling and 
service contractors, natural gas pipeline companies, natural gas 
marketers, and other businesses providing services, goods, and 
equipment to the oil and natural gas industry in the State of Ohio. 
OOGA's mission is to protect, promote, foster and advance the common 
interests of those engaged in all aspects of the Ohio crude oil and 
natural gas producing industry. The OOGA's membership totals 1,300 
members, the majority of which are small business entities.
    The administration's budget proposal for fiscal year 2006 would 
remove all Federal funding that supports oil and gas technology 
programs. Likewise, and of critical concern, the proposal eliminates 
funding for the Office of Fossil Fuel, Oil and Gas Program's regulatory 
evaluation programs that serve to make certain that other Federal 
agency rulemakings take place with full regard for the potential 
impacts the action may have on domestic oil and gas production. 
Therefore, OOGA's members maintain a substantial interest in this 
appropriation issue and offer the following discussion.
    OOGA fully supports and is signatory to comments submitted by the 
Independent Petroleum Association of America (IPAA) to this committee 
regarding this issue. We take this opportunity to briefly itemize those 
issues of particular concern to Ohio's independent oil and gas 
producers.
    OOGA requests that fiscal year 2006 funding of oil and gas 
technology and regulatory evaluation programs be restored to fiscal 
year 2005 levels. The Department of Energy should provide Congress with 
research and development plans at several levels of appropriations 
($50, $75 and $100 million per year) over at least a 5-year planning 
period.

                            TECHNOLOGY NEEDS

    Oil and natural gas stand out as essential fuels and feedstock of 
the U.S. economy. Together they account for more than 60 percent of 
U.S. energy consumption. Even though the United States is a mature 
producing region, still nearly 40 percent of oil consumed comes from 
domestic fields. The rest is imported from other sources--usually 
nationalized petroleum owned by companies who do not have America's 
best interests at heart.
    Of the remaining U.S. resource base two-thirds of all the oil 
discovered in the country remains in the ground. U.S. natural gas 
resources remain plentiful. But, as demand increases, U.S. production 
will increasingly come from more difficult-to-produce, technically 
challenging resources and settings. In light of the current economic 
situation characterized by escalating commodity prices caught in 
increasingly more volatile cycles, it seems Congress is behooved to do 
all possible to support increased research to exploit the U.S. resource 
base. Likewise, cutting the primary R&D funding assisting American 
independents, who drill 90 percent of domestic oil and gas wells, seems 
entirely inappropriate.
    Because there is so much future potential in this region, Ohio and 
the Appalachian Basin are detrimentally impacted by the R&D funding 
cuts. The U.S. Geological Survey recently issued a report assessing the 
undiscovered oil and gas potential of the Appalachian Basin 
Province.\1\ The USGS estimated a mean of 70.2 trillion cubic feet of 
gas, a mean of 54 million barrels of oil, and a mean 872 million 
barrels of total natural gas liquids exists in the region. That roughly 
translates into 7.6 billion barrels of oil equivalents (at current 
commodity price levels). If only 30 percent of the resource was 
recoverable, still that would amount to nearly 50 percent of the 
published proved oil reserves available in Alaska.
---------------------------------------------------------------------------
    \1\ ``Assessment of Undiscovered Oil and Gas Resources of the 
Appalachian Basin Province, 2002'', USGS Fact Sheet FS-009-3, United 
State Geological Survey, February 2003.
---------------------------------------------------------------------------
    Independent oil and gas producers will surely explore for and 
develop the Appalachian resource. But this resource is contained in a 
mature basin and within reservoirs that will require new technologies 
to fully exploit. The Department of Energy's oil and gas technologies 
programs provide technological products that are principally accessed 
by small, independent oil and natural gas producers. These producers do 
not have access to the in-house technology capabilities of large, 
multi-national oil companies. In fact, 85 percent of the DOE programs 
are targeted toward exploration and production activities associated 
with the independent producer community. The survival of these 
companies and the Nation's remaining oil and natural gas resources 
often depends on new technologies created by the government-industry 
partnership fostered through these programs.
    Currently, small independent producers directly plug into proven 
high-success programs such as the Petroleum Technology Transfer Council 
(PTTC) and the Stripper Well Consortium. Both programs are dependent 
upon Congress providing continued and adequate funding of the 
Department of Energy R&D program. As a direct result of these programs 
the flow of oil and gas has been sustained from thousands of domestic 
marginal wells while opening new opportunities to tap large quantities 
of the remaining oil and gas resource in place. Above and beyond PTTC 
and the Consortium, recent Department of Energy R&D has yielded six new 
deployment-ready oil and gas technologies that will extend the useful 
life of more than 650,000 stripper wells that deliver almost 15 percent 
of America's domestic oil production and almost 8 percent of natural 
gas production.

                TECHNOLOGY AND THE RBDMS DATABASE SYSTEM

    There is another outstanding success story that would not have 
happened were it not for Federal funding of R&D and technology.
    In partnership with the Department of Energy and the Ground Water 
Protection Council (GWPC), the Ohio Division of Mineral Resources 
Management, the lead oil and gas regulatory agency, developed an oil 
and gas risk based data management system (RBDMS) designed with risk 
functions embedded in the line code of the system. RBDMS is populated, 
and is constantly being updated, with data on all known oil and gas 
records in Ohio, including data contained in the DMRM's previous 
database, supplemental electronic records provided by industry, well 
log cards from the Ohio Division of Geologic Survey, abandoned well 
site information, and digitized maps showing, among other things, known 
well locations. It is now used in virtually every aspect of the DMRM 
program, including permitting, inspection, plugging, enforcement and 
administrative functions, as well as the DMRM's strategic planning 
process for the identification and evaluation of enforcement issues and 
trends.
    Access to much of the data contained in RBDMS is also available to 
the public, industry, and local, State and Federal agencies, through 
the DMRM website, which has approximately 200,000 user visits annually. 
Additionally, emergency data is shared with State and local emergency 
response agencies and local fire departments through the DMRM website.
    RBDMS serves as a risk based data management model for at least 17 
other State oil and gas regulatory programs, and has received an Award 
of Excellence in Technical Development from the GWPC and was named as 
one of the U.S. Department of Energy's top 100 technical developments.
    Ohio Oil and Gas Emergency Website.--As a direct result of the 
RBDMS project, the Ohio agency developed a website for use by fire 
departments and emergency response agencies to quickly and efficiently 
distribute information on well sites and tank batteries in the event of 
an emergency. This project was funded by a grant from the U.S. 
Department of Energy, and was managed and developed by Argonne National 
Laboratories. The website is an interactive, GIS-based system linked to 
the RBDMS, and allows emergency responders to locate wells, access 
Material Safety Data Sheets (MSDS) for chemicals stored at those 
locations, and obtain related ownership and contact information. Among 
other things, the website has been recognized at The Council of State 
Governments, Midwestern Legislative Conference in July, 2004.
    The RBDMS system and associated projects are an outstanding reason 
to continue funding to benefit not only the domestic industry but also 
the American public that interacts with the industry.

                       PROTECTING THE ENVIRONMENT

    Federal funding of DOE developed technology has resulted in 
significant environmental improvements. They include:
  --Fewer wells and dry holes--today, one well is needed to do the job 
        of four wells in 1985.
  --Smaller footprints and well pads result in minimized environmental 
        impacts through horizontal and directional drilling and rig 
        technologies.
  --Reduced waste volume.
  --Reduced power and fuel consumption using modern drill bits.
  --Reduced air emissions.
  --Enhanced worker safety.
  --Optimized recovery of oil and natural gas resources using advanced 
        hydraulic fracturing stimulation techniques.

                       ADVOCACY--THE CRUCIAL NEED

    Perhaps the most critical function requiring dependable and on 
going Federal funding is directed to the role that the Office of Fossil 
Energy, Oil and Gas Program plays as an advocate to make certain that 
rulemakings at other Federal agencies (DOT, DOI, DOC, EPA) do not move 
forward unless potential impacts on domestic production are known.
    Recently, the Office of Fossil Energy studied and reported on the 
effects of the Environmental Protection Agency (EPA) construction 
permitting requirements for stormwater management. The study explains 
that there is a potential loss of between 1.3 and 3.9 billion barrels 
of domestic oil and 15 to 45 TCF of domestic natural gas over the next 
20 years, should stormwater construction permitting requirements be 
extended to include oil and gas producing operations, again, domestic 
production we can ill-afford to lose.
    Other significant examples include EPA regulation of drilling 
fluids and produced water as it relates to the Resource Conservation 
and Recovery Act and the Office of Pipeline Safety regulation of 
natural gas gathering lines.
    DOE's assessment of regulatory impacts on energy, is critical to 
achieve the mandates of the President's May 2002 Executive Order 
requiring agencies to assess energy impacts as part of the regulatory 
process. Continued Federal funding of DOE's role in interagency 
consultation on rulemaking is key to assuring a fair and reasoned 
regulatory environment. To put it bluntly--if we lose this critical 
oversight, the independent oil and gas industry is exposed to high 
risk. Don't let that happen!

                               CONCLUSION

    The Ohio Oil and Gas Association strongly urges the U.S. Senate 
Committee on Appropriations to restore to the Department of Energy all 
Federal funding of the oil and gas technology and regulatory evaluation 
programs.
                                 ______
                                 
 Prepared Statement of the American Association of Petroleum Geologists

    To the chair and members of the subcommittee, thank you for this 
opportunity for the American Association of Petroleum Geologists (AAPG) 
to provide its perspective on fiscal year 2006 appropriations for oil 
and gas research and development (R&D) programs within the 
subcommittee's jurisdiction. The administration's budget contains 
significant reductions for the Department of Energy (DOE), including 
the elimination of the oil and gas technology programs in the Office of 
Fossil Energy. AAPG requests restoration of these DOE Fossil Energy oil 
and gas technology programs to fiscal year 2003 funding levels.
    AAPG, an international geological organization, is the world's 
largest professional geological society representing over 30,000 
members. Its purpose is to advance the science of geology, foster 
scientific research, promote technology and advance the well-being of 
its members. With members in 116 countries, AAPG serves as a voice for 
the shared interests of petroleum geologists and geophysicists in our 
profession worldwide. Included among its members are numerous CEOs, 
managers, directors, independent/consulting geoscientists, educators, 
researchers and students. AAPG strives to increase public awareness of 
the crucial role that geosciences, and particularly petroleum geology, 
play in energy security and our society.

               DOE FOSSIL ENERGY RESEARCH AND DEVELOPMENT

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

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

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

    A key feature of the PSDF is its ability to test new systems at an 
integrated, semi-commercial scale. Integrated operation allows the 
effects of system interactions, typically missed in unintegrated pilot-
scale testing, to be understood. The semi-commercial scale allows the 
maintenance, safety, and reliability issues of a technology to be 
investigated at a cost that is far lower than the cost of commercial-
scale testing. Capable of operating at pilot to near-demonstration 
scales, the PSDF is large enough to produce industrial scale data, yet 
small enough to be cost-effective and adaptable to a variety of 
technology research needs.
    As a follow-on to the ongoing development of the transport gasifier 
at the PSDF, Southern Company and the Orlando Utilities Commission 
(OUC) were recently selected by DOE as part of a competitive 
solicitation under the Clean Coal Power Initiative (CCPI) to build an 
advanced 285-megawatt transport gasifer-based coal gasification 
facility at OUC's Stanton Energy Center in central Florida. The 
facility will use state-of-the-art emission controls and will showcase 
the cleanest, most efficient coal-fired power plant technology in the 
world. The transport gasifier offers a simpler, more robust method for 
generating power from coal than other available alternatives. It is 
unique among coal gasification technologies in that it is cost-
effective when handling low rank coals (sub-bituminous and lignite) and 
when using coals with high moisture or high ash content. These coals 
make up half the proven U.S. and worldwide coal reserves.
    Southern Company also supports the goals of the Clean Coal 
Technology Roadmap developed by DOE, EPRI, and the Coal Utilization 
Research Council (CURC). The Roadmap identifies the technical, 
economic, and environmental performance that advanced clean coal 
technologies can achieve over the next 20 years. Over this time period 
coal-fired power generation efficiency can be increased to over 50 
percent (compared to the current fleet average of 32 percent) while 
producing de minimis emissions and developing cost-effective 
technologies for carbon dioxide (CO2) management. EPRI 
recently used the modern financial technique called ``Real Options'' to 
estimate the value of advanced coal R&D.\2\ The major conclusion of 
this study is that the value to U.S. consumers of further coal R&D for 
the period 2007-2050 is at least $360 billion and could reach $1.38 
trillion. But, for these benefits to be realized the critically 
important R&D program outlined in the Clean Coal Technology Roadmap 
must be conducted.
---------------------------------------------------------------------------
    \2\ EPRI Report No. 1006954, ``Market-Based Valuation of Coal 
Generation and Coal R&D in the U.S. Electric Sector'', May 2002.
---------------------------------------------------------------------------
                                SUMMARY

    The United States has always been a leader in energy research. 
Adequate funding for fossil energy research and development programs 
will provide this country with secure and reliable energy while 
reducing our dependence on foreign energy supplies. Current DOE fossil 
energy research and development programs for coal, if adequately 
funded, will assure that a wide range of electric generation and 
hydrogen production options are available for future needs. Congress 
faces difficult choices when examining near-term effects on the Federal 
budget of funding energy research. However, continued support for 
advanced coal-based energy research is essential to the long-term 
environmental and economic well being of the United States. Prior DOE 
clean coal technology research has already provided the basis for $100 
billion in consumer benefits at a cost of less than $4 billion. Funding 
the administration's budget request for DOE coal R&D and long-term 
support of the Clean Coal Technology Roadmap can lead to additional 
consumer benefits of between $360 billion and $1.38 trillion.
    One of the key national assets for achieving these benefits is the 
PSDF. The fiscal year 2006 funding for the PSDF needs to be $25 million 
to support construction of new technologies that are critical to the 
goals of the Clean Coal Technology Roadmap and to the success of 
FutureGen. The major accomplishments at the PSDF to date and the future 
test program planned by DOE and the PSDF's industrial participants are 
summarized below.

                          PSDF ACCOMPLISHMENTS

    The PSDF has developed testing and technology transfer 
relationships with over 50 vendors to ensure that test results and 
improvements developed at the PSDF are incorporated into future plants. 
Major subsystems tested and some highlights of the test program at the 
PSDF include:
    Transport Reactor.--The transport reactor has been operated 
successfully on subbituminous, bituminous, and lignite coals as a 
pressurized combustor and as a gasifier in both oxygen- and air-blown 
modes and has exceeded its primary purpose of generating gases for 
downstream testing. It is projected to be the lowest capital cost coal-
based power generation option, while providing the lowest cost of 
electricity and excellent environmental performance.
    Advanced Particulate Control.--Two advanced particulate removal 
devices and 28 different filter elements types have been tested to 
clean the product gases, and material property testing is routinely 
conducted to assess their suitability under long-term operation. The 
material requirements have been shared with vendors to aid their filter 
development programs.
    Filter Safe-Guard Device.--To enhance reliability and protect 
downstream components, ``safe-guard'' devices that reliably and 
completely seal off failed filter elements have been successfully 
developed.
    Coal Feed and Fine Ash Removal Subsystems.--The key to successful 
pressurized gasifier operation is reliable operation of the coal feed 
system and the filter vessel's fine ash removal system. Modifications 
developed at the PSDF and shared with the equipment supplier allow 
current coal feed equipment to perform in a commercially acceptable 
manner. An innovative, continuous process has also been designed and 
successfully tested that reduces capital and maintenance costs and 
improves the reliability of fine ash removal.
    Syngas Cooler.--Syngas cooling is of considerable importance to the 
gasification industry. Devices to inhibit erosion, made from several 
different materials, were tested at the inlet of the gas cooler and one 
ceramic material has been shown to perform well in this application.
    Syngas Cleanup.--A syngas cleanup train was constructed and has 
proven capable of meeting stringent syngas decontamination 
requirements. This module that provides an ultra clean slip stream is 
now available for testing a wide variety of technologies.
    Sensors and Automation.--Several instrumentation vendors have 
worked with the PSDF to develop and test their instruments under 
realistic conditions. Automatic temperature control of the Transport 
Reactor has been successfully implemented.
    Fuel Cell.--Two test campaigns were successfully completed on 0.5 
kW solid oxide fuel cells manufactured by Delphi on syngas from the 
transport gasifier marking the first time that a solid oxide fuel cell 
has been operated on coal-derived syngas.
    Combustion Turbine Burner.--Integrating the existing 3.8 MW 
combustion turbine with a new syngas burner developed by SWPC has 
allowed further system automation and controls development.

                        PSDF FUTURE TEST PROGRAM

    Future testing at the PSDF is focused on supporting FutureGen and 
the Technology Roadmap. These programs aim to eliminate the 
environmental issues that present barriers to the continued use of coal 
including major reductions in emissions of SO2, 
CO2, NOX, particulates, and trace elements 
(including mercury), as well as reductions in solid waste and water 
consumption. The focus at the PSDF will remain on supporting 
commercialization of new coal-based advanced energy technologies 
including those initially developed elsewhere. Assuming adequate 
funding, work at the PSDF will include:
    Transport Gasifier.--Continue the development of the transport 
gasifier to further optimize its performance, explore feedstock 
flexibility, increase system pressure, and provide syngas for testing 
of downstream systems.
    Air Separation Membranes.--Test advanced air separation membrane 
modules provided by U.S. manufacturers to evaluate membrane performance 
and system integration issues.
    Coarse Ash Handling.--Install and test a new type of coarse ash 
depressurization system, with no moving parts or valves, which has been 
developed. Like the fine ash removal system successfully developed 
earlier, this system will reduce capital and maintenance cost and 
improve plant reliability.
    Advanced Syngas Cleanup.--Test new advanced syngas cleanup systems 
for reducing hydrogen sulfide, hydrochloric acid, ammonia, and mercury 
to near-zero levels.
    H2/CO2 Separation Technologies.--Integrate and test advanced 
H2/CO2 separation technologies to assess their 
performance on coal-derived syngas.
    Syngas Cooler.--Test alternative designs that are less complex, 
have lower capital cost, and offer better control of the syngas exit 
temperature.
    New Particulate Control Device Internals.--Evaluate alternative 
filter system internal designs from several vendors.
    Improved Fuel Feed Systems.--Evaluate alternatives to conventional 
lock hopper feed systems that have been identified.
    High-Temperature Heat Exchangers.--Test high-temperature heat 
exchangers as they become available. These exchanger can be used in 
both advanced combustion and gasification technologies.
    Syngas Recycle.--Add a syngas compressor to allow the use of syngas 
instead of air or N2 for aeration to promote recycle solids 
flow, dust filter back pulse gas, and coal feed transport to produce 
higher heating value syngas and more closely match commercial operating 
conditions.
    Fuel Cell.--Install and test a 5 to 10 MW hybrid fuel cell/gas 
turbine module.
    Sensors and Automation.--Evaluate automation enhancements that 
simulate commercial control strategies. Further development at 
gasification operating conditions is planned for measuring coal feed 
rate, temperature, gas analysis, dust at low levels, and hazardous air 
pollutants.
                                 ______
                                 
     Letter From the State of New Mexico Oil Conservation Division
                                                    April 29, 2005.
Honorable Pete V. Domenici,
Senate Committee on Appropriations, Subcommittee on Energy and Water 
        Development.
    Dear Senator Domenici: Mr. Chairman, thank you for the opportunity 
to provide written comments on the proposed fiscal year 2006 budget. I 
am writing this letter on behalf of the Ground Water Protection Council 
(GWPC) and my agency, the New Mexico Oil Conservation Division (NMOCD). 
I, and other NMOCD staff, request continued funding for the GWPC's 
successful oil and gas environmental management program and also to 
encourage you to restore Congressional appropriations of $100,000,000 
for the Department of Energy's Office of Fossil Energy oil and natural 
gas supply R&D program.
    This DOE program provides valuable research and technical 
assistance to State regulatory agencies such as NMOCD and to small oil 
and gas operators in the United States. Without the technical 
assistance provided by this applied research program, it is estimated 
that oil and gas operators will be unable to recover hundreds of 
millions of additional barrels of oil in the United States. This 
research program has also substantially assisted NMOCD and other State 
regulatory agencies for protection of the environment.
    State oil and gas regulatory agencies in partnership with the GWPC 
are responsible for the development and operation of the nationally 
acclaimed Risk-Based Data Management System (RBDMS) system. RBDMS has 
been proven to assist the States in protecting the environment while at 
the same time assisting oil and gas operators. Through the GWPC, the 
producing States are working together to protect ground water 
resources, holding down the cost of environmental compliance, and 
providing improved access to essential data for new oil and gas 
exploration. RBDMS has been operational in New Mexico for nearly 10 
years and currently is being utilized in 19 other oil and gas producing 
States.
    Other benefits of the research programs provided by DOE's Office of 
Fossil Energy Funding is for the States to have the opportunity to 
develop management tools using newer technology that enable their 
respective agencies to make decisions that result in the best possible 
balance of exploration and environmental considerations. We are 
learning that electronic commerce mutually saves time and money for 
both the oil and gas industry and the regulatory agencies. In New 
Mexico, and other States, online permitting and reporting is cost 
effective and saves industry time and money. Electronic permitting has 
expedited the processing of applications to drill making it easier for 
operators to move quickly and adjust their exploration and production 
programs. Demonstrably, oil and gas agencies with quality data 
management systems that provide access to oil and gas data experience 
increased oil and gas development as a result of the improved data 
access.



    Additionally, NMOCD has implemented an imaging system whereby more 
than 5 million historical documents are available for download and 
research via the Internet by large and small producers alike. Travel by 
operators to NMOCD offices to research and copy paper files is no 
longer needed. This one benefit may save New Mexico operators alone 
more than $200,000 per year for travel expenses and countless personnel 
hours. The NMOCD imaging system could be constructed in large part due 
to the availability of existing RBDMS system data making the indexing 
and implementation of imaging more intuitive and timely. Continued 
funding from U.S. DOE will provide the smaller independent oil and gas 
producers access to this and other environmental data management 
systems. Smaller producers are often the most in need of such systems 
because high regulatory costs hit them the hardest and they would 
otherwise not have ready access to these data and information.
    In our home State of New Mexico, NMOCD has contributed over 
$100,000 and more that $0.5 million in staff resources as in-kind 
matches over the last 10 years. Every State currently using the system 
has also contributed to building the system and additional States are 
planning to use stated dollars in addition to Federal funds. We are 
thankful for the $1.15 million we received in fiscal year 2005 and 
request that the committee continue to fund this successful GWPC 
program at $1.15 million in fiscal year 2006.
    RBDMS and the spin-off applications are the best examples we have 
seen of how the States, working with the Federal Government and the 
private sector, can improve both industry production and environmental 
protection at the same time. Continuing to fund the U.S. DOE's Office 
of Fossil Energy oil and natural gas technologies R&D program in this 
manner allows us to tailor our regulatory program needs to the industry 
which operate in our respective States. There is no Federal 
alternative, or other national approach that would work as efficiently 
as this cooperative multi-State effort.
    The DOE Fossil Energy program funds research projects like RBDMS 
which provide improved environmental protection, less regulatory and 
compliance costs for producers, better State enforcement of 
environmental regulations, increased domestic exploration activity by 
large and small operators and increased oil and gas production.
            Sincerely,
                                         Benjamin E. Stone,
                                                Petroleum Engineer.
                Attachment.--RBDMS New Mexico Highlights

   RBDMS NEW MEXICO . . . KEY TO NMOCD'S REGULATORY RESPONSIBILITIES

    The Risk-Based Data Management System (RBDMS) was developed with 
funding from the National Petroleum Technology Office (NMPO) of the 
Department of Energy. Modification to address New Mexico's specific 
regulatory and operational needs were accomplished by the Oil 
Conservation division of the Energy, Minerals and Natural Resources 
Department, with addition funding assistance from DOE through the 
Ground Water Protection Council (GWPC) and from the Environmental 
Protection Agency. New Mexico has realized a host of benefits 
incorporated in the application using the latest technologies including 
GIS, document imaging and statewide replication of the data with SQL 
Server.
    OCD would like to thank DOE for their continuing support of these 
data management efforts, which help support the oil and gas industry, 
the regulatory community and assist in maximizing domestic activity 
while protecting the environment. RBDMS is essential to the NMOCD in 
all daily activities toward carrying out its mission responsibilities 
to the citizens of New Mexico. 



                                 ______
                                 
           Prepared Statement of the Gas Turbine Association

    The Gas Turbine Association (GTA) appreciates the opportunity to 
provide the United States Senate Committee on Appropriations, 
Subcommittee on Energy and Water Development with our industry's 
statement regarding the following fiscal year 2006 Department of Energy 
(DOE) Turbine R&D funding levels. GTA recommends the following funding 
levels for DOE R&D.

                        OFFICE OF FOSSIL ENERGY

    Coal and Other Power Systems, President's Coal Research Initiative, 
Central Systems, Advanced Systems.--$25 million, TURBINES (an increase 
of $7 million over budget request).

            OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY

    Distributed Generation Technology Development.--$5.685 million, 
MICROTURBINES (support budget request level); $3.5 million, INDUSTRIAL 
GAS TURBINES (an increase of $1 million over budget request); $8.3 
million, TECHNOLOGY BASED--ADVANCED MATERIALS AND SENSORS (support 
budget request level); $2 million, FUEL FLEXIBILITY (an increase of $1 
million over budget request).

    ADVANCED TURBINE TECHNOLOGY TO SECURE AMERICA'S ECONOMIC FUTURE

    U.S. economic growth will be restrained by an inadequate supply of 
electric power. DOE estimates that power interruptions already cost the 
United States around $80 billion annually. According to the National 
Petroleum Council (NPC), a 0.72 percent increase in electricity 
production is needed to achieve each 1 percent growth in the U.S. GDP. 
New turbine technologies will improve the power availability and 
reliability needed to maintain our Nation's economic strength.
    Forecasts indicate that, without substantial investment in gas and 
transmission infrastructure, shortages in electric power supply are 
likely over the next 2 decades. During the next 20 years, the Energy 
Information Administration estimates that electricity consumption will 
increase at an average rate of 1.8 percent per year, and U.S. natural 
gas imports (LNG) will need to more than double. To further exacerbate 
the problem, maintaining transmission adequacy at its current level 
might require an investment of about $56 billion during the present 
decade, roughly half that needed for new generation during the same 
period according to Edison Electric Institute (EEI). Unfortunately, EEI 
also predicted that only $35 billion is likely be invested in 
transmission upgrades during this timeframe.
    Federal investment in the development and deployment of versatile, 
clean, multi-fuel-capable turbine power generation is needed to ease 
the burden on the natural gas and transmission grid infrastructures. 
The turbine technologies being developed through DOE/industry 
partnerships can help power producers cleanly and efficiently produce 
electric power from gasified coal, biomass and hydrogen, as well as 
natural gas. The turbines being developed under the DOE Office of 
Fossil Energy programs will greatly improve the Nation's large central 
station fleet by improving coal plant efficiencies and offering 
superior environmental performance. The DOE Energy Efficiency and 
Renewable Energy (EERE) turbine programs will produce new technologies 
that can be deployed in distributed power applications to relieve 
stress on our over burdened transmission grid, while improving power 
supply reliability and security.

                OFFICE OF FOSSIL ENERGY TURBINES PROGRAM

    Technology being developed through the DOE Office of Fossil Energy 
Turbine program is a prerequisite for the successful development of 
cost-competitive coal FutureGen systems (near-zero emission Integrated 
Gasification Combined Cycle [IGCC] system fueled by coal and capable of 
producing both electricity and hydrogen). The President's fiscal year 
2006 budget expressly states that, ``developing turbines with superior 
performance that operate on coal derived synthesis gas and hydrogen is 
critical to the deployment of advanced power generation technologies 
such as FutureGen plants.'' With adequate funding, the following 
Program Strategic Performance Goals can be met:
  --By 2010, a commercial design for a coal-based power system at 45-50 
        percent efficiency and a capital cost <$1,000/kW, with near-
        zero emissions; and
  --By 2020, a commercial design for a coal-fueled power system at 60 
        percent (HHV) efficiency with near-zero emissions with 
        competitive costs ($800-900/kW) and a zero CO2 
        emissions option.
    GTA believes that increasing the plant efficiency and increasing 
turbine equipment output are keys to driving down IGCC system capital 
cost to $1,000/kW by 2010. Unfortunately, the fiscal year 2006 budget 
requests under-fund technology R&D in the Turbines program. This could 
push the completion dates for turbine R&D necessary for advanced IGCC 
far beyond 2010. To achieve success by the 2010 goal, as well as 
reaching the 2020 cost and efficiency targets, Federal investment in 
Turbines program requires $25 million in fiscal year 2006. GTA 
recommends Congress appropriate an additional $7 million over the 
budget request.
    The Turbine program funding of $25 million should be allocated to 
the following subcomponent areas in order to expedite the availability 
of a 50 percent efficient coal fired IGCC system at less than $1,000/kW 
with near-zero emissions, and turbines capable of hydrogen combustion.

Syngas Turbine Technology R&D Activities (Funding required.--$18 
        million)
    The basic Syngas Turbine Technology Improvement R&D activities 
taking place under the program have not received adequate funding. The 
two fundamental areas of Turbine R&D to be conducted are: (1) 
Improvement in combustion turbine performance with coal derived 
synthesis gas, and (2) Development of NOX emissions 
reduction technology for fuel flexible turbines. The primary objective 
of both areas of interest is to improve the overall performance of 
combustion turbines, in terms of emissions and efficiency, when used in 
IGCC applications. While initial Phase 1 planning has been 
accomplished, Syngas Turbine R&D has yet to begin. Funding for Phase II 
work requires a significant increase over the proposed fiscal year 2006 
request. Inadequate funding for Phase II will greatly reduce the 
potential to achieve the DOE Program Specific Performance Goal of a 50 
percent efficient coal fired IGCC plant at a cost of less than $1,000/
kW and near zero emissions.

Fully Fund the University Turbine Systems Research Program (Funding 
        required.--$4 million)
    The University Turbine Systems Research Program, a consortium of 
107 U.S. universities from 40 States working closely with the 
combustion turbine industry, has demonstrated considerable success in 
developing new technologies and training people for the industry. The 
requested funds will address the more difficult technical challenges 
involved in operating turbines on coal syngas than on natural gas, and 
respond to the increased need for university fellowships in the 
industry.

Develop the Capability to Combust Hydrogen in Turbines (Funding 
        required.--$2 million)
    As the potential to produce hydrogen from coal becomes attractive 
the ability to utilize this fuel in a gas turbine becomes paramount. 
The proposed $2 million funding level would be used to support basic 
and applied research to address combustion of hydrogen with either 
oxygen or air. There are limited market incentives for the private 
sector to address this opportunity and the associated risk.

NETL In-house Syngas Combustion Studies (Funding required.--$1 million)
    The NETL in-house combustion group is a recognized world leader in 
combustion science. The requested funds will allow this group to fully 
explore the combustion phenomena and emissions associated with the use 
of coal derived syngas and hydrogen fuels. Without this funding the 
full range of conditions and gas compositions will not be explored and 
the ability to achieve the PSPG will be compromised.

      OFFICE OF EERE DISTRIBUTED ENERGY RESOURCES TURBINE PROGRAMS

    Much of the 21st century's demand for power will be met through the 
increased use of distributed energy systems. The United States needs to 
rapidly expand its supply of distributed energy for the Nation's 
electricity security and economic future. As the Nation's economy 
rebounds and expands, economic growth will intensify the demand for 
dependable and secure power. A lack of available, secure and reliable 
power would stifle economic growth and job creation.
    As America confronts the need to modernize and upgrade the 
electricity grid infrastructure, DOE Office of Energy Efficiency and 
Renewable Energy Distributed Energy Resources programs are working on 
the research, development and deployment of clean and efficient 
turbines and microturbines to provide the dependable and secure power 
needed in America today. Distributed generation turbines and 
microturbines provide:
  --Secure and reliable electricity at the point of demand through the 
        placement of small customized power plants on-site, isolating 
        critical facilities from grid outages.
  --Dependable and secure power for growing high-tech commercial and 
        industrial facility, eliminating economic losses associated 
        with poor power quality.
  --New sources of ``just-in-time'' dispatchable power that can be 
        instantly called upon to shore up instabilities in our 
        country's electricity grid.
  --New power capabilities, strategically located to avoid transmission 
        bottlenecks, deferring or even eliminating the need for long-
        lead-time transmission line approvals and construction.
  --Fuel-flexible operation on gaseous and liquid renewable natural 
        resource fuels.

Microturbines (Fund budget request level.--$5.685 million)
    Microturbines are currently being deployed in distributed energy 
applications with competitive costs, performance, and emissions in 
selected applications. They are ideally suited to alternate fuels, 
combined heat and power (CHP) applications, and remote siting. While 
microturbines are now entering the distributed energy market, improved 
microturbine technologies are needed to expedite the installation of 
clean, efficient and affordable systems. Once the goals of the DOE EERE 
Advanced Microturbine Program have been achieved, microturbines can 
significantly expand distributed energy market potential and deliver 
the public benefits that flow from distributed energy. The 
microturbines being developed under the EERE Microturbine program will 
have with higher electrical efficiency, using significantly less fuel 
to further conserve natural and renewable resources.
    DOE EERE Advanced Microturbine program goals call for a 40 percent 
electrical efficiency microturbine that can maintain ultra-low-single 
digit NOX emissions with a system cost below $500/kW. The 
Advanced Microturbine Program plans to deliver a single design capable 
of operating on gas, liquid, biofuels (bio liquids, digester gas and 
landfill gas) and waste fuels and will be coupled with ultra-low-
NOX technology.

Industrial Turbines (Funding required.--$3.5 million)
    The Industrial Gas Turbine program enhances the efficiency and 
environmental performance of gas turbines for applications up to 20MW. 
The research focuses on advanced materials research, such as composite 
ceramics and thermal barrier coatings that improve performance and 
durability of industrial gas turbines. Work on low emissions 
technologies R&D under the program promises to improve the combustion 
system by greatly reducing the NOX and CO produced without 
negatively impacting turbine performance. R&D and testing will 
demonstrate innovative high temperature materials for combustor liners, 
shrouds, blades and vanes in gas turbines to improve endurance levels 
beyond 8,000 hours. GTA recommends that Congress provide fiscal year 
2006 funding at levels at least equal to last year's appropriations--a 
$1 million increase over this year's budget request is needed.

Technology Based--Advanced Materials and Sensors (Fund budget request 
        level.--$8.3 million)
    This research provides long-term R&D in the area of materials, 
sensors, information technologies, power electronics, combustion 
modeling and assessments of crosscutting impacts and benefits of the 
developments of distributed generation systems and end-use 
applications.

Fuel Combustion (Funding required.--$2 million)
    EERE will conduct a focused combustion solicitation to evaluate the 
long-term combustion technologies for low-emissions such as rich 
combustion, lean-burn combustion, and solonox, focusing on the next-
generation of dual fuels (gaseous or liquid) such as propane, digester, 
land-fill methane, town gas, refinery gas, process natural gas, syngas, 
associated gas, natural gas liquids, raw natural gas and other 
variations. Laboratory research will evaluate fuel characteristics and 
effects of fuel variations on the distributed generation equipment for 
long-term availability and durability. This work has become extremely 
important due to shortages in the Nation's natural gas fuel supply. The 
capability to utilize non-traditional fuels in power generation is 
essential to ensure national fuel diversification goals. GTA recommends 
that Congress provide fiscal year 2006 funding at levels to launch a 
serious effort in this area--a $1 million increase over this year's 
budget request is needed.
                                 ______
                                 
         Prepared Statement of the Fuel Cell Power Association

    The Fuel Cell Power Association (FCPA) appreciates the opportunity 
to submit this statement to the United States Senate Committee on 
Appropriations, Energy and Water Development Subcommittee regarding 
fiscal year 2006 Department of Energy (DOE) Office of Fossil Energy 
Distributed Generation Systems Fuel Cells R&D programs. FCPA urges you 
to commit the resources needed to this critical effort by appropriating 
$75 million in fiscal year 2006 to the following areas:
    Office of Fossil Energy--Distributed Generation Systems--Fuel 
Cells--Innovative System Concepts.--$55 million, SECA (Solid State 
Energy Conversion Alliance); $20 million, MW-SCALE SECA HYBRIDS.
    The funding level of $65 million proposed in the administration's 
fiscal year 2006 Budget represents a 13 percent reduction from last 
year's appropriation, at such an early stage of this 10-year program. 
Congress sent a strong message last year--that the SECA program should 
be fully funded and that DOE should ``initiate a competitively awarded 
turbine hybrid integration program.'' This Congress' affirmation of the 
Federal Government's commitment to clean, high-efficiency fuel cell and 
hybrid technology, should intensify this Nation's determination to 
achieve the promise of secure, reliable, clean, cost-effective power. 
FCPA asks Congress to send the same signal of commitment this year by 
restoring funding to a $75 million level in fiscal year 2006.

                    REVOLUTIONIZING POWER GENERATION

    The fiscal year 2006 budget request states that the DOE 
programmatic strategic objective for ``Energy'' is to ``protect our 
national and economic security by promoting a diverse supply and 
delivery of reliable, affordable and environmentally sound energy.'' 
SECA Solid oxide fuel cells and hybrids can deliver on this strategic 
objective because the systems promise to provide:
  --Secure and Reliable Distributed Energy, making electricity 
        available at the location where it is needed, detachable from 
        the transmission grid when it goes down, or able to operate 
        grid free in remote locations.
  --Fuel Flexibility, reducing dependence on foreign fuel sources since 
        fuel cells can operate on domestic fuel resources like natural 
        gas, ethanol, methanol, coal gas and hydrogen.
  --Superior Fuel Efficiency, resulting in conservation of fuel 
        resources. DOE's simple cycle electrical system efficiency goal 
        is 40 percent on natural gas. DOE's fuel cell/turbine hybrid 
        electrical efficiency goal is 60 percent on coal synthetic gas. 
        On natural gas, hybrids have the potential for efficiencies of 
        65 percent to 70 percent, and combined heat and power 
        efficiencies of up to 85 percent.
  --Environmentally Preferred Power Technology, using non-combustion 
        fuel cell technology to avoid the formation of pollutants, and 
        enables the production of hydrogen and the capture of carbon 
        dioxide for sequestration.
  --U.S. Power System Exports, maintaining the Nation's leadership in 
        fuel cell technology, and its position of market preeminence in 
        the area of cost-competitive, ultra-low-emissions power 
        generation systems to meet the rapidly growing global energy 
        market.

                SECA SOLID OXIDE FUEL CELLS AND HYBRIDS

    The SECA program focuses on the development of cost-effective solid 
oxide fuel cell systems that use fuel and oxygen from air to create 
electricity and heat. These systems are different from traditional 
power generation systems because they use an electrochemical process; 
that does not rely on combustion of the fuel. This eliminates the 
formation of NOX, as well as SOX, hydrocarbons 
and particulates. Solid oxide fuel cells are considered to be one of 
the most desirable fuel cell for generating electricity because the 
electrolyte is constructed from solid-state ceramic materials. The 
solid-phase electrolyte materials are tolerant to impurities that 
affect other fuel cells, can internally reform hydrocarbon fuels, 
reduce corrosion considerations, and eliminate liquid electrolyte 
management problems. The systems operate between 700C (1,292F) to 
1,000C (1,830F), producing heat for thermal energy application to 
deliver ultra-high overall fuel efficiency in the combined heat and 
power (CHP) applications.
    The MW-Scale SECA Hybrids program will combine solid oxide fuel 
cells and gas turbines to provide the synergy needed to realize the 
highest efficiencies and lowest emissions of any fossil energy power 
plant. According to DOE, fuel cell/turbine hybrids ``are promising 
systems offering possibly the only option for meeting the DOE's 
efficiency goal for advanced coal based power systems of 60 percent 
(HHV) for fuel-to-electricity, with near zero emissions and competitive 
costs for multi-MW class central power plants in a 2020 time frame.''
    To meet U.S. goals for secure, reliable, clean, cost-effective 
power, our Nation needs to maintain its commitment to SECA and MW-Scale 
SECA Hybrid power technology development. It is critical that Congress 
and the administration continue to make these technologies a top 
funding priority, by budgeting and appropriating the resources needed 
to drive this much needed power generation technology toward 
commercialization and deployment.
    Following is a summary of DOE SECA and MW-Scale SECA Hybrid 
programs that need Federal cost-share funding in order to achieve 
planned program milestones and accelerate system availability.

             SECA (SOLID STATE ENERGY CONVERSION ALLIANCE)

    The DOE SECA R&D program goal is to develop a new generation of 
lower cost fuel cells and should be funded at a level of $55 million in 
fiscal year 2006. To attain an order of magnitude reduction in cost, 
the program will focus on integration of design, high-speed 
manufacturing, and materials selection. Ultimately, these fuel-
flexible, multi-function fuel cells will provide future energy 
conversion options for large- and small-scale stationary and mobile 
applications. The program is targeting the achievement of stack 
fabrication and assembly costs leading to a system price of $400/kW, 
with near-zero emissions. Such a low-priced system will be competitive 
with any power generation system.
    The SECA program aims to realize the full potential of fuel cell 
technology through long-term materials development. The program is 
focusing on the development and mass production of 3-10kW solid-state 
fuel cell modules. The program is only in the first phase of a three-
phase program plan:
  --Phase 1--Technology development.--Leading to $800/kW product;
  --Phase 2--Manufacturing development.--Leading to $600/kW product; 
        and,
  --Phase 3--Cost reduction and commercialization.--Leading to $400/kW 
        product.
    There are six integrated industrial development teams that serve as 
DOE's cost-sharing partners to provide R&D, manufacturing and packaging 
capabilities needed to move the technology and complete systems forward 
into the targeted stationary and mobile power markets. The teams design 
fuel cell systems, develop materials and manufacturing processes, and 
will ultimately deploy technologies. Industrial teams are listed below.
    Industrial Development Teams.--Acumentrics, Cummins Power 
Generation (SOFCo), Delphi Automotive Systems (Battelle Memorial 
Institute), Fuel Cell Energy (Versa Power Systems/Materials and Systems 
Research, Inc./GTI/EPRI), General Electric Energy, and Siemens 
Westinghouse Power Corporation.
    In addition, there are 28 core technology developers that support 
the industrial development teams. They provide problem-solving research 
needed to overcome barriers and assist the industry teams. The core 
technology developers are universities, national laboratories, and 
other research-oriented organizations. Core technology participants are 
listed below.
    Core Technology Organizations.--Argonne National Laboratory, Boston 
University, California Institute of Technology, Ceramatec, Functional 
Coating Technologies, Gas Technology Institute, Georgia Tech Research, 
Lawrence Berkeley National Laboratory, Lawrence Livermore National 
Laboratory, Los Alamos National Laboratory, Montana State University, 
NexTech Materials, National Energy Technology Laboratory, North 
Carolina A&T State University, Northwestern University, Oak Ridge 
National Laboratory, Pacific Northwest National Laboratory, Sandia 
National Laboratories, Southwest Research Institute, Texas A&M 
University, TIAX, University of Florida, University of Illinois, 
University of Missouri, University of Pittsburgh, University of Utah, 
University of Washington, Virginia Tech.

                         MW-SCALE SECA HYBRIDS

    In addition to fully funding the 5-10 kW-range SECA program, FCPA 
encourages the Federal Government to extend the SECA technology to 
larger scale systems. Thus, it should fund the MW-Scale SECA Hybrid 
development effort at a level of $20 million in fiscal year 2006 to 
achieve meaningful results and get it underway. While Congress provided 
DOE with $5 million seed money in fiscal year 2005 to launch this 
important effort, significantly increased fiscal year 2006 funding is 
needed to ensure that the program can sustain multiple developers, 
competitively chosen, and on a practical schedule.
    A MW-Scale SECA Hybrid integrates emerging solid oxide fuel cell 
technology with proven gas turbine technology to realize the highest 
efficiencies and lowest emissions of any fossil energy power plant. 
Such systems will operate on a range of fuels of national interest; 
coal syngas, natural gas, and hydrogen as well as being compatible with 
carbon sequestration concepts. The fuel cell's clean electro-chemical 
process is the primary energy conservation mechanism. Maximum 
efficiency and cost-effectiveness is achieved by making use of the 
residual energy exiting the fuel cell to drive the gas turbine and 
produce additional energy conservation. Various cycles and 
configurations need to be examined and tested, and both fuel cells and 
gas turbines adapted for optimal fuel efficiency and cost.
    Development of MW-scale SECA Hybrid Systems is the path to DOE's 
goals of:
  --Achieving 60 percent coal syngas efficiency;
  --Reducing emissions to ultra low levels of less than 1 ppm 
        NOX; and
  --Providing the basis for meeting Clean Coal and FutureGen system 
        goals.
    Building upon a SECA fuel cell foundation, the MW-scale SECA Hybrid 
program should leverage the historical fuel cell research and 
development with a focus on scaling the fuel cell technology to larger 
sizes, and integrating it with the gas turbine to realize cost-
effective, high efficiency, clean MW-class systems.
    The administration's fiscal year 2006 budget request states, ``In 
fiscal year 2005 . . . initiate MW-scale SECA hybrids work in support 
of coal-derived gas-based, FutureGen Fuel Cell systems . . .'' and `` . 
. . hybrid systems are expected to be available for testing at 
FutureGen and other sites in the 2010 to 2015 time frame.''
    Adequate funding is needed to resolve scaling technology and 
integration challenges, and move forward MW-scale SECA Hybrid systems 
to a reality. The FCPA urges Congress to continue to support this 
important initiative by providing $20 million in fiscal year 2006 
funding.

                      FUEL CELL POWER ASSOCIATION

    The Fuel Cell Power Association promotes the interests of the fuel 
cell industry by facilitating communication on the essential role the 
government plays in improving the economic and technical viability of 
fuel cells for stationary power. Contact FCPA at www.fuel-cell-
power.org.
                                 ______
                                 
                Prepared Statement of Tulane University

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

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

                                SUMMARY

    Restoring the DOE Fossil Energy budget is a necessary step for 
secure energy supply. This testimony highlights only a few of the 
benefits of what this investment has meant to consumers in the past. 
America needs a good plan going forward that offers a near, medium and 
long term plan with steady support.
                                 ______
                                 
       Prepared Statement of the Ground Water Protection Council

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

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

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

    The American Society for Microbiology (ASM), the largest single 
life science organization in the world, with more than 43,000 members, 
appreciates the opportunity to provide written testimony on the fiscal 
year 2006 budget for the Department of Energy (DOE) science programs. 
The mission of ASM is to enhance microbiology to gain a better 
understanding of basic life processes and to promote the application of 
this knowledge for improved health, economic, and environmental well 
being. Microbiological research is related to DOE programs involving 
microbial genomics, climate change, bioremediation, and basic 
biological processes important to energy sciences. The ASM supports a 7 
percent increase, for a total of $3.85 billion, for the DOE Office of 
Science in fiscal year 2006.

         STRONG SUPPORT IS NEEDED FOR THE DOE OFFICE OF SCIENCE

    Scientific progress and the U.S. economy continue to benefit from 
investments in the basic sciences made by the DOE Office of Science. 
The DOE Office of Science, the Nation's primary supporter of the 
physical sciences, is also an essential partner in the areas of 
biological and environmental science research as well as in 
mathematics, computing, and engineering. Furthermore, the Office of 
Science supports a unique system of programs based on large-scale, 
specialized user facilities that bring together working teams of 
scientists focused on such challenges as global warming, genomic 
sequencing, and energy research. The Office of Science is an invaluable 
partner in several scientific programs of the National Institutes of 
Health (NIH) and the National Science Foundation (NSF), and it supports 
peer-reviewed, basic research in DOE-relevant areas of science in 
universities and colleges across the United States. These cross-
disciplinary programs contribute to the knowledge base and training of 
the next generation of scientists, while providing scientific 
cooperation across the sciences.
    The Office of Science will play an increasingly important role in 
the administration's goal of U.S. energy independence in this decade. 
Many DOE scientific research programs share the goal of producing and 
conserving energy in environmentally responsible ways. Programs include 
basic research projects in microbiology as well as extensive 
development of biotechnology-based systems to produce alternative fuels 
and chemicals, to recover and improve the process for refining fossil 
fuels, to remediate environmental problems, and to reduce wastes and 
pollution.
    The administration's proposed budget for fiscal year 2006 requests 
$3.46 billion for the Office of Science, a decrease of about $140 
million compared to the fiscal year 2005 appropriation. This nearly 4 
percent proposed cut for the Office of Science in fiscal year 2006 is a 
significant departure from the congressionally authorized level of $4 
billion. ASM recommends that Congress increase the DOE Office of 
Science to a level of $3.85 billion in the fiscal year 2006 
appropriation, an increase of $250 million over fiscal year 2005.

          BIOLOGICAL AND ENVIRONMENTAL RESEARCH (BER) PROGRAMS

    The proposed budget for Biological and Environmental Research (BER) 
in fiscal year 2006 is nearly $456 million, which is $126 million below 
the fiscal year 2005 appropriation for these programs. DOE is the lead 
Federal agency supporting genomic sequencing of non-pathogenic microbes 
through its Genomics: GTL Program. The sequence information being 
compiled through this program provides clues into how we can design 
biotechnology based processes that will function in extreme conditions 
and potentially could address pressing national priorities, such as 
energy and environmental security, bioremediation of waste sites, 
global warming and climate change, and energy production.

                       BER GENOMICS: GTL PROGRAM

    ASM supports the administration's request of $87.2 million for the 
Genomics: GTL program in fiscal year 2006, a $20 million increase over 
fiscal year 2005. Because microbes power the planet's carbon and 
nitrogen cycles, clean up our wastes, and make important 
transformations of energy, they are an important source of 
biotechnology products, making DOE research programs extremely valuable 
for advancing our knowledge of the non-medical microbial world. Knowing 
the complete DNA sequence of a microbe provides important clues about 
the biological capabilities of the organism and is an important step 
toward developing strategies for efficiently detecting, using, or 
reengineering particular microbes to address various national issues. 
The DOE Genomics: GTL genomic sequencing program has an important 
impact on nearly every other activity within BER.
    In addition to this program, a substantial portion of the DOE Joint 
Genome Institute's (JGI) sequencing capacity continues to be devoted to 
the sequencing of microbial genomes as well as DNA in mixed genomes 
obtained from microbial communities dwelling within specialized 
ecological niches. As part of these efforts, DOE continues to complete 
DNA sequences of genomes in microbes with potential uses in energy, 
waste cleanup, and carbon sequestration.
    About 40 percent of the JGI capacity is dedicated to serving direct 
DOE needs, primarily through the Genomics: GTL program, while the 
remaining 60 percent of this capacity serves as a state-of-the-art DNA 
sequencing facility for whose use scientists submit proposals that are 
subject to merit review. These sequencing projects will be conducted at 
no additional cost for the extramural scientific community and are 
expected to have a substantial impact on the BER Environmental 
Remediation Sciences program, with much of this program focusing on 
such uses of microbes. In addition, the Genomics: GTL program will 
continue to have a major impact on the BER Climate Change Research 
program because of the role microbes play in the global carbon cycle 
and the potential for developing biology-based solutions for 
sequestering carbon.
    The ASM urges Congress to fully support this exciting program and 
applauds DOE's leadership in recognizing this important need in science 
and endorses an expansion of the department's microbial genome 
sequencing efforts, particularly in the use of DNA sequencing to learn 
more about the functions and roles of the many microorganisms that 
cannot be grown in culture and sees this program as the basis for an 
expanded effort to understand more broadly how genomic information can 
be used to understand life at the cellular and at more complex levels.

                       ENVIRONMENTAL REMEDIATION

    The overall goal of the DOE Environmental Management Science 
Program (EMSP), which was transferred from Environmental Management to 
the BER program, is to support basic research that improves the science 
underpinning the cleanup of DOE sites. Traditional cleanup strategies 
may not work or be cost effective for remediating DOE sites. The EMSP, 
through its support of basic research, aims to develop and validate 
technical solutions to complex problems, providing innovative new 
technologies that reduce risks and provide savings in terms of costs 
and time.
    DOE bioremediation activities are centered on the Natural and 
Accelerated Bioremediation Research (NABIR) program that supports basic 
research focused on determining how and where bioremediation may be 
applicable as a reliable, efficient, and cost-effective approach for 
cleaning up or containing metals and radionuclides in contaminated 
subsurface environments. In the NABIR program, research advances will 
be made from molecular to field scales; on genes and proteins used in 
bioremediation and in overcoming physicochemical impediments to 
bacterial activity; in non-destructive, real-time measurement 
techniques; on species interaction and response of microbial ecology to 
contamination; and in understanding microbial processes for altering 
the chemical state of metallic and radionuclide contaminants.
    Additional EMSP research efforts focus on contaminant fate and 
transport in the subsurface, nuclear waste chemistry and advanced 
treatment options, and novel characterization and sensor tools. EMSP 
projects will continue to be subject to a competitive peer review 
process that identifies the most scientifically meritorious research 
proposals and applications to support, based on availability of funds 
and programmatic relevance to ensure a research portfolio that 
addresses DOE needs. Research will be funded at universities, national 
laboratories, and at private research institutes and industries. This 
research will be conducted in collaboration with the Office of 
Environmental Management.
    The administration's proposed fiscal year 2006 budget for 
remediation research, including the NABIR program, is $94.7 million, a 
nearly $10 million decrease compared to $104.5 million for fiscal year 
2005. The DOE environmental remediation programs deserve sustained 
support.

                        CLIMATE CHANGE RESEARCH

    The ASM is pleased to see the administration's support of Climate 
Change Research continue in its fiscal year 2006 budget. The 
President's proposed $143 million budget for this activity in fiscal 
year 2006, is a modest increase over fiscal year 2005. The Climate 
Change Research subprogram seeks to apply the latest scientific 
knowledge to the potential effects of greenhouse gas and aerosol 
emissions on the climate and the environment. This program is DOE's 
contribution to the interagency U.S. Global Change Research Program 
proposed by President George Walker Bush in 1989 and codified by 
Congress in the Global Change Research Act of 1990 (Public Law 101-
106).
    The Ecological Processes portion of the subprogram is focused on 
understanding and simulating the effects of climate and atmospheric 
changes on ecosystems. Research will also identify potential feedbacks 
from changes in the climate and atmospheric composition. This research 
is critical to better understanding of the changes occurring in 
ecosystems from increasing levels of atmospheric pollutants.
    The ASM recommends continued support for this important research 
within the DOE Office of Science. This program is vital to advance 
understanding of energy balances between the surface of the Earth and 
the atmosphere and how this will affect the planet's climate and 
ecosystems.

                         BASIC ENERGY SCIENCES

    The administration's requested funding for the Office of Basic 
Energy Sciences (BES) for fiscal year 2006 is $1.146 billion, 
representing an increase of $41.4 million over fiscal year 2005. This 
program is a principal sponsor of fundamental research for the Nation 
in the areas of materials sciences, chemistry, geosciences, and 
biosciences as it relates to energy. The program supports initiatives 
in the microbiological and plant sciences focused on harvesting and 
converting energy from sunlight into feedstocks such as cellulose and 
other products of photosynthesis, as well as how those chemicals may be 
further converted into energy-rich molecules such as methane, hydrogen, 
and ethanol. Alternative and renewable energy sources will remain of 
strategic importance in the Nation's energy portfolio, and DOE is well 
positioned to advance basic research in this area. Advances in genomic 
technologies are giving this research area a tremendous new resource 
for advancing the Department's bioenergy goals.

                 NEW TECHNOLOGIES AND UNIQUE FACILITIES

    New technologies and advanced instrumentation derived from DOE's 
expertise in the physical sciences and in engineering have become 
increasingly valuable to biologists. The beam lines and other advanced 
technologies for determining molecular structures of cell components 
are at the heart of current advances to understand cell function and 
have practical applications for new drug design. DOE advances in high 
throughput, low-cost DNA sequencing; and protein mass spectrometry, 
cell imaging, and computational analyses of biological molecules and 
processes are other unique contributions of DOE to the Nation's 
biological research enterprise.
    DOE has unique field research facilities for environmental research 
important to understanding biogeochemical cycles, global change, and 
cost-effective environmental restoration. DOE's ability to conduct 
large-scale science projects and draw on its unique capabilities in 
physics, mathematics and computer sciences, and engineering is critical 
for future biological research.

                               CONCLUSION

    The ASM strongly supports DOE's basic science agenda across the 
scientific disciplines and encourages Congress to maintain its 
commitment to these important research programs. ASM recommends that 
Congress increase funding for the DOE Office of Science to $3.85 
billion in fiscal year 2006.
    The ASM appreciates the opportunity to provide written testimony 
and would be pleased to assist the subcommittee as it considers its 
appropriation for the DOE for fiscal year 2006.

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




 
       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page

Advanced Composite Products and Technology, Inc., Prepared 
  Statement of...................................................   398
Allard, Senator Wayne, U.S. Senator from Colorado:
    Prepared Statements of..............................4, 67, 130, 185
    Statements of................................................4, 184
Alliance to Save Energy, Prepared Statement of...................   458
American:
    Association of Petroleum Geologists, Prepared Statement of 
      the........................................................   466
    Forest & Paper Association, Prepared Statement of the........   410
    Geological Institute, Prepared Statement of the..............   408
    Public Power Association, Prepared Statement of the..........   399
    Shore and Beach Preservation Association, Prepared Statement 
      of the.....................................................   316
    Society:
        For Microbiology, Prepared Statement of the..............   487
        Of Plant Biologists, Prepared Statement of the...........   484
APS Technology, Inc., Prepared Statement of......................   430
Arkansas River Basin Interstate Committee, Prepared Statement of 
  the............................................................   251

Baker, Kenneth, Principal Deputy Administrator, Defense Nuclear 
  Nonproliferation, National Nuclear Security Administration, 
  Department of Energy...........................................   179
Barnett, Bob, Prepared Statement of..............................   423
Beckner, Dr. Everet, Deputy Administrator, Defense Programs, 
  National Nuclear Security Administration, Department of Energy.   179
Biomass Energy Research Association, Prepared Statement of the...   374
Board of:
    Levee Commissioners for the Yazoo-Mississippi Delta, Prepared 
      Statement of the...........................................   285
    Mississippi Levee Commissioners, Prepared Statement of the...   291
Bond, Senator Christopher S., U.S. Senator from Missouri, Opening 
  Statement of...................................................   103
Brooks, Ambassador Linton F., Under Secretary and Administrator, 
  Nuclear Security, National Nuclear Security Administration, 
  Department of 
  Energy.........................................................   179
    Statement of.................................................   187
    Prepared Statement of........................................   191

Calaveras County Water District, Prepared Statement of the.......   312
Cameron County, Texas, Prepared Statement of.....................   300
Center for Advanced Separation Technologies, Prepared Statement 
  of the.........................................................   461
Chambers County-Cedar Bayou Navigation District, Texas, Prepared 
  Statement of the...............................................   302
ChevronTexaco Technology Ventures LLC, Prepared Statement of.....   448
City of:
    Flagstaff, Arizona, Prepared Statement of the................   279
    Los Angeles Board of Harbor Commissioners and Port of Los 
      Angeles, Prepared Statement of the.........................   296
    St. Helena, California, Prepared Statement of the............   314
Clark County Regional Flood Control District, Prepared Statement 
  of the.........................................................   277
Coal Utilization Research Council (CURC), Prepared Statement of 
  the............................................................   419
Coalition of Northeastern Governors, Prepared Statement of the...   394
Cochran, Senator Thad, U.S. Senator from Mississippi:
    Prepared Statement of........................................   106
    Questions Submitted by.......................................    97
Colorado:
    River:
        Board of California, Prepared Statement of the...........   361
        Commission of Nevada, Prepared Statement of the..........   354
        Energy Distributors Association (CREDA), Prepared 
          Statement of the.......................................   332
        Water Conservation District, Prepared Statement of the...   354
    Springs Utilities, Prepared Statement of.....................   361
Commission on Marginally Producing Oil and Gas Wells, Prepared 
  Statement of the...............................................   407
Consortium for Fossil Fuel Science, University of Kentucky, 
  Prepared Statement of the......................................   373
Craig, Senator Larry, U.S. Senator from Idaho:
    Questions Submitted by.......................................    97
    Statements of...............................................41, 108
Cummins Inc., Prepared Statement of..............................   365

Denver Water, Prepared Statement of..............................   347
Departments of Mechanical and Chemical Engineering, University of 
  Illinois at Chicago, Prepared Statement of.....................   453
Deschutes River Conservancy, Prepared Statement of the...........   344
Detroit Diesel Corporation, Prepared Statement of the............   371
Direct Drive Systems, Inc., Prepared Statement of................   422
Division of Intermodal Services, Department of Transportation, 
  State of New Jersey, Prepared Statement of the.................   269
DOE University Research Program in Robotics (URPR), Prepared 
  Statement of the...............................................   363
Domenici, Senator Pete V., U.S. Senator from New Mexico:
    Opening Statements of....................................1, 39, 179
    Prepared Statement of........................................   104
    Questions Submitted by........................26, 82, 139, 165, 236
Donald, Admiral Kirkland, Deputy Administrator, Naval Reactors, 
  National Nuclear Security Administration, Department of Energy.   179
Dorgan, Senator Byron L., U.S. Senator from North Dakota, 
  Statement of...................................................    42

Ecological Society of America, Prepared Statement of the.........   435
Ecotoxicology and Water Quality Research Laboratory, Department 
  of Zoology, Oklahoma State University, Prepared Statement of 
  the............................................................   429
Empire State Development Corporation, State of New York, Prepared 
  Statement of the...............................................   269

Feinstein, Senator Dianne, U.S. Senator from California, 
  Statement of...................................................   186
Fort Peck Assiniboine and Sioux Tribes and Dry Prairie Rural 
  Water System, Prepared Statement of the........................   265
Four Corners Power Plant, Prepared Statement of..................   350
Fuel Cell Power Association, Prepared Statement of the...........   477

Garman, David, Assistant Secretary, Office of Energy Efficiency 
  and Renewable Energy, Department of Energy.....................    39
    Prepared Statement of........................................    44
    Statement of.................................................    43
Garrish, Theodore J., Deputy Director, Office of Civilian 
  Radioactive Waste Management...................................    19
    Prepared Statement of........................................    21
Gas Turbine Association, Prepared Statement of the...............   474
General Electric Energy, Prepared Statement of...................   450
Geophysical Survey Systems, Inc., Prepared Statement of..........   389
Golan, Paul M., Principal Deputy Assistant Secretary for 
  Environmental Management, Office of Environmental Management, 
  Department of 
  Energy.........................................................     7
    Prepared Statement of........................................    10
Grand Valley Water Users Association, Prepared Statement of the..   349
Green Brook Flood Control Commission, Prepared Statement of the..   319
Ground Water Protection Council, Prepared Statement of the.......   483

IBACOS, Inc., Prepared Statement of..............................   390
Inouye, Senator Daniel K., U.S. Senator from Hawaii, Questions 
  Submitted by...................................................   178
Interstate Oil and Gas Compact Commission, Prepared Statement of 
  the............................................................   441
Irrigation & Electrical Districts' Association of Arizona, 
  Prepared Statement of the......................................   359

Johnston, J. Ronald, Program Director, Central Utah Project 
  Completion Act Office, Bureau of Reclamation, Department of the 
  Interior.......................................................   145
    Prepared Statement of........................................   160

Keys, John W., III, Commissioner, Bureau of Reclamation, 
  Department of the Interior.....................................   145
    Prepared Statement of........................................   155
    Statement of.................................................   152

Landrieu, Senator Mary L., U.S. Senator from Louisiana:
    Prepared Statement of........................................   106
    Questions Submitted by.......................................   143
Lewis and Clark Rural Water System, Prepared Statement of the....   340
Louisiana Department of Transportation and Development, Prepared 
  Statement of the...............................................   293
Loya, Steve, Costa Mesa, California, Prepared Statement of.......   390

Magwood, William D., IV, Director, Office of Nuclear Energy, 
  Science and Technology, Department of Energy...................    66
    Prepared Statement of........................................    68
MASI Technologies, LLC, Prepared Statement of....................   402
McConnell, Senator Mitch, U.S. Senator from Kentucky, Questions 
  Submitted by...................................................   142
Metropolitan Water:
    District of Southern California:
        Letter From the..........................................   329
        Prepared Statement of the................................   351
    Reclamation District of Greater Chicago, Prepared Statement 
      of the                                                        280
Mid-Dakota Rural Water System, Prepared Statement of.............   321
Mid-West Electric Consumers Association, Inc., Prepared Statement 
  of.............................................................   425
Mni Wiconi Project, Prepared Statement of........................   335
Murray, Senator Patty, U.S. Senator from Washington:
    Prepared Statement of........................................     6
    Questions Submitted by.......................................33, 99
    Statement of.................................................     5

Napa County Flood Control and Water Conservation District, 
  Prepared Statement of the......................................   283
National:
    Association:
        For State Community Services Programs, Prepared Statement 
          of 
          the....................................................   412
        Of State Energy Officials, Prepared Statement of the.....   443
    Coalition for Food and Agricultural Research, Prepared 
      Statement of the...........................................   456
    Hydrogen Association, Prepared Statement of the..............   415
    Mining Association (NMA), Prepared Statement of the..........   445
    Research Center for Coal and Energy (NRCCE), Prepared 
      Statement of the...........................................   454
New:
    Mexico Interstate Stream Commission, Prepared Statement of 
      the........................................................   331
    York City Economic Development Corporation, Prepared 
      Statement of the...........................................   269
    York-New Jersey Harbor Roundtable, Prepared Statement of the.   272
Northern Colorado Water Conservancy District, Prepared Statement 
  of the.........................................................   350
Nuclear Energy Institute, Prepared Statement of the..............   436

Ohio Oil & Gas Association, Prepared Statement of the............   464
Orbach, Raymond L., Director, Office of Science, Department of 
  Energy.........................................................    51
    Prepared Statement of........................................    52
Oregon Water Resources Congress, Prepared Statement of the.......   355
Ouachita River Valley Association, Prepared Statement of the.....   275

Pajaro Valley Water Management Agency (PVWMA), Prepared Statement 
  of the.........................................................   341
Perkins County Rural Water System, Inc., Prepared Statement of 
  the............................................................   271
Petroleum Technology Transfer Council, Prepared Statement of the.   481
Port:
    Commerce Department, The Port Authority of New York & New 
      Jersey, Prepared Statement of the..........................   269
    Freeport, Texas, Prepared Statement of.......................   303
Public Service Company of New Mexico, Prepared Statement of the..   358

Red River Valley Association, Prepared Statements of the.......286, 343
Reid, Senator Harry, U.S. Senator from Nevada, Statement of......     3
Riley, Major General Don, Director, Civil Works, Corps of 
  Engineers--Civil, Department of the Army, Department of 
  Defense--Civil.................................................   103

SAGE Electrochromics, Inc., Prepared Statement of................   392
Santa Clara Valley Water District, Prepared Statements of the..304, 352
SoftSwitching Technologies Corporation, Prepared Statement of....   416
Southern Company Generation, Prepared Statement of...............   468
Southwest Research Institute, Prepared Statement of the..........   396
State
    Of:
        Nebraska Oil and Gas Conservation Commission, Prepared 
          Statement of the.......................................   449
        New Mexico Oil Conservation Division, Letter From the....   471
        Wyoming, Letter From the.................................   327
    Oil and Gas Board of Alabama, Prepared Statement of the......   486
    Teachers' Retirement System, State of California, Prepared 
      Statement of the...........................................   381
Strock, Lieutenant General Carl, Chief of Engineers, Corps of 
  Engineers--Civil, Department of the Army, Department of 
  Defense--Civil.................................................   103
    Prepared Statement of........................................   120
    Statement of.................................................   118

Temblor Petroleum Corporation, Prepared Statement of.............   450
Tennessee-Tombigbee Waterway Development Authority, Prepared 
  Statement of the...............................................   260
The:
    American Society of Civil Engineers, Prepared Statement of...   298
    Independent Petroleum Association of America, Prepared 
      Statement of...............................................   433
    Nature Conservancy, Prepared Statement of....................   317
    Society of Nuclear Medicine, Prepared Statement of...........   387
Trezise, John, Director, Budget, Department of the Interior......   145
Tulane University, Prepared Statement of.........................   480

U.S. Petroleum Engineering Department Heads, Prepared Statement 
  of.............................................................   405
University:
    Corporation for Atmospheric Research (UCAR), Prepared 
      Statement of the...........................................   439
    Of Oklahoma, Prepared Statement of the.......................   368
Upper:
    Gunnison River Water Conservancy District, Prepared Statement 
      of the.....................................................   348
    Mississippi River Basin Association (UMRBA), Prepared 
      Statement of the...........................................   263

Vining, Rob, Chief, Civil Works Programs, Integration Division, 
  Corps of Engineers--Civil, Department of the Army, Department 
  of Defense--Civil..............................................   103
Virtual Engineering Solutions, Inc., Letter From.................   427

Weimer, R. Thomas, Acting Assistant Secretary for Water and 
  Science, Department of the Interior............................   145
    Prepared Statement of........................................   146
Western Coalition of Arid States (WESTCAS), Prepared Statement of 
  the............................................................   357
Wolf, Bob, Director, Program and Budget, Bureau of Reclamation, 
  Department of the Interior.....................................   145
Woodley, John Paul, Jr., Principal Deputy Assistant Secretary of 
  the Army (Civil Works), Corps of Engineers--Civil, Department 
  of the Army, Department of Defense--Civil......................   103
    Prepared Statement of........................................   109
    Statement of.................................................   108
Wyoming Water Association, Letter From the.......................   328

 
                             SUBJECT INDEX

                              ----------                              

                      DEPARTMENT OF DEFENSE--CIVIL

                         Department of the Army

                       Corps of Engineers--Civil

                                                                   Page

Additional Committee Questions...................................   139
Balance of Corps Missions and Workforce..........................   105
Budget Proposals.................................................   105
Bureau of Reclamation, Water and Related Resources...............   105
Civil Works:
    Construction Backlog.........................................   121
    Program Transformation.......................................   122
Four Proposals for Programmatic Changes..........................   113
Issues for Fiscal Year 2006......................................   105
Management and Oversight.........................................   115
Overview of Fiscal Year 2006 Army Civil Works Budget.............   109
Performance Budgeting Guidelines for Civil Works Construction....   117
Performance-based Budgeting......................................   110
Remaining Benefits to Remaining Costs Ratio (RBRCR)..............   104
Summary of Fiscal Year 2006 Program Budget.......................   120
The:
    Bureau of Reclamation........................................   105
    Central Utah Project.........................................   105
    Corps of Engineers...........................................   104
Value of the Civil Works Program to the Nation's Economy and 
  Defense........................................................   123

                          DEPARTMENT OF ENERGY

                National Nuclear Security Administration

Additional Committee Questions...................................   236
Advanced:
    Concepts.....................................................   217
    Simulation Computing.........................................   247
Cyber Security...................................................   248
Defense Nuclear Nonproliferation.................................   194
DOE Relationship with Homeland Security..........................   239
Environmental Management.........................................   198
Facilities and Infrastructure Recapitalization...................   197
Fiscal Year 2006 Budget Request................................180, 193
Five-Year Budget Outlook.........................................   244
Future of the Weapons Program....................................   180
Management Issues................................................   200
National Ignition Facility (NIF)...............................182, 245
Naval Reactors............................................184, 199, 236
Nuclear:
    Nonproliferation.............................................   183
    Weapons......................................................   235
        Complex Infrastructure Study...........................215, 244
        Incident Response........................................   198
        Relevance................................................   234
        Stockpile................................................   216
Office of the Administrator......................................   200
Pits...........................................................230, 235
Plutonium Disposition............................................   236
Potential Adversaries Nuclear Weapons Activities.................   219
Reliable Replacement:
    Warhead......................................................   218
    Warheads....................................181, 212, 221, 228, 229
Retirement of Dr. Everet Beckner.................................   233
Robust Nuclear Earth Penetrator...........................182, 231, 232
Russian Security Sustainability..................................   237
Safeguards and Security..........................................   199
Security at:
    Los Alamos National Laboratory...............................   216
    Weapons Laboratories.........................................   220
Small Business Contracting.......................................   246
TA-18............................................................   244
Test Readiness...................................................   229
Test-site Readiness..............................................   214
U.N. Resolution 1540.............................................   238
U.S./Russian Working Group on Nuclear Security--Bratislava 
  Statement......................................................   237
Underground Nuclear Test Readiness...............................   214
Weapons:
    Activities...................................................   196
    Laboratories Staffing........................................   220
What Are the Limitations of Today's Stockpile and Nuclear 
  Infrastructure?................................................   208
What's the Path to Get There?....................................   211
Where Do We Want the Stockpile and Infrastructure to Be in 2030?.   210

            Office of Civilian Radioactive Waste Management

Additional Committee Questions...................................    26
Adequate Funding for Yucca Mountain..............................    37
Cost Reduction Initiatives.......................................    25
EM:
    Contractor Workforce.........................................    36
    Procurement Decisions........................................    35
Ensuring Adequate Resources to Complete the Mission..............    25
EPA and the Radiation Standard...................................    31
Fees Paid For Yucca Mountain.....................................    32
Fiscal Year:
    2004 Accomplishments.........................................    22
    2005 Ongoing Activities......................................    22
    2006 Key Activities..........................................    23
Hanford:
    Cleanup Cuts.................................................    33
    Tanks Waste Treatment........................................    34
    Waste Treatment Plant........................................    35
    Worker Health and Safety Issues..............................    34
    Workforce Reductions.........................................    33
License:
    Application..................................................    31
    Support Network..............................................    31
Opening of Yucca Mountain........................................    29
Technical Challenges.............................................    32
The Fiscal Year 2006 Budget Request..............................    21
Transportation...................................................    31
Volpentest Hazardous Materials Management and Emergency Response 
  Training Center (HAMMER) Facility..............................    35

            Office of Energy Efficiency and Renewable Energy

Additional Committee Questions...................................    81
Biomass..........................................................    44
    And Biorefinery Systems R&D..................................    48
    Funding Program..............................................    88
    Research and Development.....................................    97
Building Technologies............................................    50
Buildings and Appliances.........................................    43
Cellulosic Ethanol Commercialization.............................    99
Conservation Efforts.............................................    87
Distributed:
    Energy Resources.............................................    49
    Power Generation.............................................    44
Eliminating Redundancy Among DOE.................................    85
Energy:
    Conservation:
        And Renewable Energy Programs Fiscal Year 2006 Request...    45
        Program Direction........................................    88
    Efficiency and Renewal Energy Programs.......................    85
Federal Energy Management........................................    44
    Program......................................................    50
Fossil Energy Programs...........................................    89
FreedomCAR Initiative............................................    88
Geothermal Technology............................................    48
Hydrogen:
    And Fuel Cell Technologies...................................    46
    Fuel Initiative..............................................    86
    Production...................................................    86
    Research.....................................................    86
    Technology Development.......................................    87
Idaho National Laboratory........................................    98
Industrial Technologies......................................44, 50, 87
Program Management and Direction.................................    51
Reduce Dependence On Foreign Oil.................................    43
Renewable Energy.................................................    43
Solar Energy Technologies........................................    47
Solid State Lighting.............................................    87
Vehicle Technologies.............................................    47
Weatherization:
    And Intergovernmental Programs...............................    49
    Program......................................................    43
Wind and Hydropower Technologies.................................    48

                   Office of Environmental Management

Additional Committee Questions...................................    26
Adequate Funding for Yucca Mountain..............................    37
Challenges Ahead.................................................    12
Delivering on Commitments........................................    11
EM:
    Contractor Workforce.........................................    36
    Procurement Decisions........................................    35
Hanford:
    Cleanup Funding Cuts......................................... 5, 33
    Tanks Waste Treatment........................................    34
    Waste Treatment Plant........................................    35
    Worker Health and Safety Issues..............................    34
    Workforce Reductions.........................................    33
Los Alamos National Laboratory Cleanup Stays With Environmental 
  Management for Fiscal Year 2006................................    28
National Academy of Sciences Study...............................    26
The Fiscal Year 2006 Budget Request..............................    12
Transfer of Cleanup from Environmental Management to the National 
  Nuclear Security Administration................................    27
Volpentest Hazardous Materials Management and Emergency Response 
  Training Center (HAMMER) Facility..............................    35

            Office of Nuclear Energy, Science and Technology

Additional Committee Questions...................................    81
Advanced Fuel Cycle..............................................    83
    EBR-II Fuel/EM Cleanup.......................................    83
    Initiative...................................................    72
Building New Nuclear Power Plants................................    97
DOE Support for Training Radiochemists...........................   100
Generation IV Nuclear Energy Systems Initiative..................    71
Idaho:
    Facilities Management and Idaho Sitewide Safegurds and 
      Security...................................................    75
    National Laboratory..........................................68, 98
Linear No Threshold Model........................................    77
National Academy of Sciences.....................................    84
Next Generation Nuclear:
    Energy Technologies..........................................    68
    Plant (NGNP).................................................    82
        At Idaho National Laboratory.............................    97
Nuclear:
    Energy Research Program......................................    66
    Hydrogen Initiative..........................................    72
    Pebble Bed Reactor...........................................    85
    Power 2010 (NP 2010).........................................70, 82
        Initiative...............................................    68
Office of Nuclear Energy.........................................    40
Radiological Facilities Management...............................    75
University Reactor Infrastructure and Education Assistance.......    73
Uranium Fuel.....................................................    85

                           Office of Science

Additional Committee Questions...................................    81
Advanced Scientific Computing Research...........................    59
Basic Energy Sciences............................................    57
Biological and Environmental Research............................    60
Environmental Molecular Science Laboratory Funding...............   100
Fiscal Year 2006 Science Priorities..............................    53
Fusion Energy Sciences...........................................    63
Genomes to Life Program..........................................    93
High Energy Physics..............................................    61
Hydrogen Research--Office of Science.............................    92
International Thermonuclear Reactor (ITER).......................    94
Joint Dark Energy Mission........................................    95
Low Dose Radiation Research......................................    93
Nuclear Physics..................................................62, 96
Office of Science:
    Funding......................................................    94
    Programs.....................................................    92
Organization.....................................................    56
Program Objectives and Performance...............................    55
Replacement Facilities at Pacific Northwest National Laboratory..    99
Safeguards and Security..........................................    65
Science:
    Accomplishments..............................................    54
    Laboratories Infrastructure..................................    64
    Program Direction............................................    64
    Programs.....................................................    57
Solid State Lighting.............................................    95
Strategy on Advanced Computing...................................    96
Workforce Development for Teachers and Scientists................    65

                       DEPARTMENT OF THE INTERIOR

                         Bureau of Reclamation

Additional Committee Questions...................................   165
Addressing other Departmental Challenges.........................   150
Animas-La Plata..................................................   167
Budget Overview..................................................   147
California Bay-Delta Restoration (CALFED)........................   157
    Implementation...............................................   149
Central:
    Utah Project Completion Act..................................   147
    Valley Project Restoration Fund..............................   157
Colorado River...................................................   163
Cost Overruns....................................................   163
Department of the Interior's Fiscal Year 2006 Budget Request.....   145
Drought........................................................152, 172
Fiscal Year 2006 Planned Activities..............................   159
Hawaii Water Resources...........................................   178
Highlights of the Fiscal Year 2006 Budget Request................   153
Klamath River Basin..............................................   174
Lake Powell......................................................   162
Management:
    Excellence...................................................   149
    Initiatives..................................................   146
Middle Rio Grande................................................   165
    ESA Collaborative Program....................................   171
New Mexico Project Operations Improvements.......................   170
O&M Costs for Security.........................................172, 175
Other Bureau of Reclamation Project Requests.....................   149
Performance-based Contracting....................................   164
Permitting Process...............................................   164
Policy and Administration........................................   157
President's Management Agenda....................................   157
Program Assessment Rating Tool (PART)............................   157
Reclamation......................................................   147
Rural Water Legislation..........................................   167
Trinity River....................................................   171
Tularosa Basin Desalination Facility.............................   169
Upper Colorado Region............................................   177
Water:
    2025.......................................................161, 168
        Preventing Crises and Conflict in the West...............   148
    And Related Resources........................................   155
    Storage......................................................   161
    Technology R&D...............................................   167

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